‘$2M savings may only go to power hike, liabilities’

The Public School System expects to save over $2 million every year from the lower rates it now pays for water and wastewater charges but that savings will likely go to increased operational expenses due to a potential increase in power charges.

According to PSS finance director Derek Sasamoto, PSS is expected to incur only about $2.3 million in utility expenses this fiscal year 2014. This is a decline from previous fiscal years when PSS averaged more than $4 million a year in CUC expenses—power, water, and wastewater.

CUC, however, has a pending petition with the Commonwealth Public Utilities Commission to increase its power charges. The rate hearing is slated next week.

“We’re projecting $2.3 million CUC expenses [this fiscal year]; however, we did not anticipate the current proposed rate increase. If that happens, the only way we can [meet this new obligation] is to control and be mindful of our funding,” Sasamoto said.

“Whatever savings we get [from the rate relief law] will pretty much go to current operation. PSS will make sure that it will stay current on bills like CUC,” he told Saipan Tribune.

He pointed out that the anticipated increase in power charges was not factored in the new budget formulated by the system for the next 12-month period.

The rate relief bill was enacted into law (Public Law 18-19) in September, reducing the water and wastewater charges of public schools by reclassifying PSS from government to commercial. Because of this, PSS water rate was reduced by 98.4 percent from $44.30 to 72 cents per 1,000 to 3,000 gallons. Its wastewater rate was also reduced by 95.6 percent from $68 per 1,000 gallons to $3 for 1,000 to 6,000 gallons.

Sasamoto said that PSS is also taking care of other liabilities and admitted that only “current liabilities” could be taken cared of in the fiscal year 2014 budget.

“Just for the current liabilities, that would eat up our funding for this fiscal year,” he said, adding that PSS—like the government—has to find a balance somehow in its operational budget.

PSS was appropriated $33 million for fiscal year 2014. The bulk of this amount—$28.6 million—is earmarked for personnel cost.

PSS has more than 900 employees funded by the local budget; over 400 of them are classroom teachers.