Govt arrears with CUC now at $27M

Government accounts collectively owe the Commonwealth Utilities Corp. a total of $27.058 million as of Oct. 28, 2014, according to CUC executive director Alan Fletcher.

“These include past arrears and payments that haven’t been collected from government agencies,” Fletcher told CUC board members at their last board meeting.

The central government itself owes a total of $3.607 million, Fletcher said. Of that amount, $3.157 million represents uncollected past arrears.

The Commonwealth Healthcare Corp. has a total balance of $13.484 million, of which $13.042 million is past arrears.

The Public School System has a total balance of $8.266 million, with $8.118 million representing past arrears.

Other government agencies owe a total of $1.7 million, of which $1.025 million is past arrears.

“So far, the government agencies are paying some of the past arrears but in little amounts. They have been keeping up monthly but not everything,” Fletcher said.

Fletcher said that CUC billed government agencies a total of $2.312 million for the month of September but collected only $597,509.75, which is a quarter of what needs to be collected.

In an earlier interview, Fletcher told Saipan Tribune that they are still struggling financially despite the $10 million infusion from Best Sunshine International that was credited to the accounts of residential customers.

“The residential and commercial accounts are keeping up and we have been collecting more, but the government still has more to work on paying back,” Fletcher said.

“We continue to struggle financially due to a struggling economy and with current account receivables of $32 million [$27 million from the government] in unpaid utility bills. CUC has no working capital and no reserves to ride out long periods of non-payment, which results in underfunded operations, such as deferred maintenance, lack of supplies for typhoon readiness, and lack of monies for capital improvements and stipulated order projects,” Fletcher said.

These fiscal and operational limitations combine to pressure CUC’s operational stability and its ability to meet the requirements of the stipulated orders and puts CUC in a fragile financial position.

“These shortfalls create added pressure on operational funding and continue a practice of short-term crisis management to the detriment of consumers and CUC’s ability to meet stipulated order requirements. If we could collect the account receivables quickly, consumers will likely see a decrease in utility bills,” Fletcher said.