Torres tells CUC: Fix leaks first

Torres

Gov. Ralph DLG Torres reiterated on Tuesday that the Commonwealth Utilities Corp. has “got to fix the leaks first,” or its problem with its unaccounted 70 percent in water distribution losses, before moving forward on a proposed reverse-osmosis system.

“But if there is a whole plan to fix the leaks and then the RO, then my answer is yes,” Torres told Saipan Tribune on Tinian Tuesday.

He was sought for comment on the issue a day after some House lawmakers and members of the CUC board butted heads over the RO proposal, projected to cost $160 million and financed through taking on debt, during a House utilities committee meeting Monday.

Board members cautioned though that this was only a “possible solution” to their problems and pleaded with lawmakers to help them address the central government’s outstanding debt.

Also on Monday, a report from legislative fiscal analyst David Demapan surfaced on CUC’s dire financial status and million-of-dollars in fines they faced from the U.S. Environmental Protection Agency for continued negligence in addressing vacant management positions.

The report, addressed to Rep. Francis Taimano (Ind-Saipan), chair of the House utilities committee, says that CUC’s negative unrestricted cash had not been approved since fired former chief financial officer Matt Yaquinto gave a report to the CUC board signaling CUC’s dire financial status.

“Vendor payments are being ‘delayed’ in order to preserve cash, but eventually CUC will not have money to buy fuel to run the plant 24/7, unless a significant influx of cash comes in soon. Many utilities have an average of 23 weeks of cash on hand at all times. In other words, the rule of thumb for CUC is to have a working capital reserves (unrestricted cash) of $40 million to cover a period of 5.4 months in advance.”

CUC, he said, is also being penalized by the U.S. Coast Guard in the neighborhood of $6.8 million related to “clean up.” Demapan did not elaborate.

Demapan also disclosed that CUC has responded to the earlier May 25 letter from EPA on vacant management positions.

“CUC responded to this letter and sent three candidates that were all rejected for the executive director position,” he said.

“EPA was not happy as none of the candidates were even close to matching the requirements and one didn’t even have a degree,” Demapan added.