‘Make a realistic payment plan in 15 days or schools will be disconnected’

Utility services at public schools on Saipan are being threatened with disconnection if the Public School System fails to come up with a payment plan within the next 15 days.
The Commonwealth Utilities Corp. board of directors made this clear in its latest letter to the Board of Education, while appealing to the board to intervene in the matter.

CUC board chair David J. Sablan, in a letter dated April 24 to BOE chair Herman T. Guerrero, disclosed that the total past due balance owed by PSS is $7.18 million. This balance represents a principal amount owing for electrical, water, and wastewater services in the amount of $6,377,023 and accrued late charges of $807,558.

It was learned that late charges continue to accrue on the accounts at a rate of 1 percent per month.

Sablan stated in his letter that CUC acknowledges that a portion of these arrears that have accrued since Oct. 1, 2013, is disputed. However, Sablan indicated that there is a total of $6.09 million in arrears for utility services CUC rendered to PSS prior to Oct. 1, 2013.

“Our receivable from PSS accounts for 31 percent of the total receivables from our government customers, and approximately 26 percent of all accounts receivables from our customers (residential, commercial, government accounts),” said Sablan, adding that the PSS outstanding receivables has a tremendous negative effect on the agency’s cash flow.

As a result, CUC is unable to take care of its operational requirements, has halted planned maintenance routines, and is unable to keep months of fuel inventory, among others, Sablan said.

He revealed that due to CUC’s cash flow situation, its fuel inventory is only good for days rather than several months as required.

CUC has already filed a lawsuit to collect on PSS’ arrears. Sablan disclosed that initial settlement negotiations have been stalled pending the approval of the fiscal year 2015 budget for PSS.

Sablan disclosed that CUC is willing to delay the collection lawsuit if a “realistic payment plan” will be presented by the school system.

“We would be willing to stipulate to delay our lawsuit, if we can come up with a payment plan that is realistic and acceptable to retire the past due accounts of PSS within a reasonable time. Such a plan would put us on track to improving our services to our customers and PSS,” according to Sablan.

However, “failure to make arrangements for payment of this amount within the next 15 days will leave CCU with no alternative but to consider further action including, but not limited, to disconnection of services.”

In the event of disconnections, the BOE was informed that further fees may also be assessed, including reconnection fees.

Education Commissioner Dr. Rita A. Sablan refused to comment on the issue when asked by Saipan Tribune on Thursday.

CUC executive director Alan Fletcher, however, told Saipan Tribune on Friday that “discussions are ongoing and [those] concerned are working cooperatively toward a resolution.”