300 government workers may get the ax • Move may be necessary if CUC insists on collecting overdue utility bills from the administration

The CNMI government may be forced to lay off at least 300 civil service employees if the Commonwealth Utilities Corporation insisted on collecting unpaid power and water bills from the administration, Finance Secretary Lucy Dlg. Nielsen said.

In a letter to CUC Board Chair Jesus T. Guerrero, Ms. Nielsen also branded as “untrue and incorrect” the amount billed by the utility corporation, noting that the government has religiously paid its tabs until the Asian crisis dampened its revenue-generating capabilities.

Ms. Nielsen argued that the government was only short $500,000 in actual payment for its utilities for Fiscal Year 2000. She reminded CUC that the government currently operates under a continuing resolution and has earmarked $8 million to spend for FY2001 utility payments.

Apparently irked by CUC’s earlier statement criticizing the government’s alleged “poor budgeting, unwise spending or ill-advised choices,” the finance chief said a total of $4.281 million had already been paid to the corporation.

Underscoring the cost-cutting measures imposed by the Tenorio Administration in light of the significant reduction in revenues due to economic slowdown, Ms. Nielsen said CUC’s insistence that the government pay its overdue utility bills would cost hundreds of civil service workers their jobs.

“The alternative would be to lay off approximately 300 employees for one year to save approximately $8,000,000 so that we could pay-off what we owe today,” she told Mr. Guerrero in a strongly-worded letter.

She added the scenario that may be created by CUC’s insistence to collect the government’s unpaid bills would be fewer police officers in the streets, insufficient medical treatment and a possible decline in the quality of education.

“These are difficult choices, which this administration is faced with during this period of hard financial times. We are forced to prioritize our spending,” she said.

The finance chief also lambasted CUC’s apparent failure to recognize the government’s efforts to prioritize payments to the corporation, which was made a month before the agreed time due to threats by Mobil Oil Marianas that it will stop shipment of fuel unless its previous accounts receivable from CUC are settled.

And because CUC’s average monthly collection from private consumers amount to $5 million, the finance department questioned the corporation’s apparent singling out of collectibles from the government for payment to Mobil.

“CUC should not have to rely solely upon the payment made by the government since CUC’s fuel cost is not solely from government utility consumption. CUC’s attempt to make the government responsible for what it owes Mobil is unacceptable,” said Ms. Nielsen.

CUC owes Mobil Oil about $2.9 million and has been spending at least $3.3 million for fuel every month. Due to oil price hikes, CUC paid Mobil 75 percent more for the last two fuel shipments.

Mobil earlier reprimanded CUC and warned that fuel won’t be delivered unless accounts are settled. CUC is $2 million short even before payments to Mobil were made.

CUC also got the blame on its depleting coffers which government officials said was caused by the publicly-owned corporation’s overspending on off-island trips, hiring of nonessential personnel and salary increases.

CUC earlier disclosed disconnection notices have been mailed out to 40 public offices for the government’s failure to settle overdue bills that now stand at $12.3 million.

Almost 52 percent of CUC’s accounts receivable will be coming from the CNMI government whose average monthly utility bills amount to $825,000.

Although payments of about $1.2 million were made later last month, utility workers who read meters in three cycles disclosed that the government has utilized an estimated $2.5 million to $3 million worth of utility services in January.

In Fiscal Year 2000, CUC suffered a major setback, with its operating income falling over $9.5 million. Because of this, the agency was forced to cut maintenance by over $1.1 million, not to mention utility operations, expenditures for supplies and others.