45-day extension sought for PSS payment plan for CUC

Board of Education chair Herman T. Guerrero is seeking a 45-day extension to come up with a payment plan for the Public School System’s utility arrears.
The 45-day extension is 30 days more than what the Commonwealth Utilities Corp. has stipulated in its demand letter recently sent to the board.

CUC earlier sued PSS for its outstanding obligations totaling to $7.184 million, which include accrued late charges. In its April 23 letter to the education board, CUC demanded that the system come up with a realistic payment plan within 15 days or else its will be disconnected from the grid.

The education board immediately sent a response to the CUC board on April 25, indicating its willingness to resolve the issue.

“We are working diligently to put together a proposal for your review but would appreciate an extension of 45 days from the transmission of your letter to submit something meaningful. This is because this fiscal year’s finances are still being worked out and because it will take some analysis for future years in order to come up with a proposal that we can commit to for the long term,” stated Guerrero in his April 25 letter to CUC board chair David J. Sablan.

Guerrero also said that, like the CUC board, PSS leaders want to continue to work with CUC in resolving the debt. “We too are of that mindset and look forward to a resolution.”

Guerrero pointed out that PSS strives to put students first and in doing so provide them with the best education possible. In fulfilling this mission, he said PSS is bound to finances that are not of its creation, but those that are allotted to them.

“However, we are committed to working out a resolution which benefits both parties,” added the chairman.

Saipan Tribune learned that both PSS and CUC had been working on a possible settlement but the effort had stalled.

Guerrero disclosed yesterday that one of the reasons why settlement talks were disrupted was the potential budget that PSS may get next fiscal year. It will be recalled that PSS endorsed a $40-million budget for fiscal year 2015. However, Gov. Eloy S. Inos’ submission to the Legislature amounted to only $33 million, which is almost similar to the current budget ceiling for PSS.

Guerrero revealed that the memorandum of understanding signed by both PSS and the central government acknowledging the millions of dollars owed by the government in unremitted maintenance-of-effort allotments to schools was never accepted by CUC.

“CUC didn’t accept that [agreement]. They don’t want us to use the MOU as a means of payment [to our arrears] because cash is not there,” he told Saipan Tribune.

When asked where BOE and PSS will squeeze the money to pay the CUC arrears under its current and next year’s budget, Guerrero admitted that he doesn’t know yet.

“That’s why we asked the [commissioner of education] to look how much we can afford to pay because unlike the CHCC and other agencies, we’re not generating revenues here,” said Guerrero.

When asked whether PSS agrees with the debt amounts presented by CUC, Guerrero said the management is examining the numbers and looking at facts and issues, including the newly enacted law that mandates schools to pay a reduced water and wastewater rates.

CUC’s Sablan earlier said that CUC is willing to delay its collection lawsuit against PSS if a “realistic” payment plan will be presented by the school system. However, failure to make arrangements for payment of this amount within the next 15 days will leave CUC with no alternative but to consider further action, including disconnection of services.