PSS on CUC suit: No funding to pay utility arrears

Public School System officials reiterated yesterday that the system has no funds to pay the estimated $6 million it owes the Commonwealth Utilities Corp. covering utility arrears from past fiscal years. This was in response to the latest lawsuit filed by CUC against PSS to collect on unpaid arrears.

Derek Sasamoto, PSS finance director, told Saipan Tribune that the system is barely surviving in its current operational needs due to the limited funds earmarked for public schools.

CUC filed last week a collection suit against PSS, the Commonwealth Health Center, and the central government for failing to pay their obligations for years amounting to over $18 million.

Sasamoto, along with Education Commissioner Dr. Rita A. Sablan and Board of Education chair Herman T. Guerrero, disclosed that they have yet to see the formal court document as of yesterday.

“We really need to look in terms of what the lawsuit is asking. In the first place, we don’t control the purse. Even if we want to [pay], the central government controls it. We need to see it and figure out what needs to be done. But as of today, we haven’t been served,” Guerrero told Saipan Tribune.

According to Sasamoto, in order to pay the utility arrears with CUC, PSS needs to be given a big chunk of money for that specific purpose.

“Any cost outside of our budget has an impact [on the operation of schools] because every year we go budget to budget. And anything outside of it is a major obstacle to PSS,” said Sasamoto. “We don’t get a large infusion of cash and we’re not only challenge by a limited budget but the cash flow as well,” he said.

The fiscal year 2014 budget of PSS allocates $2.3 million for utilities. However, Sasamoto said, this may not even be enough to pay the bills of schools during the entire fiscal year. PSS was appropriated $33 million for fiscal year 2014. The bulk of this amount—$28.6 million—is earmarked for personnel cost.

Based on the projection of PSS, it could generate $1.8 million in potential savings this fiscal year after a law was enacted reducing the water and wastewater charges of public schools. PSS used to pay $4 million in utilities a year but, with the rate relief law, the projected consumption for one year is predicted to cost a little over $2 million.

PSS earlier disclosed that this “savings” will go the immediate needs of classrooms and curriculum.

Sasamoto discounted any possibility of redirecting this potential savings to pay in part the arrears with CUC.

“Even with that savings, we still have overcrowded classrooms and limited personnel,” he said, adding that the federal grants PSS receives also have specific purposes.