Tinian, Rota deputies OK’d to approve promissory notes

A new policy that will empower deputy directors on Tinian and Rota to approve promissory notes was adopted by the Commonwealth Utilities Corp. board yesterday after a majority voted yes to the proposal.

The policy was adopted via a 4-1 vote after a heated argument during the continuation of the CUC board’s special meeting that started Monday, their fifth day of meeting this month.

The policy was proposed by vice chair Eric San Nicolas. In addition to being authorized to approve promissory notes, the policy allows both residential and commercial customers about a year to address their balance and to pay just 10 percent of their previous balance in addition to their current balance.

Checks and balances

Board member David Sablan, who gave the only “no” vote to the new policy, said this will remove all checks and balances.

“This is a terrible, terrible recommendation for a policy. You are removing the check and balance requirements to make sure that there is a second set of eyes that are responsible for the finances of CUC to make sure that we don’t give everything out the door under promissory notes,” Sablan said.

“There are a lot of people that are having difficulties trying to meet their bills. This is a means to help them but what you’re suggesting is basically allowing them to steal from CUC. You are allowing people who are involved in management and operations to solely make a decision on whether a promissory should be entered into. You must have someone in the finance department look that over in order to make sure there is a check and balance,” he added.

Sablan wanted the policy to be first reviewed by chief financial officer Matthew Yaquinto before being voted on.

“I still feel strongly that we should just give it to Matt. I suggest that vice chair San Nicolas withdraw this motion so that Matt can work on it so that we can come up with a very comprehensive recommendation from management on how to address the issuance of promissory notes,” Sablan said prior to the voting procedure.

He also raised the question as to why there is a need to adopt the policy right away.

“Why do we need to change the policy? Has something come up that requires us to review this and make a change?” Sablan asked.

To this question, board member Joe Torres said that the CUC doesn’t have a policy.

However, CUC is currently following what legal counsel James Sirok calls “practice,” not “policy.”

The current “practice” is that promissory notes on all three islands are processed through the Saipan office. Based also on Public Law 15-97, CUC may give residential consumers “up to one year to pay in full any outstanding balance in their accounts.”

San Nicolas, in an interview, said the new policy is “to give the authority to approve those promissory notes to our deputy directors in the municipality of Tinian and Rota because they are the ones who manage those offices and they know the residential customers.”

Board member Albert Taitano echoed the sentiment in the meeting when he said that they are “at the mercy” of whoever’s working on Saipan for customers on Rota to get their promissory notes approved.

Decentralizing

Yaquinto, however, pointed out in the meeting that the policy is “decentralizing” and is “not a good idea.”

After clearing from the board that the policy will allow the deputy directors on Tinian and Rota to make their own decisions on promissory notes, Yaquinto responded, “So then when something goes wrong financially, then I am going to be responsible for it? Without having any say?”

“If I’m not going to have any say in this and this will be up to them, then you’re going to have to change my job description because I’m responsible for all financial activities of CUC and now you’re taking that away from me by letting them approve it without me or my staff knowing about it,” Yaquinto added.

Despite this, and despite Sablan’s urging not to pass it, the board voted to approve the policy, which will be effective starting today.