The passage of rate relief legislation and the approval of a waiver for penalty and late charges will play pivotal roles in the operation of public schools this new school year, according to Public School System consultant Ed Tenorio.
In his analysis of the new budget for public schools, Tenorio told the Board of Education that, if the rate relief and waiver are approved, the system is projected to incur only $2.2 million in utility cost for the 12-month period this fiscal year 2014, which begins Oct. 1.
That’s $1.8 million that the system expects to save, he said. PSS was billed about $4 million this fiscal year for school water and sewer and the penalties and late charges.
The Commonwealth Utilities Corp. has filed a rate hike petition with the Public Utilities Commission effective October this year. Once approved, this will mean a higher rates for the system.
Based on the 10-month budgetary operation of PSS, total CUC billing was at $3.534 million from October 2012 through July 2013.
According to acting PSS finance director George Palican, shortfall incurred just for this 10-month period is $1.272 million. Schools’ utility consumption for the rest of the fiscal year was only budgeted at $2.2 million—an amount that has already been exhausted.
Of the $3.534 million total CUC billing, Palican disclosed that penalty and late charges alone is $307,609, plus retro-billing for Garapan Elementary School amounting to $15,417 and retro-billing for Saipan Southern High School at $90,167.
“PSS is already 156-percent over-budget for 10 months [on utilities]. I think we will be OK in personnel for the rest of the fiscal year. It’s just the CUC [bill] that we’re concerned about,” said Palican.
PSS was budgeted at $31 million for fiscal year 2013. With four more pay periods to the end of the fiscal year in October, the balance for personnel is $4.241 million while “all others” has a meager $42,575.
Education officials pointed out that PSS faithfully pays a portion of its unpaid obligation to CUC each month.
Saipan Tribune learned that of the $3.5 million 10-month billing, over $2 million has been paid. PSS has “old accounts” with CUC amounting to $4.056 million in fiscal years 2011 and 2012.
CUC officials earlier assured that no public school will be disconnected despite the increasing amounts owed by PSS. However, the same officials were also firm that there is no plan at this time to waive the late charges for schools. CUC regulations require late charges to accrue at the rate of 1 percent per month on all past due balances. The only hope for PSS is to appeal this issue to the Public Utilities Commission, which is the regulating arm for CUC rates.