CUC signs MOA making gov’t current with account

In a significant move toward financial stability, Gov. Arnold I. Palacios last Friday signed a memorandum of agreement with Commonwealth Utilities Corp. board of directors chair Janice Tenorio, effectively clearing most of the outstanding amounts owed by the central government to CUC.

“Eliminating the majority of debt by the Executive Branch to CUC, which has accumulated over several years, is an important step in strengthening the Commonwealth’s financial footing,” said Palacios. “The MOA allows us to continue to move forward as we work to eliminate the burden of past debts.”

“I am thankful to the CUC board, its staff, and all those involved in preparing and executing the agreement, which has also bolstered the CNMI central government’s partnership with CUC,” Palacios added.

The MOA outlines a framework where arrears owed by the CNMI central government to CUC for utility services rendered will be offset against arrears owed by CUC to the Office of the Public Auditor pursuant to 1 CMC § 7831, which provides that government corporations must remit 1% of their operations budget to OPA.

The CNMI Department of Finance has estimated that CUC owes about $18 million in arrears in outstanding public auditor fees. The exact amount is disputed between CUC and Finance, but both agree the balance is at least $10.9 million.

Noting that the MOA agreement was pre-approved and unanimously supported by the CUC Board of Directors last week, Tenorio echoed the governor’s sentiment, emphasizing the positive impact the MOA will have on CUC’s operations.

“This is a win-win situation,” said Tenorio. “Not only does the agreement strengthen both the CNMI government’s and CUC’s financial positions, but it also enhances our ability to serve the people of the CNMI. We are thankful to Gov. Palacios, Finance Secretary Tracy [Norita], and others involved these past few weeks in bringing this issue to a resolution.”

By agreeing to an exchange of payments in the amount of $10.9 million, both CUC and the CNMI central government are greatly reducing their respective arrears.

Among other provisions, the MOA states that “it is the shared goal of the Commonwealth Utilities Corp. board of directors and the Executive Branch of the Commonwealth government to assure delivery of the utility services that underpin the Commonwealth economy and are essential to the quality of life.”

The MOA also indicates that both the CUC board of directors and the Executive Branch of the Commonwealth government have the responsibility to maintain fiscal responsibility and full compliance with the laws of the Commonwealth. (PR)