‘CUC’s aging accounts receivable increasing; now $97.8M’

The Commonwealth Utilities Corp.’s aging accounts receivable is progressively increasing and has now reached $97.8 million, according to acting CUC chief financial officer Rodolfo Urbano on Thursday.

In his financial report during a CUC board meeting, Urbano said majority of the aging accounts receivable—at 62%—is from the CNMI’s lone hospital, the Commonwealth Healthcare Corp.

The remaining 38% is shared by the CNMI central government at 12%; residential and commercial customers, 11% each; and the Commonwealth Ports Authority and other government agencies, at 2% each.

CHCC’s last payment for utility billings, covering the period for November 2023, was received on Jan. 17, 2024, Urbano said, who added that the memorandum of understanding that requires CHCC to pay CUC $525,000 a month will soon expire on May 15, 2024.

Acting CUC executive director Betty G. Terlaje acknowledged that CHCC is paying, but just late.

“They’ve just basically moved their due date,” she said.

CUC and CHCC signed the MOU in May 2023 in a bid to resolve the hospital’s unpaid utility bills, which was already in the millions. Under the MOU, CHCC agrees to resume paying its monthly bills, starting with its April 2023 utility bill of about $525,000. CUC will continue to make regular, timely, and continuous payment, like any regular paying utility consumers. If CHCC fails, reneges, or defaults on the MOU, CUC will disconnect utilities of CHCC’s facilities.

The agreement also requires CUC and CHCC to continue ongoing negotiations to settle $53 million in the hospital’s outstanding arrears—overdue electric, water, wastewater, and late fees.

Urbano said everything is up to date regarding CUC’s accounts payable, as every expenditure is budgeted and accounted for.

“Payables are current and vendors are paid on time,” he said.

As for the CUC’s overall financial standing, Urbano said billing revenues and expenditures have been averaging $9 million to $10 million in the past three months.

As for CUC’s budget, Urbano said it’s only the first quarter of the fiscal year so they don’t see any substantial impact. He said actual expenses are within the budget.

As of Dec. 31, 2023, CUC has a cash balance of $56.3 million, broken down into $24.2 million in unrestricted cash and $32.1 million in restricted cash, Urbano said.

The $24.2 million in unrestricted cash is composed of accounts payable, purchase orders and contracts, annual leave, payroll reserve, and reserved for other balance sheet obligations.

The $32.1 million in restricted cash is reserved for engine maintenance, for CUC projects, American Rescue Plan Act projects, and restricted by local and federal laws.