The mess at CUC

Posted on Aug 11 2016

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In government business the idea of better, faster, and cheaper is translated into concepts of efficiency, organization, and budget. About a week ago, Mr. Ralph Torres, the CEO of government, met with the members of the CUC board to discuss matters about CUC’s affairs and among other things. We knew the meeting took place, but, we heard very little of what he discussed and outcome of this meeting. Like a manager of an enterprise visiting the floor of the assembly line, his presence at CUC tells the story that something important must have triggered the visit. If a summary of discussion was ever published as part of the visit, the general public would have ascertained that the CEO is hooked to making CUC a winner and things are satisfactorily okay. We can all talk and point out what efficiency, organization, and budget in government means, and spending time to detail what they are here would have sent the message to those that play and in charged. As simplified as it is presented here, we can be rest assured that the CEO at the helm of government would grasp what is being said to confront the basic issues at CUC. Let’s assume that Torres’ mission is efficiency, organization, and budget as they apply to the CNMI government and its subdivision.

As ratepayer of CUC’s services and constituency dearly and deeply affected by the CUC sole and sanctioned government corporation, if the CEO failed to address the basic issues of CUC’s going concern, in which the meeting is just the usual pomp and circumstance even if he holds meeting for the next twenty year, that would not have effectual outcomes than a mere “hafa Adai todo moulek.” If every time the CEO lays on the discussion table the concepts of efficiency, organization, and budget, the stakeholders such as the ratepayers would have sounding assurance that something good is being produced that makes this public corporation enterprise the winner that satisfies its going concern. CUC should be a benefit to the people that use its services and the product it provides as a public utility organization.

The integrated relationship of what is efficiency, organization, and budget are not mutually exclusive, they must work in whole and within its limits. Efficiency and budget means the least possible cost, the human resources, and capital resources are all integrated by frugal and effective settings, knowing employment of human resources is key to organization and efficiency. Oversimplified in this presentation, but one could see the integrative aspect of the working of producing winners of outcomes that benefit the general public who depend on the services and product produced by CUC. If the CEO spent his time in discussion outside the realm of efficiency, organization, and budget, the effort to revisit such desire to open doors at CUC is the purpose of taking the bull by the horn. This is not a trial and error, but a need to focus on the basic question so that the ratepayers benefit, and CUC shapes up to be a winner.

The electricity, potable water, and wastewater treatment services and products are for the public good. Human resources is a major factor for the production of these services and products possible. Present and future costs are important. Only if we know what the present human resource capacity and what they do can we tell that CUC is fully and properly manned. In the organization of its human resources, its present numbers and position classifications should trigger that part of cost of service. This data should not just serve the good of and for the bureaucrats in CUC, but must include those ratepayers that follow and monitor the affairs of their public corporation. This part of responsibility rests with and belongs to the human resources department, and access to this department should be liberal enough for any ratepayer to ask and obtain information. Having had some expert knowledge of public utility organization, in general, we should expect that CUC would have specific positions in an organized structure that include these sectional business units within CUC: board of directors, executive director, and deputy executive director, information technology, employee (HR) services, customer service, finance, electric production, waste water treatment, drinking water, operations and maintenance, and engineering. These departmental designations could be in different functional names, but for out purpose a start for this purpose. From this platform, the HR department should competently present in logical and expert manner a “work force” projection of at least the short period up to the next five years and inclusive of projections of a period up to eight years. If done professionally, the projections of full-time and temporary FTE, including possible interns in such programs as the apprenticeship program and training partnership with educational institutions will give clear and expected size of the workforce and when integrated in the capital and operating budget, all these factors would be the subject of the established survival rate for CUC and affordability of rate charge to its ratepayers.

For efficiency and budget, the Finance Department that is headed by a chief financial pfficer (CFO) would be tasked to—like the HR department for the manpower cost—a detail projection of the operating and capital budget for the next five years and inclusive of the period extending up to eight year. Revenues and expenses projections is key to all subsequent budgets needed to be put in logical and professional manner following specific accounting and financial accounting formats and conventions such as FASB, GASB, and Generally Accepted Accounting Practices and Principles. If CUC makes known what is expected in terms of operating revenues, operating expenses, non-operating revenues, and non-operating expenses each projected year, the residual net income or net lost would be known far in advance. But, only when careful assessment and expert review by a competent professional could this be possible. The ratepayers, however, would secure interest in what CUC has observed and plan to execute during the lifespan of the financial projections and overview.

From the financial projections and overview, the operating budget comes into focus in which all the labor, supplies, intra-governmental charges of cost centers are consolidated and allocated to the each revenue departments, other services for cost attributed,other expenses all aggregated to reflect the total expenses for each of the subject years. Cash flow projections should be a part of these projections in addition to capital improvement projects planned for the projection period. The consolidated financial projections would include the electric, wastewater treatment, and drinking water business units.

If all the workforce and financial projections are put together in a format that makes sense to the ratepayers, the tie-in of efficiency, organization and budget should be a common language among stakeholders of CUC.

Dismissing the cuing to trial and error observation should be the first thing to do. Any bureaucrat in charged or any rate payer interested should bring the point of efficiency, organization, and budget when screening CUC for the rate it charges to its ratepayers. If the CEO of this government continues to stick to the same decorum of rhetoric CUC and its bureaucrats, and overseeing board would never deal directly of what is important.

With less precision on what is reality, CUC would never be a winning public enterprise of the CNMI government. This should apply to all other autonomous departments of the CNMI government. When this problem does not creep into the mentality of the CEO, the rippling and chilling effects are all become a domino effect to all the skeletal structure of the government, including the Legislature that decides what public policy is good or not good. It is the hope, that our government does not recycle losers but instead sustain and make winners. The question is whether efficiency, organization, and budget is anywhere present in their radar screen. From here, telling it should at least embarrass the “ID 10T” that doesn’t. This is our government and we hope that one would heed to suggestion.

Francisco R. Agulto
Kanat Tabla

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