Commonwealth Utilities Corp. executive director Alan Fletcher said he is pleased with the Supreme Court\u2019s recent decision and reiterated that government agencies must pay their fair share to help avoid problems down the road.<\/p>\n
Earlier last week the Supreme Court made a ruling that CUC can file a lawsuit against the CNMI government.<\/p>\n
\u201cWe are pleased with the Supreme Court ruling and that it supports CUC\u2019s efforts to receive timely payments for utilities from government agencies. We will continue in our current collection efforts as directed by our board,\u201d Fletcher said.<\/p>\n
According to Fletcher, CUC and its board members have tried to find ways to work with the government and were consistent in its willingness to work with agencies on collections.<\/p>\n
Fletcher describes it as a \u201ctwo-way street.\u201d \u201cEfforts must be made to pay current monthly bills and make payment arrangements for payment of arrears, unfortunately, this has not occurred.\u201d<\/p>\n
CUC\u2019s sole source of guaranteed revenue to pay for operations is rate revenue and it remains in a fragile financial state due to government receivables of approximately $28 million.<\/p>\n
Earlier last month, the CNMI central government was issued disconnection notices for not keeping current with CUC.<\/p>\n
On their last board meeting in December, board members spoke of how the government should pay current bills and find payment arrangements in past arrears, so that residents and those keeping current wouldn\u2019t have to subsidize the government\u2019s outstanding account receivables with higher utility bills.<\/p>\n
\u201cAs discussed many times, these arrears require CUC to defer maintenance, delay purchasing inventories, and results in a lack of funds for capital projects,\u201d Fletcher said.<\/p>\n
Fletcher said that in addition to the outstanding debts by the government, CUC projects a $10.7 million reduction in expected revenues due to legislative actions.<\/p>\n
In fiscal year 2015 alone, there is a reduction of $1.7 million in water and sewer due to Public Law 18-99 that reduces the Public School System\u2019s rates, $4 million reduction in general revenues from Public Law 18-71 allowing $5 million credit to PSS and the Commonwealth Healthcare Corp, according to Fletcher.<\/p>\n
\u201cThis represents over 25 percent of CUC\u2019s non-fuel and operations budget and underscores the importance of receiving monthly utility payments in full and in making a real effort to pay back arrears. Also, it highlights the importance of conducting solid technical and economic analysis prior to enacting laws,\u201d Fletcher said.<\/p>\n
\u201cWhile possibly well intentioned, reductions in CUC\u2019s revenues, without considering the operational consequences will lead to trouble. Simply, government agencies must pay their fair [share] to help avoid problems down the road,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"
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