Public law prohibits the Commonwealth Utilities Corp. from paying board members for personnel subcommittee meetings\u2014regardless if the payment is characterized as compensation or as an honorarium, says the CNMI Office of the Attorney General.<\/p>\n
The OAG was responding to a request from CUC for an opinion on whether board members could be paid for committee meetings.<\/p>\n
\u201cThe short answer, as you can see, is\u2026no,\u201d CUC counsel James Sirok told board members on Thursday.<\/p>\n
When Saipan Tribune first broke the story in July, the CUC board had outspent by $17,704 its year-to-date budget of $24,925 nine months into the fiscal year.<\/p>\n
The board\u2019s budget for the entire fiscal year is $33,300. As of last Friday, its expenses stood at $49,566.79, according to the latest breakdown of expenses.<\/p>\n
On Friday, four board members\u2014Albert Taitano, Eric San Nicolas, Joe Torres, and Adelina Roberto\u2014returned the checks they got for last week\u2019s meetings to offset the honorariums that they shouldn\u2019t have been paid, after being informed the day prior of the AG\u2019s opinion.<\/p>\n
Between May and July, the board held eight meetings; several of these were committee meetings.<\/p>\n
Since July, they continued to meet. On Friday, they included their personnel committee meeting within their regular monthly board meeting agenda.<\/p>\n
They held a two-day meeting last week, starting Thursday.<\/p>\n
One item discussed last Friday was an \u201cInternal Financial Cost Savings Strategy.\u201d It\u2019s unclear if this includes cost-cuts for the board. That item was deferred.<\/p>\n
Board treasurer Joe Torres on Thursday asked Sirok if an opinion of a previous attorney general \u201csupersedes\u201d another attorney general.<\/p>\n
Sirok said the opinion Torres was referring to was issued in 2002. But the \u201crestriction\u201d to payments\u2014via a public law\u2014was enacted in 2006.<\/p>\n
\u201cThe opinion cannot cover that,\u201d Sirok said. Public law supersedes the previous AG\u2019s opinion.<\/p>\n
\u201cSo the only way that this can change is to amend that law again?\u201d Torres asked. Sirok confirmed this.<\/p>\n
Torres then told board members, \u201cSo let\u2019s work on amending this law\u2026\u201d<\/p>\n
Sirok went on to explain, per the OAG letter, that the Legislature enacted this law because there were abuses going on.<\/p>\n
\u201cThey specifically enacted this to make sure that it was clear that there wouldn\u2019t be compensation for committee meetings,\u201d Sirok said.<\/p>\n
He said government compensation law doesn\u2019t use the term \u201chonorarium,\u201d which CUC board members were paid for.<\/p>\n
Compensation and honorarium are two different things, Sirok said. Board members cannot get honorariums in place of compensation.<\/p>\n
\u201cIn essence, you would be compensating yourself. The honorarium would be compensation,\u201d Sirok further explained.<\/p>\n
The AG\u2019s opinon<\/strong><\/p>\n In their formal opinion, deputy attorney general Lillian Tenorio wrote that part of the longstanding confusion over whether board members may receive payments stems from whether an honorarium is a form of compensation.<\/p>\n \u201cThis issue arises frequently in tax law, where ordinary compensation is a form of income, but an honorarium is a purely voluntary payment and is excluded from income as a gift,\u201d she wrote.<\/p>\n Whether a payment is a gift or compensation depends on the intent of the payor. If a payment is made out of a \u201cdetached and disinterested generosity,\u201d it is a gift. But if a payment is made out of the \u201cincentive of anticipated benefit,\u201d or it is \u201cin return for services rendered,\u201d it is compensation, Tenorio explained.<\/p>\n She said based on the facts, payment to a board member for attendance at a subcommittee meeting is not a gift.<\/p>\n The board members are not a \u201cdisinterested\u201d party; they are the governing body of CUC.<\/p>\n \u201cAny so-called honorarium would be a transfer of CUC\u2019s funds to themselves,\u201d Tenorio wrote.<\/p>\n \u201cLikewise, if a member is paid for attendance at a committee meeting, the payment is made \u2018in return of services rendered,\u2019 and cannot be a gift. Therefore, because an honorarium must be a gift, a payment of board member for attendance at a meeting is not an honorarium.\u201d<\/p>\n In short, the AG concludes that payment for attendance at a committee meeting is compensation, not an honorarium, and is prohibited by law.<\/p>\n Disband personnel committee?<\/strong><\/p>\n The AG states that in requesting their advice, CUC noted that the personnel committee meets frequently to hold administrative hearings, and that the committee believes it should be compensated for spending so much time on personnel matters.<\/p>\n But Tenorio wrote that the personnel committee is not created by statute; it is a creation of the CUC board.<\/p>\n \u201cIf the personnel committee\u2019s procedures are cumbersome and result in members spending significant time on personnel matters, the board of directors should consider issuing new regulations modifying personnel procedures or even shrinking the personnel committee.\u201d<\/p>\n \u201cPerhaps, the board should consider eliminating the personnel committee altogether and transferring its functions to a hearing office within CUC,\u201d Tenorio concludes.<\/p>\n","protected":false},"excerpt":{"rendered":" Public law prohibits the Commonwealth Utilities Corp. from paying board members for personnel subcommittee meetings\u2014regardless…<\/p>\n","protected":false},"author":47,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[900],"tags":[3062,49,3063,86],"class_list":["post-209057","post","type-post","status-publish","format-standard","hentry","category-featured","tag-adelina-roberto","tag-cuc","tag-joe-torres","tag-oag"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/209057","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/47"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=209057"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/209057\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=209057"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=209057"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=209057"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}