Commonwealth Utilities Corporation Chief Finance Officer Betty Terlaje, left, Finance Secretary Tracy Norita, right, and Gov. Arnold I. Palacios, 2nd right, look on as CUC Board Chair Janice Tenorio signs a memorandum of agreement pertaining to the central government’s $10.9 million in outstanding utility bills on Friday.
THE Commonwealth Utilities Corporation and the administration signed a memorandum of agreement Friday to “offset” the central government’s unpaid utility bills amounting to $10.9 million.
The MOA signed by Gov. Arnold I. Palacios and CUC Board Chair Janice Tenorio “effectively cleared” most of the outstanding amounts owed by the central government to CUC.
“Eliminating the majority of debt by the CNMI executive branch to CUC, which has accumulated over several years, is an important step in strengthening the Commonwealth’s financial footing,” Palacios said in a statement. “The MOA allows us to continue to move forward as we work to eliminate the burden of past debts,” he added.
Palacios thanked 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.”
Under the MOA, the overdue debt owed by the CNMI central government to CUC for utility services will be offset against the arrears owed by the public utility 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 central government has shouldered CUC’s arrears to OPA, Finance Secretary Tracy Norita said.
Finance estimated that CUC’s public auditor fee arrearage is approximately $18 million. The exact amount is disputed between CUC and Finance, but both agree the balance is at least $10.9 million.
In a statement, Tenorio noted that the MOA was pre-approved and unanimously supported by the CUC board of directors.
“This is a win-win situation,” she added. “Not only does the agreement strengthen both the CNMI government and CUC’s financial positions, but it also enhances our ability to serve the people of the CNMI.”
Tenorio thanked Palacios, Norita and others involved for “bringing this issue to a resolution.”
According to CUC’s previous accounts receivable report, the CNMI central government owed $13 million; the Commonwealth Healthcare Corp, $60.5 million; the Public School System, $224,647.68; the Commonwealth Ports Authority, $2.5 million; and other government agencies, $1.5 million.
