This figure is $10 million larger than last year’s deficit.
If this trend continues, CUC’s deficit will reach $95.6 million by the end of the current fiscal year on Sept. 30.
According to the documents, which are now being reviewed by lawmakers, the continued decline in CUC’s revenue was attributed to the losses it incurred in fiscal years 2004, 2005 and 2006 due to the rising price of fuel.
Records also showed that CUC’s spending on maintenance and supplies in FYs 2006 and 2007 dropped sharply.
In FYs 2004 and 2005, CUC’s maintenance costs were approximately $5 million.
In 2006 this dropped to $3.8 million; in 2007, it amounted to $3.3 million.
The documents indicated that the losses in FY 2007 would have been much higher if the power rates were not increased.
CUC’s financial trouble is also attributed to its $45.5 million debt to the Commonwealth Development Authority.
Documents showed that although the loan was “forgiven” in 2006, the current maturities of CUC’s long-term debt remains fairly constant at about $62 million.
If it had been written off, CUC would still have a negative net worth of $170 million.
The debt was “forgiven” by the enactment of Public Law 15-12 in June 2006.
The measure converted the $45.5 million debt to CUC preferred stocks now owned by CDA.
