CNMI Gov. Arnold Palacios and the Commonwealth Utilities Corporation signed a memorandum of understanding, offsetting CNMI government arrears by $10.9M on Friday.

According to a press release from the CNMI governor’s office, the move “effectively [clears] 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,” said CNMI Governor Arnold I. Palacios. “The MOA allows us to continue to move forward as we work to eliminate the burden of past debts.”

Arrears owed by the CNMI government to CUC will be offset against arrears owed by CUC to the Office of the Public Auditor in fees. The CUC Board of Directors approved the MOA last week.

According to the CNMI Dept. of Finance, CUC owes about $18 million in arrears in outstanding public auditor fees. “The exact amount is disputed between CUC and the Department of Finance, but both agree the balance is at least $10,900,000.00,” the governor’s office stated.

“This is a win/win situation,” said CUC Board Chair Janice Tenorio. “Not only does the agreement strengthen both the CNMI Government’s and CUC’s financial positions, but it also enhances our ability to serve the people of the CNMI. We are thankful to Governor Palacios, Secretary of Finance Tracy, and others involved these past few weeks in bringing this issue to a resolution.”