CHC incurs over $500K monthly utility cost

The Commonwealth Healthcare Corp. has disclosed that the public hospital incurs over $500,000 in monthly utilities, of which only half is being paid each month to the Commonwealth Utilities Corp.

Interim corporation CEO Esther Muña told Saipan Tribune, however, that despite the hospital’s growing arrears with CUC, the corporation does not dispute its unpaid obligation, which now stands at over $9 million and growing.

CUC sued the hospital, along with the central government and the Public School System, in early December for arrears totaling $18.8 million. The bulk of the amount, some $9.6 million, is owed by the healthcare corporation, representing unpaid bills with pre-judgment interest.

Muna said the healthcare corporation has been unable to pay the utility agency in full since 2011, citing the hospital’s strained financial resources since becoming a corporation in 2011.

“We’re not disputing the bill. We’re paying CUC but not the amount they desire for us to pay,” Muna told Saipan Tribune.

Since becoming a corporation, CHCC relies heavily on its revenues and collections for its daily operation. This is far from what the health agency used to get when it received operational funding from the local budget to the tune of $37 million every fiscal year.

According to Muña, the hospital is only able to pay CUC $250,000 a month, equivalent to just half of the hospital’s actual monthly bill.

Muña disclosed that the corporation has a priority list of expenditures, and that includes paying little by little the “old accounts” owed its various vendors. Prior to Muña’s assumption as CEO, payables to hospital vendors was at over $5 million.

“By early 2014, some of these old accounts will be paid off and there’s going to be a reduction in monthly payments to these vendors. When we have that reduction, then we will have that money to spare for CUC. But right now, we’re not yet in that position,” said Muña.

She thinks the lawsuit filed against the hospital does “not make sense” since both CUC and CHCC are governmental instrumentalities.

Muña is also counting on the installation of a new energy-efficient air-conditioning system at the Commonwealth Health Center to save on utility costs. This project aims to upgrade the old system at the hospital and will be funded by CIP monies guaranteed by the Office of Insular Affairs.

Once installed, the new system is anticipated to bring down the energy consumption of the entire facility, thus reducing the utility cost for the corporation.

“Right now, our consumption is really high. We even asked CUC to waive the penalty [for us] but to no avail,” said Muña.