CUC demands full payment of hospital’s $400K monthly bill

The Commonwealth Healthcare Corp. board of trustees expressed willingness yesterday to settle the Commonwealth Health Center’s outstanding obligations with the Commonwealth Utilities Corp., even if it means paying more than $400,000 each month.
CHCC board chair Joaquin Torres told Saipan Tribune yesterday that the board has already ordered the management to come up with a payment plan based on the agency’s realistic cash flow situation.

CUC board chair David J. Sablan, in an April 23 letter to Torres, indicated that CHCC owes the utilities agency $11.901 million, which represents the principal amount owed for electrical, water, and wastewater services totaling $10.675 million and accrued late charges of $1.226 million. Late charges continue to accrue on the accounts at the rate of 1 percent per month, Sablan said.

“Despite attempts to communicate with CHC and to determine a reasonable payment plan, CHC has not addressed these liabilities,” stated Sablan in his letter to the CHCC board.

It was learned that the hospital’s arrears comprise 52 percent of CUC’s total receivables from government customers. Across all customer groups (residential, commercial, and government accounts) that owe CUC, the hospital’s debt comprises about 43 percent.

As with the case of public schools, which also owe CUC a considerable amount, CUC said it is willing to delay its collection lawsuit against the hospital if a realistic and acceptable payment plan is presented.

“Such a plan would put us on track to improving our service to our customers and CHC. Failure to make such arrangements with us will leave CUC with no alternative but to consider further action including but not limited to, disconnection of services,” according to Sablan.

In an interview yesterday, Torres disclosed that the corporation may tap portion of the $4.58 million loan recently approved by the Marianas Public Land Trust to pay off the hospital’s arrears with CUC. It was learned that disbursement of this line of credit will be based on the need of the hospital, with the approval of the MPLT board.

Torres disclosed that the hospital’s utility billing each month amounts to a little over $400,000, of which only half is being paid due to the agency’s limited cash flow.

“Based on the demand letter from CUC, we have to keep current on our monthly bill. This means CHCC has to come up with over $400,000 every month for our utilities on top of whatever amount we can afford to pay for past arrears,” said Torres.

Torres said a “final meeting” between CUC and CHCC—along with their lawyers—are expected in the first week of May.

Saipan Tribune learned that on April 23, the date the CUC letter was sent to the CHCC board, CUC executives, along with their lawyers, met with the healthcare trustees, appealing for the board’s intervention in the unpaid utility arrears of the hospital.