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CUC, hospital begin talks on $11.9M utility arrears
Officials and board members of both the Commonwealth Utilities Corp. and the Commonwealth Healthcare Corp. faced each other in a closed-door meeting yesterday, signaling the start of a potential settlement between the two agencies.
CUC earlier sued the healthcare agency for the latter’s utility debt totaling $11.9 million as of March 31 this year. During an April 14 meeting of the CUC board, a decision was made to issue another demand letter to the public hospital and public schools. If the responses are unsatisfactory, CUC plans to file a motion for judgment in court.
Yesterday, CHCC board of trustees vice chair Pete Dela Cruz disclosed in an open session that another meeting with CUC must be scheduled as a follow-up to what was discussed in the closed-door meeting.
“The reason why we’re setting a date is because we have to meet with CUC to come to an agreement of how much CHCC can actually pay,” said Dela Cruz.
He also disclosed that based on CUC board chair David J. Sablan’s comments, the utility agency is amenable to allowing the hospital to arrange a repayment plan that probably would add an extra amount for past arrears—for instance $5,000—on top of the current billing the hospital would pay CUC.
Dela Cruz reminded both interim CEO Esther Muña and interim CFO Cora Ada the importance of providing the board a “credible” cash flow for the organization.
Meantime, trustee Roy Rios pointed out that without the accurate financial records, the board’s goal of developing a “deficit reduction plan” is unachievable.
As of March 31, 2014, CUC’s aging receivables from PSS, CHCC, and the central government totals over $22 million. Of this amount, the bulk is owed by CHCC, at $11.9 million; $6.4 million is owed by the Public School System; and about $3.6 million is uncollected from the central government.
CUC has a huge underpayment in its books, about $7.3 million from October 2012 through December 2013. This is primarily due to the inability of its largest customers to timely pay its bills.
