CUC junks CHC offer of $325K monthly

Negotiations between the Commonwealth Healthcare Corp. and Commonwealth Utilities Corp. on how the public hospital will settle its arrears with the utility agency are at an impasse after CUC rejected outright the offer made by hospital officials.

Officials and representatives of both agencies met yesterday to settle the hospital’s arrears but, after almost two hours in a closed-door meeting at the Commonwealth Health Center, CUC officials felt they had no other option but to reject the healthcare corporation’s offer.

CUC board chair David J. Sablan later told Saipan Tribune that CHCC offered to pay only $325,000 for its monthly utility consumption, which averages about $540,000 a month.

“CHCC presented to us a plan that basically says what they could afford with regards to its cash flow. That plan was not accepted by us. What we wanted from them is to be current in their monthly consumption and give us some ideas how much they can retire from past due accounts,” said Sablan.

The hospital reportedly owes CUC $11 million in past due accounts. This is on top of the corporation’s current monthly consumption of nearly $540,000.

Yesterday’s meeting was the second between both parties after CUC sent the healthcare corporation board an ultimatum on April 23. In that letter, the utility agency expressed willingness to delay asking for a court judgment on the collection lawsuit it filed against the CHCC if a “realistic” payment plan is presented to CUC.

Sablan reiterated yesterday CUC’s strong position on the hospital’s increasing utility obligation.

“Today, we gave them [CHCC] three months to develop a plan to cut down on utility consumption so they can live within their means. Basically, what we told them is: pay your current monthly bill and develop your plan within three months so that your consumption will be reduced from $539,000 to less than what your cash flow could afford,” he said.

Sablan, however, pointed out that in this three-month period, CHCC has to stay current in its monthly billing.

Sablan disclosed that during yesterday’s meeting, CHCC board vice chair Pedro Dela Cruz was both cooperative and supportive in finding an immediate solution to the unpaid CUC obligations.

It was disclosed that Dela Cruz tasked corporation CEO Esther Muña to find ways and means to cut down on power consumption in non-essential services of the agency to a level equal to what it can pay CUC. Some of the ideas recommended is to turn off lights in some buildings and combine some departments to save on power costs.

“That’s the standard business practice. You cannot consume something you aren’t able to pay,” said Sablan, lauding the commitment expressed by Dela Cruz.

In the event CHCC fails to keep current in its monthly billing, Sablan reiterated CUC’s strong position on the issue.

“If they don’t remain current, they will be disconnected. CUC may not turn off the morgue, may not turn off the operating room…but we will turn off everything else. If it means they have to operate with candle lights then so be it,” he said.

Sablan disclosed that CHCC’s old accounts were never discussed in yesterday’s meeting.

“We didn’t address the ‘old accounts’ until their plan [to cut down consumption] is implemented,” he said.

CHCC has in its books some $17 million in receivables, which for both the CHCC board and the CUC board, is an area that could help the financial burden of the healthcare corporation. The CHCC board has been pushing the management to aggressively collect on these receivables.