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CHCC’s unpaid utility bills now $26M, says CUC

THE Commonwealth Healthcare Corp.’s unpaid utility bills had reached $26 million as of Nov. 30, CUC acting chief financial officer Corina Magofna reported to the CUC board.

CHCC pays a minimum of $5,000 or less a month to CUC, she added.

At a board meeting on Wednesday, CUC legal counsel James Sirok said CUC is supposed to collect $400,000 from CHCC every month, but the healthcare corporation was underfunded so CUC agreed to a $300,000 monthly payment.

But CHCC is still not complying, he added.

“The $26 million keeps escalating — it doesn’t go down at all and that’s hurting us. That’s why I’m saying, to use a medical term, that we are ‘hemorrhaging’ because of this issue,” Sirok said.

He said there were several meetings between CUC and CHCC to come up with a new and more realistic payment agreement.

Asked for comment, CHCC Chief Executive Officer Esther Muna said: “Prior to Typhoon Yutu hitting the islands, [CHCC and CUC] were working to reconcile the account as there were discrepancies. No formal agreement was reached, unfortunately, during the discussions. We are, however, ready and willing to go back to the table to come up with an agreement.  Utility costs are a huge part of the overall costs of providing care to the entire CNMI community.  CHCC accounts for utility cost in our annual budget and while a portion is offset by insurance and patient payments, there is the huge uncompensated portion that isn’t.”     

Magofna also reported that the CNMI central government owes CUC $4.8 million while the Commonwealth Ports Authority still owes $17.3 million. CPA made a payment of $4 million on Nov. 30.

Sirok said newspaper reports have depicted the CNMI government as the “culprit” that “owes so much money to CUC.”

However, he added, “in reality the CNMI government is moving along and is working well with CUC in trying to establish what they owe and to pay us what they owe.”

He said $4.8 million is substantially less than what the CNMI central government previously owed CUC.

Sirok added that CUC needs to finalize payment agreements with CPA and the hospital so they can “get back on track.”

For his part, CUC Executive Director Gary Camacho said the CNMI government is assisting CUC with the restoration program.

“The [CNMI government] has provided millions of dollars that we can’t afford,” he said. Funds have been provided by the CNMI government to CUC and other agencies for the post-typhoon repair and restoration of their facilities, he added.

He noted that the Federal Emergency Management Agency will reimburse restoration expenses only after 45 days.

Magofna said CUC’s budget for fiscal year 2019, which started on Oct. 1, is $122 million and they have already spent $12.2 million.

CUC’s revenue projection for November was $9.3 million from the power, water and wastewater divisions, but CUC  generated $6.5 million only due to the damage caused by the typhoon, she added.

A lot of our customers have been affected by the typhoon, she said. “But we have funding to sustain our operation even with the decrease in collections.”

Camacho reported that CUC incurred $6.3 million in post-typhoon expenses, and that the CNMI government has provided $23 million for CUC’s restoration program.

As of reporting, Camacho said FEMA has reimbursed $2.2 million of CUC’s expenses.

He said CUC will need $11 million for materials in the restoration effort and $49 million for labor and the resiliency program which includes the replacement of all wooden power poles with concrete ones.

Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/109663-chcc-s-unpaid-utility-bills-now-26m-says-cuc

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