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CUC, CHCC sign payment agreement, but negotiations will continue, says governor

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The Commonwealth Healthcare Corp. and the Commonwealth Utilities Corp. have signed a payment agreement regarding CHCC’s utility bills, Gov. Ralph DLG Torres said during a media press briefing on Friday morning.

Torres said the hospital’s monthly cost for utilities has been addressed, but negotiations will continue to address the arrears, including the late fees and penalty.

He said he and the attorney general met with the board members of the two autonomous public corporations on Thursday.

“We did come to an agreement to make sure that payments will be made. We have addressed the current monthly payment,” Torres said.

Under the agreement,  the central government will help CHCC pay CUC $219,000 before the 8th of each month.

Of this amount, $150,000 will be remitted by the central government, the governor said.

“The unpaid obligations underscore the importance of continuing to work with the governor and the Legislature. The CHCC needs appropriations. Without it, we continue to operate in an underfunded environment,” CHCC stated on its Facebook page.

The latest agreement, CHCC added, will allow both public corporations to move forward.

“While it is unusual for the sole hospital to be subjected to disconnection and while the agreement does not remove the possibility of disconnections completely, the negotiations concluded have led to assurances of avoiding this unfortunate act, especially during a pandemic,” CHCC stated.

“The CHCC Board of Trustees, the CHCC leadership, management and staff thank the Governor and all involved for this outcome, and most especially…our patients for their understanding and patience as we work through this.”

CUC said CHCC owes about $34 million, but CHCC said this amount includes penalties that have accumulated over the years.

On Tuesday last week, CUC disconnected the hospital from its power grid for six hours.  This forced CHCC to cancel surgeries scheduled from 12 noon to 6 p.m.

CHCC Chief Executive Officer Esther Muna said one of their generators was not working.

Reduced

CUC noted that the new agreement reduces the monthly obligation of CHCC from $250,000 to $219,000.

The payments will be applicable to current CHCC monthly bills, CUC said, adding that the payment in September covers the monthly bill for August.

Under the new agreement, the payment will remain at a minimum of $219,000 per month unless there is an increase in CHCC’s consumption or a rate increase in the fuel adjustment clause or FAC.

CHCC will increase its share of the monthly payment ($69,000) based on its actual consumption and the increased FAC to cover the heightened utility; but in no event will that increased FAC charge exceed $5,000 per month.

CHCC’s payment will decrease along with the FAC; but CHCC’s payment will remain, and be no less than, $60,000 regardless of a decrease in FAC.

“All parties to this agreement agree to faithfully participate in future negotiations to be held within a reasonable time from the execution of this agreement to discuss the arrears amount and any possible amendment to the arrears amount, notwithstanding the amount stated herein,” the agreement stated.

It added that if CHCC misses its $69,000 payment after 30 calendar days, CHC will disconnect CHCC’s utility services pursuant to its regulation under Title 50 of the Northern Mariana Islands Administrative Code.

CHCC has committed to pay using local funds.

Unpaid

The agreement stated that CHCC owed CUC a total of $34,087,471.31 as of Aug. 25, 2020, including a penalty of $10,238,146.53 that had accrued over the course of almost a decade since 2011.

“CHCC’s total arrears amount is subject to further negotiation among all parties in which the parties intend to discuss the total arrears amount and possible amendments to such amount that may result from the negotiations,” the agreement stated.

In a statement, CUC board chair Miranda Manglona said, “The CUC board has an obligation to look out for the services we provide and ensure that we can continue to provide the essential services to the entire CNMI. Many times, CUC is left with no other recourse but to do the necessary.”

Manglona said she was grateful to the CHCC board and the management as well as to Gov. Torres for understanding CUC’s situation and for their commitment to CUC.

The agreement was signed by CUC Executive Director Gary Camacho, CHCC Executive Director Esther L. Muna, Attorney General Edward Manibusan,  Finance Secretary David DLG Atalig and Gov. Torres.

 

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