CUC threatens to disconnect hospital, streetlights, and more by May 4

Despite claims made by former Gov. Ralph Torres and his ex-secretary of finance David Atalig, Jr. that the Torres administration used federal pandemic funds to pay down the Commonwealth hospital’s utilities debts, that $53 million debt remains, and now the hospital faces disconnection in 14 days.

And so does the Department of Public Works, which operates the streetlights in all three major islands of the Commonwealth.

Acting executive director of the Commonwealth Utilities Commission Dr. Dallas Peavey, Jr. issued separate disconnection notices to the Commonwealth Healthcare Corporation (CHCC) and DPW today. Dr. Peavey copied Gov. Arnold Palacios, Lt. Gov. David Apatang, and officials from the U.S. Department of Justice and U.S. Environmental Protection Agency in his disconnection notices. The federal agencies are keeping tabs on CUC on its progress with regard to a federal consent decree.

“CUC’s records show that CHCC has an accumulated outstanding balance in the amount of $53,686,518.70 over several CHCC accounts as of March 31, 2023,” Dr. Peavey wrote in his disconnection letter to CHCC chief executive officer Esther Muna. “Accordingly, power and water services for the listed delinquent CHCC accounts, enclosed herewith, are now subject to disconnection if payment or settlement is not made within 14 days from the date of this notice.”

“We do have 14 days to respond,” Ms. Muna told Kandit, who confirmed a proposal brokered by the governor, and a good-faith payment made this morning.

“We’re appreciative of Gov. Palacios bringing all the parties to the table on April 18, 2023,” Ms. Muna told Kandit. “At that meeting, we offered to continue the monthly payment of $219,000 agreed back in 2020, which is about what CHCC would be paying if we’re being charged the commercial rate just like other health care providers. With that, we issued the payment of $219,000 this morning but CUC still issued the disconnection notice.”

The disconnection threat is a departure from ex-executive director Gary Camacho, who never once threatened to disconnect ex-Gov. Torres’s personal utilities despite being years and hundreds of thousands of dollars delinquent on his home accounts, without any payment plan.

Mr. Torres received hundreds of millions of dollars in federal discretionary pandemic funds from both the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the American Rescue Plan Act (ARPA), but evidently did not use those funds to pay down the CHCC utilities debt. CHCC was the public agency at the forefront of the Commonwealth’s fight against coronavirus. According to the Palacios administration, Mr. Torres squandered every cent of those pandemic funds, and actually over obligated those funds by more than $80 million.

Dr. Peavey’s letter to Ms. Muna noted CHCC and the Commonwealth government’s previous efforts to pay down its debt to CUC, but that payment agreement was not keeping up with the rising cost of utilities, and the agreement expired in September 2021.

According to the accounts receivable ledger attached to the letter, accounts scheduled for disconnection include the main hospital in Saipan, the Tinian Health Center, and the Rota Health Center, to name only three of 37 meters with delinquent charges. An account named “DPH-HEMO-DIALYSIS EXPANSION” also is included on the list.

CHCC owes CUC $1.33 million for power consumption at the Rota Health Center, and $658,411.12 in penalties. The agency owes another $301,174.69 in power, $15,697.24 in water, and $108,381.44 in penalties for the operation of the Tinian Health Center.

It is the main hospital in Saipan, which provided most of the care for patients during the pandemic, where delinquent charges account for the majority of CHCC’s outstanding balance. According to the ledger by CUC, the hospital owes more than $11.6 million in power, nearly $9 million in water, more than $6.6 million in sewer, and more than $19 million in penalties to CUC. That brings its balance to $46.5 million.

DPW disconnection to affect streetlights, traffic lights

DPW’s debts to CUC pale in comparison to that of CHCC, but will have major safety ramifications, nonetheless, if the disconnection happens.

According to the CUC ledger for DPW’s $1,122,565.86 debt, DPW owes CUC $292,387.52 from its streetlights account, and other sums of money from spread-out accounts from which DPW operates traffic lights and other public infrastructure. The largest meter account for power owed is named “DPW-DEPT OF PUBLIC WORKS,” which owes $496,487.87, according to the ledger.

“After verifying with my staff, I can say that DPW has always promptly processed payment requests with the DOF when the department receives its utility bills from CUC,” Secretary of Public Works Ray Yumul said of the current administration’s commitment to paying bills. The secretary confirmed the broken promises of the previous administration, explaining that the outstanding balance occurred in the last administration: “I believe the issue stems from last fiscal year’s and the ‘promise of ARPA as the source of funds’ to pay CUC. As we now know, those funds have been mismanaged.”

The Governor’s Office could not be reached for comment after hours.

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