Loan bill for CHC inches forward

Posted on Feb 23 2012

After a lengthy question-and-answer with acting governor Eloy S. Inos and other government officials, the Senate passed last night a substitute version of a House bill seeking an $11.58 million line of credit for CHC but the latest action failed to avert another payless payday today for non-essential hospital employees and continued non-payment to vendors.

“I tried hard to get the line of credit we asked for the corporation to help pay our employees and our vendors, but the Senate decided that they want to use portions of that for other things,” CHC chief executive officer Juan N. Babauta told Saipan Tribune last night.

Despite his misgivings about what he described as a “watered down” bill, Babauta said he respects the legislative process. The bill authorizes the Marianas Public Land Trust to provide up to $11.58 million line of credit to CHC.

The original House bill would have given $10 million “line of credit” for CHC’s bridge capital and operational needs, while $1.58 million is for an electronic health information technology initiative.

The Senate version ended up giving only over $4.99 million for CHC’s operational needs.

That’s because senators wanted to give $3.5 million to the Commonwealth Utilities Corp. for the payment of the Public School System’s outstanding utility bills, another $1.5 million to CUC for the payment of CHC’s outstanding utility bill, and $350,000 each to Rota and Tinian Health Centers.

Inos, after leaving the legislative building, told reporters that he asked senators whether they could lower their original proposal of $2 million each for Rota and Tinian Health Centers out of the proposed loan amount.

Had the acting governor not interceded on CHC’s behalf, the hospital would have ended up with only about $1 million for its operations.

“I cannot even pay all the vendors with $1 million, and what about for payroll?” Babauta said.

[B]Delayed payroll[/B]

Babauta said that based on his understanding, only essential CHC employees or those who are in direct patient care, including doctors and nurses, will get their paychecks today.

The rest, the so-called non-essential employees, will mark their second payless payday in a row today, he added.

CHC spends some $800,000 biweekly or some $1.6 million a month for the payroll of its estimated 600 employees on Saipan, Tinian, and Rota.

Before acting on the substitute bill, senators took turns asking Inos, Babauta, and MPLT chair Pedro Guerrero on the measure’s provisions and their impact on operations.

MPLT’s Guerrero said the trust fund is concerned about CHC’s repayment, but they also weighed the hospital’s critical needs.

Around 6pm, the Senate passed House Bill 17-278, House Draft 2, Senate Substitute by a vote of 8-0. Sen. Luis Crisostimo (Ind-Saipan) is still on medical leave.

Senate President Paul Manglona (Ind-Rota) and Sen. Ralph Torres separately said the $1.58 million for the electronic health information technology initiative will be repaid using federal grants.

Manglona said once that amount is repaid, the $1 million will be used to establish a scholarship revolving fund so that students will be able to get their scholarship checks on time.

Torres, chairman of the Senate Committee on Health, also offered an amendment to use the $583,000 to buy a CT-Scan for CHC.

Senate floor leader Pete Reyes (R-Saipan) voted “yes” with reservation, citing concerns about the bill’s provisions but expressed support to CHC.


Inos said the bill in its current form is a “workable” one that he plans to sign into law once it reaches his desk.

The bill has to go back to the House and as of press time there’s no telling whether the Senate version will be accepted or rejected. The bill was introduced by Rep. Ray Basa (R-Saipan) along with seven House members.

“This is a workable legislation. It addresses many of the urgent issues,” Inos said. “The funding may not be enough but it takes care of the immediate needs like paying vendors, making sure payroll expenditure are paid, CUC and so forth. I think I would urge the House to act on it expeditiously.”

Inos said if the bill reaches his desk on Monday, assuming there’s a House session on Monday, he will sign it into law that day “so we can get MPLT to start the financial transactions to effect the transfer of funds.”

[B]Major changes[/B]

The Senate made several major changes to the House bill.

Among these is removing the governor’s power to appoint CHC’s chief executive officer, and give that power to the board of trustees.

The Senate also changed the board of trustees into a “governing” board instead of an advisory board.

Senators also reduced the number of board members from seven to five.

Under the Senate version of the bill, a Department of Public Health will be re-established.

CHC’s CEO, in consultation with the governor, will transfer units or division not related to hospital functions on Saipan, Tinian and Rota to the Department of Public Health.

Units that will go under DPH include the Division of Public Health, Medicaid, Medical Referral Program, Bureau of Environmental Health, Dental Services and at least 21 federally funded programs such as the Maternal and Child Health Program and Diabetes Prevention and Control Program.

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