Corp. board to decide fate of housing allowance

Posted on Mar 15 2012

After months of review, Commonwealth Healthcare Corp. board members remain divided on what to do with the housing benefits of hospital staff, according to board chair Jack Torres.

As a result, board members will vote on three options at their next meeting: cut the benefit by 50 percent, suspend the allowance momentarily, or completely eliminate it.

“The issue of housing is still very contentious. There are varied opinions among board members. Some of them want the benefit to be completely eliminated, while some want to keep it despite the shaky financial standing of the corporation. So in our next meeting, members will take a vote on the fate of the housing allowance,” Torres told Saipan Tribune Wednesday. All seven on the board are voting members.

Part of the benefit package provided to off-island hires at the hospital is a $600 monthly housing allowance for single employees and $800 a month for those with families.

In his personal opinion, Torres favors cutting the benefit in half until such time that the corporation recovers from its financial challenges. By doing so, the corporation can generate significant savings while still considering the needs of employees, he said.

The corporation is currently behind in paying this benefit to employees by four months beginning December.

Documents obtained by Saipan Tribune show that the hospital spends about $1.2 million a year for the housing perks of over 200 personnel, most of them nurses hired from the Philippines.

“My position is to keep it for one year until the end of the year but with a reduction of 50 percent. I think that option is reasonable considering the present situation of our hospital. And once we find it suitable enough to bring back the full benefit, the board can always revisit the policy. But for now, without a reduction of this allowance it would not be sustainable,” Torres told Saipan Tribune.

This isn’t the first time the hospital considered dropping this benefit. A number of hospital employees were not given their housing perks in 2009, also because of declining government revenue. A large number of off-island hires left the hospital soon after, prompting the restoration of the perk.

Based on the law, the housing allowance could be suspended or terminated, based on the availability of funds.

In an earlier interview, corporation chief executive officer Juan N. Babauta said he will favor scrapping the benefit if the corporation finds itself incapable of paying for it

“If we get to the point where we cannot provide anymore payment for this kind of benefit that they been having for a long time, we cannot continue it. Times are different and times are really tough now. We cannot continue to provide that kind of commitment as much as we would like to,” said Babauta. “We’re going to set the level of financial commitment on what we can afford and what we cannot afford,” he added.

Besides cutting the benefits of employees, the board will also enforce an emergency workforce reduction in the next two weeks to minimize the huge unfunded operational expenditures of the hospital.

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