Official: Luis Hospital owes GERS more than $1.7 million
Published: July 23, 2012
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ST. CROIX - Financially struggling Luis Hospital has failed to keep current in making mandatory retirement contributions to the V.I. Government Employees Retirement System.
According to information presented to the GERS board this week, the hospital owes more than $1.7 million to the retirement system in employer and employee contributions, interest and late fees - although hospital officials contended in a phone interview Friday that they recently paid off a portion of that amount.
GERS Administrator Austin Nibbs said during a GERS meeting Wednesday night that Luis Hospital owes the retirement system $1,766,722.27, which includes $391,029 for employee retirement system contributions; $1,253,281 for the employer portion of retirement system contributions; and interest and penalties on the past-due amounts.
According to information from GERS, Luis Hospital stopped paying the employer portion of the contribution to the pension system during the pay period that ended Dec. 31.
GERS information also indicates that the hospital then stopped paying the employee portion of the GERS contribution during the pay period that ended Feb. 25.
However, Luis Hospital spokeswoman Xaulanda Simmonds-Emmanuel said Friday that the hospital paid off a portion of the amount it owes the retirement system with two checks issued this month, one for $45,895 and another for $345,629,
"We have paid the employee portion, and we're current on that," Simmonds-Emmanuel said. "The portion that has not been paid is the employer portion."
She suggested that the payment may not have shown up yet in the GERS books because of the reconciliation process.
"When we send a check, there's also a report, with employees' contributions, sent with that check. So there's a reconciliation process. Sometimes that can take a couple of weeks," Simmonds-Emmanuel said. "There may be a lapse in time, while they go through the reconciliation process. But on our end, we're showing the checks have cleared."
The Daily News was unable to confirm that through GERS on Friday night.
Simmonds-Emmanuel said that she could not say how it happened that the hospital got into arrears with paying the retirement system the amount that was being deducted from employee paychecks for that purpose - nor could she say whether employees were informed about the problem.
She contended that the hospital has resolved the issue, and that the employee payments to the retirement system are now current.
"There was a lapse. But we are now current, and we hope to remain current," Simmonds-Emmanuel said.
Simmonds-Emmanuel also acknowledged that the unpaid employer contributions, penalties and interest to the retirement system remain an outstanding issue for the hospital.
Hospital officials are looking for ways to pay that arrearage as well - but it likely will prove to be a challenge.
"We're looking at our cash flow. Things have improved a little bit, so we hope to be able to do something soon," she said. "But it's a 'Rob from Peter to pay Paul' situation until we get out of this."
Luis Hospital officials have long been sounding the alarm about its bleak financial state.
During the last two years, officials have taken a variety of steps to try and improve the hospital's financial situation, while also trying to deal with shrinking General Fund allocations.
Earlier this year, on Feb. 28, the hospital fired more than 80 nursing staff members and reduced the number of beds open and available for patients in an attempt to get finances under control.
Officials have said in recent months that the hospital's financial picture has improved slightly - although it continues to owe millions to its vendors.
Simmonds-Emmanuel said that if a Luis Hospital employee should retire during this time, the hospital would "make every effort" to pay the outstanding amount due to GERS in employer contributions for that individual, "so that the retiring employee is not negatively impacted."
This fiscal year is also the first one in which Luis Hospital has processed its own payroll, which had been done by the Central Government in the past. The government still is doing payroll processing for Schneider Regional Medical Center.
Nibbs said that Schneider Regional is current in its GERS contributions.
However, Luis Hospital is not the only government agency in arrears in its contributions to the retirement system. The V.I. Water and Power Authority also owes outstanding contribution to GERS, officials have said.