There is no guarantee that MPLT will approve the loan, PSS legal counsel Tiberius Mocanu said, adding that there is a constitutional mandate that any agency or institution of the government is not permitted to borrow money to fund its operations and/or pay its employees.
However, he added, MPLT had made exceptions in the past. “It has funded operations of the government through a $15 million loan. The attorney general’s opinion found that the devastation and the financial deficit caused by Typhoon Yutu was extraordinary and that allowed the government to borrow money in order to continue its operations.”
Mocanu also noted that the Commonwealth Healthcare Corp. borrowed money from MPLT to fund payroll among other things.
During the BOE meeting held on Wednesday by videoconference, board member MaryLou Ada said they have to explain to MPLT the unprecedented impact of the Covid-19 pandemic on the Commonwealth.
“The CNMI government is unable to meet its obligations because of the downturn in the economy and there are no other revenues coming into the CNMI,” she said. “So these are extenuating circumstances,” she added as she expressed concern for PSS’ 10,000 students who cannot get “quality education because PSS has no money to operate.” About 92% of PSS’ budget goes to payroll.
The resolution adopted by the BOE on Wednesday stated that PSS will borrow $5 million and not $3.4 million as stated in the board meeting on Tuesday when the loan resolution failed to pass. The vote was 2 in favor and 2 against. Those in favor were BOE members Philip Mendiola-Long and Andrew Orsini while those against were BOE Chairwoman Janice Tenorio and vice chairman Herman Atalig. BOE member MaryLou Ada was absent.
According to the resolution approved on Wednesday, if MPLT approves the loan, PSS will repay it within five business days once it receives $12.6 million from the Coronavirus Aid, Relief, and Economic Security Act or CARES Act.
Ada said she is confident that the MPLT board will approve the loan. “There is nothing frivolous about this. It is about educating 10,000 kids and also providing resources that we need to educate them with 1,067 employees.”
PSS acting finance director Kimo Rosario said PSS owes its locally funded employees a total of $3.4 million. Of this amount:
• $675,000 represents the 30% unpaid salary for pay period 7;
• $1.32 million for the 80-hour pay period 8;
• $1.19 million for the 72-hour pay period 9 (which included the first austerity Friday); and
• $265,573.08 or 16 hours of pay period 10 (two days of work performed before the furloughs that took effect on April 15).
Rosario said there are also other accounts payable and summer pay.
Revisiting the lawsuit
BOE member MaryLou Ada expressed her willingness to negotiate with the central government.
“I read your statement about the injunction and the governor’s willingness to sit down with us,” she told BOE Chairwoman Janice Tenorio. “Then let us meet with the governor to negotiate and try to work out this problem. Let’s start a dialogue with the governor and come up with an amicable solution.”
But she said PSS should still pursue the MPLT loan. “We will work on both avenues because we cannot delay anymore. Whoever comes with the money first, we will take it,” Ada said.
BOE vice chairman Herman Atalig asked BOE members Ada, Philip Mendiola-Long and Andrew Orsini to withdraw the lawsuit they authorized PSS to file against the governor over the PSS budget.
Atalig said the lawsuit is a major obstacle in resolving PSS’s financial issue.
He said when the board voted 3-2 to authorize the lawsuit, the CNMI was already facing a financial crisis. “We are now fighting a war with an invisible enemy, the Covid-19, which is consuming all our resources. We are not the only agency that needs funding.”
Atalig instead of suing the administration the best solution is to work with it. “I’ve observed a series of roadblocks that leads me to believe that [the petition for] injunction is the enemy. Recently, we are standing all alone.”
BOE chairwoman apologizes
For her part, BOE Chairwoman Janice Tenorio said: “I want to apologize to everybody…in regards to my outright, rude response,” referring to her reply to BOE teacher representative Paul Miura’s question during Tuesday’s board meeting.
Miura asked her why she voted no to the MPLT loan resolution. Tenorio said she did not need to explain her vote.
“I had a sleepless night last night,” she said on Wednesday. “I do care for each and every one of the PSS family.”
She thanked BOE member MaryLou Ada for expressing willingness to work with the governor and the central government. “The governor has said that if we are ready, they are ready to sit down with us,” Tenorio said.
At the end of Wednesday’s board meeting Tenorio said the BOE will meet again on Monday to discuss, among other things, revisiting the lawsuit that PSS filed against the governor.
Payroll on Friday
These past few days, Tenorio said she had been negotiating with Gov. Ralph DLG Torres and Lt. Gov. Arnold I. Palacios, and this had resulted in the transfer of $500,000 for PSS, she added.
PSS acting finance director Kimo Rosario said PSS received the amount on Wednesday morning. This coming Friday, he said, PSS will able be able to pay a portion of what it owes its employees.
On Feb. 29, 2020, the Department of Finance informed PSS that it had already received all its fiscal year 2020 local funding allotments from the central government. FY 2020 ends on Sept. 30, 2020.