“Due to unavailability of funds prompted by the current economic and financial crises, it is with a heavy heart that I notify all locally funded employees that PSS is unable to make payroll for this upcoming pay period slated for…Friday, April 10, 2020,” Ada said, but added that “as soon as funds are available,” PSS will “immediately pay out the 30% …owed to employees from the last pay period (PP#7) and 100% [to cover] this pay period (PP#8).”
PSS acting finance director Kimo Rosario said the school system needs $1.9 million — $1.3 million for the payroll and the 30% that PSS owes its employees for the previous payday.
PSS, he said, is hoping to receive federal funds, including from the Federal Emergency Management Agency, soon.
No more funds
According to the Department of Finance, PSS has already received all its fiscal year 2020 local funding allotments from the central government. FY 2020 ends on Sept. 30, 2020.
On Feb. 29, 2020, PSS was informed by Finance that the school system had “encumbrances that far exceeded” what PSS was expecting to receive from the central government.
Finance said actual collections as of February totaled $81,433,766. After earmarks and debt service of $35,610,813, the available resource for earmarking was $45,822,964. Of this amount, $11,455,741 or 25% of the total was due to PSS.
“To date, the Department of Finance has transferred a total amount of $10,911,459 to PSS, leaving a remainder of $544,282 of the total 25% of available revenues,” Ada said, quoting a letter from Finance. “However, direct transfers have not represented the totality of…resources from general revenues provided to PSS this fiscal year. As of Feb. 29, 2020, PSS had encumbered approximately $2,379,149 in payments for [Group Health and Life Insurance] and Chapter 2 taxes. Seeking a true figure representing the total amount owed pursuant to the constitutional mandate leaves PSS owing the CNMI government $1,834,867.”
Three of the five elected Board of Education members — Phillip Mendiola-Long, Marylou Ada and Andrew Orsini — have authorized PSS to sue to central government for providing PSS with less than 25% of the general revenues. The CNMI Constitution states that PSS should get 25% of the Commonwealth’s general revenues. The lawsuit cited the slip opinion of the CNMI Supreme Court which stated that some of the government’s “special revenues” are part of the general revenues, and therefore, PSS should also get 25% of those funds. The special revenues included funds allotted for the retirees. Gov. Ralph DLG Torres said because of the lawsuit, the central government, starting on April 15, 2020, can no longer afford to pay 25 percent of the retirees’ benefits. He has asked BOE members Phillip Mendiola-Long, Marylou Ada and Andrew Orsini to drop the lawsuit so retirees can continue receiving 100 percent of their benefits.
In an interview, Francisco M. Sablan Middle School teacher Alex Borja said the PSS central office notified them that a written notice regarding furloughs will be issued next week.
During a recent Board of Education meeting, Commissioner Ada said a furlough was a possibility for PSS’ 866 locally funded employees. The furlough was supported by many teachers who noted that under the federal Pandemic Underemployment Assistance, each furloughed employee will receive more than their PSS pay rate which is based on a 32-hour work period per week. “I believe that furloughs should start as soon as possible,” one of the teachers said. “PUA as defined in congressional legislation will be retroactive.”
Open letter to retirees
For their part, Francisco M. Sablan Middle School teacher Alex Borja and other members of a group called CNMI Educators criticized Governor Torres’s “divisive” comments regarding the BOE-authorized lawsuit “during this time of tremendous hardship — a time [when] we should be coming together as a community.”
The CNMI Educators said they are teachers, maintenance personnel, bus drivers, support staff, special education specialists, teacher aides, counselors, librarians, administrators and key management.
According to their open letter to retirees, the CNMI Educators “are deeply affronted at the false accusations and harmful rhetoric directed toward our three BOE members, Marylou Ada, Andrew Orsini and Phillip Mendiola-Long, who had the courage and integrity to stand up for the over 10,000 students and over 1,000 educators by seeking to uphold the constitutional mandate which was overwhelmingly ratified by the voters of the CNMI in 2015 and recently interpreted in the certified question by the CNMI Supreme Court. The central government has yet to pay its full obligation, and has regularly disseminated false claims that it has.”
The group accused the Torres administration of providing “zero funding” to PSS, and for “claiming that PSS owes the central government which would not be the case in any scenario where the law is being upheld according to the Supreme Court. So, we ask our governor, if the retirees aren’t getting it, and PSS isn’t getting it, then where is it going?”
Education Commissioner Alfred Ada earlier noted that “all local funds right now are being diverted to the Covid-19 [operation]. We understand we are in a crisis.”