NMC to implement additional austerity measures; classes to continue as scheduled

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WITH the approval of the Board of Regents, Northern Marianas College will implement another round of austerity measures beginning March 8, 2020.

But NMC Interim President Frankie Eliptico said no classes will be canceled as a result of the new austerity measures. He said the college will work hard to minimize any impact on students so they can continue toward their college degrees and help build the CNMI’s workforce capacity.

During the special board meeting on Friday, Eliptico said the Office of the Governor-Office of Management and Budget informed the college of a 28.3 percent reduction in the budget.

The Northern Marianas College Board of Regents and management meet on Friday.  Photo by Lori Lyn C. Lirio

Similar budget cuts will be applied to all government branches, departments, and agencies in light of the steep drop in the CNMI’s projected revenue in FY 2020 due to the global novel coronavirus outbreak.

NMC received the memorandum from OMB on Feb. 10, Eliptico said, adding that in the college’s case, the reduction represents a cut of more than $1.7 million to NMC’s appropriated budget, which was about $6.1 million.

Under the austerity measures, NMC will implement a reduction of work hours by up to 20 percent or up to 16 hours. This will translate to an up to 20 percent salary decrease for NMC employees. Exempted are employees with salaries of $25,000 or less, 10-month faculty members, and federally funded personnel.

NMC will also restrict any non-federal travel or locally funded travel. “All federally funded programs and travel will continue as planned and as budgeted for,” Eliptico said.

NMC will not entirely eliminate but restrict the hiring of non-federal positions, including critical positions that the college needs to fill.

“These are in alignment with accreditation standards,” Eliptico said.

In addition, NMC will restrict any third and fourth quarter allocations that include funds for supplies and equipment for college programs and departments.

Moreover, the college will continue its conservation efforts to reduce electricity consumption.

“There are already initiatives being implemented from the last austerity measures. We need to do more,” Eliptico said.

He said they have moved some classes from the northern area of the campus, or T pods, to the southern area, or Y area, in the evening so they can entirely shut off the lights at T pods in the evening.

“There’s a whole list that our team has already implemented — we are not waiting until March 8. We are already doing it now,” Eliptico said.

Likewise, NMC will reduce adjunct and overload costs to increase course capacity in summer 2020, fall 2020, and spring 2021, he added.

There will be an analysis of NMC’s organizational chart to implement activities that streamline, combine, and eliminate full-time positions, Eliptico said, adding that the college is also considering requiring a minimum of 10 students per class.

“In some cases, we are running classes with under 10 students who are graduating or anticipate [to graduate] in the following semester,” he added.

To make up for the budget shortfall, Eliptico said the NMC leadership team is considering the following measures:

• Run a summer semester.

• Target a 10 percent increase of full-time students.

• A tuition increase by 5 percent to 10 percent by Fall 2020.

• Fundraising initiatives such as NMC golf tournament, employees ETC donation drive, alumni ETC donation drive.

• Increase Community Development Institute revenue through expanding workforce training activities.

• Contract NMC service, such as Information Technology, to private and public agencies.

• Expand testing services.

Eliptico said the last time NMC raised tuition fees was about four years ago. “Some institutions raise their tuition annually, incrementally, and we should consider a policy such as that,” he added.

This is the second time that NMC will implement austerity measures. The first time was in April 2019, when the central government implemented a 15 percent across-the-board budget cut due to a shortfall in revenue.

NMC implemented, among other initiatives, a reduction of work hours by eight hours or an equivalent of 10 percent salary decrease for employees.

NMC lifted the first austerity measures in Nov. 2019.

The austerity measures that will be implemented in March, Regent Michael Evangelista said on Friday, may be deeper compared to previous ones.

“Why did we get off from the austerity measures…and after three or four months later, we are back to the cuts?” he asked.

Eliptico noted that NMC was the first to implement austerity measures in 2019 and the last to lift them.

He said based on the FY 2020 projection and the budget law enacted in Sept. 2019 or about four months before the novel coronavirus outbreak, NMC would get $6.6 million in addition to $500,000 from CW fees and $1 million from the Saipan casino license fee.

“All those things combined and other factors met our threshold for lifting austerity back in November,” Eliptico said. “However, when we came off austerity, we did indicate that we were cautiously coming out of austerity. It was not a guaranteed thing that we would not go back to austerity.”

With the new funding cuts, NMC will operate on a $4.3 million budget in FY 2020 with additional funds from CW fees and $1 million from the Saipan casino license fee.

NMC acting chief finance officer Shelly Tudela said as of Friday, the Department of Finance had not yet transferred the allocations for December (partial), January, and February.

She said the Department of Finance has so far transferred a total of $1,034,512.97 for FY 2020.

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