Another payless payday looms for PSS; locally funded employees likely to be furloughed

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THE Public School System may not be able to pay its locally funded employees this coming Friday, Education Commissioner Dr. Alfred Ada said.

PSS is now hoping to receive the Federal Emergency Management Agency’s reimbursement and other funds the school system can secure to fund the salaries of 866 locally funded employees, he added.
“If I’m not able to get it, then Wednesday is probably the day that I will make an announcement on whether we are going to furlough employees and [have a] payless payday,” Ada said during the Board of Education’s emergency special meeting conducted via teleconference on Saturday afternoon.
For the next payroll, April 10, Ada said PSS needs $1.9 million — $1.3 million in personnel cost and the 30% that PSS owes its employees for the previous payday. “My prayer right now is to at least meet this payroll and hopefully the CARE Act money will come in real soon,” he added, referring to the federal Coronavirus Aid, Relief, and Economic Security Act.
In an earlier interview, Ada said PSS would furlough employees only if they are assured federal assistance for the affected personnel.
During the BOE meeting on Saturday, PSS interim finance director Kimo Rosario said PSS had only $40,000 in the bank. He added that for a 64-hour work schedule, PSS needs about $16.5 million to cover payroll until Sept. 30, the last day of fiscal year 2020.
In February, in light of the CNMI government’s across-the-board budget cuts amid the global Covid-19 outbreak, the BOE members approved the implementation of a 16-hour work reduction for PSS employees.
With no fund transfers from the central government, PSS human resources director Lucretia Borja told the board on Saturday that “a difficult but necessary decision…has to be made.” If employees are not furloughed, she added, “we will encounter payless paydays.”
She said those who will be furloughed are the 866 locally funded employees while the 232 federally funded employees will continue to work.
She added that the furlough period will be no less than 31 days and not more than one year.
During the public comment portion of the BOE meeting, Marianas High School teacher Jeremy Rother said he supported the plan to furlough PSS employees. “This decision will benefit PSS by helping improve the school system’s finances,” he said. “It will benefit locally funded employees by allowing us to avail ourselves of the Pandemic Underemployment Assistance when it is available.”
Under the PUA, Rother said 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,” he added. “PUA as defined in congressional legislation will be retroactive.”
Rother said he “highly doubts” that PSS “will have the money to pay its employees in full on April 10 and beyond. A disruption in our biweekly paychecks is already occurring due to the school system’s current state of insolvency…. Furlough conditions for PSS employees are here already.”
PSS is expected to receive $12 million from the $2 trillion CARES Act.
PSS federal programs manager Tim Thornburg said the amount for PSS can be used for its operations and payroll.
Rosario, however, noted that if they deduct PSS’ current outstanding obligation of $2.7 million from the $12 million, they would be left with $9.3 million for the rest of the fiscal year or from April 1 to Sept. 30. “It is clearly insufficient to sustain operations,” he added.
But Rosario said implementing furlough is a “win-win” situation for PSS management and employees. “The financial bleeding stops and PSS has an opportunity to pay down its debts while employees collect unemployment benefits. The furloughs will cease payroll expenses,” he added.
Without furloughs, he said PSS “will continue to incur additional payroll debt before it receives the $12 million from the federal government, and that will potentially deplete the entire amount before the end of the fiscal year. “
As for the employees’ insurance, Rosario said PSS, as the employer, has to pay its share. “So PSS still needs to secure funds to pay that expense. But again it is easier for PSS to pay insurance premiums with less expenses while employees are furloughed.”

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