PSS faces $388K shortfall in personnel

The Public School System expects a shortfall of nearly $400,000 for its personnel costs by the end of this fiscal year in September, on top of a projected $11 million it will owe the Retirement Fund.

The system’s finance officials disclosed this during yesterday’s special board meeting, saying that about $382,000 is projected to be needed to pay for PSS personnel while $6,055 is for Board of Education personnel.

The local government allocated $34.2 million for PSS this fiscal year, including $2 million in Compact Impact funds. Of the amount, $28 million is allocated for personnel, which is $2 million short of the original proposal of $30 million. The same local funding source provided $3 million to pay for schools’ utilities and $3 million for operation.

As of yesterday, $16 million has so far been paid for personnel salaries and there are still 11 pay periods that remain until end of the fiscal year, according to acting finance director Lori Grizzard and financial consultant Ed Tenorio.

Grizzard said PSS allocates over $1 million every pay period for personnel costs. That means PSS will need $12 million more up to Sept. 30.

Meantime, PSS is not anticipating any shortfall in its “all others “account as a result of federal assistance provided by U.S. Department of Education.

As for its utility payments, Saipan Tribune learned that from October 2008 to February 2009, PSS has already paid CUC a total of $1.3 million.

The billings for March 2009 through September would be paid from the remaining balance of the $3 million allocated for utilities.

Tenorio said the CNMI Finance Department has been providing “up-to-date” payments on all PSS obligations, including for personnel.

There are over 900 employees with the school system.

PSS noted a slight decrease in the monthly utility consumption of schools, from the average of nearly $300,000 monthly. Tenorio said for March alone, PSS consumption totaled $224,000. The system, in previous months, has been paying $275,000 monthly.

“We’re now paying utilities below the average amount,” Tenorio said, citing the conservation efforts of individual schools as a “great help.”

PSS earlier disclosed that it projects an unfunded liability of $11 million with the Retirement Fund by the end of fiscal year. As of April, the shortfall was at $3.8 million, which was still based on the 36.77 percent actuarial contribution rate.

Saipan Tribune learned that last fiscal year, PSS accumulated a $7.3 million shortfall on this obligation.

The anticipated amount of the current shortfall may go down due to a recent law that pegged the contribution rate of members from 36 percent to 11 percent.