Will relinquishing La Fiesta maintain WASC accreditation?

Approximately two months after Hotel Nikko Saipan sold the La Fiesta property to Cocos Lagoon Development Corporation (CLDC) based in Guam in May 2002, the Northern Marianas College Board of Regents hired Kenneth Wright to be president. At the onset of his presidency, the college was beset with a deficit that was nearly $1 million. As newly appointed president, Wright said that the college would be able to turn things around via the Pacific Gateway project and a reorganization of the college. A projection of nearly 500 foreign students was made that would presumably realize the college revenues in the millions. As it turned out, the Pacific Gateway project was not realistic and the planning for it was not based on credible research. which should have been conducted in the first place.

When Tony Leon Guerrero took over the reigns as NMC president in March 2004, he adjusted the projection established by Wright for the foreign students involved with Pacific Gateway project from 470 to a mere 30. Although the adjusted projection appeared to be realistic and achievable, it should have never been made while the college was not in a very good fiscal disposition and on the brink of losing accreditation with WASC.

Within two months of his presidency, Wright fired 11 staff members and proclaimed that it would pare down the NMC’s deficit to the tune of $588,000. At the end of NMC’s Fiscal Year 2002-2003 which ended on September 30, 2003, it became apparent that what Wright proclaimed NMC would save never happened and the deficit had increased to $1.5 million.

Several months before Wright was hired as NMC president, the La Fiesta Mall manager Hideo Nishigori told the media in February 2002 that the “outlook for the La Fiesta is good”. At that time there were roughly two-dozen businesses in the mall. Approximately two years later in February 2004, the number of businesses occupying the La Fiesta Mall complex had fallen to less than a half dozen. The occupation of businesses currently is minimal at best and the foot traffic for tourists who visit the CNMI and/or the island community residents is at an all time low. The description by some journalists in the island community of the mall being a “white elephant” is indeed very accurate.

In November of 2003, the CNMI Legislature did not approve NMC’s request for more appropriations to help them eradicate a deficit that had increased to an unmanageable level. Consequently, they denied the BOR approximately $1.5 million. With a deficit of $1.5 million, the appropriations reduction placed the college in a precarious position simply because they had no financial resources to remove themselves from the fiscal quagmire they were embedded in. NMC went into their new fiscal year 2003-2004 with some major concerns regarding their unstable financial situation.

Wright told the media in November 2003 that “NMC was out of their financial mess”. His proclamation was clearly not a true reflection of what the real fiscal picture was regarding NMC. When it became evident three months later the revelation the college was in some serious fiscal trouble, the pressure on Wright became intense and he was compelled to submit his resignation to the BOR in February 2004. Shortly thereafter, NMC went into a “fiscal tailspin” which led to the BOR making a decision to shutdown the La Fiesta Mall due to not having the fiscal resources to maintain it and meet the annual lease obligation, which was due at the onset of the new fiscal year in October 2004.

Approximately one year after Wright made the above proclamation to the media; Tony Leon Guerrero told the media on December 13, 2004, that the $1.4 million dollar deficit for the college was cleared. Leon Guerrero’s comment: “We turned around a minus $1.4 million” appears to be a description of the amount of money NMC would have been obligated to put up each year for La Fiesta, i.e., $600,000 in operating expenses and the $200,000 annual lease payment plus interest, but does not reflect the overall institutional deficit that reached nearly $2 million at the end of the college’s fiscal year 2003-2004 which ended on September 30, 2004.

The issue now is the institutional deficit that rose to nearly $2 million and began to accumulate in 2001 prior to Kenneth Wright taking on the leadership reigns of NMC. If this deficit has not been totally eradicated, then cutting loose the fiscal responsibilities for La Fiesta might not be good enough to maintain accreditation. Since the college had virtually no resources at the end of fiscal year 2003-2004 which ended on September 30, 2004, then the only way the deficit could have been eradicated would be if the governor forwarded the funds to the college. If the governor did this without the knowledge or blessing of the CNMI Legislature, then there might be some issues raised.

The WASC team that visited NMC in October 2004 to make an assessment in terms of whether or not the institution should have the warning removed regarding financial instability, as well as whether or not the college was adhering to important and established educational standards. The decision they make will be made public subsequent to their next scheduled meeting sometime in 2005. We will soon find out if WASC believes NMC is fiscally healthy enough to maintain their accreditation standards.

If WASC does not remove the warning, then it will be imperative for NMC to look carefully at how to meet the established criteria for accreditation in a timely fashion. To not do this would take away the prospect of providing the students in the island community an opportunity to pursue a two-year degree, as well as the option to transfer to an accredited college or university for a baccalaureate and/or graduate degree.

If WASC should remove the warning for NMC and allow accreditation to be maintained, then it would be a strong indicator that the college is presumably in fairly good shape fiscally and meeting the criteria expected of accredited institutions of higher education. And if this is the case, then it would be a good time for the leadership of NMC to begin generating a fiscal reserve and work towards maintaining stability so that the future for the students of the island community will not only be bright, but secure as well.

Dr. Jesus D. Camacho
Delano, California