CPA sees 4% growth in FY 2001 revenues

The Commonwealth Ports Authority is anticipating a modest four percent growth in revenues from its operation of the islands’ air transport facilities for the next fiscal year, reaching some $12.4 million from the Fiscal Year 2000’s $11.9 million.

CPA Board Chair Roman S. Palacios said the agency’s finance experts came up with the draft FY 2001 airport earnings based on the projected passenger and aircraft traffic haul prepared by airline companies and the Marianas Visitors Authority, as well as other historical data.

Mr. Palacios disclosed tourism industry officials and players are expecting growth in visitor arrivals to the Northern Marianas throughout the FY 2001, which is reflected in the projected revenues generated by the ports authority from airport operations.

A report obtained from CPA also revealed anticipated operating expenditures to jump by seven percent to about $9.62 million primarily due to the one-step increase in the monthly salary of a select group of CPA employees.

The CPA Board of Directors in April approved the restoration of the annual five percent increment in the wages of the agency’s employees, after having been frozen for two years due to financial constraints.

The five percent salary adjustment, which is equivalent to one step ahead under the Civil Service Commission rules and regulations, has been in effect beginning April 24, 2000.

However, the agency’s civil service or regular employees may qualify to the increment only after obtaining a satisfactory evaluation from the management.

In an interview, Mr. Palacios pointed out that the wage adjustment does not cover ports authority employees who were hired on a contractual basis.

Implementation of the annual five percent increment was suspended by the CPA Administration and Board of Directors in Fiscal Year 1997 due to declining revenues, aggravated by bloated personnel and operational expenditures.

Assuming that the five percent salary increase will be given to all CPA employees at one time, it would entail more than $109,000 in additional expense to the ports authority.

The draft FY2001 budget report of the ports authority also guarantees that the agency will continue to shoulder 25 percent of the health and medical insurance of all its employees.

Mr. Palacios said cost-cutting measures under the CPA Austerity Plan will remain in effect throughout the FY 2001, with overtime and acquisition of capital expenditures still being curtailed unless it involves safety.

Under the FY2001 proposed budget, CPA has earmarked some $3.2 million for its debt service payment. The agency also expects to exceed the required debt coverage ratio of 125 percent by 87 percent.

In 1999, CPA had been forced to take a painful cut in the wages of its employees, and increase non-aviation fees that include property leases in order to continue with its operations and settle its financial obligation.

Mr. Palacios said the ports authority has taken aggressive steps to intensify its austerity measures, while slashing personnel costs by five to seven percent by reducing work hours from 40 to 32 per week.

A previous review of its personnel disclosed that the agency has accumulated a total of 252 employees with a cumulative annual income of at least $8.5 million. Documents revealed that in 1994, the ports authority had only 167 employees with a combined total income of about $3.6 million.