MVA still waiting for the rest of its 2004 budget

The Department of Finance is still behind by $1.7 million in its budget allotment for the Marianas Visitors Authority for fiscal year 2004, putting on the balance MVA’s upcoming payments to its overseas marketing offices.

MVA chair David Sablan said the entire amount is all committed for and includes funds that the tourism agency needs to pay Ruder Finn Asia, which is the marketing firm selected to represent MVA in China. MVA has entered into a two-year contract with Ruder Finn Asia at a cost of $490,000 per year.

Sablan said that, while MVA is currently up-to-date in its payments to vendors, it is imperative for the agency to receive the budget balance by next month.

“We need to pay the commitment that we have coming up, we must have that money by December. I have been told that the total amount owed MVA on the various earmarked accounts will come to us in December of this year,” he said in an interview.

MVA has a total budget appropriation of $7 million for FY2004. This amount include the $858,000 that MVA had to pass on to the Department of Lands and Natural Resources for the care of Saipan tourist sites, as well as the mandatory 1 percent for the Office of the Public Auditor and the 2 percent budget reserve to help retire the government’s accumulated deficit.

This means that MVA has received only about $4 million of its FY2004 budget.

During the same interview, Sablan reiterated his call for the Legislature to reconsider its plan to cut MVA’s FY2005 budget to $4 million.

Sablan recalled that the tourism agency initially requested a $14-million budget so it could expand to the vast China market. Nevertheless, he said MVA is willing to tighten its belt and settle for $7 million.

“We can probably operate with $7 million, although it’s going to be very tight because of the additional points of origin that we have to cover: China, Hong Kong, Taipei, Manila,” he said.

He added, however, that it would be impossible to conduct any marketing with a $4-million budget. He said advertising in Japan alone costs $2 million, while marketing in Korea needs about $750,000.

“How about our operating expenses? A $4-million budget will give us no choice but to cut down on advertising to take care of payroll,” Sablan said.

Last July, the MVA board of directors approved a budget based on the assumption that the CNMI government would continue operating under a continuing resolution.

Of the $5.957 million identified as available for the agency, MVA allocated $3.72 million for advertising.

Some $625,000 of the $3.72 million will be used for advertising within the islands while the rest will go to promotions in the international markets.

The biggest advertising budget—at $1.78 million — was given to Japan, the primary tourism market of the Northern Mariana Islands. The emerging China/Taiwan market came next with $590,731, followed by Korea with $485,000. The balance will be shared by the United States, Guam, and other markets.

MVA budgeted $1.53 million for personnel expenses. The remaining $709,491 will go to other operational expenses.

In an earlier interview, MVA managing director Vicky I. Benavente said the agency plans to keep its personnel costs down by hiring no replacements for those who have resigned or otherwise left MVA, and by keeping travel expenses to a minimum.

Benavente pointed out that only $63,000 has been appropriated for employees’ travel expenses in FY2005, despite the huge number of international trade shows and marketing events that MVA attends annually.

She said MVA will make do with the limited budget by sending a maximum of two board members and two staff members to off-island trips. “We will also monitor all expenditures of our off-island offices very carefully. We will make sure that we get the maximum amount of return for our investments,” she said.