SAIPAN — Gov. Arnold Palacios of the Commonwealth of the Northern Mariana Islands on Thursday issued Directive 2023-002, implementing cost-containment measures for the executive branch ahead of the Legislature’s action on the revised fiscal year 2023 budget, which no longer includes American Rescue Plan Act funding.
The governor said, in light of the financial crisis the CNMI government faces, he is directing all departments, offices and activities of the executive branch to implement cost-containment measures, and monitor and report on the effectiveness of their efforts on a monthly basis until further notice.
He also urged the legislative and judicial branches, as well as autonomous agencies, to similarly implement austerity measures, particularly with respect to operations funded in whole or in part by ARPA.
The 72-hour work schedule for executive branch employees will take effect on April 24. Executive branch offices and activities will shut down every other Monday. But government offices must remain open for business from 7:30 a.m. to 4:30 a.m. Tuesday through Friday.
To minimize disruption to public services, the governor directed all government offices under the executive branch to immediately cease the practice of shutting down for lunch during working hours.
He further directed the heads of executive branch departments, agencies and activities to “cross-train and empower [their] staff expeditiously and as needed to ensure that public services are not stopped or delayed simply because one knowledgeable employee is on leave or otherwise unavailable.”
The governor likewise urged department heads to submit alternative plans that will achieve the goal of reducing personnel costs by at least 10%.
These alternative plans, subject to his review, may include:
• Shifting locally funded or ARPA-funded employees to other federally funded accounts where feasible.
• Implementing flexible work schedules, staggered employee times or reassignment of staff as needed, to ensure that government services and hours of operation continue without disruption.
The reduction of hours does not apply to federally funded programs and functions or employees who are funded 100% by other federal funding sources, or whose federally funded salaries are matched with local funds.
The within-grade increases will remain suspended until further notice, the governor said.
His directive instructs department heads to review locally funded vacancies to identify which positions may be temporarily suspended or eliminated, at least until the end of the fiscal year. He said he expects a list of the suspended or eliminated positions to be submitted to his office within 30 days.
The governor’s directive strictly limits the payment of overtime hours to eligible employees involved in law enforcement, fire protection, emergency or health services. It also restricts travel to essential purposes such as those for public health and welfare, public safety, fiscal recovery or critical infrastructure needs of the government.
In addition, the governor directed executive branch heads to identify and terminate all nonessential locally funded office contracts, subscriptions and leases, including vehicle leases, under their control. He instructed them to terminate all nonessential locally funded cellphones and landlines. No new or renewed locally funded office cellphones or landlines may be procured unless advanced approval is obtained from his office, the governor said.
Moreover, he directed executive branch heads to take immediate steps to reduce consumption of utilities by at least 25% a month. Department heads should designate a utility conservation action leader in their respective departments, the governor said.
He directed acting Finance Secretary Tracy Norita to review and, if necessary, terminate or impose spending limits on the government’s vehicle fleet, and instruct all department heads to take immediate actions to reduce fuel consumption.
“Fiscal recovery is one of my administration’s highest priorities, and I ask for the full cooperation of all government employees and appointees to ensure that public resources are used conservatively and efficiently in the delivery of essential services,” Gov. Palacios said.
“We all play an important role in reducing government spending and realigning operations with available resources in order to avoid further, more drastic cuts. Our collective goals are fiscal stability, more efficient government operations and improvements in the delivery and responsiveness of public services as efficiency measures are implemented,” he added.
He said he and Lt. Gov. David Apatang welcome ideas or other actions they can take as a government to reach these goals.
“We appreciate the sacrifices and hard work of all public servants, and we are confident that with everyone’s cooperation, at all levels of government, we will rise to the task of overcoming our fiscal challenges and getting our commonwealth on track to stability and recovery,” the governor said.
According to the governor’s directive, the proposed budgetary changes are primarily a result of American Rescue Plan Act and Community Disaster Loan funds no longer being available to sustain government operations and services.
“Funds awarded to the commonwealth were supposed to cover the majority of government operational costs and 20% of personnel costs for nearly all government employees. The CDL funds were supposed to cover the CNMI’s local match for Medicaid and the 25% portion of retiree pension,” the governor said.
“Both ARPA and CDL funds were overspent and overcommitted by the previous administration, and the proposed revised budget removes both as sources of funding. We must now rely almost entirely on local revenues to keep the government functioning for the rest of the fiscal year,” which ends Sept. 30.
