CPA to order 5-percent salary hike in ’05

The Commonwealth Ports Authority is planning to implement a 5-percent across the board salary increase among ports authority employees except position holders—the first salary augmentation effort after seven years of freezing all salary increase order in 1996.

The plan is part of the proposed fiscal year 2005 budget, which has yet to be approved by the CPA Board of Directors when it meets during its next board meeting.

When asked for comments, CPA executive director Carlos H. Salas said he is only authorized to release preliminary information on the budget proposal since has yet to be approved by the board.

Based on the proposal, civil service employees would be given a 5 percent salary increase in the next fiscal year; however, the CPA’s contribution rate to the employees’ dental and medical expenses remain at 25 percent.

The CPA’s expenses on salary and wages comprise only 55 percent of the overall operational and maintenance costs across all airports and seaports in the CNMI—a number that Salas said is small compared to other agencies.

Salas said the increase is very minimal, noting that all employees have sacrificed long enough and yet remain dedicated to CPA’s airport and seaport divisions.

Salas said the ports authority’s budget proposal is 2 percent higher than its FY2004 approved budget. The increase was in response to projected growth in its overall income for FY2005.

Among others, the authority projects that, by 2005, CPA would be able to meet its debt service obligations, in addition to 2-percent growth in its revenue due to the implementation of the Passenger Facility Charges, which would begin on Oct. 1, 2004.

The CPA is optimistic that the projected income of $12.8 million for the airport division would materialize by 2005. This is about 2 percent more than the 2004 income projection.

Also, CPA reported that operational and maintenance costs would increase by 6 percent due to high cost of terminal building operations, and the increase in insurance premiums.

“We are asking for a $12.8 million budget for the airport division and $5.7 million for the seaport division. Operational costs are expected to increase also by 6 percent for the airport division or $10.9 million, while seaport operation would increase by only .20 percent or cost would reach only $1.9 million,” said Salas.

Salas said the 5-percent increase will be based on the evaluation of performance of all employees. “Salary increases were withheld for so many years and night deferential would still be deferred even if salary increase efforts are implemented. There would still be no overtime and CPA will still continue the reduced contribution rate of only 25 percent for medical and dental premiums,” Salas explained adding that CPA halted salary increases in 1996 while dental and medical premiums were reduced in 1998.

Also in 2005, CPA would continue restricted travel expenses unless relating to business and security measures; no new car purchases; and no projects funded wholly by CPA. At the same time, only Federal Aviation Administration-Airport Improvement Projects will be allowed.

The austerity measures are part of CPA’s efforts to meet all its obligations alongside with continued efforts to lure more airlines and increase load factor at the airport.

Salas said seaport operations would remain the same by 2005, noting that cargo activities would be at the same level as 2004. Both seaport and airport divisions are expected to meet the 1.25-percent bond indenture obligations.

“These are all…subject to CPA board approval. These are all part of efforts to keep CPA funded at all times to operate all three airports and seaports and provide necessary services to all. We would also provide cushion to meet our debt service and ensure that we will remain cost effective, efficient, and with all safety and security programs in place. We will also continue to be competitive in terms of enplanement rates,” Salas explained.

Salas said that a slow but sure rebound in tourist traffic in the CNMI is anticipated this fiscal year onward to FY2005.