FEMA approves $9M in ‘hazard mitigation’ grants

The administration of Gov. Ralph DLG Torres announced yesterday federal approval of millions of dollars in grants related to disaster-recovery and resiliency as well as additional funds for the local small business program.

The Office of the Governor, in a statement yesterday, announced that the Federal Emergency Management Agency approved last week four grants under its hazard mitigation program, a total of $9 million for projects that will reduce the islands’ long-term risk and protect lives and property.

In another statement, the governor’s office also said the CNMI would be receiving the second disbursement, about $3.9 million, for the State Small Business Credit Initiative after qualifying for this last February.

On the FEMA grants, funding is expected to increase upon the final determination of the total cost of Typhoon Soudelor’s operations, the governor’s office said.

The available funding requires a non-federal cost share of 10 percent, of which FEMA will pay for 90 percent to the total cost.

Seven projects amounting to over $7.8 million were submitted for FEMA review.

Four projects have currently been approved.

Hazard Mitigation Assistance Specialist of FEMA Region IX, Lorena Willess, officially informed Special Assistant of Management and Budget, Virginia Villagomez, about the approved projects under HMGP last Tuesday.

Villagomez, in the statement, says one of the seven projects includes water system mitigation to harden water wells throughout the island.

This includes installing 12 emergency backup generators at 11 sites throughout the island to power 91 water wells, 11 generator houses, six sites to retrofit overhead electrical lines to underground, 209 concrete poles, and two power transformers.

“Six other projects are currently being reviewed by the administration to ensure its completeness prior to submission to FEMA for review and consideration. The CNMI intends to take a step to increase our resiliency by maximizing all the available funding that will prevent, protect, respond, recover and mitigate incidents that may impact our community,” Villagomez said.

Approved Project No. 1—which is sub-granted to the Office of the Mayor for the Municipality of Rota, will address Rota’s Office on Aging’s storm shutters.

Project No. 2 will be awarded to Rota for the Department of Public Safety’s storm shutter project.

FEMA also approved Project No. 3 for the Kannat Tabla Flood Control and Drainage for Phase 1.

“I heard the plight from the residents of Kannat Tabla about flooding, poor drainage, and road conditions after heavy rains. This is just the first step to alleviate this suffering. I appreciate the collaboration between local and federal officials on this particular project and the funding support from FEMA on the others,” said Gov. Ralph DLG Torres in the statement.

FEMA Region IX Director Colby Stanton said that the approved funding would include preliminary engineering and design work, preliminary environmental studies and consultation, certification and acquisition of any needed rights of way, and development of a Benefit Cost Analysis to demonstrate cost effectiveness.

“If the results of Phase 1 indicate that the project meets the eligibility requirements, the project will be approved for construction funding under a Phase 2 award,” Stanton said, noting that the failure to meet the deliverable of the award may jeopardize federal funds for the entire project.

Phase 1 will address concerns of hydrology and hydraulics, technical feasibility, cost-effectiveness, floodplain/wetland executive orders and compliance with historical and environmental rules and regulations, including engineered construction drawings.

The fourth project to be approved under the HMGP is for state management costs accrued during hazard mitigation for the Office of the Governor.

With a total approval of $9 million in aid from FEMA for the first phases, the CNMI should expect a total of $13 million in Hazard Mitigation Grant projects by the end of year 2016.

Torres expressed the importance of availing to and preparing for hazard mitigation.

“There have been many lessons learned involving typhoon preparedness, and I thank our federal partners for their continued joint efforts in support of the restoration of critical lifeline infrastructure and hazard mitigation,” he added.

The purpose of the HMGP program is to help communities implement hazard mitigation measures following a Presidential major disaster declaration. Hazard mitigation is any action taken to reduce or eliminate long-term risk to people and property from natural hazards. The HMPG is authorized under Section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act.

In February, the CNMI government surpassed the 80 percent threshold in disbursing the first batch of funds under the State Small Business Credit Initiative, qualifying the CNMI for the second tranche.

On Tuesday, the U.S. Department of Treasury notified Department of Commerce Secretary Mark Rabauliman of the approval. “I’m delighted that U.S. Treasury has given the green light for the release of the second tranche. This wouldn’t have been possible without the strong partnership we have with our participating banking institutions, CDA (Commonwealth Development Authority), Department of Finance, and the members of the review committee,” said Rabauliman.

“I encourage our resident entrepreneurs to take advantage of this lending program so that we can continue to grow our small businesses, our economy,” Torres also said.

In a letter, U.S. Treasury stated the Department of Commerce’s request for disbursement of the second one-third of CNMI’s SSBCI Allocation of over $3.9 million.

“Our office will begin processing the disbursement this week and you may anticipate receipt of funds within 5-10 business days,” said USDOT Compliance Manager Danielle Christensen.

Department of Treasury Director Jeffrey Scott noted that the CNMI provided documents substantiating that at least 80 percent of the first disbursement was expended, obligated, or transferred early this year.

“Treasury will promptly undertake the necessary steps to disburse $3,910,287 to the Commonwealth of the Northern Mariana Islands,” he said

The SSBCI began in March 2012 when the U.S. Department of Treasury approved $13.2 million in funding to the CNMI, an initiative born out of President Barack Obama’s Small Business Jobs Act of 2010.

The CNMI Department of Commerce received $4.35 million during the onset of the program, which is the first of three disbursements of the funds. This second disbursement brings the total to over $8.2 million.

The objective of the CNMI’s SSBCI Program is to leverage private lending to increase the amount of credit available to small businesses. The SSBCI provides federal funding to states and territories to strengthen programs that support lending to small businesses and manufacturers.

The CNMI DOC designated the Commonwealth Development Authority as the implementing agency for the CNMI SSBCI Program. The CNMI is currently approved for two programs, which include the Loan Purchase Participation Program (LPPP) designed to assist lenders, and borrowers in financing diversification projects enabling companies to acquire necessary financing that might otherwise be unavailable due to a cash flow shortage.

The LPPP can help shortfalls in cash flow for new or growing businesses with up to 40 percent of the loan amount.

The second program known as the Collateral Support Program (CSP) allows small businesses to acquire necessary financing that might otherwise be unavailable due to collateral shortfall. The CSP supplies pledged cash collateral accounts to lenders to achieve this goal for approved projects. This can help fill shortfalls in collateral required by participating banks with up to 50 percent of the loan amount secured by cash deposit.

The SSBCI is available to eligible entrepreneurs and emphasizes the need for a strong business plan. Passive real estate, business investments, gaming, delinquent federal or state taxes and reimbursement of ownership interests are ineligible for this program.

For more information, contact CDA at 234-6245 or log onto www.developcnmi.com.