Torres: ARPA will propel CNMI to the 21st century

Finance Secretary David DLG Atalig presented Friday details of how the CNMI government plans to spend over $512 million in American Rescue Plan Act funding it will get—a plan that, according to Gov. Ralph DLG Torres, was developed through a whole-of-government approach to provide the resources for a better Commonwealth.

Officials and representatives of the three branches of the CNMI government came together last Friday at the Hibiscus Hall of the Crowne Plaza (the former Fiesta Resort & Spa Saipan) to see how the administration will divvy up a total of $512,076,165 in ARPA funding—considered the largest one-time cash gift the federal government has ever given the CNMI so far.

Atalig said they are grateful for ARPA because this funding will literally assist the CNMI out of the financial rut and lead the Commonwealth to recover from the COVID-19 pandemic and its ruinous effect on the economy.

“This is a significant amount of funding that will benefit all our branches, autonomous agencies, departments, and this will provide significant direct assistance to the public,” said Atalig in his presentation before officials and members of the Executive Branch, Legislature, and Judiciary, mayors, private sector, and other community leaders.

On the state level, the CNMI will be appropriated $467,245,670; on the municipality levels, Saipan will get $22,803,551; Tinian, $11,334,010; Rota, $8,649,665; and the Northern Islands, $2,043,269, as outlined in ARPA’s Section 602.

For fiscal year 2021, Atalig said they are investing $141,375,304; the amount increases to $340,501,217 for fiscal year 2022.

In his remarks, Torres said the plan will fund repairing the aging water distribution system, fixing decades-old leaks, building new sewer systems, and providing access to water for an unprecedented number of CNMI residents.

Torres said tremendous resources are being placed in the islands’ education system.

He said the critical needs of the Judiciary and Legislature will be met to allow these branches to continue their necessary work for the public.

The governor said they are bringing back employees so they can continue their service to the community across the CNMI.

“And I am happy to announce that with this plan we are restoring within-grade increases to employees to support their professional growth and development,” he said.

Torres said this ARPA funding will propel the CNMI government to the 21st century, with investments in the IT infrastructure of the government, creating simpler and more efficient methods to residents to interact with their government. He said they are going to reduce the deficit incurred due to the response to the pandemic and beef up the medical referral program. The governor said they will be infusing the private sector with resources to support the needs of small businesses, households, nonprofits, and tourism industry.

Finance Secretary David DLG Atalig speaks in front of officials and representatives of the three branches of the CNMI government last Friday at the Hibiscus Hall of the Crowne Plaza (the former Fiesta Resort & Spa Saipan). (FERDIE DE LA TORRE)

“We will build back stronger, and our workforce and small businesses will be at the forefront of the new economy for our islands,” Torres said. …“This plan goes beyond direct spending on these priorities. These resources provide us the opportunity to support critical public services not contained in the spending plan.”

That includes full pension benefits of the CNMI’s retirees and the establishment of 2,000 new homestead lots across Saipan, Tinian, and Rota.

Torres said they will be submitting a revised budget to the Legislature by July 1 that will bring back the government to pre-COVID budget levels.

Torres said this undertaking will require all to join in the process of sharing ideas, seeking new and innovative solutions, and working together to ensure these solutions work for the people of the CNMI. He said this includes the members of the Executive Branch, the Legislature, the Judiciary, the Office of the Attorney General, and the Office of the Public Auditor to ensure the funds are accounted for and their uses supported by needs.

Lt. Gov. Arnold I. Palacios said their intention for the presentation was to give details on how the government will be investing the funds from ARPA in the islands and to provide the people a vision of where the Commonwealth can be following this global pandemic.

“You have heard where we will be placing these resources to bring us to where we want to be, but this is not the end of the discussion. We need to talk, identify needs, and fill the potholes on our road to recovery together,” Palacios said.

Atalig explained what is allowable and not allowable uses of the funds.

On Section 602 (A), Atalig said they have allocated $100 million out of the whole $481 million to respond to the public health emergency with respect to the COVID-19 or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality.

“This will help us get back and invest in our economy, invest in our people, invest in small businesses and nonprofits and aid us through this and get us back on our feet once this funding is gone,” he said.

He said one of the main priorities in looking at how they are going about spending these dollars is to make sure they have good return.

“Our goal is that we invest in industries, invest in businesses so that when these funds run out, we have a sustainable economy to move us forward post-pandemic,” he said.

Atalig said of the $100 million, they are investing $40 million this fiscal year and $60 million in fiscal year 2022.

Of the $100 million allocated, $49 million will be appropriated for tourism, travel, and hospitality; $31 million will be for households; $10 million for small businesses; and $10 million for nonprofits.

With respect to households, Atalig said they have identified $31 million to help residents affected by the pandemic. He said they’re discussing different programs assisting the residents with their utilities.

Atalig also disclosed that they’re talking about the CNMI’s own stimulus program where they are planning to provide every taxpayer $500

On the $49 million for investment, the Finance secretary said this is not specifically for the Marianas Visitors Authority but is also to help the industry rebound, so that in a couple of years from now, the CNMI is built stronger and more resilient.

“We’re looking at investing, giving travel or airline incentives, looking at the ability to service our inter-island travel and build on what we have. We’re also looking at other destinations to come here,” he said.

Atalig said $30 million is allocated for Section 602 (B) that pertains to workers performing essential work during the COVID-19 emergency by providing premium pay to eligible workers or by providing grants to eligible employers that have eligible workers who perform essential work.

He said the breakdown of this is they will spend $6 million for this FY 2021 and $24 million for FY 2022.

Atalig said of the $30 million allocated, $4.5 million will be for private company grants responding to essential COVID-19 work, and $25.5 million for recovery of premium pay for first responders.

Atalig said $250 million is allocated for Section 602 (C ) for the provision of government services to the extent of the reduction in revenue due to the COVID-19 public health emergency.

He said $75 million will be spent in FY 2021 and $175 million in FY 2022.

Of the $250 million, $48,750,000 will be to restore reduced hours and reinstate employees furloughed since March 2021.

Atalig said $93,818,207 will be for the provision of government services, its operations and activities affected by the loss of revenue since March 2021.

He said $13,160,703 will be for the operations and activities of the Judiciary. Atalig said $6,690,891 will be for the operations and activities of the Legislature.

He said $20 million will be for the payment of government utilities from March 2021; $7,638,650 will be for educational institutions across the CNMI from March 2021; $39,720,116 for Medicaid from March 2021; and $20,221,433 for medical care abroad not available in the Commonwealth incurred from March 2021.

Atalig said $101,876,521 is allocated to Section 602 (D) to make necessary investments in water, sewer, or broadband infrastructure.

Of the $101.8 million, $11 million will be used to upgrade communications infrastructure (towers, repeaters, etc.); $22 million to make funding available for the repair of water distributio; $1 million for water catchment systems for the inhabited islands of Pagan, Alamagan, and Agrihan; $10 million to make funding available for an Enterprise Resource Program and Cybersecurity Systems; $37,730,250 to make funding available for the construction of sewer systems; and $20,146,271 for land compensation for expansion of water and wastewater systems. Atalig said $20.3 million will be spent for this FY 2021 and $81.5 million for FY 2022.

On Section 603 b.2 (non-entitlement units of local government) $5.4 million will be appropriated to Saipan, Tinian, and Rota.

On Section 604 COVID-19 Capital Projects Fund, $14,285,714 is allocated to the CNMI. The $14.28 million is for making payments to carry out critical capital projects directly enabling work, education, and health monitoring, including remote options, in response to the public health emergency with respect to COVID-19.

Atalig said the allocation is contingent upon certification of the U.S. Secretary of Treasury. Upon receipt of such certification, he said their recommendation to the Legislature is that the funds will be allocated to the municipalities using the 702 CIP Program annual allocation methodology, of which 75% ($9,089,708) will be allocated to Saipan and the Northern Islands, and 12.5% ($1,514,951) each to the municipalities of Tinian and Rota.

Atalig said, however, they have to pay back Tinian for CIP funds borrowed for the Puerto Rico Dump Closure, amounting to $2,166,105, so Tinian will get a total of $3,681,056.

Atalig said there’s going to be a lot of different reporting requirements from U.S. Treasury.

He said one section of his office is going to handle just ARPA.

As Finance secretary, he needs to submit quarterly reports to the U.S. Treasury on how the CNMI is spending these funds.