FHWA: Unspent funds, low expenditure justifies status quo

A recent Federal Highway Administration letter explaining to Delegate Gregorio Kilili C. Sablan (Ind-MP) why the CNMI and American Samoa funding allocations have remained stagnant since 1992 said it is mainly due to unobligated funds and low expenditure rates compared to the other territories.

That’s what Sablan got in response after he and Delegate Aumua Amata C. Radewagen (R-AS) asked FHWA acting administrator Brandye Hendrickson about this in a letter dated Jan. 31, 2018. They had asked why their territories were merely allocated 20 percent each of the Territorial Highway Program funding as managed by FHWA. Guam and the U.S. Virgin Islands each receive the remaining 40 percent of the THP funding. This has been so since 1992.

According to a March 5, 2018, response from Hendrickson, she explained that unobligated balances combined with the low expenditure rate percentages justified the non-allocation of additional funding for each of the two territories.

At the end of fiscal year 2017, the CNMI and American Samoa still had $5.8 million and $8.2 million in unobligated balances, while USVI and Guam had $561,065 and zero respectively, Hendrickson said.

Hendrickson added in the same letter that the CNMI was able to use only 48 percent of its THP funds obligated since fiscal year 2006. American Samoa, Guam, and USVI had expenditure rates of 89 percent, 78 percent, and 69 percent, respectively.

The expenditure rate percentage measures the territories’ ability to spend funding allocated to them. A lower expenditure rate percentage implies that the territory is receiving more than it is spending.

“The amount of unobligated funds in combination with the rate of expenditure provides a reasonable justification for not allocating additional funds each year to the CNMI. Doing so would also unfairly affect the funds available for obligation in Guam and USVI, both with higher obligation and expenditure rates,” Hendrickson wrote Sablan.

Hendrickson further noted that the FHWA is working with the CNMI to “improve its ability to obligate and expend THP funds” and have seen progress.

“If the CNMI continues to improve in the timely use of available funds, we will work with the four territories to review and adjust the allocation formula as necessary, including determining which factors to use and the weight of such factors,” she added.

Sablan writes to Torres

Sablan was then prompted to write Gov. Ralph DLG Torres about this in a March 9, 2018, letter. According to Sablan’s office, the Torres administration has yet to respond to the letter.

Sablan cited the same numbers provided him by the FHWA, including statistics pertaining to the other territories for comparison. These included the unobligated balances as well as the expenditure rates for each territory in regards to the THP funding since fiscal year 2006, with the CNMI currently at the bottom of the list.

The delegate told the governor that, in order to secure more funding for the NMI, it was imperative that the CNMI demonstrate that it is “capable of expending funds that we receive, and are in need of increased funding assistance for the construction and improvement” of the NMI.

“…The Commonwealth’s ability to quickly expend the money it has available could only enhance future funding opportunities in infrastructure investment proposals as those proposed by the Trump administration,” Sablan wrote to Torres.

“I recognize that both the unobligated balance and expenditure rate for the Northern Marianas has improved in recent years. And I appreciate all the hard work and progress that the Department of Public Works has made in getting highway projects off the ground,” said Sablan.