Last part of a two-part series
The Department of Public Lands insists it is doing everything in its powers to fulfill its duties to meet its mandate when the agency was created in February 2006. Those responsibilities include implementing a homestead program, settling land claims, leasing and permitting of idle public lands for commercial use.
This was contained in acting DPL secretary Marianne Concepcion-Teregeyo’s six-page response to the Office of the Public Auditor in its investigation of a public land that is leased to A&M Corp. of Lt. Gov. Arnold I. Palacios. The report kept referring to Lease L9104S. Saipan Tribune archives show that this lease refers to Lot No. 057 E 05 that is leased to Palacios.
OPA, through Public Auditor Michael Pai, said that DPL—previously the Marianas Public Land Corp.—failed to fulfill its duty in handling Lease L9104S like not properly collecting the amount owed by the lessee that already reached an approximate amount of $185,000. Teregeyo, however, said the calculation was from a privileged attorney-client memo date June 8, 2018, while also collecting the rental, holdover, and interest fees.
OPA found that, although DPL’s revised billing—prepared on Aug. 1, 2018—is in compliance with the June 8, 2018, direction of the the Office of the Attorney General, they failed to properly assess and collect the lease rental fees based on the terms of the lease and the amendments, and by not enforcing the timely submission of required documents.
“In addition, DPL did not take into account the date the adjacent parcel was physically utilized or encroached upon by the lessee prior to the second amendment to the lease agreement,” said the OPA report.
Teregeyo said that OPA’s statement that DPL lacks documents in receiving the business gross revenue taxes is not true.
“That is an incorrect statement. All BGRT forms have been submitted under this lease. …No additional rental was due from the lessess as the rental is greater than the 3 percent of the BGRT,” she said in her response.
“Perhaps, it is OPA’s understanding that BGRT is charged automatically. However, the lease reads ‘lessee shall pay to corporation in the manner prescribed herein any surplus resulting from subtracting 3 percent of the gross receipts.’ …Therefore, this should be removed [that] DPL did not fail to collect BGRT. The assumption that DPL did not collect BGRT is wrong,” she added.
Teregeyo said the issue that OPA repeatedly raised in its report is based on the appraisal report, which is the responsibility of the lessee—not DPL. “If the lessee fails to submit the appraisal report on time, DPL charges interest rates for the appraisal rates when the appraisal reports are submitted. Further, if the lease was signed in 1990, then the next appraisal is due on 2000 and 2010.”
She added that the required appraisal report due on December 2000 was submitted in August 2014. “On Feb. 28, 2005, lessee submitted the first appraisal report prepared by MRT Corp. and the report was reviewed by DPL internal appraiser on Aug. 28, 2006, with recommendation to return report to address the internal appraiser’s concerns and recommendations.”
The appraisal company, MRT Corp., however, closed down and could no longer revise its appraisal.
Teregeyo said the current management team at DPL could no longer do anything about the mistakes of its predecessors but they are doing everything in their power to fulfill the duties that were given to them. “DPL is addressing internal controls and measures to tighten internal processes to ensure that DPL protects our beneficiaries, people of Northern Marianas descent.”
“I have held employees accountable for their actions and or inactions, and always impress on director’s meetings, Directive 5 meetings, [and] management meetings the importance of ensuring that DPL bills and collects for usage of public lands.”
The OPA report was called an “Inspection of DPL’s Assessment and Collection Fees for Lease No. L9104S.”