Faced with a cash flow and reserves problems in the wake of Super Typhoon Yutu’s devastation, the CNMI government and the NMI Settlement Fund have agreed on a payment plan in order for the Commonwealth to pay the remaining $4.8 million balance owed under the $15.1 million Minimum Annual Payment due by the end of this month.
The CNMI government, the NMI Settlement Fund, and Betty Johnson filed before the U.S. District Court for the NMI yesterday an agreement regarding payment of the second quarter Minimum Annual Payment.
Attorney General Edward Manibusan signed the agreement as counsel for the CNMI government. Dean Manglona and Margery S. Bronster signed as counsel for the NMI Settlement Fund and Johnson, respectively.
Under the 2013 settlement agreement in Johnson’s class action, the CNMI government is required to pay the second quarterly MAP in the amount of $15,130,000 on or before March 31, 2019.
MAP may be paid in irregular installments over the course of the fiscal year they are due, but the CNMI must pay at least 15 percent of the annual payment by the end of the first quarter of each fiscal year; 50 percent by the end of the first six months of the fiscal year; 70 percent by the end of the third quarter of the fiscal year; and the balance by the end of the fiscal year.
The parties said the balance on the second quarterly MAP on March 31, 2019, is $4,758,334.
Following Yutu in October 2018, the government has had to fund many emergency projects and the recovery effort with the assistance of the Federal Emergency Management Agency, which has placed a tremendous financial burden on the CNMI government’s cash flow and reserves.
Settlement Fund trustee representative Joyce C.H. Tang and the CNMI government agreed to the payment plan to avoid a breach in the settlement agreement in Johnson’s lawsuit and because of the exceptional circumstances brought by Yutu.
The payment schedule would bring the government current on its MAP weekly payments and require the government to pay the remaining balance of $4.8 million by no later than April 30, 2019.
In a meeting among Gov. Ralph DLG. Torres, Lt. Gov. Arnold I. Palacios, FEMA deputy regional administrator William Roche, Tang, Settlement Fund administrator Lillian Pangelinan, and other representatives of the CNMI government, Roche confirmed that the CNMI government will receive $11 million from the federal government on or before April 30, 2019.
The parties agree that the CNMI government will notify the Settlement Fund when it has received all or portions of the FEMA payment in its bank account.
Upon receiving the FEMA payment, the parties said, the CNMI government shall immediately pay to the Settlement Fund the unpaid portion of the $4.8 million balance, and the amount required to bring the weekly MAP payments current.
For the remaining three weeks of March 2019, the CNMI government will pay the Settlement Fund $700,000 a week, to be applied against the $4.8 million remaining balance.
The $700,000 weekly payments will continue through the third quarter (April 1 to June 30, 2019) for 13 weeks.