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    Thursday, September 19, 2019-2:08:20P.M.

     

     

     

     

     

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NMI to use FEMA funds for Settlement Fund balance

THE CNMI government will use $11 million from the Federal Emergency Management Agency to pay the Settlement Fund and bring the minimum annual payment current, according to a stipulation filed in federal court.

The CNMI government, the Settlement Fund, and the plaintiff class through their respective attorneys submitted a stipulation regarding the minimum annual payment or MAP due on March 31 for the second quarter of FY 2019 under the settlement agreement.

In 2009, retiree Betty Johnson sued the CNMI government for its failure to pay the amounts that it was required by law to remit to the Retirement Fund since 2005.

She said the Fund would run out of money by June 2014 and would no longer be able to pay retirement benefits.

In Sept. 2013, the parties agreed to settle the lawsuit and the U.S. court approved a $779 million consent judgment in case the CNMI government does not meet its obligations to the Settlement Fund.

With the opening of the Saipan casino and the rise in tourist arrivals, the CNMI government was making timely payments to the Settlement Fund and was also voluntarily appropriating funds to pay the retirees’ 25 percent pension cut.

The CNMI government has to pay the second quarterly MAP in the full amount of $15,130,000 by March 31.

The settlement agreement provides that “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 remaining balance on the second quarterly MAP on March 12 is $4,758,334, the stipulation noted.

It stated that following Super Typhoon Yutu the CNMI government has had to fund the numerous emergency projects. This has placed a tremendous financial burden on the CNMI government’s cash flow and reserves.

“In order to avoid a breach of the settlement agreement and because of the exceptional circumstances brought about by Super Typhoon Yutu, the trustee of the Settlement Fund and the CNMI government have agreed to a payment plan that would bring the CNMI government current on its MAP weekly payments and to pay the remaining balance by no later than April 30, 2019,” the stipulation stated.

It added that FEMA Deputy Regional Administrator William Roche confirmed that the CNMI government will receive “cost share adjusted awarded contract payments” from the federal government in the amount of $11 million on or before April 30, 2019.

The parties agreed 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 CNMI government “shall immediately pay the following amounts to the Settlement Fund: (a) the unpaid portion of the remaining balance; and (2) the amount required to bring the weekly MAP payments current.”

Furth, the CNMI government agreed to pay the Settlement Fund the sum of $700,000 each week, and these payments will be applied to the remaining balance for the remaining three weeks in March 2019.

“The $700,000 weekly payments will continue through the third quarter (April 1, 2019 to June 30, 2019) for a period of 13 weeks,” the stipulation added.