But the Fitial administration said despite “obstacles,” the CNMI managed to spend $34 million as of the fourth quarter of the ARRA implementation.
Press Secretary Angel A. Demapan said the local ARRA office, the Department of Finance and the executive branch “have gone through painstaking measures to ensure that all ARRA guidelines and protocols are adhered to in the execution of these projects.”
He said the U.S. Department of Energy in a recent report praised the CNMI for its swift spending and quality assurance protocols.
Sablan, in a statement, said of the $118 million that has been awarded to the CNMI, the office of the governor received the biggest portion: $44.3 million.
An additional $43 million has also been awarded to the CNMI.
The other top five recipients are the Commonwealth Utilities Corp., $8.7 million; the Commonwealth Ports Authority, $5 million; and the Public School System, $3.3 million.
The other ARRA recipients are the Department of Community and Cultural Affairs which got $2.7 million; the Criminal Justice Planning Agency, $2 million; the Department of Public Health, $1.8 million; RJCL Corporation $1.7 million; GPPC Inc., $1.7 million; the Department of Commerce, $1.2 million; Northern Marianas College, $914,493; the Department of Public Safety, $519,048; the government of the Northern Mariana Islands, $292,719; Center of Living Independently, $106,200; Winzler & Kelly, $86,873; Coalition Against Domestic and Sexual Violence, $78,125; Latte Stones Foundation, $47,499; Karidat Social Services, $44,350; and Engineering Solutions Inc., $4,244.
Sablan said the unspent ARRA funds will help the CNMI “weather the current recession and keep people employed for several more years.”
He added, “Just as important, the investments being made with Recovery Act funds — to our telecommunications system, to CUC, to our schools — will be the basis for a stronger economy for many years to come.”
So far, he said, 358 jobs were created or preserved in the CNMI during the implementation of ARRA projects, including about 100 teacher jobs at PSS.
ARRA, Sablan said, was one of the first pieces of legislation he voted for.
He still believes that this kind of stimulus spending is the right policy choice during an economic downturn.
But the slow spending of the economic stimulus funds, Sablan reiterated, could cost the CNMI its annual capital improvement project funding as provided for in the Covenant.
President Obama’s fiscal year 2012 budget submission allows the Interior secretary to take away infrastructure money from any territory that is slow to spend it.
Interior can give the money to another territory ready to put it to use.
Over the last five years, Sablan said, the local CIP spending rate is 32 cents for every $1.
One solution to this slow spending problem is to give CIP money, about $6 million, to PSS this year for the construction of a new junior high school in Koblerville, Sablan said.
This, he added, will solve the overcrowding at Hopwood Junior High School and bring the local CIP spending rate for the year to at least 60 cents per $1.
The obstacle
The administration said the most significant obstacle for the CNMI in executing ARRA funded projects has been the Buy America waiver.
Because it is a remote destination, the CNMI does not have immediate access to the companies and manufacturers in the states, the administration added.
The federal government, the administration said, did not account for these obstacles which have resulted in a long drawn out process to get the CNMI’s waiver requests approved.
To date, the administration said the CNMI government has received waivers for the lighting retrofit project as well as the CUC turbocharger project, each of which took several months to receive final approval.
According to the administration, it is also important for the public to keep in mind that these projects are large scale.
It added that the most crucial issue with these projects is the shipment of materials to the island.
The Buy America waiver issue, the administration said, has accounted for a lot of the expenditure delays related to the ARRA funds.
Until the waivers are secured the project has to wait, thus, drawdowns could not be made, the administration said.
Still working
But the process implemented by the CNMI is working, the administration said. This, it added, is evidenced by the cross-island road project.
“This is a good indication that the funding is being spent. However, expansion and rebuilding of the roads simply cannot be completed in a matter of three to six months,” the administration said.
It added that other projects that are not so easily visible to the public have already been completed, such as the lighting retrofits at the Joeten-Kiyu Public Library, the Commonwealth Health Center, and the legislative building on Capital Hill.
“Air-conditioning retrofits in the Senate chamber and Guma Hustisia are also ongoing with phase II to begin on the island of Tinian. The new CUC turbochargers and PSS Green Energy materials have begun to arrive with work to begin within the next couple of months,” the administration said.
For his part, ARRA communication compliance director Fred Camacho said the local ARRA office continues to work closely with local agencies and federal counterparts to ensure that “it not only expends the funds but does it in a responsible manner displaying the CNMI’s commitment to quality assurance.”
