During the housing board’s meeting last Thursday, it was reported that the agency was already tied to doing the school project alone for the next three years and may put all other Community Development Block Grant projects on hold.
It had earlier announced, during its board meeting last August, that NMHC will focus solely on the project and will not be able to consider any other proposal until program year 2015 as it is committed to building the school for program years 2010-2012.
But last Thursday, it all took a different turn as the agency was being asked to foot on the bill for the entire construction of the new junior high school which NMHC discovered from PSS would cost about $8 million to build.
NMHC board chairwoman Merced “Marcie” Tomokane said, “I thought in the beginning, we purchased the land and PSS will find the money to build the building. That was my understanding.”
NMHC planner and grant writer Jeannie Mafnas told the NMHC board that projects may be put on hold for up to six years.
She reported that Gov. Fitial is asking the housing agency to look into the Section 108 loan program.
Based on Mafnas’ initial research, she found out that the agency would be able to loan up to five times the amount the CNMI receives as CDBG grant.
Unfortunately, in the last board meeting, Fund administrator Joshua Sasamoto had revealed that NMHC’s CDBG funds had been slashed from $1.3 million to $880,000 due to a decline in population.
He also apprised the board that the agency would still suffer an additional budget cut with the release of the 2010 census.
Based on the existing CDBG grant, Mafnas told the board Thursday that the agency would still be able to loan up to $4.1 million under Section 108 loan program.
If the agency decides to secure a Section 108 loan, it will have to pledge its current and future CDBG funds as payment.
Mafnas said the repayment period is up to 20 years.
For how long the agency would put other projects on hold depends on the construction cost.
Tomokane said Marianas High School’s J Building did not cost that much — around $600,000 — not including collateral and equipment that cost $173,000.
Mafnas said PSS was trying to replicate Chacha Junior High School in Kagman.
Tomokane said the agency would only be able to build the school but not finance collateral equipment.
Mafnas said she doesn’t believe the agency would be able to afford to.
She told the board that they will meet with the PSS leadership on Nov. 10 to discuss the details.
Tomokane also inquired with the staffers about how soon the agency would be able to get started. She was told that according to HUD Office of Community Planning Development director Mark Chandler, work would begin “as soon as possible.”
Mafnas said CDBG regulations state that they have five years to spend the money.
But Tomokane expressed her concern that leaving the land idle for so long would not be a good reflection on the agency.
NMHC used a portion of its CBDG grant it had to spend before Aug. 2 to buy three lots in Koblerville where the new junior high school will be constructed.
NMHC paid $1.17 million for the approximately 60,000 sq. ft. properties.
It was also made known to the board earlier that NMHC was expected to spend $820,363 in the first year for planning, A&E design and administrative costs.
