This is according to a report presented by MPLT board investment consultant Bruce I. McMillan during the May 20 board meeting on Capital Hill.
McMillan told the trustees that revenues were up as of April 30.
“Trend is still strong as far as revenues. We have year-to-date revenues of $1.7 million. The original budget, based on the asset allocation, was $1.6 million,” said McMillan.
He reported that MPLT’s year- to-date budget is $2.8 million and the agency is ahead of the curve “whether we could meet this $2.8 million. We are seeing better revenues.”
He also said the agency spent $90,000 on money management fees for seven months. The agency’s budget, he said, was $156,000.
He said the fees should be well under budget and MPLT had a cushion in this area.
Based on the agency’s records, $44,000 was spent for professional fees for six months, and not seven months. McMillan said the increase was due to the foreclosures and the APLE 501.
As for salaries and benefits, McMillan said the agency was right on target while he reported no change to contractual fees that are fixed fees.
McMillan reported, “The market has been fairly good, value wise.”
This could be gleaned from the performances of the money managers based on the reports.
“The value of our investments is up,” said McMillan adding that as the value of investments goes up, professional consultant management fees also go up. “Fees go up proportionately.”
Despite the $3,000 more than what was budgeted for, McMillan said, the agency was not really out of line either.
Moreover, the agency paid $33,000 for Bank of Saipan for loan administration. McMillan said BOS reduced the fee to about 78 basis points—that fee is within budget.
We are controlling costs very well,” he said.
With regard to fiduciary liability insurance where the agency projected a $10,000 premium for every $1 million of coverage, McMillan said MPLT has not implemented this yet and it also has a cushion for this.
With the audit for the last fiscal year completed, the agency was expecting a final billing, McMillan said. “Once that comes through, we are still in line with our budget for the period and year to date.”
For the last seven months, MPLT has incurred $11,000 in expenses, which was way below the $15,000 budgeted for that period and still under the $26,000 budget for FY ’11.
“We are controlling well our administrative costs there.”
Despite the other costs kept at bay, McMillan said utilities were running a lit bit higher than what they expected.
He suggested for the board to make adjustments for the next fiscal year budget.
With five months left before the current fiscal year ends, McMillan anticipates that the agency would be able to stay within the budget for the year.
For office expenses, the agency is also staying below the budget.
McMillan also reported that MPLT had spent $67,000 for money management administration as of April 30. “That is in line with our budget year to date for the seven months. We should be able to stay within our budget—$73,759— for the year also.”
Total operating expenses was $445,000 for the last seven months compared to the $509,000 budgeted for the same period. McMillan said MPLT should still be under its $851,000 budget for the year for operating expenses.
He told the trustees that the net distributable income for the seven months was $1.3 million compared to the budgeted $1.1 million.
MPLT, according to records, is looking at having $1.965 million net income before distribution to the general fund.
The agency is also trying to exceed its expected transfer to the general fund.
MPLT Chairman Alvaro A. Santos, in an earlier interview with Variety, confirmed that the agency would be transferring a little over $1 million to the general fund. He said the final amount hinges on the performance of the market.
McMillan told the trustees that given the good market performance, “We should have a pleasant surprise for them [the administration] when we make the distribution [to the general fund]. It should be well above what they expect from MPLT.”
“Valuation is good as far as overall market goes. As of April 30, the total assets was $67 million,” said McMillan.
