Marianas Public Land Trust assets increased to $68.9 Million as of the end of FY 2005, according a financial audit conducted by Deloitte. Operating revenues derived from interest and dividend income earned on investments increased 10.8% from $6.1M in FY 2004 to $6.8M in FY 2005. MPLT engages the services of professional money managers to manage MPLT’s General and Park Trust funds.

Financial Highlights

• With a beginning principal of $26.9M, MPLT has managed to grow its trust assets substantially to $68.9M as of FY 2005. General Fund trust assets increased to $61.4M while the Park Fund assets increased to $7.5M. This is a total growth of 155.7% over the 23 years the trust has been in operation. Total net assets combined for the two trust funds increased from $63.2M in FY 2004 to $68.4M in FY 2005, a $5.2M overall increase.

MPLT allocates capital gains and losses on its investments to the principal balances for both the General and Park Fund trusts. As such, these gains or losses are not available for distribution and will increase or decrease net assets. However, other income on investments are distributed after reasonable fees are deducted.

MPLT experienced net losses in FYs 2001 and 2002 and capital gains from FYs 2003 to 2005. The losses were attributed mainly to the stock market declines of the investment portfolio. However, from FY 2003 to FY 2005, MPLT recovered its total losses of $6.5M and regained $5.1M.

• Operating revenues increased 10.8% from $6.1M in FY 2004 to $6.8M in FY 2005. The increase in revenue is due to increases in the fair value of investments and interest and dividend income earned on those investments. Operating expenses also increased by $110K or 11.9% over the prior year. Professional fees and consultancy fees make up the bulk of the increase in expenses.

• Since 1998, MPLT has initiated three Economically Targeted Investments (ETI) that aim to provide social benefits to the CNMI while simultaneously providing MPLT a required rate of return. The first two ETI’s created are the Northern Marianas Housing Corporation (NMHC) and Adelantun Publickun Luta Enteramente (APLE) loans. The NMHC loan provides the ability to make longterm
  mortgage financing available to ‘low-income’ applicants and persons of Northern Marianas descent for the construction of housing. The APLE loan is a scholarship loan program for additional educational needs for Rota residents. As of FY 2005, the balance of the NMHC loan amounts to $8.9M out of $10M given. In accordance with P.L 10-29, the distributions which MPLT makes to
  the General Fund are reverted to MPLT for the repayment of interest due on the NMHC loan. These repayments are in the form of transfers and are added on to MPLT’s trust principal. For the APLE loan, it is in default and as such is currently suspended until matters are resolved with MPLT’s Trustees and with the APLE Board of Directors. Outstanding receivables on the APLE loan amount to $143,000.

For the purpose of adding a Visitor/Cultural Center, a Memorial Garden, and making upgrades to the Memorial Park, a loan of $2M was given to the Commonwealth Development Authority to be matched with Capital Improvement Project funding grants. The repayment of this loan will be derived from the future revenues generated by the Park. As of FY 2005, this loan was at $1.8M.

• MPLT engages the services of professional money managers to manage the assets of both the General and Park Fund trusts. Before 1988, the trustees had managed the assets with the investments held in only U.S. Treasury obligations. The trust investments have since been expanded to include assets held in fixed income securities, equities, and ETI’s. For the General Fund trust, the allocation of these securities for 2005 which may change over time because of investment policy decisions, consists of 24% fixed income, 58% equities, and 15% ETIs, with the remaining 3% held in cash & cash equivalents.

According to MPLT, in addition to the asset allocation bases in domestic equity (value and growth) and fixed income, two additional allocation bases, International Equity and Small/Mid Cap Core, were added to the assets under management. This change occurred in order to decrease volatility in the overall investment portfolio and to limit losses in the event of market declines. MPLT has six money managers to administer the trust assets: Sands Capital Management; Great Lakes Advisors; Kayne Anderson Rudnick; J.P. Morgan Asset Management; Metropolitan West Capital Management; and finally Richmond Capital.

• Audit findings are reportable items considered material by the auditors. Findings document situations where established policy, procedures or standards have not been followed. Such deviations may lead to losses for the CNMI or misstatements in its financial reports. Findings, if they remain uncorrected, can ultimately lead to qualifications in the Opinion of the auditors. For FY 2005, there were no reported findings contained in the MPLT audit.

Download/view OPA Executive Summary for MPLT Financial Audit FY 2005

Download/view MPLT Audited Financial Statements FY 2005