CNMI RETIREES SAY NO TO $40 MILLION LOAN

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By Gemma Q. Casas

SAIPAN, CNMI (Marianas Variety, May 29) – Moew than 100 retirees showed up at a public hearing to voice their opposition to a measure that would require the Commonwealth of the Northern Mariana Islands Retirement Fund to lend US$40 million to the cash-strapped Commonwealth Utilities Corp.

The meeting at Garapan Central Park was conducted by Fund officials to discuss the administration-backed House Bill 15-132, authored by Rep. Crispin M. Ogo, Covenant-Rota.

The debt is proposed to be paid within 20 years with an annual interest rate of 7.5 percent

But many retirees are not convinced CUC will be able to repay the loan, noting that the agency could not pay its debt to the Commonwealth Development Authority.

CDA lent CUC more than $45 million. Over the years, the debt ballooned to more than $100 million due to CUC’s failure to make payments.

The Legislature recently passed a measure to write off CUC’s debt to CDA, and this bill now awaits Gov. Benigno R. Fitial’s signature.

H.B. 15-132 stated that the $40 million loan to the Retirement Fund will be paid through the proceeds of regular collections from CUC’s customers.

At 7.5 percent annual interest on the loan, the governor’s special assistant for management and budget Tony Muna said CUC will pay the Retirement Fund $322,237 a month.

"Total interest earnings over the life of the loan would be $37.4 million, over $3 million in the first 12 months. The Retirement Fund would get paid first from CUC revenues, ahead of employees and Mobil," said Muna.

But many retirees were still not convinced CUC will pay its debt.

"What happens in the event that they don’t pay? Who will pay for my pension?" said Leon Taisakan during the open forum.

Isidoro Cabrera, a retiree who now works as an agricultural consultant for Northern Marianas College, said he is favor of lending CUC money because it will also benefit the whole community which has been suffering from constant power interruption due to Saipan’s unreliable power facilities.

But Cabrera said he does not support the proposal to write off the government’s debt to the Retirement Fund.

Former Sen. Ramon S. Guerrero, who is also a former executive director of CUC, said he does not believe that the utilities agency can pay the Retirement Fund.

"CUC cannot afford to pay $40 million within 20 years," he said.

CUC has "so many liabilities," he added.

Former Speaker Heinz S. Hofschneider said the loan and write-off proposals should be "flat out rejected."

He suggested that the government tap into the resources of the Marianas Public Lands Trust instead.

"It is time to cash in, point them over to MPLT. There’s money there and it’s time to use it. Don’t use the Retirement (Fund). It’s the people’s money," he said.

Retirement Fund Chairman Joseph Reyes asked lawmakers to give them more time to study the consequences of the proposed loan to CUC.

He also urged government employees and retirees to help the board in making a decision.

"I need your help," he said.

Pete Igitol, the president of the association of retired government employees, told the retirees: "We all want to protect our pensions — make up your mind."

May 29, 2006

Marianas Variety: www.mvariety.com

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