‘CPA emergency not permanent’

Gov. Benigno R. Fitial says he plans to end the emergency declaration for the Commonwealth Ports Authority as soon as possible.

Fitial, in a report to the Legislature, said he had no intention to keep CPA permanently under his direct control. Proof of this was his decision to limit the reorganization order to 120 days.

“I…[state] without reservation that it is my intention to take all measures to terminate the emergency declaration as soon as possible and preferably within 30 days,” he said.

The Legislature has rejected Fitial’s executive order placing CPA under the Governor’s Office. But the governor maintains control of the ports authority because he signed a separate order declaring CPA under a state of emergency. The emergency declaration will remain in effect until June 11, 2008—30 days after it was signed.

Because of financial problems, CPA was on the verge of technical default on its airport revenue bond when the governor took over. CPA’s bond consultants had recommended measures to prevent the default, but the board of directors failed to implement them.

The Legislature said the governor could have solved the problem by simply appointing new members to the board. But Fitial defended his move. He said the removal of board members would have delayed action, as the process of nominating and confirming appointees took time.

“To do nothing and await or invite technical default would only be shirking my constitutional obligation to act in the best interest of our people even in the face of the greatest disappointment or embarrassment of seeing such inaction by the CPA board of directors under my administration. Yet I have taken a measured response. Instead of a permanent executive order, I have limited the period to up to 120 days within which time I believe we can stabilize CPA,” he said.

Since the May 12 declaration, CPA has implemented emergency measures such as raising airport rates, imposing cost-cutting measures, and ending the incentive program for airlines flying to the Northern Marianas.

Fitial said he would consider the Legislature’s resolution against the executive order. Although emergency measures had been applied, CPA still needs the support of the administration, he added.

He also urged the Legislature to support allowing CPA to offset its airport utility charges against the $8 million owed it by the Commonwealth Utilities Corp. CUC owes CPA $4.8 million for the airport road sewer line project, plus $3.6 million in wharfage fees.

The governor said that CUC may have to further increase its skyrocketing rates to raise the $8 million for CPA.

“It is my administration’s view that allowing the offset procedure is a prudent approach for both CUC and CPA as well as our community,” Fitial said. “If the Legislature disagrees, then I am happy to meet and confer on possible ways to either identify or generate funds to pay CPA approximately $8 million which would immediately improve its fiscal profile.”

Meanwhile, CPA owes $6 million to the Commonwealth Development Authority, and the governor asked the Legislature to pass legislation to waive this. Fitial said it would assist COPA with respect to its 1998 seaport revenue bonds, which is a separate obligation and indenture.

The Commonwealth’s seaport has seen its revenue plunge by 60 percent due to the decline of the garment industry.