FLASHBACK December 8, 1998-2000

Bond tied to airport fees
[/B] A financial analysis conducted by an Ohio-based consultancy firm revealed that the Commonwealth Ports Authority would have to raise the airline landing fee and facilities service charge by mid-1999 to be able to meet debt service of the $35 million 1998 revenue bonds. The study which included projections in air traffic was conducted by Ricondo & Associates, Inc., in connection with the issuance of the CPA 1998 airport and seaport bonds. Due to the significant decrease in traffic to the CNMI as a result of Asia’s financial crisis, “it is necessary to increase aviation fees and charges,” the study said. Airline cost per enplanement is estimated to increase to a high of $11.94 in fiscal year 2000 from $9.21 in fiscal year 1998 because of low projection of enplanements until the year 2000, increase in debt service and projected additional operating expenses.

The chairman of the powerful House Ways and Means Committee yesterday cautioned the administration against a proposal to cut salary of the 5,000-strong government work force because of its potential impact on personal expenses. Rep. Karl T. Reyes said government payroll should be pared down only through reduction of work hours of its personnel where substantial savings can be made to meet shortfall in the fiscal budget estimated to reach at least $32.5 million by September next year. About 75 percent of the 1999 spending level – equivalent to around $189 million – are allocated to pay the salary of civil service employees and those under government contract. At nearly 5,000, the government is the biggest single employer on the island.

Oversight eyed on Saipan power plant[/B]

Lawmakers intend to get involved deeply into the controversial new power plant for Saipan with calls for oversight investigation and a legislative policy declaring the need for such a project amid attempt by Commonwealth Utilities Corporation to scale back the initial plan. House Speaker Diego T. Benavente yesterday raised the possibility of investigating into the project, saying the move to scrap the 80-megawatt will only damage the credibility of the CNMI government. Likewise, the Senate passed unanimously during yesterday’s session a measure forbidding CUC to downsize the project as well as supporting a phased implementation of the original plan drawn up four years ago.

Commonwealth Development Authority Board Chair John S. Tenorio yesterday said he will ask the Office of the Public Auditor to look into how public funds were used by the Northern Marianas College’s Business Development Center amid allegations of mismanagement. According to Mr. Tenorio, CDA is not satisfied with the way BDC has run the graduate internship program, which gets an annual funding from his office. This has led CDA to terminate the grant agreement with NMC-BDC this year which resulted in the loss of some $93,000 funding this year for the Center. “We want to know how the funds were used once and for all. An audit will definitely help clarify things which we believe needs to be explained,” he said. BDC’s main task is to help local businesses in drafting marketing analysis, secure loans from the bank and draw up feasibility proposals.

Cabrera guilty verdict upheld[/B]

Former Finance Secretary Antonio R. Cabrera lost his fight to reverse his conviction on corruption charges after U.S. District Judge Alex R. Munson yesterday upheld the guilty verdict returned by a jury. His motion seeking a judgment of acquittal on two charges was rejected following a 30-minute hearing in the federal court during which defense lawyer Joseph A. Arriola vainly argued the case on his behalf. Judge Munson said the jury had weighed the evidence presented at the trial last October and came up with a verdict that satisfied elements of the crime.