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CDA approves PSS-USDA $3M loan agreement
The Commonwealth Development Authority passed a “ceremonial approval” on a loan that will be entered in by the Public School System with the U.S. Department of Agriculture.
In January, PSS was authorized to enter into a guaranteed loan through a law passed by Legislature and signed by Gov. Ralph DLG Torres the amount of up to $5 million from the federal agency.
The issue comes to CDA because it needs the agency’s approval as the authorized entity to transact with USDA-Rural Development.
During the discussion, the CDA board clarified if the board would have liabilities on the loan if they approved it.
Director Ignacio Kiyoshi also raised the concern on PSS’ ability to pay.
“Already we have experienced a pattern with PSS and NMHC,” Kiyoshi said. “I know for a fact PSS has been approved for certain millions by the Department of Interior for ABC project.”
“I’m in favor of PSS, I have no problems with that. But my concern here is the ability of that agency to pay back that copious amount of money,” he added.
According to CDA management, there will be no liability for CDA should PSS fail to pay its obligations.
The board passed the motion to “approve the PSS-USDA Rural Development program loan with the exceptions that were noted that the cap is $3 million and that it would exonerate CDA from any defaults or guarantee.”
“It’s a ceremonial approval because we don’t have any liability on that,” CDA board chair Ignacio Perez said.
With this, PSS will be allowed to have $3-million loan agreement with USDA-RD which will be a 10-year term and with an interest of 3.75 percent.
PSS said the money will be used to construct additional 10 classrooms that are needed as school population rise.
Two new kindergarten classrooms will be built in Garapan, Koblerville, and Oleai elementary schools as well as another two classrooms for Dandan Middle School.
Parking lots for Tinian Elementary School, Sinapalo Elementary School on Rota, and the PSS head start center in Garapan will also be paved.
