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Fitial lifts CUC debt cap
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Posted on Jul 29 2008
The Commonwealth Utilities Corp. will be able to borrow an unlimited amount of money without first obtaining legislative approval under a new order signed by Gov. Benigno R. Fitial.
The governor last Friday issued an executive order removing a requirement for any CUC debt over $500,000 to be approved by law specifically allowing it.
Under Fitial’s new order, CUC is authorized “to borrow money from any private or public source, either within the Commonwealth or the United States or in any country, and to give security in connection with such borrowing.”
The document amends a 2006 executive order that capped CUC’s borrowing power at $500,000. It does not cite any reason for the policy change.
As provided by the Constitution, the executive order will become effective 60 days after submission to the Legislature, unless modified or rejected by a majority of the members of the Senate or the House of Representatives.
In addition to the constitutional provision, the executive order includes a clause allowing the plan to be effective immediate upon being approved by one house of the Legislature. This means that the executive order could go into effect as early as today, if the House members vote to approve it during session. The House will convene at 2pm today.
One lawmaker yesterday raised concern about the executive order. Rep. Edward Salas said the administration must justify its proposal to delete the $500,000 debt ceiling.
He noted that CUC’s earlier plan to borrow $4.5 million from the Marianas Public Land Trust is now a moot issue. The Legislature has already earmarked future MPLT earnings to the contracts that CUC was looking to fund with the proposed MPLT debt.
“Wasn’t the earmark supposed to take care of CUC’s problems? Why are we still borrowing now? For what purpose?” Salas said.
He also pointed out that the executive order cites the wrong Commonwealth Code provision to be amended. Title I, Section 8123(c), which was cited in the executive order, relates to hiring qualifications for the head of the Office of Personnel Management. The provision on CUC’s borrowing power is codified in Title 4, Section 8123(e).
