Tinian lawmakers disagree on $4.7M loan with MPLT

The chairman of the Tinian Legislative Delegation, Sen. Joseph Mendiola, yesterday disclosed that the group disagrees with the language of the $4.7 million loan agreement between the Tinian municipality and the Marianas Public Land Trust, describing some provisions as “very restricted” and “unrealistically attainable.”

Tinian Mayor Jose P. San Nicolas had proposed the loan agreement late last year. It was initially approved by the MPLT board of trustees.

However, Mendiola said, upon examining the agreement it was cited that the municipality will automatically be in default if there’s any outstanding payables by the mayor’s office.

“It would be foolish to enter into an agreement with such kind of provision because…even at present, the municipality is already in default because of outstanding obligations to the Retirement Fund,” he told Saipan Tribune.

As of Dec. 31 last year, the Tinian municipality had incurred over $1 million obligation to the Fund.

The delegation chairman, however, said if certain provisions of the loan agreement are revised, the group might approve the transaction. It is the task of the delegation to allocate money, through legislation, for the repayment of the loan.

“Until MPLT is unwilling to revise the language of the agreement which we deem very restrictive…I don’t think this loan would push through,” he said.

Mendiola also wants the loan agreement to be clear about the expenditure authority.

He said a meeting with MPLT in January had disclosed that the agreement was “approved in concept” by the trustees but it needs the delegation’s action on the repayment of the loan, which eyes future casino revenues and poker fees appropriated for the municipality.

“This is a long and serious commitment that needs to be decided and consulted with the people of Tinian because we’re committing the future of Tinian here. What if we encounter major problems in our casino revenues in the future and what if these poker fees are no longer available for appropriation? What will happen?” the chairman asked.

Saipan Tribune learned that the $4.7 million loan agreement is payable in 20 years and is intended to be used for the following municipality obligations:

-Retroactive salary increases of employees since the 7th Legislature;

-The municipality’s outstanding obligation to the 60th WWII anniversary celebration; and

– Payment for the U.S. Geological Services as ordered by the court.

Mendiola said that approximately $500,000 is planned to pay for the retroactive wages of personnel, which originally cost the municipality more than $1 million in obligation.

“We already paid the half [$500,000] in the past and the amount is just the balance of that obligation,” Mendiola said.

He estimated that over $150,000 is planned to pay for the outstanding debt during the 60th WWII celebration on Tinian while some $1.2 million will pay for its obligation to the USGS as stipulated by a court order.

Mendiola said these amounts exclude the interest in the principal obligations.

“If we go into this type of commitment for the municipality, we don’t want to obligate something that is unrealistically attainable,” he added.

Tinian Mayor Jose San Nicolas told Saipan Tribune on Tuesday that he’s counting on the loan agreement as he plans to use it for more revenue-generating projects.

“Our garment factories are gone. Our tourism industry is declining. We need to look at other projects that will generate income for the municipality…and that’s what I am doing as the elected mayor,” he told Saipan Tribune, citing that a portion of the loan will be used in developing the farmers’ market, slaughter house, and the production of oysters and abalone.

San Nicolas has just arrived from a weeklong training in central Philippines where he experienced the actual process of raising abalone from the larvae stage to harvest.

“The product can be sold around the world…and who knows Tinian can export it too someday?” he told Saipan Tribune.

San Nicolas said he is “still waiting” for the final confirmation of the $4.7 million from MPLT.