Negotiations on loan request begin
The Marianas Public Land Trust has begun negotiations with the Torres administration on the loan it has approved to give to the CNMI government, hammering out the details, terms, and other conditions of the request.
The MPLT board approved last June 27 the $15-million loan to the CNMI government, and would have an interest rate of 7.5 percent. The MPLT board insisted on calling a “loan,” instead of the Torres administration’s preference for the term “line of credit.”
When consulted, CNMI Attorney General Edward Manibusan described it as a public debt.
Part of the payment to be made by the administration is withholding the interest income from MPLT, money that they remit annually to the central government’s general fund. Federal Emergency Management Agency reimbursement that the government has yet to receive was also pledged as payment for the five-year loan.
“Yes, the MPLT board of trustees have approved the request of the governor for the LOC at a cap of $15 million. The details of how this will play out is still being negotiated,” said Finance Secretary David Atalig.
He added legislation would also be needed in order for MPLT and his office to proceed with the $15-million loan, which would help the government pay its obligations to its bonds and the Settlement Fund.
“We are hoping the Legislature passes this authorization as soon as possible so we can finalize any terms and conditions and make a drawdown on the available funds from MPLT,” said Atalig.
House Speaker Blas Jonathan T. Attao (R-Saipan) already introduced House Bill 21-44, that pledges the interest income distribution from MPLT. He said they have to re-introduce another legislation, which would work for MPLT, that would substitute H.B. 21-44.
The loan request is broken down to $7.5 million, which is available to be released by MPLT while another $4.5 million will be drawn down in 30 to 45 days. The remaining $5 million will be made available once the Department of Public Lands remits revenues it collects from public land leases.
“MPLT has identified $10 million available for drawdown and, when additional funds are available, [our office] can request for more money not to exceed $15 million,” said Atalig.
DPL transferred over $3.3 million in public land lease revenues to MPLT last month. That means its transfers to MPLT have reached a total of over $15.2 million since September 2007.
Responding to two questions from Atalig, Manibusan said the LOC is public debt that will be funded by the revenues from the MPLT investment income, which is remitted annually to the CNMI government for legislative appropriation.
He, however, said the LOC could not be considered “operating expenses” since disaster relief and recovery are extraordinary and unexpected expenses.