Sanford says progress nil on Governor's line of credit bill

by Ken Wetmore, KUAM News
Wednesday, November 12, 2003

A bill near and dear to Governor Felix Camacho's heart has been labeled “dead in the water”. Bill 194 would give the Governor a $94,000,000 line of credit but was panned by senators during a public hearing this morning. Last week Camacho called a press conference to gather support for Bill 194 and to push senators to act quickly on the measure.

A week and one day later the bill had its public hearing, but it doesn't appear the legislation is unlikely to be passed anytime soon. Committee on Economic Development chair Senator Toni Sanford says the measure is unmoving in its current form. “I see this is as a really urgent matter because we've waited so long, but I don't think the next month or two is going to make that big a difference, and I think we owe it to the people of Guam to make sure we get the most cost-effective and beneficial package,” said the freshman Democrat policymaker.

The main objections heard to Bill 194 were the amount of the line of credit and the terms and conditions for the borrowed money. The Governor is asking for a $94M credit line, but some senators felt the amount was too high and should be lowered to a figure closer to $50,000,000. Some senators also objected to the terms of the line of credit. The only respondent to the request for proposal for the line of credit was a financing company out of the mainland.
Under the terms they submitted, the government would have to pay interest on the full amount of the line of credit whether it is used or not, and the interest rate increases for money that is borrowed. Additionally, closing costs will be 5.5% of the total line of credit and there will be annual administrative costs of $350,000 a year. “I think that's insane,” Sanford commented on the topic. “You know, I mean, when we draw down I think we can certainly pay money on it pay interest on it but for it to just sit in the bank somewhere; I don't think we should be paying interest.”

Even one of the Governor's fellow Republicans seemed to have a hard time swallowing Bill 194. Senator Bob Klitzkie said the bill lacked clarity, and said the Administration's representatives did not provide a stellar performance today saying today's hearing, rather than clarifying the bill, just brought more questions to the table. Said Senator Klitzkie, “If we pass this, I wouldn't know what I'm voting on, frankly, if this is all I had. So, that's my two cents worth on $48,500,000.”

Senator Ray Tenorio was also concerned about some of terms, but said the question boils down to whether Guam can afford not to borrow the money. Senator Tenorio said he felt he could support the bill with some modifications.

Guam Recovery Office administrator Dale Peterson, who was one of the Governor's representatives at Wednesday's hearing, said he can understand some of the concerns from island lawmakers, but agreed with Senator Tenorio's thinking. “Maybe the line of credit isn't the best way, maybe as they had said maybe a bond or maybe something else, but the fact of the matter is if we don't do something, if we don't get on with it, we're going to be here six months from now talking about ‘How are we going to start our restoration recovery program, and we can't wait that long?’”

After today's hearing, Senator Sanford said further dialogue will be taking place and further options will considered, such as reissuing the request for proposal for a line of credit or possibly including the borrowed funds in a bond.

Governor Camacho has said if the Legislature does not consider Bill 194 soon, he may call an emergency session.




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