$16M loan will pull through, says PSS
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Posted on Nov 26 1998
The Public School System assured that its $16 million loan application will be finalized this year and will be available to match the CIP funding to build new schools.
“It is absolutely sure,” said PSS Federal Coordinator Tim Thornburgh, to allay fears over the delay encountered in the negotiations for the $16 million loan.
Thornburgh is assigned by PSS to work on the details of the loan with both the California Financial Services Corp. and the underwriter.
The date on the signing of the loan agreement has been moved several times, and this has raised concerns from the Legislature.
Rep. Heinz S. Hofschneider, the chairman of the House Committee on Health, Education and Welfare, said the delays could set back plans of PSS to decongest its crowded classrooms.
The loan was to have been closed on October, but representatives from the underwriting company and the California Financial Services Corp. were unable to come to Saipan as scheduled.
“Any delay is obviously a problem to PSS and even more so at this juncture of our economic problems,” said Hofschneider.
The legislator is concerned that with the economic crisis, parents might move their children from private to public schools.
This could worsen the classroom congestion, he said.
“There is a considerable number of students in the private schools, and if they have a significant reduction because of economic reasons, they have no other choice but enroll in public schools. This would reflect extra burden on the overcrowding and what other problems they are facing today,” Hofschneider said.
Hofschneider urged PSS officials to set a deadline in finalizing the loan.
He suspects that the company working on the loan is having difficulty promoting the loan package with the less than six percent interest rate.
The loan bears a 3.8 percent interest rate, based on previous discussions.
“I maybe wrong on this assumption, but what other anticipated problem there is other than the (reluctance) of underwriters to float the $16 million with the stipulated interest of not more than six percent.”
