Kagman homestead, CHC expansion top project list

Homestead development in Kagman and the expansion of the Commonwealth Health Center are two priority projects being eyed by the Legislature under the $30 million loan secured by the government from Bank of Guam.

House Ways and Means Committee Chairman Karl T. Reyes said a forthcoming appropriation measure will specifically set aside to both plans the bulk of the money from the loan and federal construction grants under the capital improvement projects.

Part of the interim financing ahead of a bond float, the loan will match an equal amount of CIP/702 Covenant funding which will give the CNMI some $60 million in fresh funds to undertake various infrastructure development.

Of the total amount, more than $15 million will be earmarked to finance power, sewer and water projects in the three homestead areas in Kagman, while the proposed CHC expansion will receive about $14 million.

According to Reyes, these appropriations comply with the CIP master plan drawn up last year by the government. “We are going to try to stick to the master list as much as possible because the cost of projects has been estimated,” he said.

The legislation is currently being drafted by both the Legislature and the administration following a meeting between the Ways and Means chairman and Mike Sablan, the governor’s special advisor for finance and budget.

A drawdown schedule on the BOG loan has to be finalized before the money can be released by the bank. Once this is done, approximately $40 million worth of new projects will be bankrolled by funds from both the loan and equal amount of federal grants.

The rest of the money, which is equivalent to $20 million, may be used to substitute the local funding initially set aside for ongoing projects, including those that are not yet finished or about to be completed, or require to be refinanced.

Reyes said these surplus funds are expected to go to other projects being pitched by lawmakers provided they are part of the CIP plan of the government, such as youth centers, fire stations and road improvement.

Although the legislation is not a condition set forth by BOG, the representative said it is important to pass such a measure to “reflect the commitment” of the island government to use the federal funds.

The Commonwealth Development Authority has guaranteed the bank loan as it awaits the $60 million bond float, which proceeds will partly settle public debt, while the rest will be set aside to match other CIP grants.

CDA has chosen Paine Webber to handle the tax-exempt municipal bond float from a list of reputable underwriters that have submitted proposals to the authority. These moves are part of the law signed recently that allows the agency to undertake the financing scheme.

A total of $120 million worth of projects will be undertaken by the CNMI government with the availability of $60 million in matching funds, which represent part of the $154 million CIP package agreed upon by CNMI and Washington from 1996 to 2002.