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Governor calls senators into special session

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Senators were called to an emergency session today to take up a bond refinancing bill that could save millions of dollars in debt service obligations.  With the next payment due in September, the Guam Economic Development Authority was pushing to get refinancing approval as soon as possible. Lawmakers were moving quickly yesterday to pass a measure, however, deliberations stalled over what to do with the money saved, and whether spending amendments need to undergo public hearings. But with time running short, the governor called them back in.

By refinancing the bonds, the government expects to reduce payments by as much as $2 million a year, and nearly $50 million over the terms of the bonds. In his call for a special session, Governor Calvo wrote "We are out of time, and the opportunity will be lost" if GEDA does not get the time to prepare the new bond.

And while senators may agree on the refinance, there is disagreement when and where the money saved should be spent.

It was Senator Mike San Nicolas' bond refinance measure that was up for discussion yesterday, but he withdrew his bill in objection after colleagues began tacking on various spending amendments without public hearings. He said, "Nor was the public ever involved in was the question of how we were going to go about authorizing the money, appropriating the money or any other synonym of making a decision as to where it was going to go. People need to be involved in that decision. How important these savings are, so important that we went into session yesterday and we were called into special session today."

The measure introduced at the request of the governor mirrors a bill introduced by Senator Dennis Rodriguez, Jr., with amendments from Senator Frank Aguon Jr. passed yesterday on the floor.

He stated, "That $2 million realization is savings is real; it's today. This fiscal year. The future savings is also what we've included, the governor has included in this bill, it's for future use. This whole that and notion how do we start money that we don't have. That's how budgeting works. In this case, we are at the eleventh hour. The question is if we go through that public hearing process, otherwise there will be no savings.

So Madame Speaker, I hope my colleagues who cosponsored this yesterday are not upset. I am willing to remove that section."

The Rodriguez refinance measure first introduced in April called for money saved to go for various hospital improvements. Aguon's and other amendments include spending for next year's Festival of the Pacific Arts, compensation to farmers for crop damage, Typhoon Halong and Typhoon Dolphin overtime payments, to name a few/ The bonds to be re-financed are general obligation bonds.The new series will be Business Privilege Tax bonds, which carry higher ratings and lower interest rates.

Because they are secured by Gross Receipts Taxes, the government can theoretically raise GRT if proceeds fall short of required bond payments. But GEDA administrator John Rios says that's not likely as the total BPT bond payments would be about $89 million a year, while GRT proceeds amount to about $240 million.

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