By Mar-Vic Cagurangan
Variety News Staff

WHILE waiting for the U.S. Supreme Court’s decision on the bond-borrowing case, the administration can start making partial cost of living allowance payments by employing mechanisms that are already in place, says Vice Speaker Eddie B. Calvo, R-Maite.
Calvo said partial payments can be made out of the four special funds that an existing public law authorizes the governor to use for that particular purpose.
“That law provides for the initial payment plan and is still good and applicable. It was never repealed,” said Calvo, chairman of the taxation, finance and commerce committee.
He was referring to Public Law 28-151, which makes $23 million available for partial COLA payments by authorizing the governor to dip into the Territorial Highway Construction Fund, the Tourist Attraction Fund, the GTA Privatization Fund, and the Interim Transition Office Fund to allow partial COLA payments to 4,000 retirees.
“The most important part of the law is the provision that allows the government and the plaintiffs to negotiate a structured settlement,” Calvo said.
Besides P.L. 28-151, Calvo said, the administration has other payment sources through available options that are currently authorized by other laws, such as the line of credit, which the governor is authorized to arrange with lending institutions.
Sen. Ben Pangelinan, D-Barrigada, has filed a resolution authorizing the governor to arrange a $10 million line of credit to facilitate the initial COLA payments. He also suggested that the Department of Administration issue a promissory note that the retirees can redeem, individually or as a group, on the government’s account.
“All these proposals by Sen. Pangelinan are just reiterations of what’s already in place.  The issuance of promissory note is provided in P.L. 28-151. It’s just up to the administration to implement them,” Calvo said.
Despite the enactment of PL 28-151 late last year, the administration has not made a single COLA payment. Instead, it came out with a $123.8 million loan proposal, which is now awaiting action from Calvo’s committee.
In an earlier interview, chief of staff George Bamba said there was no need for the administration to use the special funds identified in PL 28-151, claiming that the loan agreement would cover the entire judgment amount.
Bank of Guam president Lou Leon Guerrero, however, says the bank has committed only $78 million.
The proposed loan agreement with the Bank of Guam is dependent on the U.S. Supreme Court’s pending ruling on the issue of Guam’s bond borrowing limit.
Calvo said he is waiting for the Attorney General’s Office’s legal opinion on the bond-borrowing limit and how it is likely to affect the proposed loan agreement.
“I spoke to the AG last week and I was told that they will be sending me an official letter dealing with the legal issues that are tied to the loan agreement,” Calvo said.
While administration officials and senators continue to float ideas and options on how the government can pay the retirees, the 13-year-old COLA case took a new twist Monday when six taxpayers challenged the $123 million judgment, which they said was miscalculated and marred by Judge Arthur Barcinas’ alleged conflict of interest.