By Mar-Vic Cagurangan
Variety News Staff

THE administration’s proposed loan agreement with a bankers’ consortium is pretty much a done deal, guaranteeing the immediate and full payment of the $123- million cost of living allowances owed to 4,000 retirees, George Bamba, the governor’s chief of staff, said yesterday.
“I can say with all certainly that the agreement, which calls for the full payment of COLA, has been secured. The funds are available now with this agreement,” Bamba said in an interview with reporters.
Under the administration’s proposed plan, GovGuam would enter into an agreement with a consortium of financial lending and investment institutions, from which the administration will draw the cash to resolve the COLA issue.  The governor will repay the loan out of the Section 30 funds, from which he is authorized to draw $10 million a year.
Bamba said the administration yesterday received the final contract from the legal counsel of the bank that leads the consortium.
Bamba, however, declined to identify the lead bank pending final approval of the agreement. “Until the thing is good to go, I have to take confidentiality as far as not naming the bank,” he said.
Bamba said the governor’s legal counsel is doing the final review of the agreement, and once it’s done, the administration will transmit a draft bill to the Legislature.
He said the Legislature will be asked to amend the existing measure, Public Law 28-151, specifically the provision that deals with the identification of the beneficiaries and the role of the Government of Guam Retirement Fund.
P.L 28-151 provides that COLA claims that have been probated in the past, and in which the beneficiaries have been identified, will not be probated again.
“The role of the Retirement Fund would be much more enhanced to ensure that the right recipients get the COLA,” Bamba said.
PL 28-151, which was passed by the Legislature late last year, authorizes the governor to dip into the Territorial Highway Construction Funds, the Tourist Attraction Fund, the GTA Privatization Fund, and the Interim Transition Office Fund to allow partial payment of the COLA. As of Sept. 30, these special funds have a combined balance of about $20 million.
If the proposed deal with consortium is approved by the Legislature, Bamba said the administration will not have to touch the four identified special accounts. “Were trying to avoid having to touch those funds,” he said.
Bamba said the administration is particularly reluctant to touch the Territorial Highway Construction Funds and the Tourist Attraction Fund, which are bond money earmarked for capital improvement projects.
Dipping into those accounts, he said, would jeopardize not only the CIP projects  but the government’s standing in the bond market as well.
“It may cause default on our part if we touch those funds and use them for things other than what they were intended for. We don’t want to take chances,” Bamba said.
The governor’s executive order that authorizes the loan agreement plan gives the Guam Retirement Fund the option to participate in the deal and fund up 60 percent of the judgment amount to the consortium, but Retirement Fund officials have ruled out participation in the deal.
Bamba said the retirement agency is not obligated to participate in the consortium but he said he still hopes that it will reconsider when the consortium decides later to open a secondary market.