By Mar-Vic Cagurangan
Variety News Staff

COLD cash would soon find their way into the pockets of 4,000 retirees and their survivors who are owed their cost of living allowances once the administration’s borrowing plan pushes through.
The governor’s office finally transmitted yesterday to the Legislature the proposed $123.8 million loan agreement between the government of Guam and a financial lenders consortium led by the Bank of Guam.
The money that the administration seeks to borrow is intended to clear the way for the payment of the $123 million COLA that the Superior Court awarded to 4,000 retirees who make up the class that sued the government 13 years ago.
"As my legislation focuses on addressing the needs of those who are financially challenged, the final amendment absolves any financial obligations a COLA recipient may have to the government of Guam general fund. I believe that it is important for us to consider the financial situations of those who need our help most," Gov. Felix P. Camacho stated in his transmittal letter to Speaker Mark Forbes, R-Sinajana.
Under the proposed agreement, the loan would be payable annually in 15 installments at an interest rate of 7 percent a year. The administration pledges up to $10 million a year from the Section 30 money received by Guam in federal tax reimbursements. If the Section 30 funds are insufficient or unavailable, then the payment would be taken out of the general fund, according to the draft agreement.
"I am confident that this legislation will help us move forward with this critical issue. I anticipate the progress of a great partnership and collaboration with the 29th Legislature," the governor told Forbes.
The yet-unnumbered bill authorizes the Government of Guam Retirement Fund to administer and determine the individual COLA payments.
"This measure allows the (Retirement Fund) director to identify awardees and their beneficiaries and allows the Retirement Fund to establish the necessary requirements for this process," Camacho said.
The bill simplifies the procedures for death benefits and probate process in order to ensure prompt and efficient release of funds to the survivors.
The bill sets a tax rebate cap for awardees receiving no more than $30,000.
"As we work to identify solutions to help our retirees, it is essential that we address the financial discrepancies among those receiving higher annuities," the governor said.
"Just as we are working to help all our manamko’, we must take into account that those with larger obligations to our government are also more susceptible to the rising cost of living," the governor said.
In an interview last week, George Bamba, the governor’s chief of staff, said the special funds identified by a public law passed by the 28th Legislature would no longer have to be touched since the proposed loan agreement already covers the entire COLA settlement.
Bamba was referring to P.L. 28-151, which authorizes 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 payment of COLA. As of Sept. 30, 2006, these special accounts have a combined balance of about $20 million.
Bamba said the administration is particularly reluctant to touch the Territorial Highway Construction Fund and the Tourist Attraction Fund which both involve bond money earmarked for capital improvement projects.