Speaking before the members of the Saipan Chamber of Commerce during the organization’s monthly meeting at Fiesta Resort & Spa Saipan March 2, CPA Executive Director Edward M. Deleon Guerrero assured that CPA is going to meet the bond ratio for the current fiscal year.
“For 2011, I guarantee you we are going to meet the bond ratio. Right now we are at 1.30 and we will continue to move up in our bond ratio. That will be our pledge from now on,” Deleon Guerrero said.
The CPA executive director said the ports agency has addressed “all unexpected things.”
He said, “We are now moving forward. We are aggressively watching our expenditures and aggressively collecting our outstanding receivables at the airports and seaports.”
The CPA executive director reported that the ports agency had a “clean bill of health” in 2009 for its complete audit. He said there were no findings and CPA met its bond ratio for 2009.
Based on the audited financial report of the agency, its operating revenues increased by 26 percent or $3.6 million, from $13.8 million in 2008 to $17.4 million in 2009.
As revenues increased, expenditures decreased by 3 percent from $12.8 million in 2008 to $12.4 million in 2009.
Combined assets for the airports and seaports increased also for that same fiscal year reaching $223.5 million.
According to the agency’s audited financial report for year ended Sept. 30, 2009, CPA issued revenue bonds twice in 1998 and once in 2005.
CPA grew its operating revenue by $2.5 million in 2009 and was able to avoid noncompliance with its 1998 Bond Indenture Agreement. It also cited the agency’s hiring of a consultant to monitor compliance and the resulting quarterly monitoring and implementation of austerity measures for FY 2010.
Anticipating the demise of the garment industry and decline in port revenue tons, CPA conducted a rate study for the seaport in 2008 that resulted in increased tariff for 2009.
Deleon Guerrero reported that CPA enforced a six-month austerity measure in 2010 to see where the agency was in terms of expenditures and how it was meeting the bond ratio requirements.
“For 2010, the first two quarters, we didn’t meet it. On the third and fourth quarters, we didn’t quite make it. Despite having $400,000 above our estimated revenue collection, we had $1.2 million in unanticipated costs that we need to do — it had to be done. There is no way out. Because of that, we were not able to meet our bond ratio,” Deleon Guerrero said.
The ports authority issued three bonds: two in 1998 and one in 2005.
For the airport, it issued a 1998 Series A $20,050,000 tax-exempt revenue bond pegged at 6.5 percent interest and payable on March 15 and Sept. 15 of each year, from Sept. 1998 to 2028. This was used to partially refund an outstanding $8.25 million 1987 Series B tax-exempt bonds.
It also issued a 1998 Series $33.775 million tax-exempt revenue bond for the seaport with a 6.6 percent interest, and payable in 30 years.
In 2005, a Senior Series revenue bond was issued for the seaport in the amount of $7.225 million to finance the paving of the container yard area.
CPA is current with all these payments.
For FY 2009, the audited report stated that CPA generated sufficient revenues to meet its Bond Indenture Agreement.
The agency was required to raise $12,188,947 in revenues for the airport for bond compliance and was able to collect $12,470,603, exceeding the requirement by $281,656. At the seaport, requirement was $6.17 million yet the agency came up with $356,555 more than this requirement.
