24
Answer. While the $25 million amount is short of the $40 million originally requested for fiscal year 1980, it appears adequate to cover any reasonably foreseeable emergency. It is certainly adequate to permit initiating emergency action while concurrently seeking a supplemental appropriation if required. Such a request would presumably receive expeditious handling by the Congress.
The $40 million authorization in Public Law 96-70 was patterned after the $40 million borrowing authority previously authorized for the Panama Canal Company. That borrowing authority was used by the Company both to backstop programed obligations under the Anti-Deficiency Act and to serve as a reserve source of funds to finance operations should the inflow of tolls revenue be cut off as the result of a Canal closure. For this latter purpose, the Company adopted a policy of holding in reserve funds equivalent to a 40-day loss of tolls revenue.
Since the Commission operates directly from appropriations rather than from the revenues it generates, it has no requirement for a reserve either to backstop programed obligations or to protect itself against a temporary cut off of tolls revenue. It does, however, have a requirement for a reserve to defray emergency expenses and expenses arising from unforeseen traffic increases in the event annual appropriations prove inadequate for such purposes. These requirements call for a lesser amount of reserve than was needed by the Panama Canal Company.
The $25 million requested is based on the need to fund for the potential of an emergency of major proportion occurring two years in succession. A two-year, rather than a one-year, reserve is necessary because of the time it would take to replenish the Emergency Fund once a withdrawal is made. Withdrawals from the fund will be replenished prospectively from Canal tolls-a recovery cycle taking at least a year. Accordingly, without a two-year reserve, the Commission would be without a source of emergency funds during the interim between any initial withdrawals of funds and their replenishment through the appropriation and tolls process.
Question. I am happy to see the two countries have completed their negotiations concerning the scheduling of payments to Panama and the payment of debts owed to the Commission by Panama. Could you give us an idea how many bilateral agreements are still in the negotiation stage? How are these negotiations progressing?
Answer. Four major issues, and approximately 35 others of a more technical nature, are being resolved in diplomatic channels or by the Coordinating Committee. The status of issues is discussed below.
CEMETERY AGREEMENT
The Cemetery Agreement has been accepted by negotiators of both countries, and awaits ratification by the ROP National Assembly for Community Representatives. The next session is scheduled to convene on October 11, 1980.
PUBLIC SERVICE STANDARDS
Standards of performance for fire protection, garbage and trash collection and street sweeping, road and street maintenance, street lighting, and traffic management have been agreed upon at subcommittee level and forwarded to Panama's Representative for approval at the Coordinating Committee as soon as possible. Agreement at subcommittee level on the standard for police protection has been withheld by Panama pending completion of review by the Guardia National, but we understand that agreement is imminent. Panama has not yet developed a method for verifying costs incurred in the performance of public services. However, the Comptroller's Office in Panama has just recently proposed that a meeting be set up in the near future to discuss compiling, supporting, and reporting of the cost for these services. In the event progress is not made in the near future on this matter, the subject will be raised in the Coordinating Committee.
LAND USE LICENSING
Panama is currently developing a procedure for licensing of other land uses pursuant to Article IV of the Agreement in Implementation of Article III of the Treaty. The Commission has repeatedly emphasized the importance of this matter, most recently in a special meeting with DEPAT officials on May 27, 1980. On June 11, the Panamanian Representative to the Coordinating Committee agreed to pursue this as a matter of the highest priority.