Thursday, January 15, 2009

GovGuam Can't Afford $1,000,000 a Week for New Landfill

Cruz: We can't trim:
Camacho weighs cuts to pay for landfill
By Agnes Donato
Pacific Daily News
January 16, 2009

Acting Speaker Benjamin J. Cruz yesterday rejected a suggestion for the government to rein in spending so it can raise money for the dump closure and a new landfill.

According to Cruz, a cost-cutting plan isn't an option because the government of Guam is insufficiently funded as it is.

"Where do you want to start making the cuts? The police department? The last budget we passed is not even enough to run the government. We have not paid tax refunds in 15 years," said Cruz.

The administration of Gov. Felix Camacho said it is looking into the possibility of cuts.

"Austerity measures have always been important, and key members of our fiscal team are working to identify different options and their respective impacts," governor's spokesman Shawn Gumataotao said.

Time running out
Time is running out for GovGuam to close Ordot dump and open a new landfill. The solid waste receiver in a report Wednesday said the dump will be full in two and a half years, barely five months after the new landfill is scheduled to open. The receiver said GovGuam must pay $1 million a week, beginning in March, to finance the project.

Cruz said it would be impossible to come up with $52 million a year. The amount represents about 10 percent of GovGuam's budget for fiscal 2009.

"We're not like the federal government that has plenty of money. They can print money anytime they want to because they have credit to back it up. The government of Guam does not have that ability. GBB has to understand that," said Cruz, referring to solid waste receiver Gershman, Brickner & Bratton.

Cruz said he is glad the court recognizes the government's financial problems and is now willing to entertain alternative means of funding the landfill.

District Court of Guam Chief Judge Frances Tydingco-Gatewood has given the administration a week to respond to the receiver's demand and to present an alternative funding plan that GovGuam could afford.

Court order
But Cruz lashed out at the receiver for insisting that the government pay $993,700 a week, beginning in March, to replenish the initial $20 million deposit Gov. Felix Camacho made under court order earlier this month. Cruz said the demand is "unreasonable."

The acting speaker also said lawmakers shouldn't be blamed because they failed to pass the $160 million bond bill that Camacho submitted to the last Legislature. Even if the bill went through, he said, GovGuam would not be able to float the bond because of the global economic crisis.

"Even if we wanted to, we couldn't float the bond today. Almost nobody can float bonds. GBB has to understand that," he said.

Cruz added that the terms of the government's existing loans prohibit GovGuam from floating any further bonds.

GovGuam has three outstanding loans with Bank of Guam: a 2002 loan with an outstanding balance of $5 million, a 2008 loan with a balance of $13 million, and the $20 million entered on Jan. 2, 2009, to pay for the landfill deposit. Under the terms of the 2009 loan, the government cannot float a similar bond until these loans are paid.

1 comment:

Olique Estefan said...

Will your lender be willing to modify your loan? Absolutely - It is very expensive for them to foreclose your house. With the current economy, your lender would rather work with you and continue to get paid monthly rather than going through the foreclosure process, especially when their core business is not in real estate