Senators Hit $1 Million Payout Plan

Senators hit $1M payout plan
Thursday, 15 January 2009
by Therese Hart
Marianas Variety News Staff

In a remarkable show of bipartisan unity, senators from both parties yesterday condemned the $1 million weekly payout plan for the landfill being proposed by the federal receiver.

Gershman, Brickner & Bratton informed the U.S. District Court last Wednesday that it wants GovGuam to pay out $1 million a week in cash beginning March 1 to finance various landfill-related projects.

The recommendation was made by GBB special principal associate David Manning during the landfill quarterly status hearing in District Court.

Sen. Eddie Calvo, responding to the proposal, said the payout plan is simply too heavy a burden for GovGuam to bear.

"That amounts to approximately $4 million a month, averaging 10 percent of what is taken in on a monthly basis which is about $30 to $50 million a month. If that were to occur, there would have to be a substantial realignment of expenditures within the government. That would have a very detrimental impact on the critical services the government provides," the senator said.

Calvo added that critical areas such as education, health and public safety will be adversely affected.

Sen. Frank Aguon Jr. chimed in, saying that although he respects any decision that Judge Frances Tydingco-Gatewood may make on the matter, all the parties really need to sit down and recognize that the government of Guam is not a cash cow.

"We need to work out financial arrangements that would be acceptable to all parties and recognize that the residents need a government to run, inclusive of addressing education, public safety and healthcare requirements," said Aguon.

Sen. Judi Guthertz has also criticized the payout plan, saying: "I don't think it's achievable, given the cash flow problems of the government. I think it's unconscionable that the federal government is mandating this on this territory and not considering its fair share for the closure of the Ordot Dump and the construction of the new landfill."

Destroy
Last Wednesday, Gov. Felix Camacho said one million dollars out of the government's operating fund will destroy GovGuam's ability to provide services.

In light of this latest demand from GBB, Camacho said the legislature should now give him policy approval to proceed with the revenue bond, although he told the court that given the current global financial crisis, it would be difficult for the government to secure a bond at this point in time.

The governor said that even if the government were to secure financing in the bond market, because of the high rates, it's simply not affordable.

"It's going to be very difficult to receive that right now and this will only exacerbate our already growing deficit," Camacho said.

Defended
Manning had defended the $1 million weekly payout plan, saying that the continuous replenishment of the funds on a weekly basis in which $20 million has been deposited into a bank account is necessary because it provides a "clear reassurance to the contractors employed to do the Consent Decree project work that they will be paid in a timely way." Without such assurance, Manning said it is unlikely that quality contractors will be willing to undertake the work needed to bring Guam into compliance with the Consent Decree.

Manning added that given the weak cash position of the government, a fixed weekly cash contribution may be more manageable than monthly cash amounts.