‘Guam must develop a self-sustaining economy’

THURSDAY, 22 SEPTEMBER 2011 00:32 BY GERALDINE CASTILLO | VARIETY NEWS STAFF

WITH the impending military buildup and the downturn in countries that have sustained Guam's economy, an economics expert

University of Guam Economics Professor Dr. Roseanne Jones was the guest speaker during the Association of Government Accountants Guam Chapter's monthly membership meeting at the Outrigger Guam Resort. Matt Weiss / Variety

points out this can be the chance for the island to develop its own self-sustaining economy.

University of Guam Economics Professor Dr. Roseanne Jones was the guest speaker during the Association of Government Accountants Guam Chapter's monthly membership meeting at the Outrigger Guam Resort, presenting her lecture on “Guam Economic Development: Trade and Demographic Indicators.”

Jones spoke about the physical manifestations of an improvement of trade and the importance of Guam, citing the developments being made at the A.B. Won Pat International Airport and the Port Authority of Guam.

“There's a new cement company that's coming to the Port area,” said Jones. “You can say, 'Well why is it that we get so excited about cement?' [But] these are the very key fundamental ingredients of economic development. The building going on, the capacity to build – that's what excites me ... regional trade.”

Jones also spoke about the downturn in Japan and the United States.

“Certainly [these are] difficult times for both of those nations, and it is a difficult time for Guam. It’s unprecedented that we have had both major nations that have been trading partners or countries that we've relied on for the two major sectors of our economy – tourism and federal investments in military – both not in the position to be spreading to the West like they used to,” Jones stated.

Opportunity

Despite that downturn, it presents an opportunity for Guam to look within itself to develop the economy instead of relying on the other countries to sustain us.

“For the first time, we may have this door opening where we can really begin to think about how we sustain ourselves,” said Jones.

“We've got the beginnings of domestic demand, we've got the beginnings of a solid infrastructure … but we have a momentum building and we have an opportunity to look to ourselves and say, 'Hey, what do we have and how can we make the most of what we have?’”

Jones pointed out the many things Guam already has in order to develop its self-sustaining economy, from the foundations of infrastructure and the growing educated population to the beginning of a hub of regional trade with island neighbors.

“We know that Japan and the United States will always be there,” said Jones. “But not with the same level and intensity that they once were.”

Port Authority billed $12 million

FRIDAY, 01 APRIL 2011 01:56 BY JANELA BUHAIN | VARIETY NEWS STAFF

THE Port Authority of Guam on Wednesday received an unexpected bill from the Department of Administration for $12.25 million

The Port Authority of Guam on Wednesday received an unexpected bill from the Department of Administration for $12.25 million for an “autonomous agency infrastructure collections fund” as authorized by a public law dating back to 1997. Variety file photo

for an “autonomous agency infrastructure collections fund” as authorized by a public law dating back to 1997.

The amount of the bill is an annual assessment of $875,000 since 1998 that the Port has not paid, according to the bill that DOA sent to the Port Authority.

Received

“We did receive an invoice for $12.2 million from the Department of Administration. We are currently reviewing the invoice. We will reserve comment until we have further explored this matter,” said Pedro Leon Guerrero, Jr., PAG general manager.

Leon Guerrero said he is anticipating meeting with the Department of Administration to further discuss the assessment of $12.2 million.

Public Law 24-14 states that the four autonomous agencies—The Guam International Airport Authority, the Guam Power Authority, The Port Authority of Guam and the Guam Telephone Authority—are assessed an aggregate amount of $3.5 million annually, or $875,000 per autonomous agency.

GTA is no longer an autonomous government agency as it was officially privatized in 2002.

The aggregate amount, the budget law states, is “in lieu of taxes and other charges as may normally be assessed against a private company for utility easements, gross receipts taxes, taxes on audited income, government development fees, such as water wells and monetary fees.”

But Committee on Utilities Chairperson Tom Ada is concerned that by paying the amount, the Port will face hardships that will get passed onto Guam’s consumer.

Tariff hike

“If Department of Administration is going to go and assess $12 million out of the coffers of the Port Authority, which I’m certain is money programmed for other port-related work, if they take that away from them, the Port is going to need to make up for that loss most likely through an increase in tariffs,” said Ada on Wednesday.

This likely increase in tariffs, Ada said, would ultimately get passed down to Guam’s consumers.

“Now the cost of food commodities on the shelves are going to have to be increased to cover the additional increase in shipping costs,” he said.

The entire fund was supposed to be used “solely for the purposes relating to the health and public safety of the people of Guam and public works,” the law states.

At the time, according to the law, “senseless violence” associated with illegal drugs was adversely impacting the public safety and quality of life of island residents.

The funds are supposed to go towards the training and salaries for police and corrections officers.

But even former Gov. Carl Gutierrez at the time, in his transmittal letter to the late Speaker Antonio Unpingco, said this assessment on PAG would “severely constrict the lifeblood of our island’s economic activity, the shipment of goods.”

Port celebrates 35 years: Ceremonies, growth plans mark the year

By Shaun Bevan • Pacific Daily News • October 19, 2010

The Port Authority of Guam is celebrating its 35th anniversary by hosting weeklong celebrations that began with a flag-raising ceremony yesterday morning.

"It's a legacy-setting year for the Port itself, because this is the only opportune time that the Port is getting the financial support it needs from the Department of Defense," said Monte Mesa, the Port Authority's chairman of the board. "More importantly, the Port is earning its financial creditability for the loan by the (U.S. Department of Agriculture)."

The Port soon will have access to $50 million of funding from the Department of Defense and an additional $54.5 million loan from the USDA that has yet to be awarded.

The total amount will fund the first phase of the Port's modernization program, which will include:

The expansion of the cargo yard;

Extension of the communication capabilities between cargo arrivals and account billing operations; and Improvement on customer processing to provide better reporting and check-in services. Construction for the first phase of projects is slated to begin in mid- to late-2011 and be finished in 2014.

"We are now faced with a new challenge of (modernizing) the port while tasked with keeping the service levels that the customers are accustomed to," Port General Manager Enrique Agustin said. "I'm very proud to say that the people we have at the Port are up to the challenge."

The Port was turned over by the U.S. military to the government of Guam in 1966, but the Guam law that created the Port as an autonomous agency wasn't passed until October 1975. Although the technology has changed in the 35 years of operations, the mission of the Port is still the same as it has always been, which is to provide quality service to the community, Agustin said.

Other events for the celebration will be scheduled throughout the week, and will end with an awards ceremony on Friday evening at the Hotel Nikko Guam.

Shawn Gumataotao with Ray Gibson

Shawn Gumataotao with Ray Gibson

Interview between Ray Gibson and Shawn Gumataotao about the Governor's State of the Island address. They also talked about the AG opinion concerning George Bamba's involvement with the M2D2 contract with the Port Authority of Guam. They then talked about the Draft EIS and the Governor's position concerning the military buildup. They then talked about the rumors surrounding the visit by President Obama in March.

Click here to download the entire podcast.
http://www.pacificnewscenter.com/images/stories/k57podcasts/feb10/100215_062216.mp3

Shawn Gumataotao with Ray Gibson

Shawn Gumataotao with Ray Gibson

Interview between Ray Gibson and Shawn Gumataotao about the Governor's State of the Island address. They also talked about the AG opinion concerning George Bamba's involvement with the M2D2 contract with the Port Authority of Guam. They then talked about the Draft EIS and the Governor's position concerning the military buildup. They then talked about the rumors surrounding the visit by President Obama in March.

Click here to download the entire podcast.
http://www.pacificnewscenter.com/images/stories/k57podcasts/feb10/100215_062216.mp3

Scrapped wharf plan cost Port $1.5 million

Scrapped wharf plan cost Port $1.5 million

By Steve Limtiaco • Pacific Daily News • February 9, 2010

A $1.5 million plan to help the Port Authority of Guam create a new "deep water" wharf in outer Apra Harbor has gone to waste because the wharf project was scrapped.

According to a fiscal 2009 financial audit, released yesterday by the Office of Public Accountability and prepared by Ernst & Young, the cost of the wharf plan was recorded as a loss because the project won't be implemented.

The port remains open to the idea of the wharf project, according to Port General Manager Glenn Leon Guerrero, but it was estimated to cost as much as $83 million to complete and port officials decided to spend money on other improvements instead. There were also environmental concerns related to the wharf project, he said yesterday.

"As we were evaluating the need for this project, we learned of the impending military buildup, which then forced the port to redirect our energies to ensuring the necessary upgrades were implemented to our terminal facility to meet the demands of our community and the military buildup," he said.

The port will make improvements according to its modernization plan, but a deep water wharf is not part of the plan, Leon Guerrero said.
Pre-buildup

The idea of creating a new wharf and storage space on more than 17 acres of dredged soil was explored before the military buildup was announced, as a way to allow more aircraft carriers and other large vessels to visit Guam.

In September 2002, the government of Guam received a $1.5 million grant award from the Economic Development Administration, U.S. Department of Commerce, to prepare an architectural and engineering design, and an environmental impact statement for a new deep wharf in outer Apra Harbor, according to Pacific Daily News files.

The federal share of the wharf design and environmental study was $1.3 million, and the port's share was $200,000, which came from port revenue, Leon Guerrero said. The wharf plan was done by TG Engineers, the same company that designed the new landfill, and the environmental study was done by the U.S. Army Corps of Engineers.

Military wharf

The military's preferred plan for visiting aircraft carriers, according to the draft Environmental Impact Statement for the buildup, is to create a new carrier wharf at inner Apra Harbor. The military's proposal would require widening an existing shipping channel and dredging the seabed to create a turning basin near the wharf.


The audit report released yesterday states the port currently is waiting for $99.7 million in federal grants and loans so it can start working on the $200 million in planned improvements that are part of the modernization plan.

According to the audit, the port collected about the same amount of revenue during fiscal 2009 as it did during fiscal 2008 -- $30.1 million in fiscal 2009, compared to $30.18 million the previous fiscal year.

The audit notes the port collected about $636,000 less in cargo handling and wharfage fees, but collected about $897,000 more for equipment and space rental.
The port also cut its operating expenses by $378,000 last fiscal year, the report states.

Consumers brace for higher bills, price hike

Consumers brace for higher bills, price hike

Monday, 01 February 2010 03:34
by Tiffany Sukola | Variety News Staff

STARTING next month, ratepayers will see their monthly bill increase by nearly 12 percent as Guam Power Authority will raise the fuel recovery charge from 12.96 cents to 15 cents per kilowatt hour.

The Public Utilities Commission last week approved GPA’s petition to increase the fuel recovery charge, also known as levelized energy adjustment clause.

This fee helps pay for the fuel used to run GPA’s generators.

According to the figures given at the meeting, residential customers who use an average 1,500 kilowatt hours per month can expect to pay about $30 more.

Although GPA had requested the fuel recovery charge be increased to 14.21 cents per kilowatt hour, the commission decided to increase that charge to 15 cents per kilowatt hour based on a study done by the power company’s consultants, Georgetown Consulting Group.

The commission also gave the Guam Waterworks Authority the green light to begin implementing a system development charge for first time users hooking up to the company’s water and sewer lines.

GWA officials have said that the fee, effective March 1, is necessary in order to recover costs associated with expanding, repairing and upgrading the current system in order to handle an influx of new users.

Water connection fee

The waterworks company’s proposed price tag for the new development charges start at $3,280 for a 5/8-inch water meter, the typical size for a residential waterline, according to GWA’s website. A 5/8-inch wastewater line would cost approximately $4,780 to connect.

Water and waste waterlines typically used by condominiums and other large commercial buildings could cost upwards of $700,000 to connect.

Since the PUC approved the development charges, the cost of building a brand new, average-size home will increase by nearly $5,000.

During the meeting, commissioners brought up concerns about the fees, saying the steep price might make owning a home nearly impossible for some island residents.

GWA officials said they will work on drafting a policy for a payment plan that would allow all residents, not just low-income residents, to pay the connection fee in installments.

Tariff hike

While utility bills are set to increase, consumers will also have to deal with increases in prices of goods that are shipped to Guam.

The Public Utilities Commission last Friday approved the Port Authority of Guam’s request to implement interim tariff increases to help recover operating costs and fund portions of the modernization plan.

The PUC approved the interim increases for cargo handling, fuel throughput and bunkering fees. They also conditionally approved a new $25 bill of Lading Fee. However, the request to bring the Agana Marina Fees up to the same level as the Agat Marina Fees was denied and the PUC recommended the work that the Port needs to accomplish in order to bring that request before the PUC again for consideration.

“This is a huge boost to our port modernization efforts and will help strengthen the finances of the port considering this will be the first increase in 17 years,” said port general manager Glenn A. Leon Guerrero. “These interim tariff increases are yet another milestone in our efforts to modernize and upgrade our island’s only commercial sea port. We are working aggressively to prepare our port for the future and to create a world-class facility that will service our island and our region for the years to come.”

Port union contract in limbo

Port union contract in limbo

Monday, 01 February 2010 03:32
by Jennifer Naylor Gesick | Variety News Staff

EMPLOYEES of the Port Authority of Guam have been trying to negotiate a contract with the management for two years, but the Port board has refused to sign off on anything, even things they are required by law to negotiate, Matt Rector, president of Guam Federation of Teachers, said yesterday.

The Port board is required by Guam law to negotiate scheduling, pay, hours and terms of employment seniority, according to Rector, who recently resigned as a senator and is back to serving as the chief negotiator for the union.

He said many employees currently do not know their schedule from one day to the next, making it very hard for them to plan to their attendance at family and school functions for their children.

The law states that the employees be given a two-week schedule two weeks in advance, but employees only know which shift they work and have to call in or wait for a phone call on a day to day basis to see which hours they will be working.

The law also says employees should work regular eight-hour shifts, but employees currently work 11 to 12 hours, and management "changes it up at the last minute to avoid overtime," Rector added.

"They will go from working 11 to 12 hour shift only to be cut down to a four hour shift the next day," he said.

In two years the board has not signed off on one single term proposed by the union. "Their counterproposals are basically everything struck out," Rector said.

Bernandette Meno, communications director for PAG, declined to comment on GFT’s allegation.

"The PAG was requested to sign a confidentiality agreement as per the union negotiations, so while the union can speak publicly about the negotiations, we are prohibited from doing so," Meno said.

GFT sent a mass email to its members, asking them and their supporters to tell the management of the Port to negotiate in good faith with the employees.

"The board members will open their emails tomorrow to see their inbox full," Rector said "And this is just one of an ongoing set of pressures we're going to put on the board management.”

PNC :: Sen Tom Ada with Ray Gibson

PNC :: Sen Tom Ada with Ray Gibson

Wednesday, 27 January 2010

Interview between Ray Gibson and Senator Tom Ada about this evening's Draft EIS hearing at the Guam Legislature. They discussed how the status of the various utilities will be discussed in relationship to current discussions versus the original plans for the military buildup. They also talked about the Port Authority of Guam's modernization plans and former Senator Rector's statements that because of alleged violations during the contract negotiations with the Port management that he would call someone in Wash Dc to have the Federal grants for the port be put on hold.

If player does not work click here to download entire podcast.
http://www.pacificnewscenter.com/images/stories/k57podcasts/jan10/100127_074054.mp3

Written by : Bob Gaeth

Longer time for Port contract review sought

Longer time for Port contract review sought

Monday, 21 December 2009 03:37
by Jude Lizama | Variety News Staff

THIS past Friday the chairman for the Committee on Utilities, Transportation, Public Works and Veterans Affairs, Sen. Tom Ada, introduced a bill he hopes will improve service and reliability at Guam’s only commercial port.

Bill 300 seeks to extend the period of time in which the Port Authority of Guam is to award a performance management contract for the management, and operation and maintenance of port cargo handling equipment and associated facilities.

“Due to newly enacted public laws not requiring the review and approval of Port contracts by the Public Utilities Commission and the involvement of the Attorney General in the procurement oversight and advisement of the award, such an extension is needed,” according to a media release from Ada’s office.

Current public law allows the port authority to award a performance contract subject to the request for proposal, multistep bid or invitation for bid within 120 to 150 days of the date of issuance of such solicitations, provided, submitted proposals are in compliance with the procurement laws of the island.

Ada’s measure would extend the timeline to a period stretching between 150 and 220 days in length.

The senator said “the concept of a performance management contract has worked well for both utility agencies on island, the Guam Power Authority and the Guam Waterworks Authority, resulting in greater service reliability and efficiencies.”

Ada seeks to enable port board of directors to enter into public-private partnerships to “manage the cargo handling operations.”

“With the recent adoption of the Port Master Plan and the impending military buildup, it is critical that the port be prepared for the challenges associated with this growth,” Ada said. “Through a public-private partnership, the port will be able to meet the increase service demands expected and more importantly, to bring world-class standards to its existing port operations.”