BBMR Deputy Director Lester Carlson offered a simpler explanation of the government’s financing plan for post-closure care of Ordot Dump that everyone seemed to understand better.
Guam – For the first time in several years, there seemed to be a consensus as to the financing plan proposed by the government of Guam for post-closure care of Ordot Dump.
If it wasn’t clear before, with the AG’s Office now involved and a better explanation offered by a financing expert, it’s becoming clearer that GovGuam’s proposal will not require raising of rates and fees.
Over the last few years, there has been a lot of back and forth and bickering between the solid waste federal receivers Gershman Brickner and Bratton and the government of Guam. The dispute centered on the financing of post-closure care for Ordot Dump and other projects that were not part of the original consent decree.
GovGuam has continuously opposed GBB’s proposal, noting that it’s not as flexible as they would like it to be, instead offering their save that they believe would save ratepayers in the end.
“There were legal filings back and forth and back and forth that was here and there,” says Attorney General of Guam Elizabeth Barrett-Anderson. “The receiver’s opposition to ours, we didn’t quite understand why there was such great opposition.”
But today Bureau of Budget Management and Research Deputy Director Lester Carlson joined in on the conversation to offer an alternative explanation as to the government’s financing plan.
Carlson explained that with the government’s history in successfully going out to the bond market and building up a stronger credit as a result, GovGuam should be able to secure a Section 30 bond to fund the post-closure care. Carlson says the amortization of the loan will be spread out over a longer period of time which will save ratepayers in the end.
“The government of Guam has had a very good history in the last several years of bonding. The government’s bonds are sold very successful on the bond market and if we can take the 2009 bond and refinance it, then there’s a savings to the people of Guam. We can finish the projects that are necessary in the next two years and there’s a tax savings to the ratepayers of Guam,” Barrett-Anderson explains.
Even Vice Speaker BJ Cruz agreed. He says that his Office of Finance and Budget staff analyzed both proposals. GovGuam’s version, he says spreads out the payments that need to be made over the life of the loan.
“They figured that with $8.5 million now and with going out to the bond market and having $15 million to put in from the savings, that that $23 million would start out as the corpus. It would pay for the initial $8.9 million of other projects,” says Cruz.
“Where it shows how everything would be paid but rather than the receiver keeping $4.5 million a year, the government would be putting in about $750,000 and then adjust to a half million after 2021 and we’d be able to keep the post closure and do all the projects that were necessary. That’s the government plan that we understood when we analyzed what the government had written down,” notes Cruz.
Chief District Court Judge Frances Tydingco-Gatewood took the matter under advisement and will be issuing a decisions soon.