Guam -A memo from Calvo-Tenorio Finance Sub-Commitee Co-chair – Bernie Artero reveals that GovGuam is facing a minimum $96.5 million dollar shortfall.
However, Artero’s memo points out that the shortfall is likely grow even more after the transition team has received the updates it has requested from BBMR.
She write that “The $96.5M is already anticipated to exceed $100M once the amounts for the Tax Refund Interest and Law Enforcement (LE) pending litigations are factored in.”
In response to her memo, Transition Co-Chair Dan Tydingco wrote “We appreciate your status report; albeit depressing, the candor is much needed.”
He also writes: “Akin to fires, which are either flaring, blazing or smoldering, these fiscal issues … necessitate that alarms be sounded loudly.”
Unfunded/Unbudgeted Cash Requirements
Notes: (Items compiled based on discussions with BBMR and DOA Directors excluding GMHA Info)
[ Add’l Operations Requirements]
Bureau of Prisons $ 9.2M
[currently paying $250K monthly (9.6 in FY09 audit)]
Unfunded Health Insurance Increase $20.0M
MHSA Permanent Injunction $15.2M
[Second payment due Jan. 3, 2011]
Law Enforcement $ ?
[ 10%- Litigation pending ]
Merit Awards $ 1.5M
[Litigation pending info requested]
GMHA Retirement Fund $ 2.9M
Department Budget Shortfalls $ 20.0M
[ BBMR-Estimate (details forthcoming)]
COLA Interest $ 2.7M
[DOA as of 9/30/10]
Tax Refund Interest $ ?
LE working 43 hrs not receiving 3 hrs OT $ ?
[ Litigation pending; info requested]
Hay Study- Compression, Unclassified $ 5.0M
Sub-Total $ 96.5M
FY 2010 Deficit payments using FY2011 Cash ?
Total $ 96.5M
Artero’s Memo is reprinted below:
Dan and Jerry,
At the Subcommittee meeting yesterday, I presented a preliminary list of estimated current and anticipated unfunded cash requirements of the government of Guam. The information was compiled based on discussions with the Directors of Administration (DOA) and the Bureau of Budget and Management Research (BBMR). The raw data was presented to the Subcommittee as a gauge of the fiscal challenges facing the current administration as well as the incoming administration. Both DOA and BBMR had been requested and are working to provide updated numbers and other financial information which will provide more details as to the financial posture of General Fund in particular. Below is the list of unbudgeted requirements which are expected to impact on the government’s ability to meet its financial obligations
While the $96.5 M is a number that may go up or down after updates are received, the list is not all inclusive as items such as outstanding COLA payments are not reflected therein ($20M) . Moreover, absent the COLA liability, the $96.5M is already anticipated to exceed $100M once the amounts for the Tax Refund Interest and Law Enforcement (LE) pending litigations are factored in.
The majority of these potential expenditure items, individually, come as no surprise as most have been discussed at one time or another. However, once compiled into a list of cash requirements, the total is a cause for great concern. The financial condition of the government of Guam will be affected if these expenditure items are left unaddressed. The government’s cash position and the current General Fund deficit will be exacerbated. As such, the Subcommittee is focusing its efforts in the assessment of the government of Guam’s financial condition and in the development of corollary recommendations to include options for addressing the immediate cash requirements.
/s/ Bernadette F. Artero