Early Thursday morning, Governor Lou Leon Guerrero signed off on bonds whose proceeds will be used to upgrade the Layon Landfill.
As the Layon Landfill nears its current capacity, the Leon Guerrero-Tenorio Administration has just signed off on the general obligation bonds that will finance the $30 million in project costs for the upcoming third cell of the landfill.
The signing was held in a ceremony held at Adelup Thursday morning.
Despite the heavy volume of trading that occurred when the Guam bonds were presented, the island’s offering was extremely well received, according to a release from the administration, accruing a true interest rate of 3.25 percent and reducing the total debt service by about $1 million from the initial offering terms.
“What this means is that in the global market, in the market of capital, we are seen as a very financially stable government. This is very important for the economy of our island, but also the global perspective because that means that investors trust our government,” the governor said.
She also emphasized that one of the key factors for the positive response garnered by the offering was that the stable cash flow coming into the island’s economy was made possible by the current gross receipts tax currently being set at 5 percent.
“If we roll it back to 4 percent, we will be short by $58 million dollars and the investors will see that and they will start questioning our ability to maintain the public services, the financial leverage, the financial liquidity. These are the things they look for,” the governor said.
The proceeds from the sale of the bonds will be wire-transferred to the cell’s construction fund account Thursday night and will be made available for disbursement as early as Friday.
According to Larry Gast, the general manager of the Guam Solid Waste Authority, the contract for the cell’s construction is currently in negotiation between the receivership and the winning bidder.
Gast says that the construction of the new cell will be completed by the time the landfill reaches capacity within the next two years.