Guam – The Waterworks Authority and the Consolidated Commission on Utilities issued the following release today [Monday] detailing their opposition to P.L. 30-145.
GWA and the CCU reiterated their opposition today to P.L. 30-145, a $20 million rider authored by Senator Ben Pangelinan last year that requires GWA to borrow an additional $20 million to pay to the General Fund. GWA recently appealed to the Superior Court to overturn a May PUC order to pay $18.3 million and to overturn Bill 30-145 since it forces GWA to perform what it considers an illegal act by violating a 2005 bond covenant.
The PUC order is based on their and Senator Pangelinan’s interpretation of P.L. 30-145.
Chairman Simon Sanchez repeated GWA and the CCU’s opposition to P.L. 30-145 while testifying on Bill 222, a measure that would legally allow GWA to borrow the $20 million. Sanchez noted that Sen. Pangelinan “…introduced this $20 million rider without a public hearing or meaningful consultation with GWA or long time and respected GovGuam and GWA bond counsel Stan Dirks.
Here are some other points to consider per Chairman Sanchez:
1. This $20 million General Fund tax on GWA rate payers became P.L. 30-145 “
2. Bill 222 carries all the appropriate and legal authorization for GWA to borrow $20 million. It is modeled after prior public laws (Public Laws 29-130, 30-55 and 30-101) that allowed GWA to successfully and legally borrow $30 million from the Bank of Guam in 2010.
3. If Bill 222 is passed into law, GWA could legally borrow and pay the $20 million tax on GWA ratepayers required by P.L. 30-145.
4. The testimony noted that rate increases ranging from 3.7% to 37.7% could be required depending on how fast the PUC wants GWA to pay their $18.3 million order.
5. A better alternative to P.L. 30-145 would be to use the annual debt service savings of about $10 million that will be freed up this year after the final payment of a 1988/2001 General Fund bond.
6. The Governor and Senators have all said they want to pay COLA and refunds. Due to the size of the obligation, long term borrowing has been proposed.
7. $10 million in saved debt service can be used to re-borrow about $140 million.
8. This $140 million re-financing will create enough money to completely pay off all the remaining COLA obligations and substantially pay down refunds due to Guam families.
Sanchez went on to note, “There also would be no need to burden GWA ratepayers with a $20 million tax that barely pays off anything, and just as critical no need for water rate increases to pay the Gen Fund $20 million tax. This approach is better for the people of Guam than P.L. 30-145, “Sanchez said.
Sanchez concluded, “While Bill 222 only makes up for the legal failings of PL 30-145, the real question is whether P.L. 30-145 really makes our people’s lives better or worse by unnecessarily taxing GWA ratepayers $20 million. It’s clear to us that P.L. 30-145 makes it worse for our people.”
GWA and the CCU called for the repeal of P.L. 30-145.