Panel reviews recycler’s $5.9M claim

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L-R: Sen. Michael F.Q. San Nicolas (D), Chairman of the Committee on Government Operations; Walter Leon Guerrero, Administrator, Guam Environmental Protection Agency; Frederick Horecky, Attorney for Ko'ku Recycling; and Angel Sablan, Executive Director, Mayors' Council of Guam. The group was among panelists participating in a meeting of the Committee of the Whole during session at the Guam Congress Building in Hagatna on Tuesday.

How to beat the high cost of waste management 20 years after the storm has passed? On Tuesday Guam senators wrestled with how to settle an old debt when public costs are so high, records are so scarce, and funding is so elusive.

Guam – The 34th Legislature’s Committee of the Whole welcomed a distinguished panel of attorneys and other specialists to the Guam Congress Building on Tuesday morning to help get to the bottom of why the local government owes private contractor Ko’ku Recycling $5.9 million, whether to pay it off, and how.

The prospective payout required nothing less than a right-hand oath among panelists to keep testimony on the up and up. The vow was administered by Sgt at Arms Thomas Unsiog.

“Thank you, Tom,” said Sen. Michael San Nicolas, Chairman of the Government Operations Committee.

“We swore the members of the panel in because they’re going to be discussing a potential government claim and the veracity of that claim with respect to a potential appropriation we might need to make to fund that claim.”

A 2001 Chamorro Land Trust Commission contract licensed Ko’ku to gather up and ship off what purportedly turned out to be as much as 50,000 metric tons of junk cars, old tires, and metallic waste from the island.

The year 2001 fell between devastating typhoons, so it’s conceivable that more waste than average had accumulated in the years just before and just after the licensing agreement was executed. But the written agreement stipulated 25,000 metric tons only.

“The total amount of work done was 50,000 tons, but the actual claim was already found by the CLTC to be the liability,” Ko’ku’s attorney, Frederick Horecky, said.

“They’re the ones that determined that 25,000 tons had already been removed as of 2001 and that the value was $7.5 million.”

The whole waste-removal tab may indeed be $7.5 million, but a legislative proposal would credit the account $1.6 million for Ko’ku’s prior lease of Chamorro Land Trust lots as temporary waste stations.

A zero-interest note for heavy debris removal could finally find a steady, 10-year funding stream till the entire liability is paid off, should retiring Democratic senator Dennis Rodriguez Jr.’s Bill 350-34 (COR) pass into law.

“Bill 350 is an act to provide an annual continuing appropriation from the Recycling Revolving Fund,” Rodriguez told those  gathered.

But not everyone concerned is entirely comfortable with further saddling future budgets with yet more debt, nor the means by which that debt might be piled up.

“I understand what we’re trying to do here in terms of making a certain amendment, but you’re creating a situation, in the fact, 17 years after the fact!” Sen. Mary Camacho Torres (R) exclaimed.

“We also have underlying concerns of the legislation itself and the process of what’s trying to be accomplished here,” said Carl Espaldon, Deputy Attorney General with the AG Office’s Solicitor’s Division.

“The licensing agreement may not be valid,” Deputy Attorney General Ken Orcutt told senators. “We’ve never looked into that question.”

Whether the original agreement is binding or not, Bill 350 seeks to amend the existing written understanding between the Chamorro Land Trust Commission (the lessor) and Ko’ku (the lessee) by providing a $590,000 annual appropriation from the $2.9 million-per-annum Recycling Revolving Fund. That arrangement would provide payment for the old obligation. But, as Sen. Regine Biscoe Lee (D) pointed out, that would put the pinch on another public agency.

“What programs currently funded by the Guam EPA would have to be potentially set aside to meet this appropriation from the Recycling Revolving Fund?” Lee asked.

Committee panelist and Guam EPA Administrator Walter Leon Guerrero suggested something would have to give.

“And then at the time when the money’s taken out, then that will limit the amount…that the administrator has every fiscal year,” he said.