CCU Commissioner Simon Sanchez says even with the Department of Justice’s arguments about the cost of the solid waste receivership, it still proves the receivership is costing Guam too much.
Guam – CCU Commissioner Simon Sanchez is lashing back at Department of Justice Attorney Robert Mullaney who criticized Sanchez for backing the Calvo Administration’s financing plan for post-closure care of Ordot Dump.
Sanchez says Mullaney’s comments raise even more doubt as to the motives of the federal receivers Gershman Brickner and Bratton.
In a recent federal court filing for the solid waste consent decree, Department of Justice Robert Mullaney questioned CCU Commissioner Simon Sanchez’s knowledge on solid waste management.
It stems from comments Sanchez made in a report in which Sanchez argues that the receivership is costing too much. In fiscal year 2014 it was $1.5 million.
So Mullaney responded, pointing out that the $1.5 million covers $615,000 for management costs and about $943,000 for construction management—something Mullaney says Sanchez should be familiar with given his role as a CCU commissioner.
But this is where Sanchez draws the line. Sanchez reacts to the amount of nearly a million dollars for construction management that Sanchez points out could have been handled by someone else for much less.
“At the CCU level we would’ve asked the receiver, ‘Okay what’s your management fee? Okay $600,000. Okay, let’s outsource and bid out the construction management fee. If you wanna bid on it, you can bid on it. But let’s see what the rest of the community would charge,'” Sanchez says. “They awarded it to themselves and they set their own price.”
But that’s not all, Sanchez says. While $1.5 million was the cost for the receivership in fiscal year 2014, it averaged more during previous fiscal years. According to an audit conducted by the Office of Public Accountability, the total amount paid for the federal receivers Gershman Brickner and Bratton between 2008 to 2014 was $14.4 million or an average of $2.4 million a year.
“So based on the public auditor’s numbers, the receiver was being paid about $2.4 million a year annually since 2008 to 2014. Well as they’ve now admitted, their management fee is only $600,000 a year, that means their construction management fee, the other fee, was about $1.8 million a year,” he laments.
That estimate of about $1.8 million a year in construction management fees, notes Sanchez, is much more expensive than what any other local business would have charged for the same service. Further, Sanchez says GBB took that fee off the top, instead of amortizing it into the life of landfill.
“They didn’t bid it out, they awarded it to themselves and they’re saying this is a fee, take it or leave it. How do we know that that’s the best fee they could’ve gotten? To me, they had an obligation to look for that best fee,” says Sanchez.
But what strikes Sanchez as even more disturbing is the amount GBB is charging for management: $615,000 a year, or about $51,000 a month.
“At GPA/GWA, we spend about $25,000 a month. Now the GSWA has 17,000 customers and bills $17 million a year. GWA and GPA have 45,000 customers and bills between $100 million to $400 million a year and yet we only pay our management $25,000 a month,” argues Sanchez.
“Are we paying construction management next year when everything’s done this April? It makes you wonder why they wanna keep the receivership going till the end of 2017. They make a lot more money that way,” he adds.