By Gina Tabonares
Variety News Staff

(2nd of a series)

WHEN the government of Guam signed the federal court order or the Feb.11, 2004 consent decree, part of the agreement was to create a “lock box” for the purpose of collecting the Solid Waste Operating Funds that would be allocated for the construction of a new landfill and the closure of Ordot Dump.
However, instead of appropriating more to meet the $90 million capital for the consent decree projects, the 2007 budget bill allowed the governor of Guam to borrow funds from the Solid Waste Operating Funds with the option to restore funds “as cash becomes available.”
Under the budget bill, the governor of Guam has the ability to remove cash from the SWOF in an open-ended obligation, causing great uncertainty among potential bidders as to whether the SWOF will have sufficient cash on deposit.
Georgetown Consulting Group said Public Law 28-150 not only completely destroys the “lock box” concept for the SWOF but also undermines the confidence of potential bidders for upcoming solid waste management projects that there will be sufficient funds available in the SWOF to pay for services rendered.
“If the potential bidders instead are convinced that the SWOF will soon have on deposit more open-ended IOUs from the governor of Guam than cash and that vendors will need to wait for payment as cash becomes available, these bidders are likely to increase their bid prices if they decide to bid at all,” Georgetown Consulting Group said.
The ability to borrow from the SWOF also undermines the Oct. 27, 2005 Public Utilities Commission regulatory order restricting the use of the additional tipping fees as these earmarked funds are also subject to the governor’s transfer authority.
To resolve the problem, the audit firm suggested that SWOF should be added to the list of special funds that are exempted from the governors’ transfer authority.
The Georgetown Consulting Group said that the integrity of the SWOF would presumably be restored once the Guam Legislature enacted a law that would pledge SWOF revenue as a source for the repayment of a new bond.
It suggested that the PUC should approach the Legislature to amend P.L. 28-150 to exempt the SWOF from uses other than solid waste management operations and regulatory expenses.