HAGÅTÑA (The Guam Daily Post) — The Port Authority of Guam board of directors unanimously approved the agency’s fiscal year 2024 budget last week, projecting about $52.4 million in total revenues.
But on top of authorizing the agency’s yearly finances, the board approved something that probably hadn’t been requested before – a survivability clause.
Based on the language stated in a PAG release on the budget decision, the survivability clause essentially allows the fiscal 2024 budget authorization to remain, until supplanted or the board says otherwise, in the event there is no new superseding annual budget promulgated by the board.
The PAG general manager is also authorized to exercise discretion in increasing spending, up to 3% compounded for each consecutive fiscal year after fiscal 2024.
The board also authorized the general manager to go before the Public Utilities Commission in the event the board does not have enough members to form quorum.
As evident from a Port release, and discussed during last week’s meeting on the budget, there is concern related to the board’s membership.
“Given what we’re seeing with the governor’s two nominees and how we don’t know what the delay is. We appreciate our oversight chair (Sen. Amanda Shelton) for keeping this in active discussion,” PAG General Manager Rory Respicio said last week.
There are three current PAG directors, according to the agency’s website: Dorothy Harris, Judith Guthertz and Conchita Taitano.
Harris and Guthertz were reappointed by the governor in July. The two have confirmation hearings Sept. 8, but Respicio said they don’t know how long lawmakers will take to confirm the nominees after that.
“Beginning September, you would be in a holdover position for three legislative days,” Respicio told Guthertz and Harris.
“So, in any event there is a delay in giving us a duly constituted board in order to make a quorum, we’re asking that the survivability clause be attached to the budget,” Respicio added.
Port legal counsel James Canto said he was confident there is no prohibition or impediment in law to the survivability clause.
At about $52.4 million, projected revenues for fiscal 2024 are nearly $1.3 million less than revenues projected for fiscal 2023, which was about $53.7 million.
According to last week’s budget discussion, the Port is projecting more cargo revenues for fiscal 2024 – about $1.2 million more – but is taking into account reduced non-cargo revenue compared to fiscal 2023, about $2.4 million less for fiscal 2024.
The Port’s fiscal 2024 budget also projects total expenses at nearly $51.2 million.
“Using fiscal prudence, the Port’s total expenses were based on the needs of each division and annual obligations to include yearly debt service of $5.7 million, maintaining a debt service coverage ratio (DSCR) of 1.25, days cash on hand – 500, and funding for capital improvement projects from bond, federal and local funding sources,” the release from the PAG stated.
With the projected revenue and expense numbers, the funds available for debt service will lead to a debt ratio of 1.51%, which is 20% higher than the required debt service ratio of 1.25% for fiscal 2024, according to the PAG release.
The Port Authority of Guam’s Administration Building in Piti is shown Sunday, Aug. 27, 2023.
