Guam to Begin Receiving Millions in Cash from Federal Receiver
Immediate Release: March 16, 2011
The government of Guam will receive $1.5 million today, $500,000 monthly for the next nine months, and $12 million annually for the 23 years after that.
Federal receiver for the Ordot Consent Decree, Gershman Brickner and Bratton, confirmed it will deposit thecash into a Bank of Guam government account today. That money will go to the General Fund.
The government of Guam took out a limited obligation bond in 2009 to pay for the construction of the Layon landfill and the closure of the Ordot dump. That bond pledged Section 30 revenues as the guarantee thegovernment could pay back the loan. This is because Section 30 monies are certain to come to Guam every year, and the amount does not fluctuate significantly. The repayment source, however, is the tipping fees GBB collects from island residents and businesses for the collection of trash. GBB has been collecting these fees since last year, building an efficient system.
Part of the bond agreement, or indenture, says that GBB, when it collects the tipping fees, must repay thegovernment for using the Section 30 monies to pay the debt service on the Layon landfill. This remittance amounts to about $500,000 a month for the next nine months, and $1 million monthly for the life of the bond.
The payments were to begin in December; however, GBB argued it couldn’t start payments then because theprevious administration had used cash owed to GBB for other purposes. Governor Eddie Baza Calvo orderedthe Department of Administration to work out a payment plan with GBB to reimburse the accounts.
Because of this, GBB released the money owed from December, January and February. The receiver now will make its monthly payments to the General Fund.
This money now can be used for local government operations and initiatives as budgeted.
