No raises: Calvo suspends Hay Study - KUAM.com-KUAM News: On Air. Online. On Demand.

No raises: Calvo suspends Hay Study

by Sabrina Salas Matanane

Guam - The island's chief executive, Governor Eddie Calvo, announced major changes in policy that will affect all employees of the Government of Guam. He detailed that the Hay Study has been suspended, meaning no raises until the Government of Guam can afford them.  

Calvo has also directed all agencies to reduce the cost of electricity by at least 10%, also ordering that paper be reduced through greater use of digital communication. He's also calling for an audit of fuel expenses, and looking into the consolidation of office space to save on rentals.  

His address follows.


Governor Calvo's special address

My fellow Guamanians,

I don't have very good news about your government tonight. I've made some decisions so that the public schools can stay open this year, the hospital can have medicine, and so that those most in need do not have to suffer more than they already are.

Our finance directors are continuing to assess the government's cash position for this fiscal year. Their preliminary reviews disclose that there is no apparent course of action that will result in positive FY 2011 cash balances as reported by the prior administration to the Transition committee. Some time over the next nine months, we may, quite frankly, run out of cash. If we do, we will not be able to pay employees, run the hospital, keep schools open or help the needy.

If we do not close this cash gap, those in need will suffer the most. It will negatively affect Mental Health, COLA, the hospital, and non-profit organizations like Catholic Social Services and Sanctuary. This is money to feed the homeless, shelter abused children, help victims of domestic violence, assist the elderly pay for their medication, and to aid families struggling with disabilities. We can't leave these people behind. We can't turn a blind eye and watch them suffer as the money runs out. And we also can't keep holding your tax refunds.

Ray and I are keeping our promise and are taking immediate actions. We had to act today, because I refuse to shut down the government or to have a mass layoff of teachers, police officers, doctors and other professionals of the government.

Ray and I are issuing further orders to cut costs. We are directing all agencies to reduce the cost of electricity by at least 10 percent. Paper reduction through greater use of digital communication, double-sided printing and recycling will be mandatory. We will authorize audits of fuel expenses and the use of 24-hour vehicles. We will be investigating the consolidation of office space to save on rentals. And as of today, the Hay Study is suspended.

I cannot speak to the reasons our predecessors decided to implement the Hay plan based on the financial information we have before us today. All I know is that it was an empty promise, the government can't afford it, and now our hard-working government employees will have to shoulder the burden of that empty promise.

These actions do not include further cost cuts that will be made when agency directors submit their assessments this month. We expect further containment of spending through innovative ideas. This includes the health insurance liability. We are looking at ways to reduce the cost of health insurance. There are legal issues we must address first... we need to determine whether, legally, this can be affected.

To all the government employees, I'm asking you to understand why this must be done. We need to make sure that our neighbors and friends most in need of help do not suffer the most. I will restore the Hay Study as soon as we can afford it. I know that with the other cost containment and restructuring initiatives we will undertake, we can get this government on track.

In the meantime, we will lead by example. We've reduced personnel costs at the Governor's Office alone by nearly 20 percent. We consolidated positions and we're doing without a lot. We're also reducing costs in every other way we can: paper reduction, printing, postage, power and water.

My staff and I will be adopting a public school to clean regularly so we reduce the budget burden on public schools and the mayors. The Lieutenant Governor also will be leading volunteer service projects. His Comps for Kids program will bring computers to classrooms. He is calling on the private sector to join his Beautification Task Force to alleviate funding strains on Public Works, Parks and Recreation and the mayors. I want to thank my wife, Christine, and Ray's wife, Notch, for their volunteer efforts there. And finally, Ray is taking personal responsibility for the Guam State Clearinghouse, to ensure we receive as many federal dollars as we can.

We're very serious about fixing the problems. There's a bright future ahead, but before we realize that future, we must make some adjustments so we can meet our obligations to those who need them most.

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