Guam - The Public Utilities Commission will be meeting this Thursday to hear the latest with the Guam Waterworks Authority's effort to borrow up to $20 million to comply with public law to reimburse the General Fund. During the last PUC meeting it was agreed that GWA and Administrative Law Judge Attorney David Mair would work on this alternative rather than using money from GWA's recent bond that is being used to pay for capital improvement projects to comply with the agency's stipulated order with the U.S. Department of Justice.
To help move the compromise forward, Senator Tom Ada introduced Bill 222. According to a media release the legislation is needed because upon advice from Bond Counsel Stan Dirks, it was concluded that this new $20 million debt could not be borrowed in the same way as the previously borrowed $220 million CIP bond. To do so would conflict with the original borrowing law, PL 28-71 passed in 2005, and bond agreements that had already been entered into. Bill 222 proposes a solution in which the borrowing will be structured similarly to GWA's $30 million loan from the Bank of Guam in 2010. The loan authorization will enable GWA to enter into a loan agreement without conflicting with exisiting bond covenants. "We must honor our previous bond commitments," said Senator Tom Ada.
"Unfortunately, the borrowing provision in PL 30-145 was added as a rider, without full consultation with GWA or Bond counsel. Now that GWA is trying to carry out this mandate, they have identified constraints that need to be removed if any borrowing is going to happen," Senator Tom Ada added. Bill 222-31 also makes it clear that no funds from the 2005 and 2010 CIP bonds can be used to fund the $20 million.
As we reported if GWA secures the $20M dollar rates could go up anywhere between four to eight percent. The Public Utilities Commission is scheduled to meet Thursday at 6:00pm at Suite 202 in the GCIC Building.