Lawmakers debate Bill 156 for hours
Guam - From session, lawmakers discussed for several hours a bill that would go to paying tax refunds and COLA, only to be withdrawn. On session floor Monday, the Guam Waterworks Authority and the Consolidated Commission on Utilities vigorously argued they've reached a point of no return and that Bill 156 if passed sets the stage for unintended consequences.
Joe Duenas said, "The train has left the station; the train left the station in order to pull it back we would waste time and time was of the essence."
Bill 156 essentially is a disbursement plan for $20 million that would be reimbursed by GWA to the General Fund. The measure if enacted provides that money be used for tax refunds and COLA. In order to navigate the confusion the bill caused on the floor.
Here's the background: it was in 2005 GWA was authorized to borrow a total of $220 million, GWA began by borrowing $105 million for capital improvement projects, after that waterworks then began the process of attempting to borrow an additional $118 million to meet the mandates of its stipulated order all of the proceeds were designated to go towards CIPs, their plan and a series of rate increase were approved by the Public Utilities Commission in 2009. However in May 2010 the legislature amended the public law authorizing the initial $220 million borrowing authority bumping it up to $240 million.
The remaining balance was to be used as reimbursement to the General Fund and in this case with Bill 156 to pay for past due tax refunds and COLA.
The CCU, however, at the time said instead of starting from scratch they continued to move forward on trying to secure the $118 million. But then enter the PUC's administrative law judge that ruled GWA must use the bond money to reimburse the General Fund. According to the panel that appeared before lawmakers Monday, should the PUC during its meeting next week accept the ALJ's decision it would put GWA in a real bind because the $118 million bond is supposed to be used solely for infrastructure projects.
He said, "Because our bond counsel has said this was sold as a tax exempt infrastructure loan and not sold as tax exempt infrastructure plus other refinancing then we would be in a position where we would be misrepresenting to loan lenders how they're using the money that they loaned to us. We didn't ask them to borrow money except for infrastructure."
Lawmakers on the floor accused CCU and GWA of not having any intention of reimbursing the General Fund because it didn't include the extra $20 million in its bond borrowing package when the increase was authorized. According to CCU chairperson Simon Sanchez. They treated is separately because they were already months into securing the $118 million and changing it would delay compliance with their stipulated order with the federal court.
He said, "We felt that all of that effort at the last minute would have delayed the issuance when we got the federal judge saying where is the money for the stipulated order and had promised her we would have it by the end last year, so we added all those variables together and as you said we're elected separately we used our collective judgment right or wrong to proceed."
Sanchez says GWA and the CCU fully intend to comply with the public law and are working to issue another RFP for the remaining balance left on the bond authorization roughly about $17 million to $18 million. This would require however another rate increase of about 5-8% depending on the terms of the bond. During the debate lawmakers discussed an amendment by Senator Tom Ada that would clarify that proceeds from the 2005 $105 million issuance and the 2010 $118 million bond proceeds would not be touched.
Another possible scenario holding off Bill 156 until the PUC decides on the ALJ's decision on Monday. After hours of debate Senator Ben Pangelinan decided to withdraw the legislation.