by Mindy Aguon

Guam - A local resident has asked lawmakers to implement a three-year moratorium on the Guam Waterworks Authority's system development charge. It's an idea supported by the Guam Housing Corporation and the governor, but vehemently opposed by GWA and the Consolidated Commission on Utilities.

"The system development charge has not worked," Rodney Webb strongly asserted. "It's not raising any significant amount of money for GWA. It's sitting there. They haven't spent it. They haven't put together any plans to spend it that I am aware of. And they can't because they need $450 million." The resident and local business owner believes the SDC is doing more harm than good, adding, "It's hurting everybody. It's hurting young, low-income homeowners or potential home owners. It's hurting homebuilders and its hurting Guam's economy at a time when we can least afford it."

Webb has written to lawmakers asking that a three-year moratorium be established on the SDC. Webb and his wife own a piece of property that was subdivided into 18 lots and based on GWA's table for a 6" line, it would cost him upwards of $280,000. "Therefore, nothing's going to happen, of course. And if I'm misunderstanding that, then this is really not well laid out," he shared.

The idea of completely removing the system development charge has been brought up in recent months by Senator Tina Muna Barnes with the support of the governor and the Guam Housing Corporation as they believe the SDC is a deterrent for residents trying to realize the Guamanian Dream of owning their own home. But CCU chairman Simon Sanchez believes Webb has totally misrepresented the facts, saying connecting a development to GWA's system may require a 6" or 8" line into a neighborhood.

He told KUAM News, "But then the individual houses they connect with a much smaller line - a 2" line - and the meter they use at their house is the smallest meter for residents and that's only $5,300, not $280,000."

That's a charge of $5,300 on a 30-year mortgage (about $0.60 a day). To date, GWA has collected about $3 million in charges and developer impact fees. Sanchez says new growth must pay for new growth, not be a burden to existing ratepayers. GWA general manager Martin Rousch says the money collected so far will help pay for making improvements to the existing water system through drilling of new water wells and addressing wastewater issues to serve new customers. "The system development is all about sustainability and we're trying to balance development and our environment, and clearly if we don't have a way to pay for new wells, then we can't even approve the permits, so how does that help development?" he questioned.

Said Webb, "This system development charge has been a failure. It's not going to anywhere near funding the infrastructure costs that they're looking for."

While the parties disagree, GWA and the CCU are working to create an alternative solution such as making a graduated rate based on a percentage of the cost of your home. The proposal is expected out in the next few weeks.

In the meantime, Senator Barnes introduced Bill 93 today, which states that the system development charge should not apply to a user or developer who is connecting property for the first time into the Guam water or wastewater system for affordable home projects. The legislation additionally allows for all residents, not just low- or moderate-income residents, to be eligible for the amortized system development charge with an initial payment of 20% of the total charge rather than the current $1,000.