13-year solid waste receivership cost GovGuam $22.1 million in receiver fees



By Pacific Island Times News Staff


The government of Guam has incurred a total of $22.1 million in fees paid to the receiver Gershman Brickner and Bratton over 13 years since the island's solid waste agency was placed under federal receivership in 2008.


"Of the total amount, the general fund partially funded $3.8 million with the remaining paid from the solid waste operations fund," according to the Office of Public Accountability.


Receiver fees paid to GBB amounted to $204,000 in FY 2021, the OPA's audit showed.


The Guam Solid Waste Authority was placed under receivership as a result of a federal lawsuit against GovGuam for its failure to address the leachate that built up from Ordot dump. The lawsuit, which led to the eventual construction of a new landfill and the shutdown of Ordot dump, cost Guam more than $200 million.


In April 2019, the District Court of Guam partially ended the receivership and turned over GSWA's day-to-day operations from GBB to local management.


The court, however, ordered GBB to stay on board to complete its remaining responsibilities including the approval of the Ordot dump post-closure care plan by the U.S. Environmental Protection Agency and Guam Environmental Protection Agency, and the issuance of a post-closure permit.


USEPA issued an estimated revised technical path for Ordot’s post-closure care plan approval and issuance of the post-closure permit date to June 1, 2021.


"Under the order, GSWA was required to fully fund by August 2026 an account held in trust to pay for the estimated future costs of the Ordot landfill until GovGuam can reclaim it for alternative use," OPA said. "Guam EPA with concurrence with USEPA issued the Ordot post-closure care permit on Jan. 15, 2022."

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In 2019, GovGuam issued $27.6 million in general obligation bonds that were primarily used to finance the construction of a new cell for the Layon landfill operated by GSWA. The bonds are backed solely by the full faith and credit of GovGuam.


Total principal and interest remaining on the general obligation bond are $33 million payable through November 2031.

"GovGuam will continue to assume the bond payments using the Section 30 funds at GSWA’s current rate. Should GovGuam seek reimbursement from GSWA, it will need to adopt the full government reimbursement rate. To date, no action has been taken to adopt a new rate for GSWA," OPA said.


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OPA also raised a red flag on GSWA's sole-source procurement for temporary staffing services for 10 consecutive years from 2011 to 2021.


"During the year ended Sept. 30, 2021, local funds of $1.2 million were expended, which did not demonstrate a competitive procurement or which were procured through a possible inappropriate procurement method," OPA said.

"Independent auditors recommended GSWA follow established procurement regulations consistently for all procurements and use the appropriate method of source selection," OPA added.

In response, GSWA said a local statute allows the agency to continue the contract for no more than three years from the date of transfer of management from federal receivership. "However, GSWA plans to bid out the services before the three-year period lapses," OPA said.


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OPA's audit found that GSWA's total expenditures for FY2021 amounted to $52.2 million, showing a $6.6 million decrease compared to $58.8 million in FY2020.


"This is due, in part, to the $8.3 million decreases in capital projects expenditures offset by the $1.3 million increase in debt service payments," OPA said.


GSWA manages three sets of fund: the Solid Waste Operations Fund, Capital Projects Funds, and Debt Service Fund.


"These funds collectively ended FY 2021 with a decrease in total fund balance (net loss) of $12.05 million, from $46.58 million in FY 2020 to $34.53 million in FY 2021," OPA said. "This was primarily attributed to the decrease in the Capital Projects Fund of $11 million due to ongoing new cell construction activities associated with the Layon landfill."

GSWA received $56,000 in 2021 and $34,000 in 2020 from the $118 million CARES Act received by GovGuam.


The agency also received $546,000 in additional grants under the American Rescue Plan Act, from which GovGuam received a total of $553.6 million.


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