Speaker Benjamin J.F. Cruz is seeking the evaluation of government of Guam leases and to determine the feasibility of acquiring or constructing a home for government entities presently leasing commercial space.
Cruz’s proposal is in response to the Office of Public Accountability’s recent release of an audit indicating that annual lease expenses have nearly doubled over the past decade,
The speaker introduced Bill 15-34 that require a comprehensive cost-benefit analysis to be completed prior to the authorization, funding, or construction of new government office buildings—ensuring that the construction of the unified government building in Hagåtña is both cost-effective for Guam’s taxpayers and done right the first time.
In conjunction with his legislation, the Speaker also transmitted a letter to Public Auditor Brooks this morning, requesting clarification on her audit, OPA Report No. 17-002. While the audit states that approximately $11.7 million is spent annually on commercial office space by various government entities, Cruz contends that this figure may not accurately reflect the amount of money “available” for debt service or lease payments on a unified government building.
According to an analysis conducted by the appropriation chair’s office, only $5.2 million—far less than half the amount the OPA Report No. 17-02 cites—appears to be potentially available when considering a transition to new government space. Cruz says the discrepancy is based on the fact that several of the entities contained in the review are either outside of Executive Control or required to serve the areas, villages or regions in which they are located.
“While I support the construction of government office buildings—especially as a means to avoid lease arrangements which may cost far more, none of this can be determined without a detailed analysis—a point you clearly make in OPA Report 17-02,” said Cruz to the Public Auditor.
As a result, in his letter, the Speaker called for a more comprehensive financial analysis of GovGuam leases—citing previous reports that have done so. Prior to the construction of the Guam Power Authority/Guam Waterworks Authority Multipurpose Facility at Fadian, the Consolidated Commission on Utilities commissioned a Space Utilization and Financial Analysis Report. According to Cruz, in addition to an empirical review of the lease cost for the two GovGuam agencies, the nearly 70-page analysis included a full development plan and a comparison of various funding alternatives.
“To this end, I hope that you will join me in clarifying that your report is not a substitute for a detailed Utilization and Financial Analysis Report,” concluded Cruz in his letter. “While I am joined in principle to the goal of a Capitol Building in Hagåtňa—unifying all our government agencies under a shared roof—our history is replete with examples of doing it wrong the first time. For me, and for the worthiness of this investment, this is something we should get right from day one.”
Moving forward, Cruz’s legislation would require that a detailed cost-benefit analysis and space utilization study be completed prior to the expenditure of funds on a unified government building in Hagåtňa. The measure also mandates that the study be funded in the upcoming Fiscal Year 2018 Budget Act.
“I introduced Bill 15 because knowing the right thing to do isn’t always the same thing as doing the right thing well,” said Cruz. “If we can save any portion of $5.2 million a year and give our people a building that is more efficient and cost effective, I support it, but let's get our facts straight and conduct the same meaningful analysis our public utilities did well before they broke ground.”
