• By Mar-Vic Cagurangan

FCC to Guam: Stop diverting E911 funds


(Updated July 22, 2018, 6:30 p.m.)

The Federal Communications Commission told Guam to stop diverting E911 but Gov. Eddie Calvo justified the fund transfers saying they were “made within the parameters of both federal and local Guam law” and did not adversely affect the local emergency response systems.

Calvo said the 911 fund diversion was authorized under Guam’s FY2018 budget law, which lifted the restrictions on the use of special funds. A provision in the appropriations law states, “Notwithstanding any provision of law, all appropriations from special funds contained in this act, which are not conformance with the statutory uses of said funds, shall be authorized for use in FY2018.”

However, Speaker Benjamin Cruz debunked the governor’s claim, maintaining that E911 fund transfers are a violation of the Guam law.

Based on a Jan. 19, 2018 memo from Administration Director Christine Baleto, the amount of $839,583 in E911 fund was subject to permanent transfer for the current fiscal year. E911 funds that are permanently transferred are no longer available for the Guam Fire Department’s use, according to the memo.

Fire Chief Joey San Nicolas said $488,000 was transferred in 2016 and $840,000 in 2017. “Please note that the monies that were transferred were either not appropriated or were lapsed funds,” San Nicolas said, also citing the fund transfer authority under the 2018 budget law.

The government collected $2,102,423 in E911 fees in 2016 and $2,209,374 in 2017.

Despite the fund transfers, San Nicolas said E911 is not facing a shortfall. “Operations continue to be funded in full through appropriations,” he said. “At no time was our E911 Center and Operations unable to operate due to a lack of funding.”

Since the E911 special fund does not receive federal grants, San Nicolas said, it is “not subject to federal penalties or fines.”

Guam had one previously recorded instance of fund diversion based on FCC’s 2012 report, which identified the territory as one of the five jurisdictions that allowed the use of E-911 for “other purposes.” Of the $1.78 million collected in 2011, Guam expended $486,223 “for other public safety-related activities, including leasing ambulances and maintaining the territory’s public safety radio communications system.”

“It is beyond disappointing to learn that your territory has made a habit of diverting these funds for other purposes,” FCC Commissioner Michael O’Reilly said in a June 21 letter to Calvo.

This was the second letter received by the governor since O’Reilly sent the first request for E911 fund report earlier this year.

“In February, I requested that your territory explain why you failed to respond to our request for information, take steps to rectify this failure and submit to the commission whether your territory diverted 911 fess to other functions,” O’Reilly wrote. “In total, despite the FCC currently only having self-reported data from Guam in 2009 and 2012, it spears that from 2014 to 2017, almost $4 million was transferred out of Guam’s 911 fund.”

See related story

Is Guam diverting E911 fund?

Speaker Cruz, meanwhile, said he previously asked the administration to stop the fund transfers in a letter to Baleto dated Oct. 25, 2017.

“I noted that between Fiscal Years 2014 through 2016, the sum of $3,041,143 was permanently transferred out of the E911 fund into the general fund,” Cruz said in his letter to O’Reilly.

The administration later authorized additional permanent transfers out of $839,583 from the E911 Fund in 2017. This action, Cruz said, was based on the governor’s wrong and ambiguous interpretation of the law.

The speaker said Calvo misinterpreted the legislature’s intent as a permission to use “unspent or excess funds” for other purposes prior to the end of fiscal year 2018 on Sept. 30, 2018.

“However,” Cruz added, “the same chapter of the same public law referenced by Governor Calvo also includes Section 13 which states that the Guam Fire Department [and other specified agencies] are authorized to expend all revenues collected by their designated Special Funds for ‘the purpose authorized by statute.’ This specifically included E911 Funds for Fiscal Year 2018, and unexpended carryovers authorized by law.”

Even if the governor’s “convenient ‘Never-Never Land’ reading of the law applied,” Cruz said, the permanent transfer of approximately $3.8 million between fiscal years 2014 and 2017 would not be subject to a section of law which took effect only in 2018.

The week prior to the June 15 budget hearing, senators confronted the Department of Administration’s financial manager, Kathy Kakigi, about the illegality of special fund transfers.

Kakigi, replied: “The bottom line is, ‘Which law do you want me to break?'’ Do you want (me) to break the federal law with payroll, or do you want (me) to break these special revenues?”

“How then can the Calvo Administration admit to a violation of local law, regarding special fund transfers, before the Guam Legislature, and then represent that neither federal or local law was violated to the FCC?” Cruz asked. “Based on the facts before me, and presently on the public record, transfers from the E911 Fund were executed in contravention of Guam law and applicable federal provisions.”

Calvo, for his part, defended the E911 fee raid, saying “there is no evidence that the transfer of fees has caused any disruption of emergency response services,” which he said have been a priority under his administration.

Over the years, the governor said, “support for emergency response has improved” with an increase in the number of working ambulances from 1 or 2 to 13; and fire trucks from five to 13.

“The Guam Fire Department is rightsizing after years without promotions and new recruits to backfill natural attrition that left the department with vacancies in critical leadership positions,” Calvo said.

San Nicolas said GFD is now in the process of completing the replacement and upgrade of the current Enhanced E911 system to a NextGen E911 System. The project, he added, will include an annual maintenance and service contract.

In his March 20 speech in Rhode Island, O’Reilly said raiding the E911 funds—even if used for “other public safety purposes”— is a “very disturbing” and “unacceptable” practice.

“Diversion is diversion, even if some believe it goes to meritorious functions,” he said. “Allowing other functions to be shoe-horned under the guise of 9-1-1 is deceptive to those paying the fees, American communications users. They should rightly expect that dedicated fees for 9-1-1 actually go to the intended purpose. It is not appropriate for states to creatively label certain spending as public safety related and use their 9-1-1 accounts as payfors.”

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