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San Nicolas: Alarm bells are ringing on federal Covid relief funds

Updated: Jul 12, 2022

By Mar-Vic Cagurangan

The administration cannot continue to “hoard” the remaining $300 million in federal Covid relief funds for a hospital project that is still in its nascent stage given the strict deadlines that must be met to use the grant, Congressman Michael San Nicolas said. Federal rules require that the funds received by Guam through the American Rescue Plan must be obligated by 2024 and expended by 2026, San Nicolas said, noting that such deadlines “do not coincide with even the most optimistic of new hospital complex projections.” In his last congressional address delivered before the 36th Guam Legislature on Monday, San Nicolas noted the complex process involved in building a hospital.

Based on the timelines of previous projects of the same magnitude such as the Guam Museum, San Nicolas projected that it may take 13 years to complete the construction of a new hospital.

In October last year, Gov. Lou Leon Guerrero signed a bill authorizing a 40-year lease-back arrangement and pledging funds for the "Twenty-First Century Healthcare Center" that will replace Guam Memorial Hospital and incorporate the Department of Public Health and Social Services and the Guam Behavioral Health and Welfare Center.

The project, estimated to cost $800 million, will be partially funded by the ARP money.

San Nicolas said the Army Corps of Engineers was just in the scoping phase as of August last year.

He said the procurement process, which begins with the architectural and engineering design, is likely to be marred by protests that might take three to five years to resolve.

“These are best-case scenarios, and do not include change-orders and delays that may come with site scoping and value engineering,” San Nicolas said. He noted that the Simon Sanchez High School reconstruction, which was planned four years ago and is "nowhere as complex as the new hospital rhetoric," is still in the planning phase.

"There is no way we will be able to obligate $300 million for a new hospital by 2024, in one and half years. And no way we will be able to fully expend those monies by 2026, four years from now. We are looking at a six-year to 13-year undertaking depending on how well we balance expediency with responsibility and manage known and unknown variables," San Nicolas said.

"As we speak, this administration continues to hoard over $300 million in federal relief as our people suffer," he added.

Monday's congressional address was San Nicolas' farewell speech while wrapping up his second term as Guam's delegate to Congress, which was marred by an ethics investigation.

Now a candidate for governor, San Nicolas is challenging Gov. Lou Leon Guererro for the Democratic Party's nomination in the Aug. 27 primary.


In his congressional address. San Nicolas also slammed Leon Guerrero for stripping him of credit for the massive stream of federal Covid-19 relief funds that flowed into Guam during the pandemic crisis.

"These statements are dangerous. Not because of the political season, but because it reduces the expectations our people should have of their Congressional Office," San Nicolas said.

"Nevermind 'me,' if we want to ensure that whoever holds this office long after I am gone is held accountable to deliver for our people, then we need to acknowledge the work delivered so that they can continue to be so delivered," he added.

San Nicolas said his response to Leon Guerrero's claims about the federal funds was not supposed to be part of his congressional address, but it "was something that really weighed heavily."

He was referring to "very disturbing" video footage that shows the governor, addressing a crowd saying: “Federal aid would have come to Guam regardless of who the congressional delegate is.”

San Nicolas said the governor fed the public pieces of "misinformation" that attempted to discredit the congressional office.

"You further go on to state, governor, that, 'Our people demand the truth, our people demand accuracy, our people demand correct information, so to say that the federal aid came because of one person is furthest from the truth,'" the congressman said.

San Nicolas defended his performance, saying his office had been working to make sure Guam was included in all relief packages.

"Congressional work is complex. We cannot, if we want to keep channels open and we want to keep relationships intact, publicly share details of how we’re able to make things happen – at least not all of the details – because we run the risk of those relationships becoming compromised and future opportunities not being available to us because we weren't able to know when we can say something and when we need to keep our mouth shut," San Nicolas said.

He said the federal relief dollars and programs that came into Guam did not happen by default.

"One such example was securing relief in the Pandemic Unemployment Assistance," he said. "How so close we came to thousands of our people not having jobs, not being able to feed their families, not being able to pay their mortgages or their rent. It was so close."

He recalled that Guam's displaced employees almost fell into the cracks because the territory did not have a local unemployment program, which was the basis of the mechanism to fund PUA.

"What this meant was we were going to be excluded entirely from PUA because we did not have the local unemployment infrastructure in place to receive federal money," San Nicolas said. "This was a very stressful time for your Congressional Office."

2022 Congressional Address (OFFICIAL COPY)
Download PDF • 617KB

To solve the crisis, San Nicolas said his office "worked closely with the Ways and Means Committee and the committee staff to find a 'back door' for us to get our people PUA. The way we did it, was to craftily make all of our people eligible under the 'independent contractor' language of the bill."

"To solve our problem here on Guam, we made sure to loosely define the Independent Contractor eligibility for PUA so that it wouldn’t just be applied to contractors, but to “anyone not covered under a local unemployment program.”

"As a result, Guam was one of the only districts in the entire country who had 100 percent of our pandemic unemployed 100 percent federally funded," he added.

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