OPA: Landfill bonds payment will hit nearly $400 million by 2047; GBB paid $20M since 2008
The government of Guam officially takes over the day-to-day operations of the local solid waste system effective April 30, but the federal court has extended Gershman Brickner and Bratton’s receivership status pending completion of the post-closure plans for Ordot dump, which are estimated to cost $21.69 million.
Adelup announced last week that the 11-year federal receivership has been fully lifted but Federal Judge France Tydingco-Gatewood clarified in Monday’s written decision that GBB remains on board.
While the U.S. and the local governments both agreed that the receiver is “in the best position” to complete the remaining tasks at the now closed Ordot dump, they are in conflict over GBB’s official role. The local government wanted GBB to serve as a contractor while the U.S. government has proposed that GBB retain its receiver status.
“In the interim, the court will continue the status quo and orders that the receiver complete these important tasks in its previously-appointed role,” Tydingco-Gatewood ruled. “Because a partial receivership remains in place, the court orders that (Guam Solid Waste Authority) shall be obligated to pay for the Receiver’s bills, both lagging and future invoices, as approved by the court.”
In 2018, GBB was paid $1.6 million in total fees. Since being appointed as federal receiver in 2008, GBB’s bills racked up to $20.8 million, of which $3.8 million was paid through the general fund, according to the Office of Public Accountability’s audit.
The new landfill construction, Ordot dump's closure of Ordot and other related projects were funded through $202 million government bonds issued in 2009. In 2018, GovGuam paid $14.1 million for the principal and interest on the 2016 bonds. When the bonds mature in 2047, GovGuam’s cumulative payment will reach a total of $395.4 million, of which $158. million is for interest, OPA said.
“The bond was refunded in August 2016 with a new Section 30 Bonds 2016 Series A for $236.6 million. GovGuam assumed the interest and principal payments for these bonds from the Section 30 federal income tax collections,” OPA said.
In Monday’s decision, the federal court ruled that GBB will continue its oversight and control of all work associated with the post-closure of the Ordot dump.
The remaining technical work includes full implementation of a remediation plan for potentially explosive gases which complies with applicable federal regulations; completion of the development of a groundwater monitoring program and expansion of the leachate monitoring program. “This technical work is necessary before the post-closure plan can be approved,” the court said.
The court-approved financing plan for the post-closure care of the Ordot Dump included the use of a trust fund managed by an independent trustee.
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That plan required monthly installment deposits which totaled approximately $2 million annually from Guam Solid Waste Authority funds collected from all commercial haulers.
In an April 24 report, GovGuam proposed a “hybrid plan” that all parties “agreed to in principal.”
“The financing plan envisioned the continued monthly deposits of $166,667 totaling $2 million annually into a trust fund account to be managed by a bank escrow trustee who would ensure the funds are expended for the stated purpose,” the court said.
As managerial responsibility over the solid waste operations is officially restored to GSWA, the court ordered the agency to pay any lagging invoices from vendors, services or materials authorized by the receiver prior to the close of business on April 30.
“Any dispute with respect to such invoices that cannot be resolved by mutual agreement between the receiver and GSWA shall be submitted to the court for resolution,” the court said.
The court has identified other remaining conflicts between the U.S. and local governments that need to be ironed out.
The parties, for example, do not agree on whether the receiver or the GSWA Board will procure the bank escrow trustee. The parties have also not finalized the arrangements for the independent engineer or the pending bid for the construction of cell 3 at the Layon landfill.
“Accordingly, until such time as a full resolution is reached and a bank escrow trustee is selected, the court orders GSWA to continue the monthly set-aside of funds into the Ordot dump post-closure account and further orders that the receiver have full management authority over said account until such time as a trustee is in place and the funds are transferred to the trustee,” the court said.
The court commended GBB for its accomplishments over the last 11 years, such as the closure of the Ordot Dump, the installation of necessary systems to protect Guam’s waters from this environmental hazard that had plagued the island for decades, the construction of a modern solid waste system, a recycling program and a household hazardous waste disposal center.