A SPECIAL REPORT: GUAM COMPACT SPENDING REVIEWED

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By Steve Limtiaco

HAGÅTÑA, Guam (July 1, 2002 - Pacific Daily News)---Since 1996, the government of Guam has received $41.85 million from the Department of the Interior to help pay for the public services Guam provides to regional immigrants.

The United States signed Compacts of Free Association with regional island nations that allow their citizens to live and work on Guam.

The greatest burden of immigration has been on the island's education, health and welfare systems, but Gov. Carl Gutierrez has spent little of the federal grant money in those areas.

Federal regulations give the governor the authority to decide how the money should be spent, but final approval must come from the Interior Department's Office of Insular Affairs.

About half of the grant money received by Guam -- $19.94 million -- has been spent on water, sewer and road projects, according to a list prepared by Insular Affairs.

"I think that the spending of the money does reflect the needs of the community," said governor's communications director John Ryan. "The governor has maintained all along -- and the federal government obviously concurs -- that there are people on this island who are living in the first half of the 20th century. There is no shame in trying to bring everyone into the 21st century by providing them the very basics -- water, sanitary sewer, power and telephone."

Guam lawmakers want to decide how the grant money is spent, and Sen. Vicente Pangelinan, D-Barrigada, said he believes the public schools are being shortchanged by the administration.

He said new schools need to be built, and the existing schools need as much as $3 million in repairs to make them safe for students. Pangelinan said the Legislature passed a law that sets aside most of the compact-impact money for school construction. "We saw that that was the biggest impact."

But it is the governor's job to decide how the money should be spent, according to an Interior Department official.

"The Legislature feels he shouldn't have the right to do it (decide how the money should be spent), but technically he does," said Keith Parsky, spokesman for the insular affairs office. "If they make the request, and it's arguable that it's related to a (capital improvement project), it will be granted."

While the money is supposed to be spent on capital improvement projects, Parsky said the federal government has interpreted the policy liberally and allowed the money to be spent on other projects as well.

In addition to paying for capital improvement projects, compact-impact money has been used to buy ambulances, dump trucks and computers.

"The governor has the right to ask us if he can use it for something else instead," Parsky said. "Generally, the attitude of late, especially with compact-impact funds, has been, 'why should we second-guess the governor?' As long as it seems as though it's related to a CIP project, or it's a traditional CIP project."

Ryan, of the governor's office, said the governor takes a team approach to decide which projects should be funded.

"It's been the same every year. The governor relies on his advisers -- people at Adelup and various agencies -- that have projects that could be covered by compact-impact," Ryan said.

Ryan said capital improvement projects have a greater financial benefit to the local economy than other projects because they employ local companies and most of the money stays on Guam.

He said it also is harder to identify capital-improvement projects that are related to health and education, as opposed to road and water projects.

Ryan said it also could be argued that some capital improvement projects have indirect benefits to health and education.

"The installation of water or sanitary sewer lines -- while that is an infrastructure project -- the net impact of that is going to improve health conditions for people," Ryan said. "If people look at it within the parameters of what compact-impact money is allowed to be used for, and what gets approved.

"I don't think everything fits into neat little packages."

Guam started to receive compact-impact funding to partially reimburse the island for the costs associated with regional immigrants.

According to the federal law that created the grants, the purpose of the federal aid is to reimburse Guam, Hawai‘i and other areas specifically for immigration-related education, health and welfare costs.

Guam Delegate Robert Underwood said there are many misunderstandings about the grants.

For example, the money only is supposed to apply to immigration from the Federated States of Micronesia and the Republic of the Marshall Islands, he said.

It is not supposed to pay for costs associated with immigration from the Republic of Palau, which signed a separate treaty with the U.S. government.

Underwood, who is running for governor, said his personal preference would be to spend the compact money solely on projects related to education, health and welfare.

According to a compact-impact report prepared by the governor in January, Guam has spent about $252.1 million providing services to immigrants since the 1980s.

More than 83 percent of that money has been spent providing education, health and welfare services to immigrants.

But only 11.3 percent of the compact-impact grant money received by Guam has been spent at Guam Memorial Hospital, and nothing has been spent at the Department of Public Health and Social Services.

Documents state that $150,000 was spent to remove asbestos from Piti Elementary School, but no other education-related projects are listed.

Guam lawmakers have questioned the way the compact-impact grants have been spent.

"The Legislature is in a position to know and understand where those impacts are during the budget process," Pangelinan said. "For that reason, I think it is appropriate that the Legislature allocate that money to meet the operational requirements of those departments and agencies that provide services to these habitual residents. Those areas are mainly health, education and public safety."

Pangelinan said he does not object to money being spent on roads, but said the island already receives federal highway money and should not be spending compact-impact money on those projects.

And Guam Waterworks Authority should not rely on that money for its projects, he said.

During fiscal 1996 to 1999, Guam received $4.58 million per year, but the budget increased during President Clinton's administration, with Guam receiving $7.58 million in 2000 and $9.58 million in 2001.

The amount was reduced to $4.58 million for fiscal 2002 and the island currently expects to receive as much as $5.58 million for fiscal 2003.

Guam has received only a small fraction of the money it believes it is owed because of the compacts.

The Marshall Islands and the Federated States of Micronesia currently are negotiating for continued financial assistance from the U.S. State Department.

Federal officials have said the financial assistance already received by those countries has helped them become self-governing, but they are not financially independent.

Underwood in December told the Senate Committee on Energy and Natural Resources that developing the economies of the freely associated states will benefit Guam by reducing the number of immigrants to Guam.

Several Guam lawmakers visited the nation's capital last October, and they asked the chairman of the House Resources Committee to include reimbursement for Guam in the renegotiated financial aid provisions of the Compact of Free Association.

For additional reports from the Pacific Daily News, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/Pacific Daily News (Guam).

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