INSURANCE SNAFU COULD COST GUAM $5.5 MILLION

HAGATNA, Guam (Pacific Daily News, Feb. 5) - The Department of Education may lose out on $5.5 million in federal funds to repair damaged schools because it failed to insure those buildings after 1997's Supertyphoon Paka.

Dan Best, Federal Emergency Management Agency infrastructure branch chief, said one of the conditions attached to the grant received after Paka was that local agencies would have to insure their buildings.

"It's a condition of receiving the federal grant for the disaster damage repair required by the law," Best said.

Government and education officials are not sure why previous administration officials failed to comply with FEMA's requirement.

"Overall, it was the responsibility of the previous administration," said John Dela Rosa, the governor's spokesman.

Best said the education department is not the only agency that failed to insure buildings.

The airport agency and the Department of Parks and Recreation also face the prospect of having to pay, out of their own budgets, millions of dollars in post-Supertyphoon Pongsona repair costs because they did not buy insurance coverage for typhoon losses, according to Pacific Daily News files.

Best said based on FEMA's preliminary assessments, the education department sustained about $7.5 million in damage from Pongsona, which struck Dec. 8.

But the federal agency will be able to cover only about $2 million in damage to buildings because eligible structures were not built or repaired with FEMA funds, thus were not required to have been insured.

Best added preliminary assessments have yet to be finalized and FEMA officials are working closely with local officials to maximize federal assistance.

"It's really a complicated issue. We're going to take this case by case, building by building, to ensure we've done it right. And our goal is to provide as much assistance as the law allows," Best said.

"We're looking at all the options available, ... but there are rather severe penalties for not having insurance."

Because the education department failed to insure buildings, the agency will have to pay for the uninsured buildings damaged by Pongsona, in addition to 25 percent of the damage repair costs that will be augmented with FEMA funds.

The department is looking at a current operational budget shortfall of $10 million. That amount does not include costs for current and previous balances owed for water and power, or taxes and retirement payments, among other things.

Dela Rosa said the current administration will continue to work with the federal agency, but also is seeking other federal grants. He added that officials are waiting for President Bush to approve a 90-10 emergency cost share, rather than a 75-25 split.

"We're expecting to hear from Washington, D.C., sometime this week," Dela Rosa said.

February 5, 2003

Pacific Daily News, www.guampdn.com/ 

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