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Loan and grant available through stimulus funding

By Steve Limtiaco

HAGÅTÑA, Guam (Pacific Daily News, Mar 25, 2009) - Guam could know by early June whether the federal government will provide funding to help the island build a new landfill and close the Ordot dump.

The government of Guam this week will apply for a US$170 million loan and grant from the U.S. Department of Agriculture to pay for those projects, Governor Felix Camacho told the Guam Chamber of Commerce during its general membership meeting yesterday afternoon.

"We’re very positive this could be one of the solutions," Camacho said, adding that the administration still will pursue bond borrowing for the projects because federal Judge Frances Tydingco-Gatewood has ordered it. The island also is looking for a private partner to pay for and build the projects, he said.

After the speech, governor’s chief of staff George Bamba said Guam is seeking a USDA grant of between US$15 million and US$20 million and a low-interest USDA loan for the rest -- US$150 million to US$155 million.

He said the loan and grant would come from the USDA’s environmental division and are possible because of US$1.4 billion in federal economic recovery funding.

Guam must compete with other jurisdictions for the loan and grant but Bamba said Guam’s application has been endorsed by the Department of Defense, the U.S. Environmental Protection Agency and the Department of Interior.

Bamba said the USDA has to act on the applications by June 30, which means GovGuam could know by early June whether it will receive the money.

If Guam’s application is approved, Bamba said, the loan would be assumed by Guam’s private partner for the solid waste projects. The grant could be used to reimburse past expenses, he said.

A low-interest loan could save Guam residents millions of dollars in interest payments, compared to the bond-borrowing proposals already approved by Guam lawmakers.

Bamba said the interest rate on the federal loan is 4 percent, but it could be as low as 2 percent if Guam is able to qualify as a "substantially underserved trust area." That means an area has been identified as having a high need for the benefits of an eligible federal program.

In comparison, Guam lawmakers have approved bond borrowing up to 9 percent interest.

Court-appointed solid waste receiver Gershman, Brickner & Bratton in October estimated it will cost about US$159 million to build a new landfill and close Ordot dump, but this year has reported the cost could be lower.

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