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GovGuam must now secure landfill financing

By Dionesis Tamondong

HAGÅTÑA, Guam (Pacific Daily News, April 15, 2009) - A federal judge yesterday suspended the weekly $1 million payments imposed on the government of Guam, which, for now, puts off the need for governmentwide furloughs, said Gov. Felix Camacho.

But District Court of Guam Judge Frances Tydingco-Gatewood added several conditions requested by federal attorneys and the federal receiver overseeing the landfill projects.

In addition to requiring progress reports and cooperation among the parties involved, the judge said she would reinstate the weekly payments if GovGuam is unable to secure at least $120 million in bond financing for the landfill projects by June 30.

If it's not secured, the judge will also require the local government to deposit the full amount of cash that would have been deposited had the weekly payments not been suspended. That amounts to more than $10.9 million.

"While we still face many obstacles in funding the closure of the Ordot dump and the opening of a new landfill, we will work with bond counsel as well as our underwriters to move forward expeditiously," Camacho said in a statement after the judge's decision. "This suspension of payment affords our government the opportunity to normalize disbursement of operational funds as much as possible."

But Vice Speaker Benjamin Cruz, D-Piti, said he was quite disappointed with the judge's decision, particularly with a condition he said already jeopardizes the bond-borrowing effort before it can get going.

Cruz said he expected the judge to not just suspend the weekly payment requirement but to terminate it without conditions. If GovGuam has to disclose to potential investors that it will be required to make hefty back-payments if the bond financing falls through, that drastically lowers investors' confidence in GovGuam's financial standing, he said, citing testimony provided by GovGuam's bond counsel and financial consultants. "It's already dead on arrival," said Cruz, who attended yesterday's hearing.

Cruz said he and some of his colleagues are "seriously considering" appealing the judge's latest order and other orders that are still within the period for appeal.

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