Guam Waterworks Revenue Bonds Authorized By CCU

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Bonds to be used to finance capital improvement projects

By Louella Losinio

HAGÅTÑA, Guam (Marianas Variety Guam, Oct. 23, 2013) – The Consolidated Commission on Utilities (CCU) last night approved a resolution authorizing the Guam Waterworks Authority (GWA) to issue $195 million worth of revenue bonds to raise funds to finance required capital improvement projects as well as pay costs related to the bond issuance and sale.

After the approval, CCU chairman Simon Sanchez said they will need to get approval from the Public Utilities Commission for the 2013 bond borrowing.

In his report to the utilities commission, GWA General Manager Martin Roush said that from Oct. 14 to 17, the waterworks authority met with its rating agency and bond counsel in San Francisco to discuss GWA's Series 2013 revenue bonds.

He said so far, the waterworks agency has received favorable feedback.

GWA's Consulting Engineer's Report provided a summary as well as an analysis supporting the waterworks authority's planned bond issuance, taking note of several projects that will be supported by the Series 2013 bonds.

These projects include improvements to water production, treatment, distribution, and storage as well as wastewater collection and treatment, among others.

Bill 181

The Legislature’s appropriations committee recently conducted a public hearing on Bill 181, a measure introduced by Sen. Tom Ada seeking to approve the terms and conditions for the issuance of GWA revenue bonds and the possible refinancing of the water agency’s existing revenue bonds.

The bill authorizes the waterworks authority to borrow up to $495 million in bonds to meet GWA's regulatory requirements, including those specified in the 2011 court order and in the U.S. Environmental Protection Agency’s significant finding reports for water and wastewater.

Sanchez said to complete these projects, GWA has to borrow the funds in three separate financings, over the next five years, starting in 2013.

GWA has developed a capital improvement plan from 2013 to 2018 to rehabilitate and improve its wastewater and water system and infrastructure.

Sanchez said they hope to obtain approval from the Legislature and the governor by the end of October in order to sell bonds in November and close the sale in December, to comply with court-ordered timelines.

So far, GWA has had two bond issuances since 2004 and borrowed around $220 million using the two five-year rate plans to pay for the two initial bonds.

GWA utilized funds from the $220 million borrowing to fund its meter replacement program, upgrades to the Ugum Water Treatment Plant, and construction of the water reservoirs in Barrigada and Mangilao. It also used the funds to bring the northern wastewater plant into compliance this year.

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