GOVERNOR Felix P. Camacho is considering withdrawing the $88 million loan approved by the U.S. Department of Agriculture for the landfill project in Layon, according to the governor’s legal counsel Shannon Taitano-Lujan.
Lujan said there were concerns brought up during the negotiations on how the government of Guam would be able to pay for the loan.
Speaker Judi Won Pat said when the federal court ordered the local government to finance the closure of the Ordot Dump and the opening of the new landfill, it was already known that the local government would have to borrow the money and at a low rate.
“We were not sure that we would be able to borrow at a lower rate so the governor decided to submit an application to USDA and at the same time they went out to the bond market to see if they’re also able to secure financing,” Won Pat said.
The government ended up doing both.
“Here we are applying for both funding sources, hoping to get one, but ended up getting two,” she said. “Here we have now for the solid waste management system, a loan at 3.5 percent interest, the USDA at $88 million plus $15 million of grant monies whereas the other loan is $202 million. We’re paying that at 5.5 percent.”
She explained the governor realized the government does not have the resources to pay for two loans and because the judge is holding on to the $202 million, they couldn’t reprogram $103 million of that amount over to the USDA loan and use the USDA loan instead for the landfill and use the tipping fees to pay for the loan.
She spoke to the governor who in turn said they need to find a funding source or he has no choice but to return it.
She said they put a few proposals together for the governor to consider. “There’s an indication he was favorable to one of the options but not committing at all to it. The holdup is the governor verifying with his financial people on what was submitted and what would be viable and if he feels they are available then he could use what was identified,” she added.
The options include using funding from the highway bonds, which accrue to $6 million by 2012, and compact impact monies.
“He still has the authority as long as he’s governor to commit to the compact impact monies like he did for the schools,” Won Pat said.
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Governor to decline USDA loan
