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FOR IMMEDIATE RELEASE
For more information, contact:
David L. Manning, Special Principal Associate
Gershman, Brickner & Bratton, Inc.
Federal Receiver
(615) 830-1200
dmanninggbb@gmail.com
www.guamsolidwasteauthority.com

Federal Receiver Provides an Update to Set the Record Straight

(Guam, July 1, 2015) – Federal Receiver Gershman, Brickner & Bratton, Inc. (GBB) today provided an update to the Setting the Record Straight section on the Receiver’s Website. In this press release, and on the Receiver’s website, information that is underlined is linked to the documentation that backs up our statements.

Statement of the Receiver

In a June 26, 2015 interview on K-57 with Phill Leon Guerrero, Arthur Clark says that the Guam Solid Waste Authority (GSWA) under the Receiver is operating in the “red.”  This is false as is demonstrated by the recently released audit that clearly shows that GSWA increased its fund balance (the term used for surplus in government accounting) by $1 million.

Mr. Clark attempts to suggest that Guam taxpayers are subsidizing solid waste cost.  This is simply not true.  All operating expenses for solid waste are covered by fees from GSWA customers.  All of the debt service on the solid waste bonds is fully paid with federal (Section 30) funds. Thus, 100% of all operating costs and debt service for solid waste are covered by GSWA fees and federal taxpayers.  The Office of the Governor wants to use the federal funds now paying for solid waste debt service for other purposes. The Receiver does not need or want a rate increase. This is because the current rates, together with the federal funds allocated to solid waste debt service, are sufficient to pay all solid waste expenses and debt service, including all future capital cost and post closure cost for the Ordot Dump. There may come a time in the future when modest rate increases are needed to adjust for future inflation, but no such adjustment is needed for the foreseeable future.

In the same K-57 interview Mr. Clark takes issue with the Receiver’s continued reliance upon the Department of Administration for payroll and accounting services, just another way to subsidize solid waste, according to Mr. Clark. This argument is without merit since this is the way the organization was structured by the Government of Guam itself when the Receivership began.  The reason we continue to use it is that it works and is cost effective. If the Department of Administration wishes to have a cost study performed to identify any additional cost it incurs as a result of GSWA (costs that would not exist if it did not provide this service to GSWA), the Receiver would be more than willing to assist and pay any reasonable such cost that can be demonstrated to exist.

Finally, in the K-57 interview, Mr. Clark expresses concern that the audit shows GSWA revenue is declining and both he and Phill Leon Guerrero suggest this is indicative that the Receiver is unable to collect all of the tipping fees charged.  They further suggest that this foreshadows a return to the days before the Receiver when the Government could not collect the tipping fees it charged.  This is not correct. Revenue did decline when compared to the year before. This occurred for two reasons: 

Mr. Clark is also quoted in an article dated June 27, 2015 in the Marianas Variety, in which he falsely accuses the Receiver of “stonewalling” the Government of Guam with respect to a “cost analysis” of the solid waste system and seems to suggest that the Administration will conduct its own cost study.  The Government of Guam has audited and analyzed the cost of the solid waste system every year of the Receivership.  All expenditures of the solid waste system are reviewed by officials of the Government of Guam as they occur. A detailed rate study and cost analysis was submitted by the Receiver to the Court and the Government of Guam in 2012. The costs of Guam’s Solid Waste System are an open book to anyone who will take the time to review them.  

Mr. Clark says that “GovGuam has zero ability relative to controlling tipping fees.” This is not true. As the Receiver has said many times and the District Court in its Order dated May 27, 2015 confirmed, “the court finds that both the Receiver and the Government of Guam have the ability to petition the PUC for a rate increase if either believes it is necessary.” The Receiver does not need or want a rate increase.

Mr. Clark also tells the Marianas Variety that GovGuam “shelled out more than $100 million for the Layon Landfill which is only projected to be in use for 10 to 15 years.”  In fact, the Layon Landfill costs substantially less than $100 million (see Table 11 of Quarterly Report of the Receiver dated March 5, 2015 ) and will serve Guam’s solid waste needs for more than 50 years. 

It remains our hope that the Office of the Governor will work with the Receiver to address the remaining issues to assure compliance with the Consent Decree.

About Gershman, Brickner & Bratton, Inc., Receiver

In a Court Order dated March 17, 2008, U.S. District Court Judge Frances M. Tydingco-Gatewood appointed GBB to be Receiver with full responsibility for bringing the Guam Solid Waste Management Division into compliance with the 2004 Consent Decree for violation of the Clean Water Act.  As Receiver, GBB’s objective is to work with Guam’s government, the Guam Solid Waste Authority, solid waste companies, the people of Guam, and the U.S. military to establish a long-term, financially viable and sustainable waste management system for Guam. For more information on the receivership, visit www.guamsolidwastereceiver.org.

GBB is a national solid waste management consulting firm, headquartered in the Washington, D.C. area, that works on solid waste collection, processing, recycling and disposal issues, and assists in planning, procuring, and implementing sound, cost-effective facilities and services at the local, state, and national levels for both the public and private sectors. Since 1980, GBB has planned and developed a wide range of integrated waste management programs that use the latest technologies to improve efficiency, save money, enhance customer service, and protect the environment. For more information on the firm and its products and services, visit www.gbbinc.com or call 1-703-573-5800.

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