District Court of Guam
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For more information, contact:
David L. Manning, Special Principal Associate
Gershman, Brickner & Bratton, Inc.
Federal Receiver
(615) 830-1200

Federal Receiver Sets the Record Straight

(Guam, April 10, 2014) – Federal Receiver Gershman, Brickner & Bratton, Inc. (GBB) announced today that it will establish on the Receiver’s website a section to Set the Record Straight, providing Guam with accurate information responding to the attacks in the press release from the Office of the Governor and other inaccurate information being spread around by those working to undermine the Receivership. 

"It is unfortunate that we have to spend time responding to these intentional misrepresentations.  This time should be exclusively devoted to closing the Ordot Dump, improving solid waste services and the other steps necessary to comply with the Consent Decree, but Guam deserves the truth,” said David L Manning GBB’s Receiver Representative.  "While we will always put the real work of the Consent Decree ahead of responding to these baseless attacks, we will respond with the truth when others spread erroneous information and untruth about the Receivership.  We will continuously update the information provided, as time permits, when any new attacks occur,” Manning said.  In this press release and on the Receiver’s website, information that is underlined will be linked to the documentation that backs up our statements.

There was no multi-million dollar Bend in the Road – In its press release the Governor’s Office charges that the access road to the Layon Landfill was designed and built around a piece of land that was thought to be private property but which the Government actually owned.  This is not true.  The change in the road design was to avoid a watershed and was not based on a bad map as alleged by the Governor’s Office.  The decision to redesign the road was not made by the Receiver.  It was, in fact, made by the Government of Guam 2 years before the Court appointed a Receiver.  It was not our decision, but it does make environmental and economic sense.

There are no multi-million dollar salaries for Receiver personnel - In its press release the Governor’s Office charges that individuals working for the Receiver have been paid in the millions.  GBB’s Rates range from a low of $65 to a high of $270 an hour.  From these rates, in addition to the cost of its highly skilled personnel, many other GBB expenses not reimbursed by Guam must be paid.  These include company overhead and Guam, federal and state taxes (GBB has paid more than $640,000 in income taxes and fees to the Government of Guam).  It is clear that Mr. Arthur Clark, who is leading the effort to undermine the Receivership, understands how these rates work, since, his former law firm bills at significantly higher rates than GBB.  According to a recent Freedom of Information Request reported in the Marianas Variety, "In 2013 alone, GIAA has paid Calvo & Clark $1.35 million for 6,317 in total billed hours. The rates range from $150 to $325 an hour.”

All travel expenses of the Receiver are managed within federal guidelines – All tickets for air travel and other travel expenses have been managed within federal guidelines for flights from the mainland to Guam.  Travel can certainly be expensive, but the Receivership has worked to manage these expenses responsibly.  All airline miles earned as a result of our work in Guam are applied to reduce the cost of travel to Guam resulting in savings for the Government of Guam, not GBB.  Total cost to date for air travel since 2008 has been about $451,000, not the $674,000 claimed in the press release of the Office of the Governor.

There have been no extravagant dinners – All meals are within the federal per diem.  During the early days of its work on Guam, GBB had as many as five professionals on Guam simultaneously to gain an understanding of the problems and develop the plans for assuring compliance with the Consent Decree.  To single out meals that were for multiple individuals and clearly imply that it was for one person, is a gross exaggeration intended only for the purpose of stirring up resentment.  The press release from the Office of the Governor complains about several meals it says occurred in Guam in March 2008.  While the Receiver was appointed in March 2008, we did not come to Guam until April of 2008.  Just as the Governor’s press release has its dates wrong, it also has its facts wrong about these meals that occurred in April, not March. 

It is true that some meals cost more than others, however, the Governor’s press release fails to take notice of the many meals that were at Wendy’s, McDonalds, Subway or that were pizza carry-out, or the many meals that were prepared in-house at even greater savings.  The 14 inch barbeque grill cited in the Governor’s press release cost about $20 and has paid for itself many times over by preparing meals in-house at significant savings.  All costs were within the per diem and total expenses were well below the per diem allowed for federal contractors.

There have been no luxury hotels or luxury condominiums.  The cost of all hotels and other accommodations on Guam for Receiver personnel are within the allowable federal per diems.  The Governor’s Office cites the following as examples, but again they are wrong on the facts:

As we have said before, federal contractors like GBB working on Guam, receive a per diem for living expenses while on Guam.   At the beginning of our work on Guam we decided to do our best to keep living expenses low by submitting detailed receipts of expenditures to the Court and we agreed to be reimbursed the lesser of the actual expenses or the per diem for federal contractors.   This has resulted in savings to the people of Guam of more than $300,000 since the beginning of our work and complete transparency for all of our expenses.  Had we simply accepted the per diem, cost to Guam would have been far higher and the transparency of our expenses would have been far less. 

GBB meets its fiduciary duty to Guam - The Governor’s press release makes several false statements charging that GBB is not meeting its fiduciary responsibility.  These false statements are also reflected in remarks Mr. Clark is making to journalists and Mr. Mantanona is making in documents filed in Court.  Their primary argument is that the Receiver is required to raise the rates of the customers of GSWA in an amount sufficient to reimburse to GovGuam the debt service it pays on the 2009 bonds from its Section 30 Revenue.  The Receiver has not hesitated to raise the rates when it was needed to achieve compliance with the Consent Decree, however, the Receiver does not need another rate increase.  The current rates provide sufficient money to pay for the operations of GSWA and the bonds are paid by Section 30 Revenue, so the Receiver does not need a rate increase.  The District Court has rejected the Governor’s argument that the Receiver must raise the rates, most recently in its Order of March 17, 2014. The Governor is free to raise rates if he wants to but the Receiver will only do it when it is absolutely needed.

The Consent Decree Projects are not $63 million over budget – The Governor’s press release and recent filing in the District Court falsely states that the Consent Decree projects are $63 million over budget.  This is not true.  The following table presented to the District Court at its November 20, 2013 hearing accurately portrays the matter:

Consent Decree Projects
While the closure of the Ordot Dump will cost more than originally expected, the savings we were able to achieve building the Layon Landfill will more than off-set the increased cost for the Ordot Dump.  The Office of the Governor knows this but insists on misleading the people of Guam.

The Office of the Governor complains that the Receiver never said the Ordot Dump closure was likely to cost more than the amount originally estimated in 2008.  This is not true.  In nine reports since 2008 we have cautioned that the original estimate for the closure of the Ordot Dump was preliminary and would likely need to be revised. We have consistently recommended that all of the savings from the Layon Landfill and associated projects be reserved for the closure of the Ordot Dump.

Mr. Clark and Mr. Mantanona also wrongly claim that the Receiver never told the Court and the Government of Guam about the cost of post-closure care of the Ordot Dump. This is false. In our April 8, 2010 Report, we specifically said "funds will be required to establish a reserve for post‐closure care for the Ordot Dump. The amount of the needed reserve will be determined as a part of the work to complete the closure design for the Ordot Dump.”

Additional projects added by the Government of Guam - Mr. Clark and Mr. Mantanona have also claimed that the Receiver is somehow at fault for the projects added to the Consent Decree by the Government of Guam.  With respect to the upgrades required to permit the residential transfer stations, Mr. Clark says that the Receiver knew about this in time to include its cost in the original bond issue.  This requirement was first discussed with the Receiver in the fall of 2009 and was imposed by Guam EPA on November 23, 2009.  The estimates upon which the bonds were based were made over a year earlier, in October 2008 and the bonds were actually sold by the Government in June of 2009.   It is simply not possible to include something in the bond issue we were not informed about until nearly six months after the bonds were sold.

In a similar manner, the upgrades to Dero Road are an addition by the Government of Guam that was never mentioned until well after the 2009 bonds were sold.  We all agree that the road should be repaired and it will be, but the Government of Guam is now requiring sidewalks, curbs and storm drainage and other improvements, all desirable but which are not included in the Consent Decree.  We have no problem with these upgrades but the Government has to pay for them.

Finally, Mr. Clark now describes the Receiver as being unconcerned about public safety on Route 4 when it was the Receiver who discovered the failure of DPW to correct all of the safety hazards on Route 4.  We have never suggested that the Government of Guam not address these safety hazards.  What we have said to the Court is that the Government of Guam should fund these critical needs directly instead of trying to run them through the Consent Decree.  In any case, the safety hazards must be corrected.

As the Pacific Daily News recently editorialized,"With all the problems facing the government of Guam and our island, it's ridiculous that the Calvo administration continues its efforts to undermine the federal receiver for solid waste and its efforts.”  We can only hope that the Office of the Governor will accept this good advice.  While we will not respond to name calling, we will respond to attempts to intentionally mislead the people of Guam about our work.  We will respond to such distortions with the truth, because the truth matters and the people of Guam deserve the truth.

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, which 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, please visit www.gbbinc.com or call 1-703-573-5800.


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