Setting the Record Straight

The Federal Receiver established this section to provide 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. The section, announced in an April 10, 2014 press release, will be continuously updated with additional information added at the bottom, as time permits, when any new attacks occur.

July 2015

The Receiver is not operating in the "red"
Guam taxpayers are not subsidizing solid waste cost
Department of Administration - Payroll and accounting services
Two reasons for revenue declining when compared to the previous year
The costs of Guam's Solid Waste System are an open book
The Receiver does not need or want a rate increase
Layon Landfill: Costs substantially less than $100 million; will serve Guam for more than 50 years

April 2014

There was no multi-million dollar Bend in the Road
There are no multi-million dollar salaries for Receiver personnel
All travel expenses of the Receiver are managed within federal guidelines
There have been no extravagant dinners
There have been no luxury hotels or luxury condominiums
GBB meets its fiduciary duty to Guam
The Consent Decree Projects are not $63 million over budget
Additional projects added by the Government of Guam
Chace Anderson - Fire in Nashville
Chace Anderson - Tenure in Nashville
Chace Anderson - Age Discrimination Claim
There Are No Personal Bodyguards
40 Hours Work Week
Chace Anderson's Leadership
False Rumors About David Manning

July 2015

1. The Receiver is not operating in the "red"

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.

2. Guam taxpayers are not subsidizing solid waste cost

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.

3. Department of Administration - Payroll and accounting services

In the June 26, 2015 interview on K-57 with Phill Leon Guerrero, 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.

4. Two reasons for revenue declining when compared to the previous year

In the June 26, 2015 interview on K-57 with Phill Leon Guerrero, 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:

The first is the success the Receiver has achieved in collecting significant amounts owed by some commercial customers over a long period of time. This is good news for GSWA in that it received revenue that it had been owed but not paid from several years earlier. As these overdue amounts are paid off, the ongoing collections from the same customer will be lower because they no longer owe overdue amount. In addition, one commercial customer that still owes money from the past attempted to get out of paying some of what it owed by pleading hardship to the Court. Because of legal representation issues between the Governor and the Attorney General’s Office, delay ensued. Fortunately, this is now resolved and the old debt is again being paid.
The second reason is that in FY 2014, the auditors recognized an allowance for uncollectable accounts based on useful information provided by the Receiver. This is something that should have been done years earlier but until the Receiver was able to restore accountability to the system, it was not possible. While there will always be some who do not pay their bills, under the Receivership this has been reduced to less than 2 percent of residential customers unlike the time before the Receiver when 4,000 customers (more than 30 percent of residential customers) received free service for several years. Under the Receiver, if you do not pay, service is cut off and you must pay the amount owed plus a restoration fee to get it restored. It is for these reasons that revenue declined slightly in FY 2014.

5. The costs of Guam's Solid Waste System are an open book

Mr. Clark is 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.

6. The Receiver does not need or want a rate increase

Mr. Clark tells the Marianas Variety 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.

7. Layon Landfill: Costs substantially less than $100 million; will serve Guam for more than 50 years

Mr. Clark 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.

April 2014

1. 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.

2. 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.”

3 . 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.

4. 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.

$180 for dinner at Hotel Santa Fe – This was a meal for five people and was well within the per diem;
$78 for dinner at Jamaican Grill - This was also a meal for five people and was well within the per diem;
$146 for meal at Tumon Bay Lobster & Grill – This was a meal for three people and was within the per diem limit;
$120.88 for dinner at Roy’s Restaurant – This was a meal for two people and was within the overall per diem.
$16.58 for lunch at Caffe Cino – This was for lunch and was within the per diem.

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.

5. 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:

January 2009 at the Sheraton Waikiki - Federal regulations allow for overnight layovers for very long trips. Trips between Guam and the mainland qualify. The January 2009 bill cited in the Governor’s press release is for one night going to Guam and one night on the return trip. The hotel room for each night was a typical hotel room and the total cost for each night was $230.75, for a total of $461.50, not the $930.51 stated in the Governor’s press release. This was within the federal per diem for Hawaii during the time of this travel.
June 2011 Chancellor Hotel in San Francisco – This was for 2 nights at $199.24 per night for a mandatory meeting called by USEPA to review plans for the closure of the Ordot Dump. Guam EPA also attended the meeting.
February 2012 Marriot Guam – The apartment rented by GBB was full and a hotel had to be used on this trip. The hotel rate was within the approved per diem.
During the time GBB has worked in Guam, it has rented housing for its personnel. Hotels are only used on Guam when the rented housing is full and there is no room for additional personnel. In June 2010, the month singled out in the Governor’s press release, when the cost of rent, all utilities and furnishings are all included, the cost for this housing was $120.88 per day which is significantly lower than the federal per diem allows. The savings are much greater when more personnel are needed on Guam in connection with our work. These accommodations are not, as suggested in the Governor’s press release, "luxury” housing, but represent a reasonable housing accommodation. Others living in these same kinds of housing units included other contractors, employees of airlines, military families and other professionals who live and work on Guam.

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.

6. 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.

7. 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.”

8. 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.

9. Chace Anderson - Fire in Nashville

Mr. Clark has spread a false story about Chace Anderson, the Operations Manager for the Receiver on Guam, suggesting Mr. Anderson was responsible for a fire in Nashville. Mr. Clark should know this is not true. Mr. Anderson was the Director of Solid Waste in Nashville, working for the Metropolitan Government of Nashville and Davidson County. At that time Nashville used a waste to energy plant to dispose of trash. The plant was operated by a third party. Even a casual reading of the record concerning this fire shows that Mr. Clark is repeating unfounded charges made by the insurance company for the waste to energy plant. The insurance company was attempting to avoid liability for the negligence of the plant manager, not Chace Anderson. Mr. Anderson’s employer, the Metropolitan Government of Nashville and Davidson County, sued the plant’s operator for their negligence. The facts of the case clearly show that the plant operator allowed a hauler to bring in loads of sawdust after hours and dump it at the plant with no supervision. Sawdust is extremely flammable and a spark from the truck ignited the sawdust causing the fire. The lawsuit against the operator of the plant was decided by a Nashville jury, which found the fire was caused by the negligence of the plant operator, not the City of Nashville or Chace Anderson. The jury awarded Nashville $7.2 million and the Tennessee Court of Appeals upheld the verdict.

10. Chace Anderson - Tenure in Nashville

Mr. Clark and his surrogates also suggest that Chace Anderson left Nashville as a result of the fire. In fact, Mr. Anderson remained in Nashville for several more years, only leaving when he moved to the West Coast to take care of his aging parents. Mr. Anderson had a very successful tenure in Nashville, revamping the solid waste system from top to bottom and implementing a very effective curbside recycling program. Like so much of what Mr. Clark is spreading around Guam these days, there is no truth to his twisted version of these events.

11. Chace Anderson - Age Discrimination Claim

Mr. Clark is also twisting the facts to try to blame Mr. Anderson for an age discrimination claim filed against the Metropolitan Government of Nashville and Davidson County. Many large governments and private businesses have similar claims filed against them. The employee who filed this claim was terminated for a variety of reasons that were upheld by the Civil Service Commission and the Courts of Tennessee. The federal judge who heard the age discrimination claim dismissed it, but a federal appellate court found that the district court erred in dismissing the claim. The employee’s problems began before Mr. Anderson came to Nashville and he was only one of several supervisors and fellow employees who reported problems with the employee involved in this matter. Blaming this situation on Mr. Anderson grossly distorts the record – as an experienced attorney like Mr. Clark surely knows.

12. There Are No Personal Bodyguards

Mr. Clark and his surrogates are also attempting to use another disgruntled employee to attack the Receiver. Mr. Clark’s surrogate, former Senator Jess Lujan, announced on his broadcast on April 16, 2014, his intent to spread baseless and unfounded complaints from Mr. Tony Carbullido against the Receiver. To protect the privacy of our employees we do not discuss the details of job performance or the reasons we made the decision to terminate this contract employee. However, we will respond to the baseless charges from this former employee.

No bodyguards have been hired for anyone. Receiver personnel have been subjected to threats and GSWA equipment has been vandalized in the past, prompting us to consult with the U.S. Marshals about how best to address this problem. In 2010, upon the recommendation of the Marshals, we brought in private security. Since that time, we have seen a significant drop in harassment of Receiver personnel and vandalism, but we remain vigilant and work with our security contractor (Pacific Island Security Agency), and the U.S. Marshals, to address any new problems that may occur. The security we provide is for all of GSWA’s and the Receiver’s workers and to protect Guam’s investment in the equipment used to meet the needs of GSWA’s customers. There are no personal bodyguards.

13. 40 Hours Work Week

No worker is forced to work more than 40 hours per week. Any employee who does work more than 40 hours in a week is compensated in compliance with Guam and federal laws and regulations.

14. Chace Anderson's Leadership

Chace Anderson has worked hard and is principally responsible for the improvements Guam has experienced in the collection and management of residential trash services and has also been instrumental in the dramatic improvements that occurred at the Ordot Dump while it was still operating. He led the effort to bring the residential curbside recycling program to Guam. He has also been extremely effective working with the new landfill and the Hauler-only Transfer Station as these critical new facilities became operational. The positive results in these areas speak for themselves and of Chace Anderson’s leadership of a dedicated group of hardworking employees.

15. False Rumors About David Manning

Mr. Clark is spreading false rumors about David Manning. Mr. Manning worked for a large Healthcare Company, Hospital Corporation of America (HCA), from January 1995 through December 1997. Manning was hired by HCA to help the company improve services to the poor and uninsured and to assist in working with the federal government to properly address the issues that prompted a federal investigation of the company’s billing practices. These billing issues, which were the subject of the investigation, went back to the late 1980’s. Mr. Clark is spreading rumors that Mr. Manning was actually being investigated when, in fact, he was a public official for the State of Tennessee from 1987 to 1995 and had worked in Tennessee Government for several years prior to 1987 with absolutely no connection to HCA. Mr. Clark, through one of his surrogates, former Senator Jess Lujan, has made numerous baseless accusations using the false information Mr. Clark has been peddling around Guam. To be clear, Mr. Manning left HCA in good standing, was never the subject of any investigation, subsequently worked as a private consultant and a Receiver for the State of Tennessee managing another healthcare company, before being appointed by the Mayor of Nashville as Finance Director for the Metropolitan Government of Nashville and Davidson County. He served two terms as Finance Director, being confirmed to the position twice by the Metropolitan Council.