House OKs $7.8M for hemodialysis, Kagman road projects

After making amendments, the House of Representatives passed Monday afternoon a bill reprogramming $5.8 million for the completion of the Public Health and hemodialysis project and $2 million for the Kagman III road pavement.

The House approved House Bill 14-258, introduced by Vice Speaker Timothy Villagomez, which only provided funding for the hemodialysis project. The lawmakers later added $2 million for the road pavement in Kagman III and Kagman III phase 4.

The funds will be taken from the Dandan sewer project or the expansion of the Agingan sewer treatment plant, a requirement by the Environmental Protection Agency.

The bill now goes to the Senate for similar passage.

The amended bill states that the Kagman wastewater funds, which include federal grants, may likely remain unused for at least another 18 months because of design changes and permitting delays.

“While unused, these funds lose value,” it said.

Further, it said that keeping these funds idle “jeopardizes future federal grant funding because the Office of the Insular Affairs has instituted a policy “conditioning future capital improvement grants on prompt expenditure and project completion.”

The Legislature said it is imperative and necessary to complete the construction of the Department of Public Health/hemodialysis expansion project as the existing building lacks much needed office spaces, exam rooms, and patient rooms.

“In addition, the construction is undergoing and the longer the delay of completion, the more costly it will be for the Commonwealth,” the bill said.

The bill specifies that the Executive Branch shall reserve $5.8 million from the 702 funding for FY 2007 to reinstate the amount reprogrammed from the Kagman wastewater project and $3 million in FY 2007 and $2 million in FY 2008 for the completion of the Dandan sewer project.

The bill states that the governor has committed $17 million to replace funds needed for the Kagman wastewater project and $5 million for the Dandan project beginning with FY 2007 capital improvement grants.

The bill was introduced after Gov. Juan N. Babauta asked the Legislature to approve the reprogramming of funds for the hemodialysis project, citing that the original appropriation has been depleted, with a remaining balance of only $857,000.

The bill acknowledged that the fund’s depletion was caused partly by several change orders “to correct certain design defects and to accommodate unforeseen circumstances during construction.”

The two-fold project was earlier appropriated $11.8 million: $8.28 million for expansion of the hemodialysis wing and $3.5 million for a new public health building.

The Department of Public Health and the Department of Public Works had awarded the $5.6 million contract to AIC Marianas to construct the center.

In Tuesday’s public hearing, DPW officials led by Secretary Juan Reyes and Technical Services Division director Richard Cody said that more expenses were incurred stemming from incorrect architectural design. They said the project had to be redesigned requiring some $900,000.

The original design, which was contracted to Leo Daly, amounted to $786,000.

The redesign was awarded to Tanaguchi Ruth

Cody said there are least four change orders incurred by DPW since the project started in early 2003.

“So all these contributed to the depletion of funds. The appropriation was not only used for the contract [$5.6 million] but also A&E design, administrative costs, etc,” said Cody.

In his testimony, Cody said the design contract was awarded to Leo Day because the evaluation team chose what they thought was “a world class international A&E firm.” He said DPW did not realize the “terrible job” done by Leo Daly until the construction began. He said there were 18 pages of deficiencies in the original design.

“We communicated to them but they never responded to us. They just fooled us up,” he said.