Governor disapproves $3.3 million funding bill

Citing inadequate funds and the federal government’s disapproval of fund reprogramming, Gov. Juan N. Babauta disapproved the bill appropriating $3.3 million for the construction of Agingan ocean outfall and upgrade of the Agingan treatment plant.

Babauta vetoed House Bill 14-286, which intends to authorize the reprogramming of $3.3 million from the Kagman Wastewater System, which originally received some $10 million through Public Law 11-119.

Babauta said his administration fully supports the intent of the bill and is fully committed to ensuring that the Commonwealth Utilities Corp. comply with the administrative order imposed by the U.S. Environmental Protection Agency.

Following consultations, however, with the Office of Insular Affairs, the CIP administrator, and the special assistant for CIPs, it was determined that the whole amount could not be made available.

He said the administration was informed that the only available amount for the Kagman project is $2.6 million and that the OIA would not approve the reprogramming of the remaining funds because “no funds would be left in place for the Kagman Wastewater Project.”

He said the OIA would not approve the reprogramming because “CUC, at that time, had failed to timely submit its required financial audits for fiscal years 2003 and 2004 to OIA.

Further, he said that OIA would not approve the reprogramming of remaining funds because an “Agreement and Contract for Construction” (CUC WW 05-C008) had already been hammered out with Guam Pacific Power Corp on March 1, 2005, “which provided that CUC be obligated to pay interest on any unpaid contract balances at a rate of 16 percent per annum.”

Babauta, in his transmittal letter to the Legislature, also noted that his office requested the Senate not to transmit the bill, but rather reconsider its action so that the bill could be amended to reflect the available funds and ensure that CUC submit the needed requirements to OIA.

The Senate, he said, worked with the administration, but did not recall its action.

“The administration, for the reasons set forth in detail herein, has no choice but to disapprove the bill in its current form. The administration, however, will continue to work to ensure that the funds required are identified as soon as possible,” he said.

Babauta, who currently has emergency control of CUC, said he has authorized the utility firm to work with all concerned agencies, including the OIA and EPA, to resolve the funding and compliance concerns.

In 1999, EPA issued an administrative order against CUC for its failure to upgrade the ocean outfall to meet environmental standards.

EPA had given CUC a $2.1 million grant for this project but it required local matching funds. The whole project reportedly requires $5.6 million to complete.