Public Law 29-130 - An Act to add a new §14241 to Article 2 of Chapter 14, Title 12 of the Guam Code Annotated, relative to authorizing emergency financing options for the Guam Waterworks Authority in order to provide for efficient and orderly operations and to promote growth on Guam for the betterment of all its residents

Felix P. Camacho Governor P.O. Box 2950 Hagatfia, Guam 96932 TEL: (671) 4 72-8931 • FAX: (671) 4 77-4826 • EMAIL: govemor@mail.gov.gu Michael W Cruz, M.D. Lieutenant Governor The Honorable Judith T. Won Pat, Ed.D. Speaker Mina' Trenta Na Liheslaturan Guahan 155 Hessler Street Hagatfia, Guam 96910 Dear Speaker Won Pat: ~ 1 4 JAN 2009 --9 · ~~ Transmitted herewith is Bill No. 397(EC), "AN ACT TO ADD A NEW §14241 TO ARTICLE 2 OF CHAPTER 14, TITLE 12 OF THE GUAM CODE ANNOTATED, RELATIVE TO AUTHORIZING EMERGENCY FINANCING OPTIONS FOR THE GUAM WATERWORKS AUTHORITY IN ORDER TO PROVIDE FOR THE EFFICIENT AND ORDERLY OPERATIONS OF THE GUAM WATERWORKS AUTHORITY AND TO PROMOTE GROWTH ON GUAM FOR THE BETTERMENT OF ALL IT'S RESIDENTS "which was signed into law on January 8, 2009 as Public Law 29-130. Sinseru yan Magahet, 9a.-,c.~ FELIX P. CAMACHO I Maga 'lahen Guahan Governor of Guam Attachment: copy of Bill cc: The Honorable Tina Rose Muna Barnes, Senator and Legislative Secretary I MINA'BENTE NUEBI NA LIHESLATURAN GliAHAN 2008 (SECOND) Regular Session CERTIFICATION OF PASSAGE OF AN ACT TO I MAGA'LAHEN GliAHAN This is to certify that Substitute Bill No. 397 (EC), "AN ACT TO ADD A NEW §14241 TO ARTICLE 2 OF CHAPTER 14, TITLE 12 OF THE GUAM CODE ANNOTATED, RELATIVE TO AUTHORIZING EMERGENCY FINANCING OPTIONS FOR THE GUAM WATERWORKS AUTHORITY IN ORDER TO PROVIDE FOR EFFICIENT AND ORDERLY OPERATIONS AND TO PROMOTE GROWTH ON GUAM FOR THE BETTERMENT OF ALL ITS RESIDENTS," was on the 30th day of December, 2008, duly and regularly passed. Tin Ros Mufi.a Barnes Senator and Secretary of the Legislature Judith T. Won Pat, Ed. D. Speaker This Act was received by I Maga'lahen Guahan this S / day of ~ , 2008, at J;l,J O o'clock f .M. CjOVED: V~~A FELix r. CAMACHO I Maga'lahen Guahan Date: 8 ~~ ~ Public Law No. 2.9-130 ~ Maga'lahi' s Office I MINA 'BENTE NUEBI NA LIHESLATURAN GUAHAN 2008 (SECOND) Regular Session Bill No. 397 (EC) As substituted by the Committee on Finance, Taxation, Conunerce and Economic Development. Introduced by: James V. Espaldon Frank F. Blas, Jr. Edward J.B. Calvo B. J.F. Cruz Mark Forbes Judith P. Guthertz, DPA Frank T. Ishizaki J. A. Lujan Tina Rose Mufia Barnes A. B. Palacios, Sr. v. c. pangelinan R. J. Respicio Dr. David L.G. Shimizu Ray Tenorio J. T. Won Pat, Ed.D. AN ACT TO ADD A NEW §14241 TO ARTICLE 2 OF CHAPTER 14, TITLE 12 OF THE GUAM CODE ANNOTATED, RELATIVE TO AUTHORIZING EMERGENCY FINANCING OPTIONS FOR THE GUAM WATERWORKS AUTHORITY IN ORDER TO PROVIDE FOR EFFICIENT AND ORDERLY OPERATIONS AND TO PROMOTE GROWTH ON GUAM FOR THE BETTERMENT OF ALL ITS RESIDENTS. 1 BE IT ENACTED BY THE PEOPLE OF GUAM: 2 Section 1. Legislative Intent. I Liheslaturan Guahan finds that the Guam 1 1 Waterworks Authority recently imposed a temporary moratorium on sewer 2 connections in Central Guam in order to prevent sewage overflows that pose a 3 threat to human health, and to ensure compliance with the Clean Water Act. 4 However, that moratorium has had an understandable, albeit adverse impact on the 5 course of economic development on Guam by either delaying or scrapping 6 construction projects which has in tum caused either a temporary or permanent 7 loss of revenue for the government of Guam through increased taxes on those 8 activities and the resultant economic use and the loss of income from those seeking 9 to develop their properties. IO I Liheslaturan Guahan further finds that given the Guam Waterworks 11 Authority has neither the time nor the luxury of procuring construction or 12 financing a fix to the moratorium in the traditional methods provided for under 13 Guam law, in light of the problems in the world credit markets and since the Guam 14 Economic Development Authority has recently learned from GWA's bond 15 underwriters that it would be unlikely to issue bonds in the near future thereby 16 making the declaration of an emergency inevitable in order to not impede 17 economic growth which is so important to the long-term well being of Guam's 18 citizens. 19 I Liheslaturan Guahan further declares that the aforementioned moratorium 20 and similar capacity-related problems, which may arise from time-to-time, are an 21 emergency and as such, does hereby authorize the Guam Waterworks Authority to 22 enter into financing and construction contracts, subject to regulatory oversight 23 from the Guam Economic Development Authority and the Guam Public Utilities 24 Commission. 25 Section 2. A new §14241 is hereby added to Chapter 14, Title 12 of the 26 Guam Code Annotated, to read as follows: 27 "§14241. Approval of Financing and Construction Options to 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Alleviate Emergency Conditions in the Guam Waterworks Authority's Water and Wastewater System. (a) Notwithstanding any other provision of law, in order to eliminate the emergency that currently exists relative to the current Guam Waterworks Authority's moratorium on sewer connections in Central Guam, the Guam Waterworks Authority is hereby authorized to enter into long-term and short-term financing agreements, credit facilities and other construction and procurement models which are necessary to rapidly alleviate the moratorium in order to promote economic growth on Guam for the betterment of all, provided, however, that said financing shall be issued subject to the terms and conditions of GWA's 2005 Series Bond Indenture and any other supplemental indenture issued by the Authority under Public Law 28-71. (b) Financing agreements, credit facilities and procurement methods can include, but are not limited to, the following: (1) qualified public activity bonds; (2) certificates of participation; (3) design-build-finance agreements; (4) (5) build-operate-transfer agreements; build-lease agreements; ( 6) lease-to-own agreements; and (7) any other credit facility or financing agreement approved by the Consolidated Commission on Utilities. ( c) All contracts for financing and construction entered into under this Section shall be subject to the approval of the Guam Public Utilities Commission under the Contract Review Protocol. ( d) All financing entered into under this Section shall be subject to the approval of the Guam Economic Development Authority (GEDA) and 3 1 all fees due to GEDA under existing statutes to GEDA shall apply. 2 However, all other provisions of §50103(k) of Title 12, Guam Code 3 Annotated, shall not apply. 4 ( e) Prior to issuing any financing under this provision, the Guam 5 Waterworks Authority shall obtain a legal opinion from a licensed Bond 6 Counsel designated by the Authority who possesses a national reputation for 7 expertise in matters relating to governmental obligations, the interest on 8 which is excluded from gross income for federal income tax purposes under 9 Section 103 of the United States' Internal Revenue Code. 10 (f) In view of the urgency for the procurement in order to lift the 11 moratorium in Central Guam and only for the project as defined herein, the 12 requirements of Chapter 5, Title 5, Guam Code Annotated, are hereby 13 waived and the Guam Waterworks Authority is hereby authorized to utilize 14 such method of source selection as it deems necessary, subject to the 15 approval of the Guam Public Utilities Commission under the Contract 16 Review Protocol and with all financing to be approved by the Guam 17 Economic Development Authority. However, the following minimum 18 limitations apply to the procurement for this project: 19 20 21 22 23 24 25 26 (1) A competitive selection request shall be published in a newspaper published on Guam for on at least two (2) occasions at least thirty (30) days prior to the date set to select the best bid/proposal to GW A based on the lowest overall life cycle costs and financing; and (2) GW A shall not use sole source as a method of selecting the successful bidder/proposer. (g) The moratorium project is defined to mean: 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 ( 1) Upgrades to the Mamajanao Sewage Pump Station (SPS): This will include an extension of the force main down the hill to a new terminating manhole and will control the flows from the pumping station. (2) Route 16 Pump Station Operational Measures: Increase risk management measures at the Route 16 sewage pump station and eliminate the flow split to the south. (3) Route 4 Wastewater Piping: Pipe the flow from the New Chaot SPS directly to the Agana WWTP. ( 4) Tamuning Pump Station: Build a new sewage pump station in Tamuning that will collect all of the flow from Marine Corps Drive and pump it directly to the Agana WWTP. (5) Agana Main Pump Station: Upgrade the Agana Main SPS and provide a fat, oil, grease and grit removal system at Agana WWTP to enhance overall operability. (6) Other works associated with the above scope as proposed or identified during the bidding process." 5