Copyright guampdn
Plans from the Guam Waterworks Authority to secure a $75 million line of credit from Royal Bank of Canada and pump another $8.2 million into a project to improve water pressure and deal with leaks both got the Public Utilities Commission’s approval. PUC commissioners voted unanimously to approve the projects during a meeting last Thursday. GWA plans to use a two-year agreement with Royal Bank of Canada for the $75 million revolving line of credit to fund water and sewer upgrade projects, PUC administrative law judge Fred Horecky said. Horecky said GWA will be able to borrow, repay and re-borrow up to the $75 million limit as needed during the two years. “This access to funding enables GWA to procure invitations for bids and requests for proposals in a timely manner, ensuring that projects can proceed without delay while long term financing is pending,” he told the PUC. GWA plans to start as much as $898 million worth of water and sewer upgrades through 2029. The authority already has permission from lawmakers to borrow up to $560 million to that end, and floated a $266.5 million bond in July. The short-term borrowing with Royal Bank of Canada is meant to help GWA cut down on debt payments and interest, Horecky said on Thursday. Unlike bonds, which are sold to public investors, the line of credit is essentially a bank loan. PUC Commissioner Doris Flores Brooks asked why GWA is not borrowing from a U.S. bank. Royal Bank of Canada was the only institution to offer a proposal to GWA, according to assistant general manager of administration and support Chris Budasi. The main issue may have been that the business was not big enough to show interest, Budasi said. Depending on the outcome of GWA’s ongoing court battle with Core Tech International, the line of credit could go down, Horecky told the PUC. GWA and Core Tech are in a land dispute over the Dededo property the Northern District Wastewater Treatment Plant, Guam’s largest, sits on. The waterworks authority wants to revoke certificates of title it argues Core Tech mistakenly holds for the decades-old government plant. Core Tech is countersuing for $220 million. “I think the concern is the potential liability attached to the current lawsuit, and therefore they’re limiting the amount we can borrow on the current agreement until that lawsuit is settled,” Budasi said Thursday. If the judgement in the case is favorable, the line of credit could go up to $125 million or even a $150 million limit, he said. The Supreme Court of Guam is currently weighing arguments made in the case. Pressure zone improvements Meanwhile, GWA got the OK to spend another $8.2 million in a contract with Sumitomo Mitsui Construction Co. Ltd. for better water pressure controls and meters to help measure and identify leaks. Sumitomo bagged a $23.4 million contract for the project earlier this year, PUC’s Horecky said, but about $14.9 million will be grant funded. A number of new pressure reducing, sustaining valves will let GWA automatically adjust pressure in different areas, with better precision, GWA assistant general manager for engineering Brett Railey told the PUC. Crews have to manually “choke” valves to adjust pressure, but demand changes and pressure requirements change throughout the day, Railey said. “If you set it at 10 a.m. and it’s just perfect at 10 a.m., it’s not going to be perfect at 2 a.m. and it’s not going to be perfect at 6 a.m.,” he said. New valves will help “smooth that out” so water pressure is better throughout the day. Besides that, Sumitomo will also be installing meters that will help GWA measure how much water is lost to leaks in different areas. The waterworks authority is setting up 36 different “district meter areas” spread around the island. This will allow GWA to measure where the amount of water flowing into the water system at any given area, and compare it to customer billing to determine where leaks are. Meters will help, Railey said, but crews still have to play “whack-a-mole” with leaking pipes until more can be replaced. He said crews often fix one pipe, only to have another section of weak pipe burst. Plans for more pipe replacement will be forthcoming, he told the PUC.
