The government of Guam has added to its annual debt-related expenses in order to address long-delayed capital improvement projects.

Lou Leon Guerrero

Gov. Lou Leon Guerrero

Gov. Lou Leon Guerrero signed two pieces of legislation into law Wednesday that earmark $40 million each year – for 30 years – to finance the construction of a new health care campus and prison.

“It is our responsibility as public officials and leaders … that we provide our people with the quality of facilities – not just the facilities, but the quality of the human resource and the talents of the people (who) work within those facilities,” Leon Guerrero said.

The “21st Century Healthcare Center,” which will commit $35 million in funds annually for repayment, is expected to build new facilities for the Guam Memorial Hospital, the Department of Public Health and Social Services and the Guam Behavioral Health and Wellness Center.

When discussions began at the beginning of her administration, the governor said it was clear that an initiative to build a new GMH should include more health care programs. GovGuam is authorized to borrow up to $600 million for the health care campus project. The total bill for the health care campus has been estimated at close to $1 billion - with the new hospital alone previously projected to cost nearly $800 million.

The governor plans to use $300 million in federal pandemic funds to seed the health care construction project.

“This is not just going to be convenient for our patients, but it’s also going to be convenient for the visitors that come. It’ll be convenient for our employees that work there. So this vision of our administration is a vision that, yes, is going to be realized during our term,” Leon Guerrero said. “We have heard past administrations talk about the need for a new hospital. But this administration did not just talk, but acted.”

The new prison’s construction can be paid with up to $80 million in debt, financed through a $5 million annual earmark. The amount will be enough to pay for the first two phases of the Department of Correction’s master plan for expansion, according to the governor.

“In that sense, it’s going to be a big leap (for) the facilities and structure where you all will be working,” Leon Guerrero said to corrections officials at the bill’s signing ceremony, later adding: “We have said that one of the biggest priorities for our island is security and safety … tempered with mercy and good judgment. And that’s why I really want to make sure our facility is truly a rehabilitation facility.”

The projects may be financed through a lease-back agreement similar to ones that built Okkodo High School and other northern public schools. In a leaseback arrangement, developers foot the construction bill and provide the maintenance. The developers get their money back through annual lease payments similar to lease-to-own financing.

GovGuam has budgeted to pay $66.7 million in annual debt-related payments, including for bonds borrowed over the years. While the new laws won’t add to the local government’s debt ceiling limit, they will tie up an additional $40 million in revenue for up to the next three decades.

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