More than half — about $53M — of ASEDA bond sale revenues has been spent
A large portion has been expended of the $78.91 million in revenues the government received from the sale of American Samoa Economic Development Authority (ASEDA) bonds, with just over $15 million left, according to the Sept. 1st 11-page ASEDA summary report for 2017.
The report was prepared for the Fono and comes at a time when several lawmakers are wondering how much of the money has been expended, whether ASG is on time in making payments, and what is the update on the status of the projects funded with bond money.
Perhaps the biggest concern with lawmakers and many in the community is whether the government is meeting its payment obligations to ensure that future generations are not stuck with a huge debt.
The report explained that all debt service payments are paid monthly to the Trustee, who then disburses it semi-annually to all investors on Mar. 1 and Sept. 1st every year. According to the schedule of payment, the final one is to be made on Sept. 1, 2035.
ASEDA issued three series of bonds in 2015 and collected just over $78.91 million in revenues, according to the report, which also noted that ASG had disbursed, or payments have been made since 2015 — a total of $8.98 million. On Sept. 1st, the date of the report, ASG made another $5.05 million payment bringing the total payments to $14.03 million.
“The Territory will continue to make monthly payments to our bond convants [sic: convenant] with semi-annual payments to investors from the Trustee,” the report said. It shows that the principal amount of $78.91 million (which ASG received as revenues from the bonds sale) has a total interest — during the lifetime of the bonds — of $70.21 million, netting a total principal and interest of just over $149.12 million.
At the time of the report, over $63.79 million had been expended, leaving a balance of $15.11 million.
Repayment of the bonds is through a percentage of current excise taxes. For example, 80% of $190% collected on beer/malt; 25% of alcohol tax, 50% or 15-cents of every 30-cents collected from the tobacco/cigarette tax; and all customs declaration fees ($5) collected.
An Administration bill, which amends provisions of the current excise tax, includes the beer tax. Currently, excise tax on imported beer is 190% of the value, but the Administration is seeking to amend it to 35-cents per 12-fluid ounces, or fraction thereof — basically it means 35-cents per can.
In amending the beer tax, the Administration proposed a slight change in the earmark for the bonds repayment. It says that 15-cents per 12-fluid ounces is earmarked for bond repayment while the balance (20¢) is deposited in the general fund.
Regarding the projects to be funded with bond revenues, Samoa News had previously provided specific details of each project and the amount they get. And the ASEDA report provides a brief summary of each project, the amount allocated and expended, as well as the balance.
The project with the largest balance of $3.76 million is the Fono architectural & engineering design and implementation, which was allocated $4 million, according the ASEDA report, which explained that a design firm has been selected to complete the architectural engineering and drawings of the Fono buildings. Approved plans will be implemented concurrent to design.
The next project with the highest balance, of $646,215, is the shipyard railway improvements, which was allocated $1 million for among other things, repairs and improved railway services at the shipyard; and facilitate repairs for larger vessels, such as purse seiners and longliners, at the 3,000 tonnage slipway, as well as repairs to the 1,000 tonnage slipway for smaller and medium size vessels to include yachts, alias and other types of smaller boats.
Some of the projects whose funding allocations have been fully expended, include the $13.5 million for the Territorial Bank of American Samoa; $2.96 million in financial assistance to LBJ Medical Center; $8.1 million for ASPA renewable projects — which includes the solar parks on Ofu and Ta’u islands; and more than $11 million for two previous ASG loans from the ASG Employees' Retirement Fund.
The report also summarizes bond compliance measures, which include anti-deficiency law concurrence; quarterly and mid-year analysis of revenues and expenditures, and budget adjustment if necessary; reduce allocated budgets to align with cash collection; aggressively recruit a comptroller; and address financial reports on time, 210 days after fiscal year ends.