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Lolo: Cautious enthusiasm for GARVEE program

Gov. Lolo Matalasi Moliga has responded to Rep. Larry Sanitoa’s request for the American Samoa Government to look into a federal program called Grant Anticipation Revenue Vehicles (GARVEEs), which enables states to pay debt service and other bond-related expenses with future federal-aid highway funds.


As of September 2012, a total of 24 states and three territories have been issued $16 billion under the FHWA Innovative Funding Program to finance their infrastructure through the GARVEEs program.


In his Feb. 15 letter to Sanitoa, Governor Lolo thanked the Tualauta representative for “bringing to my attention an innovative funding scheme to facilitate comprehensive accommodation of our deteriorated public thoroughfare.”


He added, “I do appreciate very much the ingenuity of your colleagues and due diligence that you have demonstrated to ensure that the needs of our people are promptly addressed.”


Lolo said that while he is “excited” over this possibility, “it is crucial that we explore and assess our local capacity to ensure that we can expend this money quickly and compliant with terms and conditions of the Grant Anticipation Revenue Vehicles (GARVEE).”


Moreover, the governor said there is a need “to gauge our financial ability to defray debt service and other bond related expenses.”


According to Lolo, “Our current financial condition and our poor credit rating may preclude qualification for this program. We will need to thoroughly address all of the relevant issues upon which we arrive at a prudent decision.”


Lolo has tasked the Public Works Director Faleosina Voigt to “research the program and to report to all of us on steps that we ought to pursue to forge our participation in the program.”


But legislation needs to be enacted to provide legal sufficiency facilitating ASG’s pursuance of this program, something both Sanitoa and Lolo agree upon.


“Once we have determined that we do have capacity to handle program requirements, we will collaborate on the development and passage of requisite legislation to implement this program,” Lolo concluded.


In his letter dated Feb. 13 to Governor Lolo, Sanitoa explained that the GARVEEs financing mechanism generates up-front capital for major highway projects at generally tax-exempt rates and enables a State or Territory to construct a project earlier than if using traditional pay-as-you go grant resources.


"An early start to getting projects in place allows for lower costs due to inflation savings, and the public realizes safety and economic benefits. These benefits in my opinion would be advantageous to American Samoa's transportation needs given the current conditions of our infrastructure,” Sanitoa wrote.


Sanitoa reminded Lolo that "since American Samoa currently receives $4 million annually from the Federal Highway Administration, the American Samoa Government can conceivably apply for an up-front of $40 million to accelerate our most critical highway projects. Furthermore, the most important aspect of this potential funding program is that it will provide an economic and fiscal stimulus which is something that we are in dire need of for our territory."


Sanitoa referred to last December when the Department of Public Works advertised and held a public hearing on the Territorial Transportation Improvement Program, (TTIP) for FY 2013 and FY 2014.


The TTIP listed all of the most critical and urgently needed road improvement projects throughout the island. As required by GARVEEs, the American Samoa TTIP could be used to identify highway projects that can be funded under this program.


Copies of Lolo’s letter were forwarded to Lt. Governor Lemanu P. Mauga, Public Works Director Faleosina Voigt, FHWA representative Clifford Chew, Reps. Taotasi Archie Soliai and Pulelei'ite Li'amatua Tufele Jr., and the Governor‘s Chief of Staff, Fiu J. Saelua.