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Despite earlier concerns, Fono passes bond bill into law

The biggest piece of legislation from the Lolo Administration — in terms of money involved, more than $110 million — has been endorsed by the Fono and will be transmitted soon to the governor for his signature.

 

The measure, which seeks to modernize and enhance the bond issuing capability of the American Samoa Economic Development Authority, gives the ASEDA board the authority to refinance six long term debts totaling $35.5 million. It also gives them the authority to issue bonds totaling $75.3 million in order to generate revenue to fund seven specific projects.

 

Despite earlier concerns in both the Senate and House that the measure lacks Fono oversight, the House version of the bill was approved. The final approval came in third reading yesterday in the Senate with no changes by the Fono.

 

“Due to the need to take advantage of current low interest rates, to fund outstanding obligations of the government presently at above-market interest rates, and to take full advantage of FY 2015 federal funding supporting Grant Anticipation Revenue Vehicles (GARVEE)”, this bill becomes effective immediately upon passage by the Fono and approval of the governor, according to language of the measure.

 

One issue for which senators wanted further clarification was explained by ASEDA board member Iulologologo Joseph Pereira during a committee hearing Wednesday, and this involved the seven infrastructure projects for which general bonds will be issued.

 

Iulogologo, who is also the governor’s executive assistant, explained that three of the projects already have sources of revenue streams. For example, he said the $2 million the territory gets annually from the Federal Highway Administration has been pledged for a $20.3 million bond for road projects and will be issued under the federal government’s GARVEE bond program.

 

He said this major project covers roads from Onenoa  in the Eastern District to Amanave in the Western District.

 

For the new Manu’a ferry boat which will sail between Tutuila and Manu’a, part of the annual Interior Department’s capital improvement project funds have been pledged to this project, which is a $10 million bond.

 

On the $5 million bond for the ‘airport fuel tank relocation’ project, part of the CIP funds and a percentage of revenues collected by the ASG Fuel Tank Farm operations will be pledged for this venture, Iulogologo said.

 

The other four projects— each with a $10 million bond— include the Charter Bank, Malaloa Marina Wharf, a new Fono building and a cannery container wharf.  These four projects have “no revenue streams” at this point and the ASEDA board needs authority, under this legislation, to get new revenue streams for these projects, Iulogologo explained.

 

Senators expressed appreciation for the explanation, but Senate President Gaoteote Tofau Palaie suggested that the Fono building project — which is priority number six on the list — should be moved up the list of priorities.

 

“Make the Fono project a priority to ASEDA and the administration. The current building is very old and many sections of the wood panel building have rotted away,” he said, but there was no reaction from the ASEDA board members attending the hearing on whether they will honor Gaoteote’s request.

 

It was stressed during the hearing that although the bill states that all tax revenues are pledged for repayment, the ASEDA board can only utilize between 20% and 25% of these revenues. Any additional revenues needed — beyond 25% — will require Fono approval.