American Samoa is being allocated just over $9 million in Capital Improvement Project funds and more than $22 million in the annual government allocation for operations, under the U.S. Department of Interior’s Office of Insular Areas proposed budget for fiscal year 2016, which begins Oct. 1, 2015.

OIA’s total proposed FY 2016 budget of $643.6 million is part of the entire DOI funding proposal that was yesterday sent by President Barack Obama to Congress and includes all federal departments and agencies.

The OIA request includes $103 million in annual appropriations and $540.6 million in permanent and indefinite appropriations mandated by law to the U.S. Territories and the Freely Associated States.

Interior Assistant Secretary for Insular Areas, Esther Kia’aina said Obama’s FY 2016 budget request demonstrates his strong commitment to the U.S.-affiliated insular areas.

“The request supports quality of life in the insular areas by bolstering programs aimed at improving K-12 public school facilities and confronting energy security challenges,” she said. (See www.doi.gov for full details of the news release and the OIA budget document.)

ECONOMY

In the OIA’s 136-page budget justification document sent to Congress, the federal agency explained that in 2013 American Samoa’s gross domestic product (GDP) shrank 2.4% and the drop followed a 2.7% loss in 2012.

However, it notes that the territory’s economy is expected to return to growth with the opening this year of Tri Marine International’s Samoa Tuna Process cannery. The cannery is expected to employ some 1,500 workers making Tri Marine the second largest fish processor after StarKist Samoa.

“With two canneries working again, American Samoa will have a larger economy with a bigger fiscal impact,” OIA said and notes with concern that the implications of recent “international tuna treaty negotiations, however, may adversely impact the success of the current canneries.”

OIA also said that federal programs and grants are a “critical piece of the overall budget” in American Samoa. For example, in FY 2013, federal funds made up 65% of the territory’s total revenues. Also in 2013, OIA’s grants of $35.3 million contributed 1,237 jobs (9% of the territory’s total employment); $29.1 million in employee compensation (17% of the total) and $44.8 million in GDP (7%of the total).

According to the justification document, OIA is allocating $22.75 million for American Samoa operations, which includes $7.9 million for LBJ Medical Center, $1.3 million for the American Samoa Community College and $855,000 for the High Court.  (The $22.75 million allocated was the same amount for FYs 2014 and 2015.)

It says that ASG does not have sufficient local revenues to fund the entire cost of its government and therefore this annual allocation will fund the differences between budget needs and local revenues.

CIP FUNDING ALLOCATION

The justification document shows that OIA is allocating $9.50 million in CIP for American Samoa — an increase of $208,000 from FY 2015, which has a total of $9.29 million (FY 2014’s CIP approved allocation was $10.04 million).

OIA explained that all projects have been categorized into three general priority areas and the first priorities include health, safety, education, and utilities. Second order priorities include ports and roads. Third order priorities include industry, shoreline protection, parks and recreation and other government facilities.

According to OIA, the object of this program is to assist American Samoa in providing infrastructure to promote economic development and improve health, education and public safety.

Over the past year, OIA said several important CIP projects in American Samoa made significant progress. For example, LBJ hospital made steady progress on the renovation and expansion of the dialysis unit and the forensic psychiatric unit while the American Samoa Power Authority continued connecting homes to the main sewer system in Tualauta.

In addition, the Department of Public Safety broke ground on a new inmate building at the Tafuna Correctional Facility to alleviate overcrowding while the American Samoa Community College made steady progress with construction on its new Multipurpose Building that will be finished by July 2015.

According to the breakdown of CIP fund distribution, $2.6 million is for health; $2.5 million for education’ $250,000 for water improvements; $2.08 million for port service’ $500,000 for roads; $1 million for public buildings; $95,050 for administration purposes; and $475,250 for set-side for Operation and Maintenance.

OIA provides an overall brief description of how the CIP funds will be spent. For example,  $1.7 million will be utilized to design and renovate the Labor Delivery, Nursery, and Operating Suites at the LBJ.

The new facility will improve patient services and help the Medical Center meet life safety code requirements and requirements of the Centers for Medicare and Medicaid Services, it says, adding that the governor requested that an additional $1.2 million be set aside for the purchase of new school buses to help minimize the overcrowded buses that currently force students to stand while in transit.

For the $500,000 allocated for roads, OIA said this money will be used to purchase heavy equipment for the Public Works Department, which is in need of a new backhoe, two dump trucks, and a street sweeper to provide proper maintenance to territorial roads.

OIA also said that about $350,000 requested will help the airport provide a 5% local match to grant funding awarded by the Federal Aviation Administration (FAA), which annually awards approximately $9 to $11 million to American Samoa for continued improvements to its airport.

FAA grants are used for a wide variety of purposes, but mainly to construct and enlarge runways, provide necessary equipment, and build airport facilities.

And the funds allocated for “administration” is to help fund the CIP Administration Office, which is responsible for overseeing and managing the CIP Program by ensuring that all projects comply with federal grant requirements.

Samoa News should point out that specific amount and projects to be funded with CIP money will become public when the administration sends to the Fono the ASG’s budget proposal for FY 2016.