The Chair of the American Samoa Economic Development Authority (ASEDA) Faleosina Voigt confirmed statements by Governor Lemanu Peleti Mauga at the Fono opening that the payments and maturity date of the bond debt haven’t changed with the additional bond debt for 2021 of more than $22 million.
Speaking at a Senate hearing yesterday, Voigt explained that the reason for this is because the 2021 bond series was floated at the right time when interest rates had dropped considerably. For the 2015 bond series, the interest rate was between 7.4% and 10% but for the 2021 bond series they were able to secure a 3.3% interest rate.
The 2021 bond series raised $22.6 million which is assigned for three projects:
- Fono building – offices for lawmakers, furnishings and landscaping budgeted at $11.5 million
- High Court building budgeted at $7 million
- Relocation of Territorial Correctional Facility to make way for a new hospital budgeted at $4.1 million
Voigt said yearly payments remain at $12 million and the maturity date for the last bond series is 2038.
The debt service (which is all sources of revenues pledged for bond payment) is $12.7 million and this includes the various tax hikes, fees and charges assigned to repay the bonds.
The hearing was chaired by Senator Magalei Logovii, who is also a member of the ASEDA board.
A concern expressed by several senators is that the ASEDA Board and the executive branch was deciding additional debt and how to spend the bond proceeds without any review and approval by the Fono.
Magalei pointed out that he had introduced a bill in the last Fono to address this concern. He said the bill was stalled in committee because some senators wanted to amend the bill but they never acted.
One of the most vocal senators at yesterday’s hearing, Faiivae Alex Godinet, said the Fono should have a say because while ASEDA makes the decisions it’s the people who will pay the bond debt.
He remarked that all of the current Senators will not be around by the time the bonds mature future generations will have to pay the bond debt.
Senate President Tuaolo Fruean asked why the courthouse was being funded with bond money when there was CIP money allocated for the job. Voigt said the CIP allocation of $2.7 million was not enough for the new courthouse building.
Tuaolo also asked if the Fono building qualified for funding from the American Rescue Plan Act. Board member, Attorney General Fainuulelei Ala’ilima, responded that they had explored this and the Fono and courthouse buildings do not qualify.
Tuaolo came back by saying –
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The AG said because ASG spent federal grants on disallowable costs in the past, it’s had to use local revenues to reimburse the federal monies and they don’t want that to happen again.
Regarding the ARPA funds, Tuaolo asked if the administration will provide the Fono a report of how the money will be spent. The AG said Keith Gebauer was recently appointed to head this office and needs time to be able to start projects for the benefit of the territory.
He said that the Senators should allow the office to implement projects then the Fono will be briefed. Tuaolo advised him not to wait until after they’ve spent the funding but to allow the Fono a chance to review how the money will be spent.
