Gov. Lolo Matalasi Moliga has proposed to the Fono a joint resolution to address part of American Samoa’s corrective action plan which allocates $2.5 million annually in an American Samoa Government subsidy for the airport following a US Federal Aviation Administration land use audit report of the Pago Pago International Airport two years ago.

In an Aug. 31 letter to the Fono leaders, the governor noted that they (Fono leaders and the governor) had previously discussed this matter and that in order to satisfy the condition of the FAA land use audit finding issued in December 2014, a correction action plan was necessary to address the findings cited in the report.

The governor explained that the FAA findings “include criticism” of the fact that 325 acres of land included in the original airport layout plan from 1973 have been converted to non-airport use — covering the areas such as the Tafuna Industrial Park, Tafuna government housing and government lands starting at the American Samoa Power Authority compound in Tafuna and continuing all the way to the Veterans Memorial Stadium.

Lolo says American Samoa has made a preliminary agreement with FAA to lift the land use restriction that limits this land to be only used for airport purposes, by re-compensating the airport by way of a $2.5 million subsidy per year over the next 10 years.

“For the last 10 years, ASG has appropriated approximately $2.5 million per annum to fund the operations of the airport,” the governor said and explained that in proposing the settlement with the FAA, “we are suggesting that we formalize ASG’s commitment to appropriate $2.5 million each year for a minimum of 10 years to ensure proper funding of our international airport.”

“At the end of each fiscal year, when the true revenues and expenses of airport operations are known, any unused portion of the subsidy can then be re-appropriated by the Legislature for airport-related uses in the following year,” Lolo further explained. “This will enable us to invest in necessary infrastructure to further develop our airports in Tutuila and Manu’a.”

The governor also submitted to the Fono leaders the administration’s draft proposed Joint Concurrent Resolution expressing the intention of the Legislature to commit to this process. The Fono can also consider its own draft resolution that would start the processing of $2.5 million annually starting in fiscal year 2017 to FY 2026.

By terms of the land use audit report, the governor said, “Until we have a satisfactory corrective action plan in place, we are unable to execute any leases in the subject area. This is hampering our efforts to develop our economy.”

BACKGROUND

FAA spokesman Ian Gregor confirmed to Samoa News late last month that ASG submitted their corrective action plan to the FAA on Feb. 15, 2016. “We accepted the corrective action plan, and are monitoring ASG's progress in addressing the audit report findings,” he said.

ASG was also required to submit a “Resolution and Reinvestment Agreement”, which is “an official government declaration” that “obligates the ASG to make an annual contribution of $2.5 million to the airport account and devote the payment exclusively for airport purpose.” (See Samoa News edition Aug. 29 for details.)

ASG’s proposed fiscal year 2017 budget shows $1 million for the ASG subsidy and $367, 500 under the hotel room tax. According to the 5% hotel room tax law, which went into effect last summer, 75% of revenues collected goes to the Airport Division of Port Administration and 25% to the general fund.