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DBAS defends move to increase its board’s stipends

The President of Development Bank of American Samoa, Ruth Matagi-Fa’atili has defended the move to increase the stipends for the DBAS board members, saying, “they are a hard working board.” Her comments were made during a hearing before the House Commerce & Economic Development Committee, chaired by Larry Sanitoa.

 

Chairman of the DBAS Board, Nuanuaolefeagaiga Saoluaga Nua was also at the hearing.

 

Mrs. Fa’atili was responding to questions from Fagaalu faipule, Vailoata Amituana’i who asked what prompted the move to increase the stipends of the board members, even though DBAS had just secured a loan from the American Samoa Government Employees Retirement Fund (ASGERF).

 

Vailoata was referring to DBAS’ proposal last month to change its by-laws in order to increase annual stipends for members of the Board of Directors.

 

According to the current by-laws, board members receive $7,200 per year, while the chairman gets $8,200 per year. The proposed change would add an additional $1,200 for each of the members and the chairman. If approved each of the board members would receive $8,400 while the chairman would get $9,400.

 

The House Chairman of the ASGERF pointed out that the bank is operating at a loss yet; he read in the paper that DBAS is moving to increase the stipends. He asked for an explanation from the DBAS president, noting that these are concerns raised by the public — since the bank sought financial assistance, yet here they are moving to increase the board’s stipends.

 

Mrs. Fa’atili said she understands that the Fono is concerned about the DBAS loss, however, as indicated in the 2014 audit report, under the cash flow statement, $3.4million has been loaned out to the community. “If we’re going to constitute a loss that’s because we’re doing work in the community — we’re collecting the money and we’re lending it back. The interest is what we are using to run our operation, pay our payroll and pay our bills.

 

“If you're seeing a loss, that’s why — because a lot of the repayment money we put it directly to the accounts to be loaned out. It’s difficult but one thing we realize for the management, the staff and the board of directors is that we’re still serving the community, that’s the most important thing. I am still able to keep the bank operations above water and still serve this community.”

 

She agreed this is a sensitive issue to the lawmakers given that the bank is operating at a loss.

 

Mrs. Fa’atili said that the stipends were not an easy topic when they were discussed. “This time I want you all to know about our board of Directors. They work very hard,” she said. “ I’ve never been to a board meeting that’s less than three hours and they meet three times a month. This is because to help with all the policies, trying to upgrade and renew policies to ensure that my decision making with the management is effective and efficient, and that it’s cost saving for the bank. That’s why we saw that it was important.”

 

Mrs. Fa’atili pointed out, “also this board doesn’t have a travel allowance. They never travel and we always try to get training for them to help them make good management and sound decisions for the benefit of the community.”

 

She continued, ”They don't have car allowances, they don't have anything, they only have a stipend and I am very thankful that they continue to work with a young person like me and they continue to support my decision making in order to help the community and to get the information out for the programs that we have.

 

“Also I have nine members on the board,” she added, saying again, “It’s not easy. One thing that I am very thankful and blessed for is that they are a very hard working board, and they don't dictate to me how to do my job and I am very, very grateful for that.”

 

In the meantime, the DBAS President has yet to respond to a request by Samoa News to review the comments made by the public regarding their move to increase the stipends. The Notice of Intent to amend by-laws posted in Samoa News said that interested members of the public could review the proposed amendment or document and/or present their written comments at the DBAS building from February 11, 2016 to March 10, 2016.

 

$2MILLION LOAN FROM ASGERF

 

According to DBAS president, with the $2million loan they are trying to lend the money out with the hopes to increase their interest income. “We were hoping to get something like 5% interest rate but unfortunately they gave us 7.5%interest rate, so were lending it out now at 8.59% interest rate. It’s a small profit for us, but we try our best to keep it above water to make sure that the bank can still function and still lend out to the community.”

 

Mrs. Fa’atili explained the bank is paying $30,748 on the first of every month to the ASGERF, at the 7.5 interest rate and the loan is for seven years. She said this loan has enabled DBAS to offer an additional $1.5million in mortgage loans and $500,000 in commercial loans.

 

She said that to date the ASGERF loan has resulted in 17 home mortgage loans and three commercial loans.

 

BACKGROUND

 

According to current by-laws, the board can approve reimbursements for travel, lodging and meal expenses for directors attending bona-fide events or conferences of interest, which benefit the overall governance of DBAS.

 

Samoa News understands that board members for ASPA, ASTCA and LBJ receive annual payments of $5,000 each for the members while the chairman gets $6,000.

 

More from the DBAS hearing in later editions.