Pago Pago, AMERICAN SAMOA — Gov. Lemanu Peleti Palepoi Sialega Mauga shared with the investigative-arm of the US Congress many of the challenges faced by the local government, while continuing to look at available opportunities for growth and development.

The governor also informed the US Government Accountability Office (GAO) in a June 3rd letter on the influx of federal COVID-19 funds that is helping the local economy at this time, as his Administration marks the 5th month since taking over the helm of ASG.

GAO publicly released on Wednesday this week its US Territories Public Debt Outlook — 2021 Update, a report covering all US territories including American Samoa as required every two years by a provision of federal law.

According to the GAO analysis, American Samoa’s total public debt outstanding grew from $122.2 million in fiscal year 2017 to $235.6 million in fiscal year 2019, representing an increase of 93 percent. It also says that continued reliance on a single industry — the cannery — and significant pension liabilities “remain fiscal risks in American Samoa”. (See yesterday’s Samoa News online edition for more information.)

Prior to making the report final, before it was released, GAO submitted the draft to governors of the territories for comments. Lemanu responded in a June 3rd letter saying that this date marks the 5th month of his administration in office.

“We are keenly aware of the challenges we face as a local government and as a territory,” he wrote to Yvonne D. Jones, director for Federal Budget Analysis-Strategic Issues at GAO.

“We have embraced these challenges which have empowered us to seek solutions in a fiscally responsible manner that allows us to meet the challenges head-on for the good of our people,” he said. “As in any progressive administration, opportunity is always available for growth and development.”

The first issue addressed by the governor is the COVID-19 pandemic, during which American Samoa and other US jurisdictions have been blessed with federal financial assistance through various federal CARES Act and Coronavirus legislation.

CANNERY

“While the economy has been fortunate with the influx of stimulus and COVID funds,” Lemanu said, “we continue to work collaboratively with StarKist to address the challenges facing their operation.”

He explained that the expansion at the cannery will require additional workforce and his administration is working to help alleviate this through the guest worker permit program.

He then raised with GAO the same issue that has been raised over the years by previous governors and other leaders, that some federal policies have ramifications on StarKist. For example, the federal minimum wage increase, expiration of the federal 30A tax credit and federal oversight of US fishing waters — all have an impact on the industry.

“These challenges continue to erode the competitiveness of the American Samoa-made tuna product,” the governor pointed out. “We ask that our request to extend the 30A Tax that expired December 2020 is revised for a positive outcome and extension.”

ARPA FUNDING

The governor also address the American Rescue Plan Act (ARPA) funding, which “provides a once in a lifetime funding to significantly improve our dire healthcare and service capacity, construction sector which will have a profound improvement to key infrastructure developments supporting our education, economy, healthcare and transportation.”

And his administration is mobilizing priorities through its ARPA Implementation Plan to ensure compliance and accountability through reporting and adhering to guidelines set forth by federal partners.

The governor expressed appreciation to the US Army Corps of Engineers’ assistance “in planning for a new hospital to serve our people and the people of the Pacific and requests the help of Congress to find additional means to support our plan to develop a world class health care system in the heart of the Pacific.”

American Samoa has been allocated more than $470 million in ARPA funds, according to information made public at last Friday’s cabinet meeting. And the governor has already established the ARPA oversight office to — among other things — ensure the territory’s full compliance with the ARPA law.

ASEDA BONDS

The governor also informed GAO that the territory through the American Samoa Economic Development Authority (ASEDA) has fulfilled its mandate by ensuring 100% compliance with the bond covenants to investors.

“As noted in our FY 2020 audit, the reduction of findings reflects sound financial management, the positive fund balance has steadily improved over the years and we now stand at an $18.14 million fund balance,” the governor said.

He also pointed to the increase in general revenue funds from $87.6 million in 2019 to $97.5 million in 2020, and this is an improvement of over 11%.

“Despite the border closure” due to COVID-19 restrictions, “commerce imports and exports are robust and have increased revenue collections,” he said

The governor also addressed the 2021 bond series, part of which will refinance previous bonds. According to GAO, American Samoa, in May this year, refunded bonds issued in 2015 and 2016 at lower interest rates, “yielding savings for the territory.”

“We believe the opportunity to refund our bonds in 2021 is a testament of quality and worthiness that the American Samoa Government and by extension, its people, have demonstrated its fiduciary responsibility and commitment to fulfilling its financial obligations,” Lemanu wrote to GAO.

“We believe the infrastructure of our debt-management policies and legislation allows our administration the flexibility and still maintaining the controls to ensure sound financial stewardship of our government debt,” he said.

“As reaffirmed in our Moody’s [Investors Service] updated credit analysis following revision outlook from a negative to a stable position is a result of, ‘... improving financial position resulting from governance improvements, including enhanced transparency and disclosure and budget management; and risks associated with operating a government-owned charter bank’,” the governor pointed out.

“Ensuring our debt is managed appropriately, will allow for proactive plans to combat the impacts of climate change, improved healthcare, continued development of our growing and educated workforce and expansion and diversification of our economic development engine, the fastest and only fiber network in the region.”

CONCLUSION

Lemanu expressed appreciation to the GAO team’s efforts to fully understand the uniqueness of American Samoa.

“Our administration is committed to the connection of our past and a drive to move our economy, our territory, our people forward toward a future with stronger families, a resilient and more diverse economy, and an outpost for the ideals of America in the vast Pacific,” he concluded.

Samoa News will report in future editions on other issues of interest in the GAO report.