The Fagatogo mudslide disaster in 2003 resulted in more than $10 million worth of claims against the American Samoa Government, which has moved to liquidate these cases through court settlements, according to Gov. Lolo Matalasi Moliga.

Additionally, the government’s legal debt to Progressive Insurance Inc., the insurer of the old Laufou Shopping Center destroyed by fire several years ago, has been reduced by $3 million following negotiations handled by the Attorney General’s Office.

The governor made the revelation in the English text of his State of the Territory Address, which is 168 pages long.

According to the governor, the Attorney General’s Office is aggressively negotiating settlements on lawsuits made against the government to bring closure, and facilitate the determination of true liabilities and financial exposure of the ASG as well as forge the appropriate earmarking of financial resources for their liquidation.

OLD LAUFOU FIRE

He says negotiated settlements have been favorable to ASG, and have resulted in savings. This is particularly true with the Progressive Insurance case, with a new negotiated settlement from the original liability amount of $8.5 million down to $5.6 million— a $3 million savings for ASG.

Lolo says ASG made payments to Progressive totaling $1 million in 2014 with the remaining amount of $4,675,000 to be paid from the proposed bond proceeds anticipated to be received in April of 2015 “with the caveat that we must comply with the approved schedule of payments.”

The bond, issued under the American Samoa Economic Development Development Authority as authorized by legislation signed into law last year, will also be the funding source for other outstanding ASG debts outlined below.

MUDSLIDE CASES

The Fagatogo mudslide cases followed the May 19, 2003 heavy rain, flooding and mudslides that killed three family members — including two students — in Pago Pago, and one in Fagatogo. The Fagatogo mudslide also destroyed the Langkilde building that housed two separate businesses which were located at the current site of McDonald’s restaurant in Fagatogo.

The disaster seriously injured a Langkilde family member who was inside the building at the time, and another person who was near the area when the mudslide occurred.

The governor said that the mudslide lawsuit claims against ASG, dating back to 2004, totaled $17.6 million—with $10 million for the Tavake case; $3.5 million for the Jordan case; and four (4) Langkilde cases totaling $4.16 million.

According to the governor, each of these cases have been settled at $100,000 for each case.

Lolo reminded lawmakers that these cases are all outstanding court decreed settlements which had been incurred before 2013 (when his administration took office); but “we made the decision to address these liability issues which undermine and compromise the integrity of ASG’s financial condition.”

Other court cases settled by the government include: $40,000 for Ala’ilima for wrongful employment termination; $230,000 for Talauega due to LBJ Medical Center malpractice; and $500,000 for Filoiali’i over an LBJ malpractice suit.

UNBUDGETED COMMITMENTS

The governor also reported to the Fono the government’s accumulated unbudgeted commitments of which $8.7 million was owed to the American Samoa Power Authority. However, he says this amount has been reduced down to $8.32 million due to ongoing payments and “ensuring that we are current in our bill payments to our utility.”

The governor went on to point out that the local Department of Education is the  the largest user of electricity, and prone to wasteful use of energy. Thus, the decision was made to install debit meters at all DOE facilities, aimed to regulate and monitor electrical consumption.

There are over 50 DOE school buildings and offices that currently have a debit meter, according to the governor, who pointed out that schools that are currently on a debit meter have realized savings and a drop in their usage.

“School officials are doing a better job with monitoring their usage and turning off lights and air conditioning units after hours,” he said.

Another unbudgeted commitment, according to Lolo, is the balance of the FEMA Community Development Loan, which is $3.05 million.

Yet another is the “accrued compensation totaling $13.75 million compared to $13.29 million reported in 2013,” the governor said, adding that the Human Resources Department is currently working to reconcile the leave balances as it has been discovered that leave which had been paid due to resignations, retirement, and change of employment status had been restored, causing the noted increase in accrued compensation for fiscal year 2014.

And in the spirit of improving the ASG “asset to debt ratio” Lolo said both the Fono and the executive branch have collectively agreed to pay off the two outstanding government loans with the American Samoa Government Employees Retirement Fund. The current balance of the two loans stands at over $10.4 million.