AMERICAN SAMOA FONO CALLS FOR REALISTIC BUDGET

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Senate says governor’s budget doesn’t cover expenses

By Fili Sagapolutele

PAGO PAGO, American Samoa, (Samoa News, March 21, 2009) –The Senate via an approved resolution is calling on Gov. Togiola Tulafono to review the government’s budget to ensure realistic funding is available for utility services and if not, to implement necessary measures to achieve timely payment of such service.

A major concern to the Senate is the $3.9 million the government owes in electric service to the American Samoa Power Authority (ASPA), which is trying to collect this debt from ASG.

The Fono is blaming the Budget Office for not providing the necessary budget to cover utility expenses which former Treasurer and now senator Velega Savali Jr. says is around $5 million a year while the budget allocation is about $500,000 annually.

The resolution, whose main sponsor is Sen. Tulifua Tini Lam Yuen, says during the course of the Senate’s inquiry into a variety of current issues pertaining to ASPA and its financial ability to properly support its mission, it has been revealed ASG currently owes ASPA "approximately $4 million for utilities."

According to the resolution, the "accumulation of huge payables owing to ASPA is of a recurring nature and the amount of this payable has increased from $1.65 million on Sept. 30, 2007 to the current level."

Senators point out the delay in receipt of this substantial amount of money severely interrupts ASPA’s cash flow stream, which in turn has several undesirable results including causing ASPA to:

"These results not only jeopardize ASPA’s ability to provide reliable utility service, but work unnecessary hardships and inequities on its customers," the resolution notes.

A review of the current government budget document "fails to reflect consistent, realistic planning and provision for utility expenses, without which sufficient revenues cannot be identified and appropriated to meet these obligations," it says.

"Such omissions not only deal a disservice to ASPA, but, from one aspect, do not require agency managers to reduce utility usage and conserve limited resources," it notes. "Moreover, the result of incurring expenses for which there are no offsetting revenues is contrary to both constitutional and statutory mandates."

The Senate requests Togiola to review provisions in the government’s financial plan and budget and related procedures, to ensure realistic expense items for utility services are contained therein and, if required after review, adopt and implement such policies and provision as necessary to achieve the result of timely payment for such services.

Both the Senate and the House previously stated if the government pays its debts, this would be financial assistance available to ASPA especially with the problems with downed generators.

The government’s utility debt was among the issues raised by the private sector during Wednesday’s meeting with ASPA chief executive officer Michael Keyser, who was asked if ASPA customers are paying more to cover the ASG debt.

This has also been the public’s belief, since their electricity can be disconnected due to the lack of payment, while ASG can owe up to $4 million and not be disconnected.

"We have not increased anyone’s bill to offset the government debt. That is not happening," Keyser told Chamber members. "We’ve been trimming pennies everywhere possible to get by. I do think it will get resolved one way or the other. We will ultimately shut off their power if it gets to that point."

Keyser said ASPA management has a plan in place dealing with ASG’s debt and it was presented to the board "about six times" over the last 12-18 months to shut off the power to ASG, but that was turned down by the board.

He said ASG is going to have to pay this debt, adding it’s "irresponsible for us to make everyone" pay their bill while not the government.

"Either the Fono is going to have to pass a special measure to pay off that bill (debt)....or they are just going to have to find a way to pay it," he said. "We just can’t keep carrying them $4.5 million to $5 million in debt. It’s also killing us."

One businessman told Keyser this amount owed by the government could actually help purchase a new generator, which Keyser earlier told the Chamber would cost $5 to $6 million per generator.

"I actually e-mailed the governor right around the time we lost our second unit (generator) and I said ‘I promise you if you pay your power bill in full I will take that money and pay it directly towards a new generator. I can show you the bill. I can show you the check that we’re going to cut’," Keyser recalled of the message he sent to the governor, whose reply was, "I’m not sure that we have that money available to...pay you right now..."

Keyser said the real problem is the budget making process — when ASG does not allow enough money to cover utility costs and the Fono approves the budget without the proper allocation.

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