DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1980

WEDNESDAY, MARCH 21, 1979

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C.

The subcommittee met at 10:20 a.m., in room 1224, Everett McKinley Dirksen Office Building, Hon. Ted Stevens presiding.

Present: Senator Stevens.

DEPARTMENT OF THE INTERIOR

TRUST TERRITORY OF THE PACIFIC ISLANDS

STATEMENT OF ADRIAN P. WINKEL, HIGH COMMISSIONER, TRUST TERRITORY OF THE PACIFIC ISLANDS

ACCOMPANIED BY:

CAPT. J. M. WEIS, U.S. NAVY, OICC, MARIANAS

RUTH G. VAN CLEVE, DIRECTOR, OFFICE OF TERRITORIAL AFFAIRS HUGH H. GALLAGHER, BUDGET OFFICER, OTA

BUDGET REQUEST

Senator STEVENS. Good morning. This is the second day of hearings for appropriations requested for territorial affairs.

We will consider today the $99 million request for the Trust Territory of the Pacific Islands. This fiscal 1980 request is a reduction of $15.6 million from appropriatons to date for fiscal 1979.

Mrs. Van Cleve, it is good to see you back.

Mr. Winkel, will you come forward and be good enough to introduce your associates, and then you may proceed with a brief highlight of your prepared statement.

The full statement will be printed in the record.

We are happy to have you here this morning. [The statement follows:]

STATEMENT OF ADRIAN P. WINKEL

We are pleased to once again have the opportunity to appear before the subcommittee to present the trust territory government's funding requirements for the coming fiscal year. The fiscal year 1980 budget for the trust territory government may be the last, or the next to the last, budget for this government to present to you. As you know, Secretary of the Interior Order No. 3027, issued September 29, 1978, effected interim reconstitution of the legislative authority of the trust territory government to

take effect on October 1, 1978. This order gives due recognition to the results of the referendum on adoption of the Constitution of the Federated States of Micronesia held on July 12, 1978, which resulted in the emergency of three separate Micronesian political entities. This legislative separation will be followed by a secretarial order, now in the process of preparation, which is expected to provide for additional reorganization of the trust territory government giving effect, to the maximum possible extent, to developing constitutional arrangements for the governance of the Marshalls, and the Caroline Islands portions of the trust territory consistent with the obligations of the High Commissioner, the Secretary of the Interior, and the U.S. Government under the Trusteeship Agreement with the United Nations.

Under these developing circumstances, there is a multitude of complexities in which the development of our fiscal year 1980 budget was, and in which the administration of our fiscal year 1980 funds will be, involved. Not unnaturally, the fact that we are requesting approximately $15.7 million less funding for fiscal year 1980 than we have presently available for fiscal year 1979 appears to further complicate our present problems. However, when it is noted that only a little less than $3 million of that reduction applies to our operating funds-and that all of that reduction was absorbed entirely at the headquarters level-then it becomes clear that the three new political entities in the trust territory are proposed to be funded in fiscal year 1980 at essentially the same level as during the current fiscal year. Given such built-in additional costs as personnel pay increases and increases in the cost of services and supplies, however, we must plan now to effectively manage our program within the available appropriation by the beginning of fiscal year 1980 in order to cover those additional costs which we estimate at about $4 million.

At the headquarters level, we plan to effect the $3 million savings by: (1) eliminating an estimated 73 positions (mostly non-Micronesian) which will be excess to our needs as we wind down the headquarters organization; and (2) by a judicious pruning of activities in virtually every unit which we have determined are not essential to the effective performance of the headquarters function. The forthcoming secretarial order on reorganization of the trust territory government, mentioned earlier, will establish the parameters within which the divestiture of many of those activities, beginning this summer and continuing through fiscal year 1980, will be carried out. We plant to move as quickly as possible to effect the elimination of those activities upon the issuance of that order. Certainly, as the three new governments come into existence there will be far less need for many functions now performed at the headquarters. However, there will not be savings resulting from these transfers because it will be necessary that we transfer to the new entities as much as the headquarters funding for those functions as is possible. With regard to the proposed $51.7 million for capital improvements, this amount is $6.7 million below the funds made available for that purpose for the current fiscal year. However, it substantially completes the funding for the fiscal years 1976-80 5-year CIP program designed to be funded and obligated by the termination of the trusteeship, providing the airports, docks, harbors, roads, and utilities required in the six district centers to provide a firm base for economic development, with some additional funding necessary in fiscal year 1981. The construction program is under the Aegis of the Naval Facilities Engineering Command and is being directed by Captain Weis, the OICC Guam, who is here to advise you on the status of the program and to respond to any questions you may have on it. I want to say that we appreciate the Navy's handling of the program and the manner in which OICC responds to the many problems inherent in such an undertaking.

The remaining $6 million reduction in our proposed fiscal year 1980 funding as compared to our current year funding results from the temporary deferral of the Bikini relocation and Kili rehabilitation project. It is anticipated that additional funding and authorization will be sought at a later date for Bikini and Kili, once final relocation and rehabilitation plans have been made.

This completes my opening state, Mr. Chairman. Thank you very much for your kind attention.

OPENING REMARKS

Mrs. VAN CLEVE. Mr. Chairman, the High Commissioner is free of associates except for the two you see before you from the Office of Territorial Affairs, Mr. Gallagher, our budget officer, and me.

It had been our hope that Mr. de Brum could be in attendance, but I understand he is still in the Marshall Islands.

Senator STEVENS. Thank you very much.

Good morning.

Mr. WINKEL. Good morning, your Honor.

Senator STEVENS. You can proceed in any way you like, Mr. Winkel.

FISCAL YEAR 1980 BUDGET REQUEST

Mr. WINKEL. With your permission, I would submit my full statement for the record and briefly summarize it if I may.

As you just stated, we are submitting a budget request for approximately $99 million, which is some $15 million less than what was appropriated for the trust territory government's operations in fiscal year 1979.

That $15 million reduction really consists of three elements: $6 million appears as a reduction, because $6 million was appropriated for rehabilitation of Bikini in fiscal 1979, $15 having been previously authorized. There is no request for additional appropriations of that authorization in the fiscal 1980 budget, because an appropriate determination as to the actual needs and so forth cannot be made until the prior decision concerning the future of the people of Bikini can be made.

And it will not be possible for the Department of Interior-or the trust territory government-to make that decision until sometime this summer, hopefully when the the necessary information will be available from the Department of Energy concerning the conditions existing on Bikini.

The second element of the $15 million is what appears to be a reduction of approximately $6 million in CIP between the fiscal year 1979 appropriation and 1980 budget request. That is a reduction only in the sense that the balance remaining, out of the total CIP program of approximately $8 million will, in accordance with present plans, certainly be included in the budget request for fiscal 1981-$51.7 million for 1980 being an adequate appropriation, totally adequate, to meet the program for the obligation of funds in fiscal 1980.

Capt. John Weis of OICC, Office of the Navy in Guam, and the office in charge of the management of CIP programs, is here and would be able to answer questions concerning that matter if so desired.

Senator STEVENS. Captain Weis, why don't you join Mr. Winkel at the table if you would, sir.

We do have your statement, too, which we will print in full in the record. If you want to summarize that, we will be happy to have it Captain.

TRANSFER OF FUNCTIONS TO DISTRICTS

Mr. WINKEL. Mr. Chairman, if I could refer just to the last $3 million, which in some respects is the most complex. That is the $3 million reduction in operations, all of that reduction being allocated to headquarters.

I simply want to point out very briefly that, in fiscal year 1980, we

are going to be engaged very intensively in the process of transferring administrative functions, responsibilities, and authority from headquarters in accordance with the provisions of existing and forthcoming secretarial orders to the new governmental entities.

With that transfer, there will take place, also, a transfer of such funds as are in the headquarters allocation and allocated for those functions and available to be transferred.

Consequently, during the course of the year, the balance of headquarters' accounts is going to change quite substantially in any case. And that change would, of course, be a downward change of functions, and the company funds are transferred.

For this reason, a reduction of $3 million in headquarters was simply an administrative-was an easier way of handling the matter, rather than attempting to allocate the funds to the districts, in view of the fact that much of the funds would be coming to them in the manner which I have described in any event.

So that is the background and the basis for the manner in which that fund is applied, and I just wanted to bring that to the attention of the committee.

Thank you very much.

ADDITIONAL STATEMENT

Senator STEVENS. Thank you.

Captain Weis, your statement will be printed in the record. [The statement follows:]

STATEMENT OF CAPT. JOHN WEIS

Thank you for this opportunity to appear before your subcommittee, on behalf of the High Commissioner of the Trust Territory of the Pacific Islands, to describe and support the Department of the Interior's fiscal year 1980 funding requirements for the capital improvement program in the trust territory and to discuss the status of the ongoing projects.

Before addressing fiscal year 1980 funding requirements, I would like to review briefly the background and current status of work. The intended objective of this program is the construction of basic infrastructure facilities necessary for social and economic development of Micronesia. Program content was developed under the direction of the High Commissioner, approved by the Department of the Interior in 1976, and presented to the congressional committees at the out-set. The first 2 years of the program wre largely devoted to program planning and the design process. Intital costs associated with design were funded from unobligated fiscal year 1977 and prior year funds, under reprograming authorization provided by the congressional committees. The design effort now is substantially completed in all districts, with the exception of some fiscal year 1980 projects. We expect to complete the remaining designs by the end of calendar year 1979, in order to be able to award construction contracts soon after fiscal year 1980 funds are apportioned. The actual costs of project design are exceeding original estimates, and the $8 million originally allocated for design will be insufficient. However, funds are available within the portion reserved for construction administration and overhead, and it is intended to utilize these funds to complete the remaining design effort.

The focus of our present effort is on construction. Three projects have been completed and a number of major projects are under construction. Road, water, electrical, and dock facility projects in Palau, Yap, Truk, Ponape, Kosrae, and the Marshall Islands districts are underway. In addition, an airport expansion project is in progress at Truk. The programed amount for these contracts totals over $53 million.

In addition to this ongoing construction, bids are being opened this week for a

major contract package in Ponape. Pre-invitations for bids for the Kosrae airfield, dock, roads, and water projects were issued last month. Invitations for bids for the next increment of work in Truk will be issued next month; the airport, electrical, and additional roads in Palau in May; and the water and electrical in the Marshalls by June. Award of these major constrution contracts will obligate an additional $74 million.

In summary, by the end of fiscal year 1979, we will have under construction $127 million, or approximately 93 percent of the funds made available through fiscal year 1979, including Federal grants related to the funds provided through direct appropriation by the Congress.

Fiscal year 1980 will augment available funds to continue work on programs started in earlier fiscal years. In Yap, a new airfield will be constructed to replace the existing inadequate field, as well as continuing road and electrical work. Outer-island docks will be constructed in Yap and the sewer construction program will commence. In Truk, the road, water, and sewer programs will be initiated. In Ponape, sewers will be constructed and further progress made to the circumferential road programs. In Kosrae, added development work includes roads, dock, water, electrical, and sewer projects. In the Marshall Islands district, additional outer-island docks will be constructed, the Majuro power project will be completed and work on the hospital will be begun. In addition, on a territory-wide basis, an in-depth analysis of water quality and quantity will be initiated.

In short, the planning of 1976 is emerging from the drawing boards and conference tables into tangible structures and facilities which are truly appreciated by the Micronesian people. But we need the continued support of this subcommittee in the final stages of this program to provide much needed basic infrastructure facilities in Micronesia, in order to stimulate economic growth, increase self-sufficiency, and generally improve the living conditions of the people of Micronesia.

The $51.7 million requested in fiscal year 1980, is essential to the successful continuation of the program, and the requested funds are fully consistent with program objectives and scopes developed and approved at the inception of the program. Thank you very much.

STATEMENT OF NAVY OICC

Captain WEIS. Mr. Chairman, I sincerely appreciate the opportunity to appear before the subcommittee on behalf of the High Commissioner's program. I think that we are at the stage of finally putting into place the construction which has been appropriated over the last 3 or 4 years.

The designs are nearing completion. We have a very firm obligation plan. We are opening bids tommorrow for the big job in Ponape.

We have, the Kosrae set of plans for the Kosrae district ready to go and we will be advertising it on the 2d of April.

We have the second phase of Truk ready to go on the 2d of April. We'll be opening bids for those two projects on the 14th of June for Truk and the 28th of June for Kosrae. And then we have the Palau package ready to go for the middle of May for a 2d of August bid opening.

This will obligate substantially 93 percent of the moneys which had been appropriated through the 1979 program.

Obviously the 1980 program, as you know, and which the High Commissioner has so well stated, is pretty much the culmination of the 5-year program which has been approved in the past.

I am very pleased to say today that we have this firm financial planobligation plan-that we are going to be able to get your money obligated and get construction in place.

There has been some difficult times getting the projects ready for advertising, but much of the hard work has been done and all the glory is left for us now, sir.