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Agency Heads: Not all Services May be Transferable to Municipalities, P3s

By on March 11, 2017

It appears the government of Puerto Rico will have a difficult time transferring some of the services and programs currently handled by public agencies to municipalities or public-private partnerships (P3s).

The proposed regionalization of central and municipal services is a money-saving alternative at a time when the government is proposing to cut the number of public agencies from 125 to 35, the privatization of certain services and a $350 million cut to the general fund for municipalities.

Which services can be regionalized? That is still a big question.

Puerto Rico Education Secretary Julia Keleher (Juan J. Rodríguez/CB)

Puerto Rico Education Secretary Julia Keleher (Juan J. Rodríguez/CB)

While Gov. Ricardo Rosselló Nevares recently said he plans to transfer the management of schools to municipalities and nonprofit organizations, Education Secretary Julia Keleher had something different in mind. She is proposing the consolidation of school districts into local educational agencies, or LEAs in Spanish, to grant more managerial and fiscal autonomy to the regions.

She also plans to meet with mayors to discuss community needs and to distribute resources. However, when asked how education-related areas can be delegated to municipalities or regions, she did not mention transferring schools to municipalities.

“The [Education] Department has identified various areas whose competence can be delegated. They are maintenance of public schools and green areas, school transportation, collection of solid waste and security, among others,” she said at a recent Senate hearing evaluating the regionalization of services provided by municipalities and agencies.

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The delegation of agency competencies to the municipalities could be of benefit as long as the process is compatible with the Plan for Puerto Rico and accounts for the limitations imposed on the use of federal funds, she said.

While the government in its fiscal plan is proposing the privatization of the Real ID Program through a P3, Carlos Contreras Aponte, secretary-designate of the Transportation & Public Works Department (DTOP by its Spanish acronym), said anything related to the issuance of drivers’ licenses has to be under DTOP’s strict control. In that regard, he dismissed the possibility that the program could be regionalized or passed on to municipalities.

“One of the services that cannot be delegated to municipalities is the issuance and renewal of licenses. This program is guided by strict security and confidentiality rules established by the Real ID Act of 2005,” he said at a public hearing.

He did say that municipalities could take over the renewal of marbetes, or car license stickers, which authorize vehicles to travel on streets, if DTOP and the Treasury Department agree to it. Right now, towns collect money from ticket fines.

Agriculture Secretary Carlos Flores said the agricultural lime-processing factory in Ciales could be operated under a P3. “Another option is to have the operations managed by the municipality to decentralize services,” he said.

See also: Gov’t to hike property taxes to ease elimination of $350M in municipal subsidies

He also noted the need for a P3 to create coffee nurseries. “The department has the need to increase the production of coffee trees to supply the coffee growers on the island. Towns together with the private sector have the expertise to create coffee nurseries to meet supply and demand,” he said.

In the fiscal plan made public last week, the government said that by 2018 it will start transferring public services to interested parties in the private sector that meet certain characteristics and have the experience.

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