Sunday, January 29, 2023

Alphabet Soup Disaster Aid

By on September 13, 2019

In the days of old, when the reps were bold and Promesa had just been invented, they placed their hopes upon the law and walked along contented. Yes, in the days immediately following the run-up to passing the Puerto Rico Oversight, Management & Economic Stability Act (Promesa), the members of Congress were hopeful that in drafting Title V of the law—assuming that energy reform in Puerto Rico would be a net positive—they would provide the mechanism by which affordable energy would be achieved through an expedited process.

The preamble for affordable energy in Title V was on full display during Promesahearings and in the hallowed halls of U.S. Congress. The permitting process in Title V was to have stood on its own with broad powers given to the Oboard to put critical infrastructure works on a fast track. The drafters hoped that once environmental regulatory hurdles were cleared, projects certified by la Junta could be up and under construction within 30 days. The drafters had no idea how that would play out under the actual Promesa mandate. Now, nearly three years after Promesa was signed into law, the answer is: “Not very well.”

The critical infrastructure works certified by former Revitalization Coordinator Noel Zamot (see Column, p. 15), who resigned in frustration after several hundred projects worth $8 billion were put on ice by the Oboard because of philosophical differences among members of the FOMB, were treated as a throwaway option under Title V to focus debt restructuring.

In other words, because of contentiousness between the Oboard and the administrationof then-Gov. Ricardo Rosselló over structural balance in budgets and fiscal plans, it was best to let the government have its way, ignoring Title V as a tool for the construction of critical infrastructure. Instead, the Oboard allowed the Central Office for Recovery, Reconstruction & Resiliency (COR3) to run amok as the agency in charge of green-lighting infrastructure works, which has resulted in a disastrous track record and given room for the Federal Emergency Management Agency (FEMA) to drag its feet with layers of bureaucracy.

All told, only 131 projects have been certified with fixed-cost estimates, from a list of 9,200 projects. Although the holdup is multifactorial, tracing to mistrust in the vestiges of corruption in the Rosselló administration and a reported tug-of-war between FEMA and COR3, allegations by several sources interviewed by this newspaper claim the impasse resides in the disaster alphabet soup.

In fact, civil engineer Carlos Pesquera, a former New Progressive Party gubernatorialcandidate, who has skin in the disaster-recovery game with his firm, CapitalImprovements Program Management, claims FEMA is downright complicit in the trickling down of funds and approval of projects. In this edition’s Cover Story, Pesquera claims the recovery process was disrupted June 6 when FEMA assumed control of the process establishing a new business model layered with bureaucracy (see table National Workflow, pages 10 and 11.)

The sticking point is in Section 428 of the Stafford Act, which has been ignored by FEMA in granting municipalities 18 months to submit Damage, Description & Dimension (DDD) reports for fund disbursement. The deadline for submission is Oct. 11—a near-impossible milestone given that it will take collaboration between FEMA and COR3 to nail down the estimates.

And FEMA is moving at its typical glacial pace while using contractors who are not fromPuerto Rico, thus inflating costs, and worse still, selecting stateside disaster-relief capitalists who will not leave a dime in Puerto Rico.

At this writing, the Oct. 11 deadline under Section 428 seems likely to be extended.However, FEMA continues to insist on conducting site inspections although the law permits the use of local resources to conduct that work.

Two months ago, the U.S Government Accountability Office sounded the alarm over inconsistencies in FEMA’s procedures on a case-by-case basis, pointing to the federal agency’s ongoing development of a cost factor for use in the fixed-cost estimatingprocess as the culprit in slowing the pace of FEMA obligations.

If U.S. Congress has concerns over the use of funds destined for recovery, it should provide oversight without slowing the flow of disaster aid, and hold FEMA accountable for the proper use of local resources that lead to job creation and not a jumbled alphabet soup of disaster relief.

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