Wednesday, May 22, 2019

COR3 Director Calls for Control Over Recovery Funds

By on January 25, 2019

Omar Marrero, director of the Puerto Rico Public-Private Partnerships Authority and the Central Office for Recovery, Reconstruction & Resiliency (CB/Rafelli González Cotto)

Editor’s note: The following originally appeared in the Jan. 24-30, 2019, issue of Caribbean Business.

Omar Marrero, director of the Puerto Rico Public-Private Partnerships Authority (P3A) and Central Office for Recovery, Reconstruction & Resiliency (COR3), insisted he needs control over disbursement of funds for Puerto Rico’s recuperation, saying the excessive bureaucracy imposed by the Federal Emergency Management Agency (FEMA) is delaying the island’s recovery from the 2017 hurricanes and commencing as permanent works.

“At COR3, we have engaged in the task to ensure we can take control of a highly bureaucratic process that FEMA itself has not been able to manage efficiently,” he said.

The island not only has no control of the disbursement of funds, but also has no control over the formulation of projects. “As of today, we have zero permanent works obligated for Puerto Rico. That means everything that has been worked on are Categories A and B, which are primarily emergency categories because FEMA has a highly bureaucratic process,” said a visibly frustrated Marrero.

He said FEMA is not giving Puerto Rico the opportunity to help hasten the processes, even though Marrero said he has provided ideas.

Two weeks ago, Marrero was in Washington keeping the different agencies appraised of the island’s recovery efforts but acknowledged that currently, the challenges and conditions imposed by FEMA to disburse funds still persist.

As of this Caribbean Business interview with Marrero, only 45 percent of public assistance funds, which are used to repair public facilities damaged by Hurricane Maria, have been disbursed. “Because those funds have not been disbursed at the pace we have requested since the first day, certainly, the recuperation process has been slow,” he said.

Contrary to other U.S. jurisdictions, Puerto Rico has no control over the reimbursement process because it is totally in FEMA’s hands. Currently, mayors have complained that two years after Hurricane Maria, they are waiting for the government to reimburse them for what they paid to make repairs after the storm, hurting not only municipal coffers but also private companies.

In an effort to help gain the U.S. government’s trust, the administration of Gov. Ricardo Rosselló created COR3, which not only relies on “experts on disaster” but has a transparency portal of the federal funds that have been disbursed. The island completed two types of reconstruction plans. “We have kept the federal government abreast of what we have done, and with all due modesty, we have done a great job. But at the end of the day, we need to take over control of the process. It is the only way we can hasten the disbursements,” Marrero said.

Limited control

President Donald Trump recently accused the local government of using federal funds to pay debt in violation of federal law. Marrero said his remarks are lamentable and based on wrong premises. He said using federal disaster funds to pay debt is a violation of the Stafford Act. “Also, when you look at Puerto Rico, we don’t have control of the funds. Therefore, anyone who dares to say that Puerto Rico has wasted the funds and used the funds for something not authorized, does not know what he is saying,” he said.

The process to obtain federal funds is highly bureaucratic and consists of at least 10 steps, of which COR3 has only control of one. “I only control the disbursement,” he said.

For instance, if an agency seeks reimbursement for a $1 million repair, Marrero said the agency has to submit a request for investment to COR3 along with required documentation. COR3 then submits the request to FEMA, which does an initial review, examines whether any mitigation measures can be applied, and then puts it through an environmental preservation review and then an insurance review. The application is then returned to COR3 for review. “I usually review it in a day,” he said. The request is then submitted to FEMA again for a final review.

If the request for reimbursement is for more than $1 million, it has to go to an office in Washington, D.C. If it is more than $20 million, it has to go to another office in D.C. Only then is the money awarded.

However, the process does not end there. “That does not mean the funds are put in an account. I only get a notification that says ‘award,’” he said.

The request then has to go through what he called “the 270 process,” which consists of seven other steps in which COR3 must also show need. The process was adopted in November 2017 by the United States because Puerto Rico was a “high-risk jurisdiction.”

The 270 process requires the request to be sent to a Fiscal Transparency Group and FEMA confirms the funds can be disbursed.

“Once the money is put in our account, in less than a day, I disburse the money,” he said. “So, anyone who says we have misused a single dollar does not know the process and that includes the White House,” Marrero said.

Regarding Community Development Block Grant (CDBG) funds, Marrero said that because of the federal shutdown he does not know when the $8.2 billion that has already been allocated is going to be received. Federal officials told the government it would take them longer to evaluate a plan developed by the government.

Which funds is the island at risk of losing because of the dispute over the construction of the wall along the U.S. southern border? “They are not FEMA or CDBG funds, but the ones allocated to the U.S. [Army] Corps of Engineers because the president has discretion over them as chief commander,” he said, referring to $2.5 billion for channeling of bodies of water at Puerto Nuevo in San Juan and other dredging projects in other jurisdictions.

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