Democratic lawmakers request HUD publish disbursement requirements for Puerto Rico, USVI recovery funds

Say no timeline was given; financial monitor ‘could slow the already snail-like pace’

SAN JUAN — U.S. Sen. Bob Menendez (D-N.J.) and Rep. Darren Soto (D-FL) and 25 other Democratic lawmakers from both congressional chambers sent a letter to Housing and Urban Development (HUD) Secretary Ben Carson requesting the publication of a Federal Register Notice (FRN) detailing the requirements for the disbursement of disaster recovery funds appropriated for Puerto Rico and the U.S. Virgin Islands to mitigate the impact of future hurricanes, under the Community Development Block Grants for Disaster Recovery (CDBG-DR) Program.

“In a recent background briefing, senior officials at HUD announced the agency would soon be publishing an FRN for $16 billion in CDBG-DR for disaster mitigation. While HUD officials noted that an FRN for a first tranche of funding for nine states would be published in the upcoming weeks, they failed to provide a specific timeline for the second tranche in which Puerto Rico and the U.S. Virgin Islands would be eligible,” the lawmaker wrote.

“Furthermore, the appointment of a Federal Financial Monitor to oversee billions of dollars in CDBG-DR funding to potentially hundreds if not thousands of contractors and subcontractors could slow the already snail-like pace at which HUD is providing aid to Puerto Rico,” they added.

HUD recently announced the decision to appoint a Federal Financial Monitor to oversee Puerto Rico’s disaster funds, which includes the disbursement of the $8.3 billion in CDBG-DR. Some $774 million were appropriated to the USVI under the same program.

“More than a year and a half after enactment of the Bipartisan Budget Act of 2018 (PL 115-123), it is unconscionable that HUD has failed to publish the FRN to disburse the CDBG-DR funds needed to help mitigate the potential effects of future disasters in Puerto Rico and the U.S. Virgin Islands,” the letters says.

In a release announcing the letter, the chairman of the House Natural Resources Committee, Raúl M. Grijalva, stated: “The Trump administration has used Puerto Rico as a punching bag from day one, and the people of the island have suffered long enough. Congress approved disaster relief, and that relief needs to be distributed so communities can rebuild and struggling Americans can get on with their lives. Hiding behind the president’s whims or endless excuses is not good enough. The administration needs to answer these questions, distribute this assistance, and show it’s capable of doing the work our laws demand.”

The other lawmakers who signed the letter were Sens. Charles Schumer (D-N.Y.), Cory Booker (D-N.J.), Kirsten Gillibrand (D-N.Y.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Dick Durbin (D-Ill.), Ed Markey (D-Mass.), Richard Blumenthal (D-Conn.), and Reps. Nydia Velazquez (N.Y.-07), José Serrano (N.Y.-15), Adriano Espalliat (N.Y.-13), Eleanor Holmes-Norton (D.C.), Donna Shalala (Fla.-27), Juan Vargas (Calif.-51), Raul Grijalva (Ariz.-03), Ruben Gallego (Ariz.-07), Alexandra Ocasio-Cortez (N.Y.-14), Yvette Clarke (N.Y.-09), Albio Sires (N.J.-08), Gregory Meeks (N.Y.-05), Jesús “Chuy” Garcia (Ill.-04), Jim McGovern (Mass.-02), Tom Suozzi (N.Y.-03), Sheila Jackson Lee (Texas-18), and Tony Cardenas (Calif.-29).

The full text of the letter can be found below and here.

Dear Secretary Carson:

We write to request the immediate publication of a Federal Register Notice (FRN) detailing the administrative requirements for the disbursement of the $8.3 billion in Community Development Block Grants for Disaster Recovery (CDBG-DR) appropriated for mitigation projects in Puerto Rico and $774 million to the U.S. Virgin Islands. Given the Department of Housing and Urban Development’s (HUD) recent decision to appoint a Federal Financial Monitor to oversee Puerto Rico’s disaster funds, we see no reason to further delay the immediate publication of an FRN to begin the process towards disbursal of the aid.

In a recent background briefing,[1] senior officials at HUD announced the agency would soon be publishing an FRN for $16 billion in CDBG-DR for disaster mitigation.  While HUD officials noted that an FRN for a first tranche of funding for nine states would be published in the upcoming weeks, they failed to provide a specific timeline for the second tranche in which Puerto Rico and the U.S. Virgin Islands would be eligible.  Furthermore, the appointment of a Federal Financial Monitor to oversee billions of dollars in CDBG-DR funding to potentially hundreds if not thousands of contractors and subcontractors could slow the already snail-like pace at which HUD is providing aid to Puerto Rico. 

To that end, please provide answers to the following questions:

1.         Please describe in detail the policy justifications for the appointment of a Federal Financial Monitor to oversee all HUD funding provided to the government of Puerto Rico and its subsidiaries.

2.         Has HUD ever appointed a Federal Financial Monitor to any other U.S. jurisdiction receiving funding from the agency?  If so, please describe the circumstances, length of appointment, and responsibilities and authorities of the monitor.

3.         Will this monitor be a direct HUD hire or an external contractor? 

a.         What qualifications is HUD requiring for this appointment?

b.         Which office at HUD will be responsible for managing the hiring process?

c.         Will they have support staff assigned to them?

d.         What party is responsible for compensating the monitor?

e.         Will the monitor have additional assignments besides Puerto Rico?

f.          What will the monitor’s role be in relation to the federally appointed Fiscal Oversight and Management Board?

4.         Please provide a specific timeline on when HUD expects to publish a Federal Register Notice for the $8.3 billion in mitigation funding for Puerto Rico and $774 million to the U.S. Virgin Islands, including a timeline for the receipt and approval of an action plan, a grant agreement and the extension of a credit line to the island.   

More than a year and a half after enactment of the Bipartisan Budget Act of 2018 (PL 115-123), it is unconscionable that HUD has failed to publish the FRN to disburse the CDBG-DR funds needed to help mitigate the potential effects of future disasters in Puerto Rico and the U.S. Virgin Islands. As we are currently in the middle of the 2019 hurricane season, this funding is more critical than ever given the extreme loss of life caused by Hurricanes Irma and Maria and the vulnerabilities to which Puerto Rico and the U.S. Virgin Islands are still exposed. 

Thank you in advance for your attention to this matter. ,

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