Fiscal Board Certifies Puerto Rico Gov’t Action Plan for CDBG-DR Funding
Makes Recommendations on How Programs Should Align With Fiscal Plan Reforms
SAN JUAN– The Financial Oversight and Management Board for Puerto Rico announced Tuesday that it certified the “action plan” by the Puerto Rico Housing Department for the use of U.S. Department of Housing’s (HUD) Community Development Block Grant- Disaster Recovery (CDBG-DR) program funds.
The oversight board—which was established under the Puerto Rico Oversight, Management and Economic Stability Act (Promesa) of 2016 to provide a method for the island to achieve fiscal responsibility—said it determined that the programs the island’s Housing Department laid out in its action plan are “generally consistent” with the fiscal plan and budget it certified.
“Some Action Plan programs align with the Certified Fiscal Plan’s structural reforms, and the Oversight Board’s certification of the Action Plan provides recommendations on how the programs should complement Fiscal Plan initiatives, specifically human capital and welfare reform, and ease of doing business reform,” the fiscal panel said in its media release.
The Housing Department was appointed to administer about $20 billion in CDBG-DR funding Puerto Rico is slated to receive from HUD, with oversight provided by the Central Office for Recovery, Reconstruction and Resiliency of Puerto Rico (COR3). In February 2018, HUD allocated the first grant of $1.5 billion. In January 2020, HUD announced the grant agreement for the second tranche of $8.2 billion, which requires Housing to submit an updated action plan for the board to review and certify that the programs are consistent with the certified fiscal plan and budget. In addition to these funds, HUD allocated to Puerto Rico $8.3 billion related to disaster resilience and $1.9 billion related to the energy grid.
The board also certified the budget for the next $1.7 billion block of funding, as required by HUD prior to providing access to the funds and to continue implementing the action plan.
“Federal funding is a crucial element of Puerto Rico’s recovery from the series of natural disasters the people of Puerto Rico have suffered,” board Executive Director Natalie Jaresko said. “Critically important is that these federal funds, like all funds, have the greatest possible impact on Puerto Rico’s economy and its residents. The Oversight Board reviewed the Action Plan with those goals in mind.”
“The Certified Fiscal Plan is the road map for Puerto Rico’s recovery, and the structural reforms that are part of it are the minimum required for future sustainable economic growth in Puerto Rico,” Jaresko said. “HUD mandated that the Action Plan be consistent with the Certified Fiscal Plan and Certified Budget, and we take this responsibility very seriously.”
The board recommends that the Action Plan’s Workforce Training Program should be coordinated with the Economic Development and Commerce Department’s (DDEC by its Spanish initials) efforts to revamp workforce development programs.
“Complementing DDEC’s efforts would result in a more coordinated and efficient program that will foster a Puerto Rican workforce with the skillsets required to find meaningful jobs in growing industries,” the board’s release reads.
“Further, the Action Plan aligns with the Certified Fiscal Plan’s structural reforms related to the ease of registering property on the island. Ease of property registration is a part of the effort to improve the Ease of Doing Business but also critically important to ensure those suffering from disasters in the future easily and successfully have access to related disaster funding,” the document says.
The board recommends that the action plan’s Agency Planning Initiative related to a geographic information system (GIS) database “limit its initial scope to essential foundational elements that are achievable, with focus on the Department of Justice, the Planning Board, and the Municipal Revenues Collection Center (CRIM), which currently have data on home and property ownership. Through this process, the Puerto Rican government will be able to create one comprehensive database and identify properties that are not registered on all databases,” the board wrote.
Recommendations related to modernizing Puerto Rico’s property registration through the process outlined under Pomesa’s Title II, Section 205, will be submitted by the board.
“We look forward to the full implementation of the Action Plan and the structural reforms, and to future Action Plans implementing CDBG-DR programs utilizing best practices and evidence-based policies in both design and implementation,” Jaresko said.