Senate Democrats block disaster aid measure

(CyberNews)

Puerto Rico gov, congresswoman reject differences on federal disaster aid bills

SAN JUAN – Resident Commissioner Jenniffer González and Gov. Ricardo Rosselló rejected Monday the controversy between the two over the bills in U.S. Congress that would allocate disaster funds for Puerto Rico.

However, Senate Democrats blocked the Republican disaster aid bill because it did not help Puerto Rico enough they said. The measure, which differs from the bill passed in the House in January, was reportedly changed after President Trump expressed hesitance toward approving further disaster funding for the island.

“The Democrats today killed a Bill that would have provided great relief to Farmers and yet more money to Puerto Rico despite the fact that Puerto Rico has already been scheduled to receive more hurricane relief funding than any ‘place’ in history,” Trump tweeted Monday.

“The people of Puerto Rico are GREAT, but the politicians are incompetent or corrupt,” his post reads. “Puerto Rico got far more money than Texas & Florida combined, yet their government can’t do anything right, the place is a mess – nothing works. FEMA & the Military worked emergency miracles, but politicians like the crazed and incompetent Mayor of San Juan have done such a poor job of bringing the Island back to health.”

Puerto Rico’s congresswoman González backed the Senate measure, while the island’s governor the already passed House bill.

“At the end of the day, what we want is for the money for Puerto Rico to appear. What worries me most is that this could have been approved in January; it could have been approved in February and we are already in April and a reduction in PAN (nutritional assistance program) benefits has already begun. That is why I believe the Senate bill forces both delegations, Democrats and Republicans, to work out the details in the different parts. The governor and I want the most funds possible for Puerto Rico,” González Colón said at a press conference, concluding her remarks with a Spanish expression that means they obviously are both working toward that end.

When asked what their plan was, Rosselló said, “The strategy is to negotiate with all the parties [involved] to get the greatest number of resources for Puerto Rico. If the resident commissioner and I were to draw a diagram here, we’d be putting ourselves at a disadvantage for what we are negotiating there. So our goal is to get the most resources.”

The U.S. House of Representatives has passed H.R. 268, which includes the allocation of some $14.2 billion in disaster aid for several states but the Senate voted Monday afternoon on a measure authored by Sens. Rick Scott, Marco Rubio and Sonny Perdue, which only included $600 million for Puerto Rico’s nutrition assistance program, which faces a funding cliff in September.

Democrats blocked passage because they want to “add almost $700 million more to unlock further disaster aid for Puerto Rico and several states, including help to rebuild badly damaged water systems. Democrats are also seeking to force the administration to release billions of dollars in rebuilding funds that have already been approved,” according to the Associated Press.

On Sunday, Rosselló urged Congress to consider voting on H.R. 268, “as already approved in the House,” because, he said it “provides much-needed support to Puerto Rico to address infrastructure, education, nutritional and housing needs.”

He issued a statement saying: “Puerto Rico must receive the federal resources necessary to sufficiently complete our recovery and reconstruction in a timely manner, and to assist the more than 3 million U.S. citizens who live on the island and are working each and every day to recover” from Hurricane Maria, which he said “depleted our resources.”

The governor stressed: “Currently, we simply do not have the funds to cover cost-share requirements set forth – unilaterally and unnecessarily – by FEMA [Federal Emergency Management Agency]. What we are requesting is the same treatment other jurisdictions have received from the federal government: For the federal government to cover 100 percent of the cost-share requirements for emergency work is extremely helpful and will speed up the recovery’s current pace. We reiterate that we are not setting new precedent as this help has been extended to other jurisdictions in the past. We merely request equal treatment.”

The governor said he was also asking for $500 million to continue repairing the Puerto Rico Aqueduct and Sewer Authority (Prasa) infrastructure to make it more resilient in the event of another disaster.

“Moreover, the Caño Martín Peña, an underserved community in San Juan, is in desperate need of environmental restoration. To put an end to the constant flooding and devastating living conditions endured by it’s over 23,000 residents, as well as hundreds of thousands in its vicinity, the U.S. Army Corps of Engineers requires $25 million, which H.R. 268 provides. As we rebuild our electric grid, we are asking for $15 million in Department of Energy technical assistance so that we can rebuild our electric grid stronger, better and more resilient than before.”

The amendment being considered by the Senate, he said, “falls short of addressing the majority of our most pressing needs.”

–CB’s María Miranda and CyberNews contributed to this report

Trump’s alleged reluctance on Puerto Rico disaster funding complicates passage of U.S. aid bill

Puerto Rico gov implores U.S. Senate to pass supplemental appropriations bill

Trump’s reluctant dismissals could alter White House




FEMA Gives Puerto Rico authority to disburse recovery funds

FEMA interim Director Mike Byrne and COR3 Executive Director Omar Marrero

Shows island is capable of managing its recovery with same seriousness as any state, official says

Editor’s note: The following originally appeared in the March 28 – April 3, 2019, issue of Caribbean Business.

Despite public differences between Gov. Ricardo Rosselló’s administration and the Federal Emergency Management Agency (FEMA) over the management of public funds, the executive director of the Central Office for Recovery, Reconstruction & Resiliency (COR3), Omar Marrero, and FEMA’s interim director, Mike Byrne, announced an agreement that would transfer to the local government the responsibility of disbursing recovery funds.

Marrero said the agreement came after an intense effort by COR3 to work together with FEMA in the development and establishment of policies, fiscal procedures and internal controls to ensure compliance in the evaluation and approval of disbursements, also known as “Process 270.”

“Our goal is to obtain the disbursement of federal funds in an efficient and effective manner as possible with the goal of achieving progress and the vision of recovery established by Gov. Ricardo Rosselló,” indicated Marrero, who said the established methods and procedures to manage, internally control and hasten the disbursement of funds “will show that Puerto Rico is in a better position to manage its own recovery.”

The executive director of COR3 insisted the agreement shows the government of Puerto Rico is capable of managing its own recovery with the same seriousness and responsibility as any other state. Marrero indicated that control of the disbursement process is limited to funds managed by FEMA and not to other monies, such as Community Development Block Grant-Disaster Recovery (CDBG-DR) funds, which are administered by the federal Department of Housing.

Meanwhile, Byrne praised the local government’s ability to manage the funds and was pleased the island can finally move on to the next phase of its recovery.

“I think it is important to recognize that we have always been in sync in terms of wanting to make sure the tax dollars and grants that we are authorizing are used in the most responsible way. That has always been the case,” Byrne said. “What’s exciting about this juncture is that the capability is in place, the confidence is in place to have Puerto Rico manage that process and go forward.

“When you think about the scope and scale, we’ve been dealing with unprecedented amounts of money and will continue to do so going into the future. And it will be many, many years that Puerto Rico is going to be managing this process, and we have full faith and confidence that they are going to do the right thing and that we again, together, can stand and tell all the taxpayers in America that this money, it’s been spent properly and wisely,” Byrne said.

Experts hired

The officials said that to ensure the process is efficiently and transparently carried out, and with full protection and compliance with applicable federal regulations, COR3 hired experts to establish, in collaboration with FEMA, the necessary protocols to take over the task of managing FEMA funds. Marrero did not indicate how much of the contract is awarded for this function.

Asked what could have caused the White House’s and certain sectors of Congress to change their position—who had showed great skepticism in transferring the disbursement of recovery funds to the Rosselló administration after several scandals involving allegedly illegal contracts—Byrne said the establishment of new controls provides greater confidence.

“It’s not so much that anything has changed. What happened is that from the outset we, together, have put in place controls so we have a high degree of confidence that the money is being spent on what it was intended to be spent on,” Byrne said.

“These grants…are going to be rebuilding the infrastructure of the commonwealth, so there is nothing simple about it, or the work of these two agencies [FEMA and COR3],” he added. “We have a high degree of confidence now that the procedures we have in place will do exactly that, and we welcome any scrutiny of what they wanted in place.” Echoing Gov. Rosselló’s expression, Byrne added, “This is going to be the most transparent recovery in history.”

“There will be no tolerance, no suspicion of fraud, abuse, waste or negligence in the handling and disbursement of these federal funds,” Marrero assured, since the COR3 office has established a confidential line as an independent and impartial mechanism to report any illegal act regarding these funds. People wishing to make a report can call, free of charge and in total confidentiality, 1-888-876-7548 or access transparencypr.ethicsglobal.com.

The announcement to transfer responsibilities came only weeks after former Revitalization Coordinator Noel Zamot made serious allegations involving the supposed illegal manipulation in the evaluation of multimillion-dollar investment projects under Title V of Promesa Act.




University of Puerto Rico Initiative Seeks R&D Funds on Capitol Hill

New office won’t be limited to STEM research, will seek grants for humanities, law and soft sciences

Editor’s note: The following originally appeared in the March 28 – April 3, 2019, issue of Caribbean Business.

In mid-February, the University of Puerto Rico (UPR) and Puerto Rico Federal Affairs Administration (PRFAA) announced an agreement to recruit a person to the PRFAA offices in Washington to help attract federal research funding to the university.

At the most recent meeting of the University Board, UPR President Jorge Haddock Acevedo informed the governing body that the person who would serve under the agreement, which has a budget of $40,000 for the remainder of the fiscal year, would be Elsa Luis.

This would be the second time the president has mentioned Luis as the new liaison between the UPR and the federal government regarding research funding. The first time was when Haddock mentioned Luis’ name during the March meeting of the UPR Governing Board, during which he also generally defended the new position by arguing, “The University of Puerto Rico is going to have this person, [just as] the majority of the universities of the nation have assigned [someone] in Washington.”

How does it compare?

While offices of federal relations, government affairs and other variations on that title are not uncommon at institutions of higher learning in the States, it is worth pointing out that stateside they have broader missions than the agreement between PRFAA and the UPR, which focuses on research funding. The key difference is that the UPR Office of Federal & External Affairs falls under the mandate of the Vice Presidency of Research & Innovation, while federal affairs offices at other universities generally have had a place in the bureaucratic structure that allows them a greater range of influence.

Indeed, when looking at top-ranking public universities, with the exception of military institutions, all have government relations offices for each individual campus, or from their central administration or both. However, these offices serve as advocates for the universities in the federal arena as well as with the local or state government.

For example, the website of University of Massachusetts (UMass), which was Haddock’s previous workplace, indicates “the Government Affairs Department of [the UMass] President’s Office is responsible for monitoring all legislation that affects all aspects of the university, including but not limited to funding for the university and other legislative and policy issues that arrive before the city, state and federal government.”

In the case of the Office of Governmental Relations (ORG) in the University of Illinois System (UI), its 2018 annual report shows the ORG has been actively monitoring the state’s budget process and legislation on financial aid, admissions and pensions, among other matters. The information on the tracked legislation in the report includes its current status as well as UI’s position on each bill.

The ORG report also shows the office has worked to promote various activities in Washington, D.C., for UI members to advocate for or promote the university.

“The ORG made the most out of the time Congress was in session by getting UI System leaders and faculty in front of the Illinois delegation to advance our legislative priorities and interests. The ORG planned several UI System events in Washington and arranged for our experts to participate in opportunities to showcase our strengths and assets,” the report reads.

These activities include a seminar, panel participation and securing participation of six professors to testify in meetings of several committees.

For its part, the University of California (UC) has two offices, State Governmental Relations and Federal Governmental Relations, with the latter in Washington, D.C.

The UC federal affairs office website indicates that the UC is the “the largest public research institution in the world,” but the monthly report also tracks other budget discussions and allocations under “Congressional Legislative Activity” and “Policy & Regulatory Update.”

Private universities also have federal affairs offices that touch on various topics, including but not limited to research.

For example, Harvard University, which has an Office of Federal Relations, has a “congressional to-do list,” and identifies the issues under its purview to “include student financial aid, admissions, scientific research and other policies at the intersection of government and education.” The university’s office has a presence in Cambridge, Mass., and Washington, D.C.

By contrast, the UPR-PRFAA agreement identifies the qualities for the person to hire as a “specialist in concessions of federal funds, who works in planning and advising the agency through analysis, evaluation, interpretation, research and training on the development and presentation of proposals to obtain federal funds that benefit the University of Puerto Rico.”

A federal liaison office for the UPR, which would resemble other universities, could include the tasks of following other budget allocations or funding discussions that are not directly related to preparing proposals. For example, they could secure the participation of UPR representatives to testify at Energy & Natural Resources committee meetings that discuss the impact of the Financial Oversight & Management Board measures. That office would also be tasked with monitoring legislative and executive actions that are not strictly related to funding for higher education, including changes for higher education being proposed by President Trump.

In this particular case

In the UPR president’s March 6 work plan, Haddock states that one of his pillars is “New Revenue,” which includes “research funds” as part of the plan’s five funding sources.

“At any university institution, whether public or private, capturing external funds is a vital priority. Our work plan has established as a priority the strengthening of research, efforts toward the collection of external funds and the recovery of funds from projects subsidized by federal agencies,” says the plan’s introduction to “External Funding for Research.”

Carmen Bachier, vice president of External Research Funds, who will be a contact person between the UPR and the new PRFAA office, explained that the UPR is already considered a “high research activity” institution, and the goal is to maximize research funding opportunities by utilizing a resource in Washington.

“We’ve been very effective in the preparation of proposals, actually. That is why we are classified as a ‘high research institution.’ So, we are very well-positioned when it comes to federal proposals, but we need to maximize and increase [external] funds,” Bachier said.

“Right now, we are working with proposals, but this person, who is in Washington, has the contacts with the agencies, has the access to the officials, and is going to be evaluating the programs that right now have a priority to receive our proposal,” Bachier said.

As for the person expected to finalize the contract—Elsa Luis, of Elsa Luis & Associates LLC—the UPR would be its largest client, from the academic research institution realm. The other academic clients mentioned on her website are Universidad Ana G. Méndez, EDP College and the Initiative Independent Schooling of P.R.

Luis & Associates has an office in Virginia and, according to her website, specializes “on providing capacity building, grant writing and partnership development services.”

Bachier pointed out that for this legislative initiative, which is part of a group of measures to increase external funding for the UPR, several measures will be put in place. She explained that the goal is to increase overall research funding by 20 percent in one year but would also measure proposed amounts from any campus or professor.

The vice president pointed out that when preparing and competing for proposals, the campuses have different levels of activity. Therefore, they will be monitoring if campuses or professors are not only submitting more proposals but also in areas in which they had not previously submitted, including encouraging professors who have not pursued grants or other forms of outside funding.

She added that the office will not be limited to research in science, technology, engineering or math, but will also seek grants for the humanities, law and soft sciences.

Whether the UPR has enough internal resources, such as eligible professors to meet increased research demands, Bachier explained that the UPR’s central administration is collecting information on each campus’ resources and their areas of interest.

Bachier mentioned that part of the initiative is to promote increased participation to attract outside funding, including incentives for professors, which Haddock’s work plan describes as a “reward & recognition” plan that would be organized in collaboration with the vice president of academic affairs.

“We are right now obtaining the information from every campus about what their proposals and strengths are. We want to do mapping or a matching where we can match the research in the strong areas and the strength of the researchers with the opportunities that exist in Washington.”




FEMA approves nearly $195 million in additional grants to Puerto Rico

Includes emergency measure funds for Guaynabo and Housing Dept., debris removal in Dorado and administrative costs of Transportation Dept.

SAN JUAN – The Federal Emergency Management Agency (FEMA) has awarded $193.6 million in additional funds to Puerto Rico to cover costs related to Hurricane María.

These awards bring the amount of funds obligated under FEMA’s Public Assistance program to $5.6 billion.

The latest grants approved are as follows:

  • Nearly $1.5 million to the Municipality of Guaynabo for emergency protective measures.
  • Nearly $2.5 million to the Municipality of Dorado for debris removal.
  • More than $6.1 million to the Puerto Rico Department of Transportation for direct administrative costs.
  • More than $183.5 million to the Puerto Rico Department of Housing for emergency protective measures.

Emergency protective measures are actions taken to eliminate or lessen immediate threats either to lives, public health or safety, or significant additional damage to public or private property in a cost-effective manner.

FEMA works with Puerto Rico’s Central Office for Recovery, Reconstruction and Resiliency, or COR3, through the agency’s Public Assistance program to obligate recovery funds to private nonprofit organizations, municipalities and agencies of the Government of Puerto Rico for expenses related to hurricanes Irma and María.

Assistance is available for debris removal, life-saving emergency protective measures and the repair, replacement or restoration of disaster-damaged facilities. The Public Assistance program also encourages protection of these damaged facilities from future events by providing assistance for hazard mitigation measures during the recovery process.

FEMA obligates funding to the applicant for projects through COR3. For applicants to receive the awarded funds, they must provide required documentation to ensure conformity with local and federal requirements.

FEMA sums up Hurricane Maria recovery aid for Puerto Rico




FEMA sums up Hurricane Maria recovery aid for Puerto Rico

Sets the stage for long-term recovery, ‘resiliency through partnership’

SAN JUAN — The Federal Emergency Management Agency (FEMA) published a release Wednesday, saying that local government agencies and other federal partners continue supporting the Government of Puerto Rico’s plan for recovery after Hurricane Maria.

“With more than $8.5 billion granted so far for Public Assistance, Individual Assistance and Mitigation grants, the island is better positioned to build back stronger,” the agency said on the year and a half mark since the hurricane’s historical impact on Puerto Rico.

FEMA assured that work on “key infrastructure and lifelines is ongoing, helping the island during its recovery process while also restoring and empowering communities.”

Below are some examples of projects underway for the island’s long-term recovery, as per FEMA’s release:

Restoration of Water Systems

FEMA has awarded approximately $135 million to the Puerto Rico Aqueduct and Sewer Authority, or PRASA, for Hurricane María-related expenses. These funds were for debris removal and immediate measures to save lives and protect public health and property.

PRASA has identified over 5,000 facilities to be repaired or rebuilt, making this a massive undertaking.

FEMA is also working on approving roughly $2 million in funds for repair works in Non-PRASA water systems. Roughly 90,000 residents rely on community aqueducts, many of which were severely damaged after the storm.

In the Guayabota community in Yabucoa, located in the eastern part of the island, repairs to broken fences, gates and pipes help ensure residents have access to clean drinking water. Under a mission assignment with the Environmental Protection Agency, community systems like this one are continually assessed and supported and promote the importance of community resiliency.

New Ways to Rebuild

So far, FEMA has disbursed over $745 million for home rental, repairs and replacement costs. But even with several housing programs up and running, and volunteer organizations eager to lend a helping hand, the scarcity and high prices of construction materials delayed the process of getting people back in their homes. More needed to be done.

The Voluntary Agencies Leading and Organizing Repair program, or VALOR, was created for nonprofits to receive materials and equipment to perform minor home repairs. FEMA has provided $12.6 million for home construction materials that volunteer agencies have used to repair 3,300 homes on the island. The successful implementation of this program in Puerto Rico has opened the door for its use in other disasters.

Recovery in the Hands of Every Survivor

Puerto Rico residents, regardless of whether they registered for assistance with FEMA, who still face disaster-related unmet needs have a network of resources to help get them back on their feet. FEMA and the Government of Puerto Rico have established community recovery centers throughout the island as a place where residents have access to federal and local recovery specialists, disaster case managers and volunteer organizations.

FEMA has awarded nearly $70 million for disaster case management in Puerto Rico, providing survivors with a single point of contact to facilitate access to a broad range of resources. There are over 600 disaster case managers available to meet with survivors across the island in community recovery centers.

Over 100,000 people have visited and continue to visit CRCs, helping create more resilient communities and establishing ties with local nonprofits and volunteer organizations.

Repaving the Road to Recovery

FEMA has provided over $54 million in funding to repair hurricane-damaged sites including roads and bridges in Puerto Rico. These sites, owned by the state and municipalities, are under mission assignment with the Eastern Federal Lands Highway Division and include repairs to bridges in Utuado, one of the hardest hit areas on the island.

In collaboration with the Puerto Rico Electric Power Authority and Puerto Rico’s Central Office of Recovery, Reconstruction and Resiliency, or COR3, over 106,000 street lights across the island will be repaired or replaced at an estimated cost of $35 million.

With emergency work complete, permanent work underway and communities coming together to develop innovative solutions tailored to their long-term recovery needs, Puerto Rico will be better positioned to withstand whatever comes next. Recovery is the longest phase of a disaster and FEMA is committed to rebuilding a stronger Puerto Rico.

For more information on the Hurricane María recovery, visit fema.gov/disaster/4339.




Foundation for Puerto Rico calls for participation in resiliency planning

Begins touring island to receive input from communities, provide guidance

Foundation for Puerto Rico COO Annie Mayol, standing on right, discusses the WCRP program in Culebra. (Courtesy)

SAN JUAN – Foundation for Puerto Rico (FPR) has begun visiting communities around the island to listen to and inform the public and organizations involved in the Whole Community Resilience Planning (WCRP) program, which was established as part of the island’s Disaster Recovery Action Plan.

The foundation was tasked with developing comprehensive recovery strategies for communities affected by hurricanes Irma and Maria. It was assigned $37.5 million as part of the Community Development Block Grant for Disaster Recovery (CDBG-DR) Action Plan for the WCRP. The federal funding was allocated via the U.S. and Puerto Rico housing departments.

Foundation is seeking to produce locally driven planning by providing opportunities for direct involvement in how the communities are rebuilt in a way that increases their preparedness and reduces their vulnerability to future disasters. Its objective is to integrate the needs, desires and resources of the residents in the reconstruction or relocation solutions.

The first phase of WCRP entails data collection and initial analysis, technical training and outreach to communities for input regarding the needs of each community and providing information about the program. The meetings will lay the groundwork for the next phase of housing recovery.

In the second phase, communities may apply for funding and receive up to $500,000 per community plan. Communities may submit plans through an NGO, with assistance from professional planning firms and developers. Planning may include “examining structural mitigation measures at either a community or individual house level, housing innovation, and effective land-use,” according to the disaster plan.

Regional planning and coordination, the plan adds, “are highly encouraged and municipios are encouraged to examine the needs of special communities. Plans should include a consideration of hazard risk as part of their assessment.”

The first community meeting was held Wednesday in the island-municipality of Culebra, where more than 20 members of organizations attended, including Mujeres de Islas, Proyecto Siembra, Proyecto Launch, Arte para SanArte, Asociación Educativa, Organización Green Culebra, Organización El Legado and Iglesia Episcopal Puertorriqueña.

“An integral part of the Program is to involve the communities, listen to them, provide the information they need so they can participate and know what the process and aid will be to design their resiliency plans. These methods will allow them to be prepared for future emergencies, especially high-risk communities,” the foundation’s president and COO, Annie Mayol, explained.

During March and April, the foundation will be traveling around the island as part of its Ruta a la Resiliencia, or Road to Resilience, tour. It will be holding two meetings in each region–as per the colors on the map below–one with nonprofit organizations and another with the municipalities.

The following are the next scheduled community meetings:

March 12 – Proyecto PECES in Humacao
March 19 – Vieques
March 20 – C3Tec in Caguas
March 22 – CMTAS in Yauco

In a press release, the foundation urged individuals and organizations interested in participating to email wcrp@foundationpr.org. It added that the dates for other upcoming meetings will be announced this month as well.

Foundation for Puerto Rico starts emergency resilience program




Puerto Rico governor challenges U.S. Senate to cut red tape

Editor’s note: The following originally appeared in the Feb. 28 – March 6, 2019, issue of Caribbean Business.

SAN JUAN – Gov. Ricardo Rosselló appeared before the U.S. Senate Energy & Natural Resources Committee where he not only requested equality in federal regulations, programs and funding to transform Puerto Rico’s energy system but also complained that the Federal Emergency Management Agency’s (FEMA) red tape is threatening the island’s recovery.

Following the recent U.S. Court of Appeals ruling that declared the Financial Oversight & Management Board unconstitutional because the appointment of its members violated the Appointments Clause of the U.S. Constitution, Rosselló called for clarifications of the law to stop the Oversight Board from intervening in the government’s day-to-day operations, a move he called undemocratic.

Rosselló participated in the hearing with governors from the other U.S. territories, all of whom complained about delays in federal funding to help them rebuild, as well as a lack of federal healthcare funds.

The governor’s testimony focused on Puerto Rico’s ongoing fiscal and debt restructuring under the Puerto Rico Oversight, Management & Economic Stability Act (Promesa); the process of economic and disaster recovery and reconstruction, including the reconstruction of the island’s entire energy sector; the need for equality under federal laws and programs; and the need for new tools to spur economic development and competitiveness.

“However, although all of these are necessary; none will be sufficient in unlocking Puerto Rico’s full potential unless Congress works with us to end the current unequal and undemocratic territorial status and places Puerto Rico on the definitive path to full equality through statehood,” he said.

In his remarks, the governor listed his administration’s achievements in restructuring the debts of the Government Development Bank, Sales Tax Financing Corp. (known as Cofina) and reducing the budget, but said it was critical for the government to retain its democratically elected powers. He expressed concerns about possible conflicts within the Oversight Board.

“We are reviewing the Oversight Board’s report to the U.S. District Court about how it intends to deal with these issues and hope a meaningful resolution can be brought to bear in that venue. However, our government also supports efforts to apply basic transparency principles to the Oversight Board through federal legislation as well,” he said.

Regarding the Court of Appeals ruling, Rosselló said the government was still evaluating options for how to manage the practical impacts of this decision. But we anticipate needing further engagement with both Congress and the executive branch to ensure the corresponding actions do not imperil the progress we have made to date.

The lion’s share of Rosselló’s testimony centered on the need for parity in federal funding, as the island is approaching a healthcare cliff; on the need for $600 million in nutritional assistance funds; and on the roadblocks hurting the island’s reconstruction. Among these areas, he cited inconsistencies in FEMA guidance with respect to the implementation of Section 428 of the Robert T. Stafford Disaster Relief & Emergency Assistance Act, the alternative procedures for permanent work public assistance; “significant delays” in fixed-cost estimate approvals by FEMA; “unnecessary requirement of duplication” in damage description and dimension analysis by FEMA; and a “lack of willingness” by FEMA to end the form 270 manual drawdown process. “Our reconstruction depends on us completing these processes as diligently and quickly as possible, and we rely on FEMA to get the job done. Puerto Rico has only had about 45 ‘permanent work’ projects approved in the 17 months that have followed the hurricanes. In stark contrast, in the same timeframe, over 13,000 projects were approved for Louisiana and Mississippi in the wake of Hurricane Katrina. The discrepancy is startling,” the governor said.

Additionally, Rosselló said he was concerned about the federal administration’s departure from the New Orleans precedent in FEMA’s denial of Puerto Rico’s request for an extension of the 100 percent federal cost share for Categories A and B for debris removal and emergency protective measures. He also criticized FEMA for insisting the island rebuild facilities damaged by the hurricane to their original condition.

“To do otherwise would be shortsighted and would not only waste the many billions of dollars in taxpayer funds that would be invested in Puerto Rico and the U.S. Virgin Islands, but also put the taxpayer at extraordinary risk the next time a hurricane or other natural disaster causes widespread impacts to the islands,” he said.

In response to a question from the senators, Rosselló highlighted the impact that climate change is having on Puerto Rico, noting that the island of Palominito, on the east coast, no longer exists, as well as the erosion of the beaches. For those reasons, he said he wants to build an energy grid focused on renewables.

However, he acknowledged that wind turbines and solar panels were destroyed by the hurricanes, too. Besides completing the lease of the transmission and distribution system by December through a concession and the transformation of San Juan powerplant’s Units 5 & 6 to use natural gas, Rosselló said there are plans to convert the Palo Seco powerplant and another one on the southeast coast to use natural gas.

“We have an RFP [request for proposals] out for a peak unit substitution with a solar and battery component,” he said.

He also said there were 25 renewable projects in the pipeline, most notably a virtual powerline for which solar panels on the rooftops of public housing projects will be used to provide energy to areas in need.

“We have a commitment to incorporate nanogrids and microgrids that would be independent and run on natural gas…so consumers have choice. What we need is clarity on the resources. We have a plan and we have a strategy,” Rosselló told the Senate panel.

See the hearing here.




CofC: A Trump-aligned fiscal board would ease flow of Puerto Rico recovery funds

SAN JUAN – As far as Puerto Rico House Minority Leader Rafael Hernández is concerned, the U.S. First Circuit Court of Appeals’ ruling shows that the island can remain under its bankruptcy-like process without the need for a financial oversight board meddling in its local affairs.

A recent ruling declared the island’s Financial Oversight and Management Board was unconstitutionally appointed because its members were not approved as per the  Appointments Clause, which stipulates that the U.S. president nominate, and by and with the advice and consent of the Senate, appoint the members.

“If that ruling proved something, it’s that part of the law could be declared unconstitutional and the rest of it can stay the same way. We still have a debt and access to the regulatory framework to handle it,” the lawmaker said after participating in the Puert Rico Chamber of Commerce’s third forum on the Puerto Rico Oversight, Management, and Economic Stability Act (Promesa). “The theory espoused by everyone that if the board went away, Puerto Rico would collapse, did not happen,” he added.

Promesa established a different method of appointments, whereby congressional leaders also appointed members. After its analysis, the Boston court concluded that the fiscal board’s members were federal officers. The ruling gave President Trump 90 days to correct the situation. The rest of Promesa was upheld, including its bankruptcy provisions.

Hernández said the time was ripe for Puerto Rico to seek the help of all sectors for the removal of the fiscal board and represent itself in Promesa’s Title III bankruptcy process. Much of the criticism against the board has centered around its power to effect local decisions.

Hernández said the board’s executive director, Natalie Jaresko, said the panel sees itself as having more of an administrative role, and that while Chairman José Carrión agrees with that view, there is a difference between action and words. He said Carrión has become more of a “non-elected official” who is trying to establish public policy.

“If he wants to run for governor, then he should do so within a political party…but not in an undemocratic manner, trying to establish public policy,” he said.

Senate Minority Leader Eduardo Bhatia, who participated in a panel discussion, titled “How Promesa affects Democracy,” said the board has eroded the island’s democratic processes and, as a result, the island’s economy.

“My argument is that one cannot have economic development, one cannot have economic stability without democratic stability,” Bhatia said.

Meanwhile, majority New Progressive Party Sen. Carmelo Ríos said the board, “as it is designed, does not work,” adding that the ruling by the First Circuit court will force Congress to deal with Promesa’s inherent issues.

“Until recently, we thought this supreme organism could not be challenged, but now we see its vulnerability. For the first time, Congress does not have an excuse not to deal with them,” he said.

Chamber of Commerce President Kenneth Rivera, whose organization was one of the Promesa Forum sponsors, said Washington officials have not asked the CofC to propose names for the board. Under the court ruling, Trump could ratify the current board members, whose appointments end in September, or appoint new ones.

CofC President Kenneth Rivera (CB/Eva Lloréns Vélez)

“We are going to Washington in two weeks to deal with other matters, but I imagine they will seek input from the private sector. However, the question that should be asked is whether current board members want to be renominated, which [is something] I don’t know. There have been different names that have popped up on the internet but I doubt the president has had time to think about this in a serious fashion,” he said.

 

The court ruling does not say what would happen if Trump does not appoint anyone to the board after the 90 days are up. Rivera, however, believes that if Trump appoints a board that is more akin to his way of thinking, federal funds for Puerto Rico’s reconstruction will be released faster than they currently are.

Rivera said that while the board has done certain things well and others poorly, such as not defining which are the government’s essential services, his biggest concern is it has failed in establishing a healthy collaboration with the government of Puerto Rico and instead has developed an “antagonistic relationship” with the local government.

“You have to learn to work with other people,” he added.




FEMA yet to assess cost of 90,000 Puerto Rico sites damaged by 2017 hurricanes

SAN JUAN – While the Puerto Rico government is moving hastily, the Federal Emergency Management Agency (FEMA) is still lagging in estimating project costs for some 90,000 sites damaged by hurricanes Irma and Maria so the permanent-works phase of the island’s rebuilding can actually begin.

Under the Stafford Act’s section 428, the alternative procedures for large project funding for Public Assistance (PA), FEMA and Puerto Rico’s Central Office for Reconstruction and Recovery (COR3) must agree by Oct. 11 on the cost estimates for the about 90,000 projects, COR3 Director Omar Marrero said. On that day, “the government will know how much funds are there exactly for the permanent reconstruction work,” he said.

Were FEMA to not complete the estimates by that date, section 428 allows for an extension but Marrero said his office is pushing FEMA to speed up its process because “we want to have an effective recovery.”

Marrero added that is the first time FEMA is implementing section 428 for an entire disaster, and “the reality is that there 90,000 sites to inspect.” COR3 is in a more advanced stage in the estimates than FEMA because it hired an outside firm to help in the process.

If the two entities agree on the cost estimates for all of the projects, according to the recovery plan the projects will be performed by priority, with those involving energy, water and transportation to be carried out first.

On Oct. 30, 2017, the Puerto Rico government elected to participate in alternative procedures for all large project funding for Public Assistance (PA) Categories C-G, provided by section 428 of the Stafford Act, for permanent work following Hurricane Maria.

More than a year and a half since Irma and Maria struck the island, most towns have been unable to start the permanent reconstruction projects. COR3’s recovery website, shows that less than 10 percent, for permanent work categories C through G, has been appropriated.

In a letter dated Nov. 2, 2017, President Trump authorized federal funds for all categories of PA at 90 percent of total eligible costs, except for assistance previously approved at 100 percent. In accordance with the president’s letter, the increased federal cost share was conditioned upon the commonwealth establishing a grant oversight authority, supported by third-party experts, to perform as the grant recipient for PA and Hazard Mitigation funding to ensure “sound project management and enhanced, centralized control and oversight over the distribution” of FEMA grant funds. As a result, the government created COR3.

A second condition was that all large project funding for PA categories C-G must be obligated by FEMA “only through alternative procedures as FEMA shall establish under section 428 of the Stafford Act, including third-party independent expert validation of estimates for projects exceeding a threshold established by FEMA.”

Another condition was that Hazard Mitigation grant funding available under section 404 of the Stafford Act be prioritized toward protecting federal investments in Puerto Rico’s public infrastructure.

Transparency questioned

Marrero made his remarks Tuesday during the first of several quarterly roundtables with the press to inform about COR3’s work. The roundtable came after Espacios Abiertos, a nonprofit that advocates for transparency in government, charged that COR3’s website did not meet international standards for transparency.

Marrero said the government complies with the responsibility of maintaining a transparency portal as required by Congress and federal legislation to qualify for disaster aid.

‘”The COR3 portal complies with all federal requirements of the United States and its data is updated weekly,” he said, denying that the press conference was prompted by the claims of Espacios Abiertos.

The portal shows how funds have been disbursed, and the data can be transferred to Excel. “In this portal, the user should be able to see the progress that we have made in the different areas by sector, amount and origin of funds,” he explained.

The portal was developed by CSI Technologies, a company that obtained $88 million for a three-year contract to monitor the projects and the disbursement of federal funds.

Marrero revealed that the portal will soon display the different projects that are divided among the agencies. The public will be able to see the cost of the projects, their contractors and when will they be finished.

“The information available will be made so anyone can know here and outside the island about what is happening with Puerto Rico’s rebuilding,” he said.




Swain’s World: Puerto Rico government frustrated with FEMA bureaucracy

Editor’s note: The following originally appeared in the Feb. 14 -20, 2019, issue of Caribbean Business.

While the government of Puerto Rico has an office to manage all recovery and rebuilding projects as well as federal disaster funding, the government is promoting the idea of having a federal coordinator to handle all matters related to the disbursement of federal funds.

Puerto Rico’s resident commissioner in Washington, Jenniffer González, proposed the idea to the White House in an effort to hasten the disbursement of federal aid. For weeks, the government has expressed frustration with the bureaucracy of the Federal Emergency Management Agency and pace to disburse billions in funding needed for the island’s recovery.

Resident Commissioner Jenniffer González (Screen capture of www.naturalresources.house.gov)

Part of the problem, as reported by stateside news outlets and investors on social media, is a lack of trust in the local government, which is viewed as corrupt and dishonest. This perception has been spurred by a lack of transparency in the financial information the government provides.

The federally appointed Financial Oversight & Management Board (FOMB), which has been in charge of the local government’s bankruptcy for more than two years, has until recently been urging the government to file needed financial reports.

Has the government complied? Not really.

The government was supposed to submit some 129 reports related to its progress to implement fiscal plans to the FOMB but has only provided 59 over the past month. In addition, 46 financial data reports were also required, but only 37 have been submitted.

The government has also failed to finish audited financial statements since 2016.

The FOMB publishes documents on its website and appears to be transparent. Caribbean Business, however, recently requested access to the documents used in the investigation conducted by Kobre & Kim about the causes of the debt, only to be told everything was in the report.

Cofina deal

As Caribbean Business first reported on the government’s Title III bankruptcy case, the FOMB, P.R. Fiscal Agency & Financial Advisory Authority and government confirmed that the debt-adjustment plan of the Sales Tax Financing Corp. (known as Cofina) went into effect Feb. 12.

The U.S. District Court for the District of Puerto Rico, by an amended order entered Feb. 5, confirmed the plan has come into effect. This marks the first-ever plan of adjustment under Title III of the Puerto Rico Oversight, Management & Economic Stability Act (Promesa) to be confirmed and put into effect.

“Cofina’s emergence from Title III of Promesa is an important step toward restructuring Puerto Rico’s public debt, returning to the capital markets and laying the foundation for a more resilient, vibrant and stronger economy. Today’s achievement is proof that the government of Puerto Rico can accomplish creative restructuring solutions that safeguard the interests of the people of Puerto Rico,” Gov. Ricardo Rosselló said.

Cofina has issued $12,021,321,817.35 in new sales-tax revenue bonds in accordance with the adjustment plan. The new bond issuance and other restructuring transactions provide clear economic benefits to Puerto Rico. Today, Cofina restructured nearly 24 percent of Puerto Rico’s funded debt, providing Cofina with more than $17 billion in debt-service savings. Settlements implemented by the adjustment plan will provide the government of Puerto Rico with access to an average of $425 million annually.

In related news, the Unsecured Creditors Committee (UCC) came out this week against a proposed $7 million payment requested by the Puerto Rico Fiscal Agency & Financial Advisory Authority (Fafaa or Aafaf by its Spanish acronym) for expenses incurred by Bonistas del Patio, a local bondholder group, in Cofina’s negotiations.

“On the eve of the anticipated effective date of Cofina’s recently confirmed plan of adjustment, [Aafaf]— and surprisingly, not the Oversight Board—has filed an informative motion attaching a stipulation pursuant to which the commonwealth agrees to pay $7 million from its own funds to Bonistas del Patio, on account of professional fees purportedly incurred by Bonistas in connection with the Cofina plan of adjustment. This is the first time the court and other parties of interest, including the [UCC], have been advised of such an agreement,” the UCC said.

Rafael Rojo, head of Bonistas, said the lawyers hired by the group worked on a contingency basis and not through an hourly fee. “They were supposed to be paid once we reached an agreement on Cofina. Everyone criticizes the fact that millions were paid by other bondholder groups that were negotiating the deal and yet we are trying to protect some 60,000 local bondholders and are also trying to get the best lawyers we can,” he said, adding that the UCC’s counsel charged more than $15 million in fees. There are very few local law firms, he added, that could have done the work. Rojo said the government had agreed to pay for Bonistas’ expenditures for legal fees. Bonistas hired Davis Polk & Wardwell LLP as counsel, and Ducera representation as financial adviser.