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Who controls federal funds received by Puerto Rico post-Maria?

By on November 1, 2017

SAN JUAN – Ahead of the arrival of millions of dollars from the federal government after Hurricane Maria, it is unclear who has the last word between the government or the fiscal control board regarding the handling of these funds.

While the administration of Gov. Ricardo Rosselló Nevares recently created the Central Recovery & Reconstruction Office (OCRR by its Spanish initials) to be in charge of managing all “resources” received for Puerto Rico’s reconstruction, the board assures that the Promesa law allows it, in some form or other, to control a large portion of the federal funds received after the natural disaster struck the island.

This responsibility would include the nearly $4.9 billion in federal loans Washington, D.C., recently approved to meet the government’s liquidity needs, as well as funds granted to rebuild infrastructure.

This information was stated Tuesday by member Ana Matosantos during a press conference after the board’s 10th public meeting, when explaining that Promesa provides mechanisms through which the entity can exercise its role over these funds.

Ana Matosantos, second from right, also said any loan request by the government should be endorsed by the board, as provided in section 207 of Promesa. (Juan José Rodríguez / CB)

“In terms of the dollars Congress has authorized for liquidity, any request under that is covered under the Promesa law. It would be [money] that would come to pay expenses in the budget. The budgets will have to be amended to include emergency expenses that weren’t originally included there,” she explained, while recalling the “flexibility” afforded to the government so it could redirect up to $1 billion from the approved budget.

Matosantos also said any loan request from the local government should first be endorsed by the board, as provided in Promesa’s section 207.

Regarding funds directed toward infrastructure, the board member said the government’s fiscal plan would have to include them. “Promesa already has a structure that provides for [those funds] to be reflected in the fiscal plan and for the fiscal plan to specify how those dollars are going to be spent and how they are going to be used,” she said.

For his part, the government’s representative to the board, Christian Sobrino, also referenced Promesa, but to explain that the law stipulates there are federal programs for which the board “doesn’t formally come in.”

Christian Sobrino, the the fiscal board’s government representative (Juan José Rodríguez / CB)

One of the items under section 204 of Promesa establishes that the board may not exercise its powers to prevent local government actions aimed at implementing federal programs.

In statements he made Sunday, Sobrino said the concept for the new OCRR was informally consulted with the board, but not the executive order creating that office.

To questions on Tuesday about the new disaster response office, fiscal board Chairman José Carrión said he did not have “any kind of comment” because he did not know “about the matter.”

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On Sunday, Rosselló Nevares indicated that neither the federal government nor the fiscal board requested the creation of the OCRR, which “will receive and administer all funds and resources made available” for recovery and reconstruction efforts in Puerto Rico, no matter where they come from.

The office will determine priorities and implement guidelines for the use and disbursement of these “resources,” while being the exclusive beneficiary of any federal funding program made available to Puerto Rico. The OCRR will also be in charge of the development and implementation of a “strategic plan” for short-, medium- and long-term reconstruction.

The OCRR falls under the umbrella of the Public-Private Partnerships Authority and will therefore initially be under the control of the entity’s director, Omar Marrero.

 

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