FEMA Assigns $18.5 million for Hurricane Recovery Projects
Approximately $18.5 million in additional FEMA funds have been assigned to Puerto Rico to be used in 115 recovery and reconstruction projects. Of these, some $6 million are aimed at developing protective measures during emergencies, while $5.5 million will be used to repair roads and bridges. The rest is expected to be used to recover debris, make repairs to public buildings, equipment, and water control installations, among other things.

To date, nearly $5.9 billion have been assigned to Puerto Rico as part of FEMA’s Public Assistance program, according to FEMA and COR3 [the Central Office or Recovery, Reconstruction, and Resiliency].

Municipal Effort to Restore Hydroelectric Plant Crosses Milestone
After a wait of nearly four months, the Cooperativa Hidroeléctrica de la Montaña, a municipal co-op made up of the residents of Adjuntas, Jayuya, and Utuado, has been allowed to submit proposals to rehabilitate and manage Puerto Rico’s hydroelectric system.

The Cooperativa seeks to take charge of the Caonillas and Dos Bocas hydroelectric systems in order to develop a reliable and constant power source for its member municipalities. The Cooperativa has stated that its goal is to generate between 45 and 47 megawatts of power.  

According to the Cooperativa, the restoration of the hydroelectric plants is expected to cost $150 million, which it will access using funds from the U.S. Department of Agriculture’s Rural Development Program. 

Municipalities on Edge as They Wait for Judicial Ruling on Act 29
Earlier this year, Governor Ricardo Rosselló signed Act 29 into law, exempting municipalities from having to contribute to the “PayGo” retirement system. Consequently, the Financial Oversight and Management Board (FOMB) sued the government, arguing that the law was inconsistent with Puerto Rico’s Certified Fiscal Plan, and that funds to finance its statutes had not been assigned.  

For five months, municipalities have been waiting for a court ruling; should Act 29 be nullified, it could send municipal finances into a tail spin. “The impact would be that those municipalities whose income from property taxes depend substantially from contributions or from matching funds would be affected in their totality. They’d be in the red. They can’t operate—it’s not that they won’t be able to provide services, it’s that they would not be able to operate,” warned Cidra mayor Javier Carrasquillo. 

Mayor Carrasquillo also noted that the Municipal Revenue Collection Center (MRCC) based municipal remittances on Act 29, and that if the law is repealed, the agency would have to recover $320 million it disbursed to the municipalities at the beginning of the current fiscal year last July. According to him, more than 30 municipalities would be rendered inoperable.  

Meanwhile, Natalie Jaresko, executive director of the FOMB, has remained in conversations with the government, and does not expect reaching a final agreement until a ruling is made. “Nothing can happen until then,” Jaresko said, adding that she was “sure and confident” that a solution would arise and that once a ruling was made, she would work with mayors and the government to “support those small municipalities which have the great challenge of balancing their finances” and work with the MRCC to increase tax revenue for larger municipalities. 

Trump Administration Sets New Restrictions on Funds Assigned to Puerto Rico
Consistent with its expressed antipathy for the governing institutions of Puerto Rico, the Trump Administration has set new restrictions on funds assigned to the Island.   

As early as February, the U.S. Department of Education may have in place a new trustee to oversee a large part of the nearly $1.5 billion the Puerto Rico Department of Education receives per year. For its part, the U.S. Department of Housing and Urban Development (HUD) intends to have in place before the end of the year a financial monitor to supervise the administration of the $20.25 billion in CDBG-DR funds that have been assigned to Puerto Rico, most of which have yet to be disbursed. Additionally, new controls are slated to be placed on Puerto Rico’s Medicaid funds.   

This marks the continuation of a trend. In recent years, the Puerto Rican government has had diminished autonomy in some key areas. For instance, in the wake of Hurricane Maria, the federal government persuaded then-governor Ricardo Rosselló to agree to obtaining FEMA emergency management funds under Section 428 of the Stafford Act, which prevents alterations from being made to cost agreements, regardless of new or changed circumstances.