The Oversight Board´s executive director Board Natalie Jaresko denied yesterday that they had stopped the use of public funds to address the emergency in southern municipalities following the earthquakes.
"From the very beginning of the earthquakes in the southwest of the Island, the Financial Oversight and Management Board (the “Oversight Board”) has supported the people of Puerto Rico suffering from this natural disaster," Jaresko said in a letter sent to the executive director of the Fiscal Agency and Financial Advisory Authority (FAFAA), Omar Marrero.
In her letter, Jaresko explained that “immediately” after the January 7 earthquake, the federal entity authorized the use of $260 million “in reserves set aside in the Certified Budgets of FY19 and FY20 for just this type of crisis situation.” The government could use the money without further authorization from the fiscal agency to cover expenses associated with the emergency until January 31.
However, after that initial period, the Board adjusted the authorization process and determined that each release had to be authorized by the federal entity. "We assured you the unspent reserves remained available for reasonable earthquake-related needs, but on the basis of a request for release. The situation in the southwest remains dire, there is no doubt," she added in the letter.
She also rejected Wanda Vázquez Garced´s allegations made on Saturday that Board had not considered more than 50 requests made by the Executive Branch to buy supplies and hire services for the victims. She denied that any of those requests were for the purchase of portable toilets or water, as the director of the Office of Management and Budget (OMB), Iris E. Santos said.
According to Jaresko, they have only received 10 requests since they adjusted the procedures. For the Board, all these expenses although still "critical," are "plannable." "Allegations that the Oversight Board has introduced too much bureaucracy at a critical time are simply untrue," the executive director said.
"All requests were processed within hours of receipt... We continue to be focused on providing efficient and transparent support," Jaresko added.
After the Board refused to temporarily extend access to the funds without its approval, Vázquez instructed the OMB to continue using the emergency fund, even without the federal entity´s authorization.
Marrero said yesterday that he sent a letter to the Board on Friday, asking the entity “to reconsider its decision” as it is urgent to access those funds and that “requiring prior authorization from the Oversight Board to access said could delay the Government´s response to the emergency, putting at risk the People of Puerto Rico, particularly those living in the southern part of the island.” The request was rejected yesterday afternoon. "We will not leave our communities stranded and we will take whatever steps are necessary to access these emergency funds," he said.
Agreement with central government bondholders
By press time, the Board announced it reached a new agreement with the Lawful Constitutional Debt Coalition (LCDC) and certain investment funds that own General Obligation Bonds (GOs), which have been questioned by the entity. The agreement should be notified to Judge Laura Taylor Swain, who presides over Puerto Rico´s Title III cases.
The new agreement would reduce the island's public debt by approximately 70 percent and would take 20 years to repay, the Board´s president Jose B. Carrión said in writing.
"The new agreement is another step forward for Puerto Rico, one that gets the island much closer to
ending bankruptcy and to the beginning of a true economic recovery," added Jaresko.
The governor immediately indicated that she will not support the agreement. "My government has determined not to join the new agreement in its current terms," she said.