FEMA multimillion-dollar investment in Puerto Rico (semisquare-x3)
The aid that FEMA will grant to Puerto Rico will be through section 428 of the Stafford Act. (Ramón Tonito Zayas)

The Federal Emergency Management Agency (FEMA) will use almost half of its Disaster Relief Fund (DRF) to counterbalance the effects of Hurricane Maria, and most of that allocation will, in turn, be for works in Puerto Rico.

According to the latest FEMA monthly report to Congress, the agency will invest $ 15.652 billion this fiscal year, in order to respond to the devastation left by Hurricane Maria in the Virgin Islands and Puerto Rico. Out of that amount, $ 13.732 billion will go to Puerto Rico.

According to the report, until December, FEMA had invested almost half of the amount budgeted for the Island in the current fiscal year. The administrative calendar of the federal government covers from October 1 to September 30  each year.

Alejandro De La Campa, director of FEMA for Puerto Rico and the Virgin Islands, explained that, after the cyclone on September 20, the first allocations were aimed at the emergency. Now, the budget will be mainly intended  to provide assistance to the victims and to build permanent works, a decisive part of the recovery, but which is just beginning.

For De La Campa, Puerto Rico has not begun to request funds for permanent projects under the C-G categories of the Stafford Act. It is a process in which municipalities and government agencies complete their damage estimates and identify -in collaboration with FEMA- how and how much it costs to repair or rebuild what has been lost.

The aid that FEMA will grant to Puerto Rico will be through section 428 of the Stafford Act. Under that section, FEMA allocates an amount for each recovery project. If the local government fails in its projections and estimates, it will be up to the government and not FEMA to cover the difference.

"In Puerto Rico, section 428 will be implemented in all municipalities. It is pioneering. It was implemented after Sandy, but only with certain entities, here it will be throughout the entire Island, it will be for the benefit of all of Puerto Rico," said De La Campa.

At present, FEMA has disbursed some $6 billion between what was anticipated to municipalities and agencies for categories A and B of the Stafford Act, claims of individuals and the "missions" assigned to the Department of Defense, such as mobilizing the hospital ship, helicopters, ships and army personnel to the Island, the repair of radar and communication systems, as well as the tasks carried out by the US Army Corps of Engineers, such as the installation of awnings or the repair of the power grid. 

"As of today, we have approved $ 984 million to help families with the repair and construction of homes, and that figure increases daily," said De La Campa.

Unprecedented disaster

Hurricane Maria has left the highest number of claims due to a disaster in FEMA records: 1,099,000 claims. The data makes Hurricane María the biggest disaster FEMA has ever dealt with in its history, even greater than hurricanes Wilma, Rita and Katrina combined.

The impact of Hurricane Maria is such that, according to the report, at the end of fiscal year 2018, the Disaster Relief Fund would be in negative for $ 4.556 billion, unless Congress allocates more funds to it.

"I cannot predict how much we will be approving, but we do have to start from the premise that it would not be any surprise that this surpasses Katrina and Sandy," said De La Campa. "There is not going to be anything that prevents providing the assistance needed for Puerto Rico," he added.

A true lifesaver

Puerto Rico has experienced a budgetary and economic crisis that, in March 2018, will turn 12 years. During this period, the local government has lost the capacity to invest in infrastructure and has paid a large part of the expenses at the central level with federal funds transferred through the so-called Obamacare and the 4 percent excise tax paid by foreign companies to the General Fund. In addition, Congress approved the federal PROMESA Law for the Island to renegotiate its public debt, however it did not allocate funds to avoid any financing or a possible rescue or bailout.

Only the injection that Puerto Rico would receive from FEMA this year, exceeds seven years of collections from the 4 percent tax. From 2011 to last year, according to data from the Department of the Treasury, the revenues of this item totaled about $ 11.970 billion.

The government's revised fiscal plan before the Board provides that Puerto Rico would receive about $ 35.3 billion in the next five years, however the document does not indicate how they will be invested.

"It's not just FEMA. There are countless federal agencies: the Department of Housing and Urban Development (HUD), the Department of Transportation ... We are identifying the different sectors: water, transport, power, housing, to maximize funds," said De La Campa.

"We are working in an intelligent way and we are working together in order to mitigate and improve infrastructure at the same time," he said.

The $697 million in loans that the Small Business Administration (SBA) has approved to individuals and businesses for the reconstruction of their properties represent an example of the funds that will come to the Island from other federal agencies.

Setbacks

However, De La Campa acknowledged that there is a key aspect of the recovery that FEMA does not control: the time and the use that will be given to the funds received by the Island.

According to the official, there are still "many municipalities" responding to the emergency. In some cases, instead of reimbursing, FEMA advanced money for municipal contractors to do the work. At present, there are municipalities and agencies that have not fully resumed  operation, which affects the requests for funds.

"Part of the mission of FEMA, after this disaster, is to revitalize the economy of Puerto Rico, creating better infrastructure so that it can be better prepared for emergencies," said De La Campa.

The official explained that the objective of the agency is that most of the funds allocated remain on the Island by hiring local resources, and stressed that, to set a guideline, FEMA has already hired about 1,500 Puerto Ricans to address the disaster .

The figure should increase to 2,000, he anticipated.

"We reimburse municipalities and agencies, but those who will handle that contracting process and who will meet the requirements are the agencies and municipalities," said the federal official.

"We want them to be local companies, but the local government will have that power," assured De La Campa.


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