Although over the last two years, the federal government has disbursed just over $15 billion in disaster relief funds for Puerto Rico after Hurricanes Irma and María, the island has never received an allocation of $92 billion as President Donald J. Trump has been claiming for months.
In the best of cases, according to interviewees and documents from the federal government itself, funds for Puerto Rico's reconstruction after the 2017 hurricanes will total $45 billion. And even if Puerto Rico were to receive that amount, some of those funds have gone to the Federal Emergency Management Agency (FEMA) and to address matters related to the emergency.
According to the president of the Puerto Rico Builders Association, Emilio Zavala, the island has not seen a penny of the money that should be invested in mitigation efforts through FEMA, to a large extent because it has been held up by what he believes, is the erroneous implementation of Section 428 of the Stafford Act.
"The local government has not failed to comply or caused the delay because it was decided that the Puerto Rican government does not control the estimates process for public assistance projects," Zavala said, referring to the special regulations created by FEMA for the island.
According to economists Joaquín Villamil and Kevin González, Puerto Rico and the federal government did not have the adequate institutional framework to facilitate the disbursement of funds after the 2017 hurricane season. That reality contributed to a scenario of misinformation and confusion about when, how much and how the funds needed would be used. But even so, Villamil and González said, neither through FEMA nor through the Community Development Block Grant for Disaster Recovery Program (CDBG-DR) has Puerto Rico received the amount the President claims.
Thus, since 2017, of every dollar allocated for permanent projects through the CDBG-DR program, Puerto Rico has only received eight cents.
In the case of FEMA, as of last June, the agency had used nearly $10 billion (or the equivalent of one-third of every dollar authorized by Congress to respond to Hurricanes Irma and María) to pay for its operational expenses and to address the emergency and help individuals in the months following the disaster. Today, two years after the cyclone, virtually no permanent projects have been carried out in Puerto Rico.
Funds tied-up by bureaucracy
According to Villamil, one of the first obstacles to the federal funds came when the Puerto Rican government commissioned a private firm to prepare the Action Plan. It was initially alleged that Puerto Rico would need some $94 billion to recover, a figure that was later revised to $134 billion.
However, a few months ago, the Planning Board estimated the damage associated with Irma and María at $45 billion.
"If you're in Washington and you see three different figures, the confusion is real," Villamil said.
According to economists, the delay in releasing disaster recovery funds is not only for Puerto Rico. Yet, 14 years after Hurricane Katrina in Louisiana, the federal government still allocating funds to mitigation projects there.
"Funds to deal with the emergency are disbursed fairly quickly, but that is not usual for permanent projects," González said.
He stressed that on the island federal funds are referred to as if they were a package, but in practice, Congress can authorize the funds, but they don't reach the people until the federal Executive branch, through its agencies, directs the funds to a particular program and then they are disbursed, according to established criteria.
As for Puerto Rico, according to Zavala, FEMA has applied a rather peculiar interpretation of section 428 of the Stafford Act. Through it, and in very simple terms, FEMA allocates funds to reconstruction initiatives based on an estimate of fixed costs for each permanent project filed by the affected agency or municipality. FEMA validates the numbers and allocates the funds. If the government does the work as estimated or achieves savings, it keeps the surplus. But if the project is over-estimated, the agency or municipality will have to pay for that difference.
In the case of Puerto Rico, Zavala said, it was determined that all projects would be done under section 428 and for the process to be faster, FEMA would be the agency that would make the estimates. Currently and according to official data, of some 9,000 possible projects, FEMA has only completed a hundred of those estimates.
Zavala also said FEMA's Office of the Inspector General (OIG-FEMA) examined what was done in the Tu Hogar Renace (Your Home Reborn) program and did not question anything.
However, the engineer noted, in the last few years, OIG has complained about what FEMA has done with section 428 in the case of Hurricane Sandy and others.
"There is a difference between what they say and what they do," Zavala said.