An odyssey getting funds

Puerto Rico has, at the most, a two-year window to request and receive the largest possible amount of federal funds for recovery after the strike of Hurricane Maria and develop the institutional capacity needed to ensure the proper use of each dollar received.

It is, according to two interviewees, a race that Puerto Rico will have to do especially in the federal capital and in which time is running out.

On the one hand, Puerto Rico -that deals with a problem of credibility in federal spheres, according to a report by the House Committee on Natural Resources- will have to win supporters to its cause, in the run-up to an electoral cycle and under the restrictive watch of the Board and the Promesa Law.

In addition, if Puerto Rico wants money in order to install the bridges devastated by the overflow of rivers or repair substations of the Puerto Rico Electric Power Authority (PREPA), it will have to compete with jurisdictions such as California, Texas and Florida, also affected by natural disasters.

However, and perhaps because of the magnitude of the cyclone that hit it, Puerto Rico seems to have lost valuable time because the administration of Governor Ricardo Rosselló Nevares took 40 days to request the Federal Emergency Management Agency (FEMA) funds under sections C-G of the Stafford Disaster Relief and Emergency Assistance Act.

"The governor of Puerto Rico requested Public Assistance (PA) funds for categories A and B on September 20 and for categories C-G on October 30," a FEMA spokesperson told El Nuevo Día.

Categories A and B of the federal Stafford Act provide funds to address the emergency, while the C-G categories provide funds for permanent projects in facilities that do not generate profits. That is, roads and bridges, water and electricity infrastructure, public buildings and parks or recreational spaces.

The spokesperson from FEMA stressed that funds under PA are activated "at the request of each governor." Once FEMA received the request from Rosselló Nevares, President Donald J. Trump approved the use of funds for permanent projects on November 1 and amended the declaration of a major disaster in Puerto Rico to that effect.

"We continue to make progress, working hand in hand with the government of Puerto Rico, businesses and voluntary agencies in order to stabilize the government after hurricanes Irma and Maria," pointed out FEMA.

By approving the use of funds for permanent projects, Trump increased, from 75% to 90%, the contribution that FEMA will make and Puerto Ricowill pay the difference.

The federal bureaucracy

"Each fund is a different world," said Anitza Cox Marrero, in charge of the Social Analysis and Policy Division at Estudios Técnicos.

"When these disasters occur, the legal context is the Stafford Disaster Relief and Emergency Assistance Act," explained Cox Marrero, adding that the assistance, in turn, is divided between direct assistance to people and companies and the one that the state government receives.

"First comes what we have seen, the immediate response that is no more than mobilizing resources from various agencies to the disaster site and providing technical and operational assistance to address the emergency," explained Cox Marrero.

Also, the jurisdiction may request authorization from federal government agencies to use funds previously approved for other purposes and redirect them to the victims.

Compete in order to rebuild

However, the most necessary move for permanent recovery is one in which FEMA acts "as a main door" through section 406 of the Stafford Act, where categories C-G are grouped.

A second door, in the same way, are the funds for disasters through the Community Development Block Grant (CDBG) program, explained Cox Marrero.

"Those are the deep waters," indicated economist and lawyer Kevin González Toro, who explained that the federal government's modus operandi for granting disaster relief relies on filling the coffers of federal agencies, so they can grant subsidies as requested by the affected jurisdictions.

"The most important battles that Puerto Rico can fight in these agencies will be for the distribution to consider Puerto Rico’s high levels of need and apply an objective formula, using socioeconomic variables," explained González Toro.

The economist, with expertise in managing federal funds, said that obtaining federal money for recovery will depend on many factors and also on the strategy adopted to make the use of the funds viable.

Texas and Puerto Rico

"In the case of Texas, a reconstruction commission was created and a whole system of information gathering was set up to identify the funds," said the economist. "Moving with one voice, after having made a preliminary damage assessment, works to mobilize the federal machinery," he added.

The commission created by Governor Gregg Abbott is named Rebuild Texas. This made a plan of 300 pages that indicates, by geographical location, each permanent project that is needed and how it will be carried out. The plan is available on the commission's website.

Hurricane Harvey hit Texas on August 23. Trump declared a disaster there two days later and, after ten days, the White House had already authorized the use of funds for permanent projects in much of Texas.

Last October 31, about 69 days after Hurricane Harvey, Abbott arrived in Washington to request $ 61 billion for recovery in that state.

Meanwhile, even though Rosselló Nevares told Congress that he would need about $ 94 billion for the Island's recovery, last Friday, President Trump's spokeswoman, Sarah Sanders, told El Nuevo Día that the figure finally requested for Puerto Rico will depend on a preliminary damage analysis (PDA). Two months after the disaster, that PDA has not been finished, Sanders said.

Thus, Sanders explained the allocation of $ 44 billion that the White House just sent to Congress will compensate the disasters in Texas andFlorida.

A political process

González Toro recalled that seeking federal funds after a disaster involves interacting with a political apparatus: the US Congress.

"With a tax reform in between, all of this falls into the background and that is really worrying," said the economist, referring to the tax bill that, without amendments, would also end up hitting the economy of the Island.

According to González Toro, one aspect that seems to be outside the public discussion in Puerto Rico is that, "usually," disaster aid programs are designed to be spent in a short period of time.

At the most, expressed the economist, Puerto Rico has about two years to get the assignments it is interested in and, at the most, another two years, to use such resources. That is, as the urgency of a disaster weakens, getting federal funds becomes more difficult, especially if an electoral process is approaching like congressional elections next year in the United States.

The weakness of Puerto Rico

According to González Toro, the regrettable thing in the case of Puerto Rico is that, despite being an economy highly linked to federal funds, the government has not adopted policies or made innovative institutional adjustments to ensure its efficient management.

Annually, the economy of Puerto Rico receives about $ 29 billion in federal transfers. Most are benefits paid by US citizens living on the Island. But almost half of that figure is funds allocated to multiple governmental and institutional programs.

Until now, Puerto Rico had not experienced the devastation of a hurricane since Georges in 1998.

But between 2000 and 2013, the Island was eligible for some $ 943 million in emergency and disaster funds, according to FEMA data used about two years ago, by the Congressional Research Service (CRS) to examine the use of funds by disaster.

"One of the most important criticisms of the use of federal funds in Puerto Rico is that, traditionally, they have been fragmented," indicated González Toro, noting that receivers of those resources on the Island do not communicate with each other to ensure the most efficient use.

About three years ago, under the direction of the former Executive Director of the Office of Management and Budget of Puerto Rico, Carlos Rivas, an office was created to obtain and manage federal funds in Puerto Rico. The program promised to give a 180 degree turn to this management on the Island, but the initiative was disjointed as soon as Rivas left the Office of Management and Budget.

"As of today, Puerto Rico does not have a portfolio of federal funds that it receives, which would have helped a lot at this time," said the economist.

On the other hand, Hurricane Maria arrived on the Island while the government changed the way in which it procures certain federal funds.

About three years ago, the tasks of the Governor's Authorized Representative before FEMA (GAR), key functions to help identify federal funds, were transferred to the Puerto Rico State Agency for Emergency and Disaster Management (AEMEAD, Spanish acronym), so that now they are transferred back to the Office of Management and Budget.

At the beginning of the year, the new government modified the Office of Special Communities and gave it the responsibility of managing federal funds within municipal scope, a task performed by the Office of the Commissioner of Municipal Affairs (OCAM, Spanish acronym).

In addition, the cyclone came practically during the first year of a new government administration, dealing with a fiscal crisis and with many resources with little or no experience in the public sector.

Last week, El Nuevo Día revealed that the Rosselló Nevares administration did not follow the current catastrophic plans, designed in collaboration with the federal government, to address a disaster.

Now, with the expectation of getting the funds that Puerto Rico is lacking for its reconstruction, Rosselló Nevares created a new office that would receive the funds associated with Hurricane Maria, whose operation is still not fully known.

"There are institutional barriers that prevent the disbursement of received funds. We must develop the institutional capacity that allows us to innovate and use those resources in the best way," said González Toro.