San Juan objects to Board´s control over its finances

By pointing out that the threat to "Puerto Rico´s self-government and democracy" has become "systemic," the Municipality of San Juan asked the federal court to exclude the capital from the list of municipalities under the control of the Oversight Board.

According to the complaint seeking injunction and declaratory judgment filed by the municipality, after on May 9 the entity created by PROMESA declared that Puerto Rico´s 78 municipalities were entities covered under the federal statute, it did so in an "indiscriminate" manner and without reasonable grounds.

To that effect, the administration of Carmen Yulín Cruz Soto requested the Federal Court to prevent the designation of San Juan as a covered entity. Charlie Hernández and Raúl S. Mariani, the lawyers representing the municipality of San Juan, requested a declaratory judgment establishing that PROMESA is unconstitutional when it comes to designating a covered entity under that statute without a cause tied to the purpose of that law, or because the Board´s directors designated San Juan as a covered entity without having the authority to do so.

And this because the members of the Board directors have not been appointed following the U.S. Constitution Appointments Clause.

The case was assigned to Judge Pedro A. Delgado Hernández.

According to the complaint, the Board has used the fiscal plans certification process to impose certain public policy preferences despite the opposition from the elected government.

On May 9, the Board established that the 78 Puerto Rican municipalities will be covered by PROMESA. As part of that process, the federal entity announced that it would start a pilot plan with 10 municipalities for them to begin operating under fiscal plans.    

The goal, as stated by the Board, is for for the 78 municipalities to adopt such a public resource management mechanism.

According to the complaint filed by San Juan, the Board has not explained why taking control of the Puerto Rican municipalities has allegedly become necessary now, more than two and a half years after it designated the (central) government as a covered entity.

From San Juan´s perspective, proposing that good fiscal health of municipalities is key for the central government is unfounded since this fiscal plan cuts 80 percent of the funds that municipalities will receive over the next four years.

The document reads that instead of conducting an individualized analysis of each of the remaining municipalities (the 68 municipalities that are not included in the pilot program) and their links to the Puerto Rican fiscal health in general, the Board simply grouped them all into one broad designation for no reason.

The lawsuit adds that the San Juan municipal government already taking action to address its fiscal challenges.