Fiscal board to tweak highway authority fiscal plan
By The Star Staff
The Financial Oversight and Management Board has devised a schedule to revise the fiscal plan for the Puerto Rico Highways and Transportation Authority (PRHTA), which has been in Title III bankruptcy since May 2017 to restructure some $6 billion in debt.
The fiscal plan is the blueprint of changes that need to be made to straighten out the entity’s finances. However, the oversight board said the changes to the current plan will be limited. The board said it expects to have a revised fiscal plan for the PRHTA by Jan. 19.
In a letter the oversight board said it was initiating the process for revising the May 2021 Certified Fiscal Plan in order to incorporate new information available regarding federal funding for Puerto Rico, the broader macroeconomic environment, and certain expenditure items.
The revisions to the May 2021 Certified Fiscal Plan will consist of an update of fiscal year (FY) 2021 actuals -- to revise all actual figures referenced throughout the fiscal plan as of a date before the FY 2021 year-end date and include actuals as of June 30, 2021.
The board also said it will include technical adjustments to align the revised fiscal plan with the Certified Fiscal Plan Model in relation to the fiscal measures and final assumptions used for the FY 2022 Certified Budget.
It will also contain updates to federal funding -- including potential additional federal funds that the PRHTA could receive as a result of the Infrastructure Investment and Jobs Act (IIJA).
The revisions will also modify capital expenditures (Capex) disbursement projections -- to reevaluate Capex disbursements based on historical performance, including FY 2022 year-to-date (YTD) actual disbursements, including the most recent third-party estimates on achievable State of Good Repair investment levels, and considering the potential impact of the IIJA on the total baseline capital contributions.
The new fiscal plan will take into account the impact of the commonwealth’s Plan of Adjustment (POA), which would restructure some $33 billion in debt and cut it by 80%, to reflect any payments to creditors required to be made by the PRHTA in connection with the effectiveness of the Commonwealth POA, including any potential initial cash payments and consummation costs, timing of payments, and sources of funds.
The new PRHTA fiscal plan should also take into account economic and demographic updates, inflation, and traffic and transit volumes based on actual trends observed YTD in FY 2022.
By Dec. 10, Gov. Pedro Pierluisi Urrutia should submit a proposed updated fiscal plan to the oversight board.
On Dec. 21, the oversight board sends the governor a notice of violation, as needed. The governor must submit revisions to the board by Jan. 4 of next year and by Jan. 19, the board should certify the new fiscal plan.
The PRHTA and the Puerto Rico Electric Power Authority have yet to restructure their debt. Earlier this week the Title III court completed confirmation hearings for the restructuring of $33 billion in central government debt.