Oversight board urges replenishment of emergency reserve
By The Star Staff
The Financial Oversight and Man- agement Board for Puerto Rico an- nounced Thursday that it proposed to the Gov. Wanda Vázquez Garced and the Puerto Rico Legislature to replenish the Emergency Reserve that is part of the certified Fiscal Plan.
Governor Wanda Vázquez Garced in a statement threw her hat behind the idea. “With great enthusiasm, I announce that we have reached an agreement with the Oversight Board to allocate $536 million to the Emergency Reserve, an unprecedented amount that will help us deal with any emergency, including this hurricane season, earthquakes and the current pandemic caused by COVID-19,” she said.
The oversight board proposed to appro- priate up to $536 million from government cash and previous year budget surpluses through a special appropriation to replenish funds tapped by the government, includ- ing following Hurricane Maria in 2017, Tropical Storm Dorian in 2019, the series of earthquakes earlier this year, and the ongoing coronavirus pandemic, the federal entity said in a statement.
“The Emergency Reserve will ensure that the Government has the necessary funds to help the people of Puerto Rico in case of natural disasters and other emer- gencies fast and effectively,” said Natalie Jaresko, the oversight board’s executive di- rector. “The Emergency Reserve established in the 2018 Certified Fiscal Plan has strict rules that ensure the government can use the funds only for emergencies, not for other government expenses.The funds should be available when unexpected disasters strike to provide urgent relief to the residents of Puerto Rico.”
“Over the last 12 months alone, the Emergency Reserve provided direct as- sistance to people affected by the earth- quakes, provided food and shelter, funded the temporary relocation of schools during the pandemic, and provided vital support to municipalities,” Jaresko said. “Now, as we prepare for hurricane season, we can be assured resources will be available to ensure a swift response in case of need.”
The Emergency Reserve is funded every year with a regular $130 million ap- propriation from the island government’s annual budget through fiscal year 2028.The oversight board’s proposed appropriations would replenish the $260 million in com- bined contributions from fiscal years 2019 and 2020, and $276 million the Puerto Rico government used as emergency funding, the statement said.
The proposed special appropriations, together with remaining unused funds from previous years and future Emergency Reserve contributions outlined in the Certified Fiscal Plan, would provide the island government with a total Emergency Reserve of $1.7 billion in 10 years, in line with the International Monetary Fund’s definition of an adequate emergency reserve.