PDP denounces $323 million bond issue, accuses mayor of fiscal negligence

By THE STAR STAFF

The San Juan delegation of the Popular Democratic Party (PDP) on Sunday denounced what it described as a pattern of fiscal negligence in the capital city’s government following the approval of a $323.7 million bond issue by the Financial Oversight and Management Board.

According to PDP leaders, $209 million of the bond issue will be used to refinance debts dating back to 2007 and later years, a move they said shifts the burden of repayment onto future generations of San Juan residents.

 Ingrid Colberg Rodríguez, the PDP spokesperson in the San Juan City Assembly, said at a press conference that the board’s determination “will transfer the burden and compromise future generations of San Juan residents.”

PDP Secretary General Manuel Calderón Cerame said the $209 million refinancing approved by the board, rather than reducing San Juan’s debt, shifts it onto future generations of city residents.

“This action by Mayor Miguel Romero repeats the pattern of negligent fiscal administration that led Puerto Rico’s central government into bankruptcy: borrowing today, deferring payment into the future, and presenting it as if it were an achievement,” Calderón Cerame said.

Colberg Rodríguez said annual payments are lower only because 60 percent of the debt is not being paid down but postponed. In 2033, she said, “the next generation of San Juan residents will have to face a balloon payment of $123.9 million that Romero did not want to pay today. That is not responsible fiscal management.”

The municipal legislator also said 90 percent of the debt now being refinanced was incurred under the administrations of former Mayor Jorge Santini and current Mayor Miguel Romero.

“Instead of correcting that legacy, Romero perpetuates it, extends the maturity dates of debt that has been circulating for two decades, amortizes it minimally and transfers it in full to those who govern after him,” Colberg Rodríguez said. “This is exactly what the central government did before Title III: live on credit and let others pay the bill.”

Colberg Rodríguez said there was no fiscal need to justify the refinancing. She noted that over the past four to five years, the Municipality of San Juan increased its revenue from municipal license taxes and other collections.

“When revenues rise, the sensible thing to do is reduce debt, not defer it,” she said.

Colberg Rodríguez and Calderón Cerame said the outlook is more troubling when considering projections in the board’s own certified fiscal plan, which anticipates a 17 percent population decline between 2029 and 2053 and an accelerated aging of the tax base.

“The San Juan community that will have to pay the $123.9 million in 2033 will be smaller than today’s,” they said. “The extraordinary revenues from 2020 to 2026, partly the result of post-pandemic federal funds and nonrecurring construction activity, cannot be guaranteed at that time.”

They also said another ordinance filed the same Friday for a second $123.5 million financing does not mention any of those risk factors in its analysis.

Colberg Rodríguez said she submitted a formal request to the oversight board asking that authorization be postponed until an exhaustive, independent and transparent evaluation was conducted and all information needed for the public to assess the fiscal advisability of the transaction was disclosed. However, she said, the board approved the financing the same day the proposed ordinances were filed.

“Decisions on public debt cannot be evaluated from the perspective of who governs today; they must consider who pays tomorrow,” Colberg Rodríguez and Calderón Cerame said. “The mayor benefits now and commits future San Juan residents.”