Puerto Rico gov’t begins transition without SEC’s final certification
By Pedro Correa Henry
Special to The Star
Although the State Elections Commission has not begun its general scrutiny due to electoral records from the general elections not adding up, Gov. Wanda Vázquez Garced and governor-elect Pedro Pierluisi began public hearings Monday to initiate Puerto Rico’s government transition process.
Amid a rocky beginning in the Sala Sinfónica Pablo Casals at Luis A. Ferré Performing Arts Center, where connection issues in the lobby bedeviled members of the press situated there to watch the hearings, Pierluisi said the proceedings would be focused first on the COVID-19 emergency, Hurricane Maria recovery funds administration and the next term’s budget allocated by the Financial Oversight and Management Board (FOMB).
“I would mention those three at first because there are so many issues as the transition process covers everything,” the governor-elect said.
As for Pierluisi being the representative before the oversight board, he said it was still correct that he was going to face the oversight board personally, instead of delegating the role to someone else, “but with the support of AAFAF [the Fiscal Agency and Financial Advisory Authority] and other government agencies.”
Meanwhile, Vázquez said one of her concerns, which she has shared with the governor-elect, is for recovery projects to carry on given that her administration “focused for a year and a half on speeding up the approval and obligation of [federal] funds as 78 municipalities currently have approved projects and disbursed money.”
“That relationship between the federal government and the government agencies has been extraordinary and it has allowed projects to start, that towns have funds, and that is the priority, for these projects and any other initiative to go on,” the governor said.
As for the hearings, the Incoming Transition Committee president, Bayamón Mayor Ramón Luis Rivera Jr., spoke with members of the press in the afternoon after connection issues continued during the public hearing. He said one of the issues brought up in the hearings was that there might be a chance of an 86 percent reduction in the negotiated public debt agreement as part of the Puerto Rico Oversight, Management, and Economic Stability Act, which he said would be “fantastic” because it would greatly reduce the amount of money the government owes.
“Now, we have to see if that can be achieved or not after the new member of the oversight board [Justin Peterson] came in, and then he got up from the meeting and stopped that negotiation,” Rivera Jr. said, noting that the reduction under consideration would decrease the debt to $11.9 billion.
Rivera Jr., who won re-election as mayor of Bayamón on Nov. 3, said there are “many positive things and some other issues that need to be worked on.” He said clearer information was required to prove if the consolidation of government agencies has been effective.
“We know that there are some gaps between some and others,” he said. “Another point, which at least this servant is very concerned about, is that there is a large amount of federal money that is going to arrive in the next few years. We are talking about $83 billion in the next 15 years. But we are worrying about the first four.”
Meanwhile, the Incoming Transition Committee president said one of his greatest concerns, one that AAFAF Executive Director Omar Marrero confirmed at the hearings, was the lack of manpower, as well as certain materials, in the construction industry.
“We had before more than 100,000 employees working in the construction field. At this moment, there are only 30,000 people working. There’s not enough manpower; we could have all the money, but if we don’t have the workforce, we’re going to face difficulties,” he said. “For the amount of money that will arrive and the number of projects that could be generated, there’s not enough aggregate in Puerto Rico, which are different-sized stones used in construction projects.”
Rivera Jr. said that due to the gravel shortage for construction, the new government has to negotiate with the federal government “to allow bringing aggregate from neighboring islands to boost construction projects in Puerto Rico” as this will promote economic growth on the island.
The Bayamón mayor-elect also expressed concern about the Coronavirus Aid, Relief, and Economic Security (CARES) Act funds, as there are $1.2 billion left unspent and the government has until Dec. 31 to at least allocate their use.
“We’re talking about a big amount here, and looking at different alternatives for maximizing the use of these funds, [the concern is] that the federal government doesn’t decide to provide an extension and we lose that money,” he said.
When asked by a member of the press if the new government would be responsible for implementing the Incentive Retirement Program and Justice for Our Servants Acts 80, 81, 82 of 2020 with the oversight board requesting a government workforce reduction in order to mitigate costs, Office of Management and Budget Director Iris Santos said that, at the moment, the government has provided all of the information that the oversight board requested through AAFAF and the Government and Judicial Administration Employees Retirement Systems.
“The board continues requesting information, and as petitions come by, we continue responding,” Santos said, adding that the oversight board has the last word. “At the moment we are evaluating, because there are a number of employees who are eligible for Act 80; we are in the process in which these employees are determining if they want to take part in it or not. Once they are done, we will be aware of the impact that the act would have.”
As for $8 million for the liquidation of around 800 government trust employees, Santos said this is according to the law, and no other bonus is being considered. Meanwhile, the government is still looking for $3 million to complete the disbursement.
“It’s still a bit premature because we don’t know how many trust employees will keep working [for the government],” Santos said. “We don’t have an official list available. There’s been a separation of some trust employees who have returned to their career employment; therefore, taking away their liquidation benefits,”
As for the Christmas bonus for public workers, she said the government is $23 million short of being able to pay for it this year.
“I want you to understand that we have submitted the petition to the FOMB,” Santos said. “We are talking about approximately $63 million for the Christmas bonus for all government employees and we are identifying $23 million, which is what we would be lacking.”
Along with Marrero and Santos, Treasury Secretary Francisco Parés participated in the public hearings, where he spoke about the process the agency took upon itself amid the COVID-19 pandemic to address refunds and the federal economic stimulus.