The Financial Oversight and Management Board for Puerto Rico announced the adoption of two new policies to “foster accountability, transparency and efficient dealing” in certain government transactions and public projects.
The Board’s new Rules, Regulations and Orders Policy requires its approval of certain rules, regulations, administrative orders, and executive orders proposed to be issued by the governor or the head of any department or agency to assure that they are not inconsistent with certified Fiscal Plans.
The policy applies to matters related to proposed Puerto Rico Electric Power Authority transactions, matters related to the management and operation of the Office of the Chief Financial Officer, matters related to the right-sizing of the Commonwealth and covered instrumentalities — including those related to procurement, contracting policy, or employee compensation or benefits — among others.
“Oversight is required in all areas impacting the Commonwealth’s ability to deliver on the certified Fiscal Plans,” said Natalie Jaresko, executive director of the Board.
“This policy will help keep everyone accountable to help Puerto Rico achieve fiscal responsibility, regain access to capital markets, restructure outstanding debt, and return to economic growth,” she said.
Meanwhile, under the Board’s new Title V Process Policy, all projects that require obtaining a contract award or request for proposals award from a Commonwealth government agency or a public corporation — not including municipalities — before they can be executed must obtain it before they can be considered under PROMESA’s Title V Critical Projects process.
Moreover, energy-related projects involving PREPA must first have an agreement in place that is validly assumed under Title III of PROMESA.
“This is a policy adjustment in the process we have established for the consideration of potential critical projects under Title V that is well justified in terms of transparency and fair dealing when it comes to public projects,” said Jaresko.
“It would be inefficient for a proponent of a project that requires a contract or RFP award from the government to put the project through PROMESA’s Title V process before having obtained the requisite award from the government, as it may give its proponent an unintended advantage over its competitors,” she said.
Meanwhile the Board’s Revitalization Coordinator, Noel Zamot, said if the agency “determines that a project is a public project, we will request and confirm evidence of the requisite contract or RFP award.”
“Otherwise, [we] will return the project submission to the project sponsor and direct the project sponsor to obtain the requisite award. Non-public projects — i.e., those projects that are private-to-private or that are with a municipal government — will be considered through the Title V process, as it has operated thus far,” he added.