Working Capital Advance program launched to move municipal reconstruction projects
Revisions to the Disaster Recovery Financial Management Guidelines have given way to the Working Capital Advance pilot program, through which the government can advance up to $375 million to municipalities so they can move forward with their reconstruction projects.
In a news conference, Gov. Pedro Pierluisi and Central Office of Recovery, Reconstruction and Resiliency (COR3) Executive Director Manuel Laboy offered details of the program that was established given the reality that many municipalities lack cash in hand to start their projects, something they said, “is essential for the reconstruction to continue advancing.”
The municipalities that request and qualify under the pilot program’s requirements, will receive 25% of the money obligated by the Federal Emergency Management Agency (FEMA) for the project they select. With these funds — which will be disbursed within seven to 10 business days — the municipalities can start with those permanent works that are stalled.
“This initiative will be vital for thousands of projects to begin their execution without delay,” said Laboy.
Once the municipalities receive the funds, they must submit a status report of the progress of the project within 90 days. Some 1,700 municipal projects could be eligible and represent $1.5 billion of the funds obligated by FEMA.
“The ongoing advances in the reconstruction and renovation of our infrastructure are essential for us to have the modern and resilient footing on which we are building future economic development for Puerto Rico,” Pierluisi said.
COR3 will make changes to Chapter 7 of the Disaster Recovery Financial Management Guidelines in June, when the agency will conduct training workshops.
The modifications to the reimbursement and funding advance policies respond to an announcement made in September 2021 related to eliminating the 2019 Agreement, which allows making the validation process of project disbursement requests more flexible for all subrecipients.
“As part of the adjustments and in response to a request from the mayors, the discount for the insurance payment to the municipalities will be made as the project progresses and the money will not be deducted in one fell swoop,” said Laboy.
“These are just some of the changes that we will make so that the subrecipients have greater liquidity, without risking compliance with state and federal statutes,” he said.