On Tuesday Oct. 10, the Puerto Rico Financial Oversight and Management Board (the “Board”) sent a letter to Secretary of the Treasury Steven Mnuchin calling for the maximum federal assistance to aid the Island.
The letter complements similar outreach by Puerto Rico Governor Ricardo Roselló, who sent a letter to the President and to Congressional leaders requesting that “the hurricane assistance legislation that the House intends to take up this week include, in addition to other critical disaster relief, separate provisions to deal with the Island’s looming and potentially devastating liquidity crisis.”
Puerto Rico, as mentioned by the Board in its letter, does not have the ability to provide essential services, “such as paying the salaries for teachers and first responders, providing healthcare, and paying pensions,” and unless the Government of Puerto Rico receives immediate access to a significant federal liquidity facility, the board estimates that the Government “will run out of money at the end of this month.”
Based on the liquidity needs in Puerto Rico, the Board urged Secretary Mnuchin to consider the proposal that it developed with the Government of Puerto Rico. The Board notes that “the proposal has the flexibility to provide Puerto Rico with the cash that it will need to operate core government services.” Also, the proposal would be integrated “with PROMESA, its monitoring mechanisms, its fiscal reform goals, and the pre-hurricane certified fiscal plans.”
The Board, which was established by the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”), closes the letter by stating the following: “The challenges that Puerto Rico faces are significant but with your leadership, particularly with respect to addressing Puerto Rico’s imminent cash flow deficiencies, we can build a stronger, more resilient Puerto Rico.”