President Trump late yesterday reduced the Puerto Rico share of infrastructure rebuilding costs from damage done by Hurricane Maria to 10% from 25%. The amendment to his original declaration providing for disaster assistance could mean hundreds of millions of additional dollars for the effort to repair damaged or destroyed public works in the territory.
The basic Federal disaster assistance law sets Federal-local cost-sharing for infrastructure repair at 75%/25% but authorizes the President to waive the local share. Federal Emergency Management Agency (FEMA) infrastructure repair assistance is generally provided on the 75%/25% basis. FEMA policy is that communities should have to pay at least 10% of repair costs for their infrastructure. After the last hurricane that caused serious damages throughout Puerto Rico in 1998, President Clinton lowered the local cost share to 10%.
According to FEMA, Trump authorized the additional assistance “conditioned upon having extra controls on project cost estimation and project management in place to facilitate the expeditious rebuilding of Puerto Rico’s infrastructure, to allow for cost-effective activities that reduce risk of future damage, hardship, or suffering from a major disaster, and to ensure sound stewardship of federal tax dollars” – in part an allusion to the Puerto Rico Electric Power Authority’s now-being-investigated and now-cancelled $300 million power lines repair contract with a two-person Montana company named Whitefish.
The recent disaster funding law’s authorization for $4.9 billion in loans to Puerto Rico and the neighboring U.S. Virgin Islands included $150 million for the Puerto Rico share of matching costs. Between that and the President’s action yesterday, Puerto Rico may not have to fund much, if any, of the costs of repairing public infrastructure.