House Natural Resources Committee Issues Testimony From Gov. Rossello
"Hurricane Irma struck
"It is impossible to describe the fury and violence of the storm to people who did not experience it, but the aftermath told the devastating story. The storm left no corner of Puerto Rico untouched. The electric grid experienced a complete failure with damage to every major transmission line, thousands of towers and poles were down, and generation facilities were damaged. For a significant period of time, 100% of the electric grid was down throughout the island. The communications networks were almost all destroyed, meaning 100% of the island had no traditional cellphone service for a period of time. All of the island's ports and airports were unable to operate. Nearly 100 % of fields and crops were wiped outdza devastating blow for a society that already imported much of its food. Small and large businesses were forced to close, wiping out any source of economic activity and revenue for the Government of
"AIR a worldwide, a global leader in catastrophic risk modeling, estimates that the damages caused by Maria correspond to a storm that happens once in 250 to 1,000 years, while Moody's has estimated the damages to be up to
"This is an event that has no parallel in modern American history. During Hurricane Andrew, Tallahassee was up and running, Katrina left
"I became Governor earlier this year with the unenviable task of correcting years of misplaced priorities and insufficient leadership, because as you know long before this hurricane season had started
"A decade-long recession resulted in a loss of over half of the manufacturing jobs. More than half of the population was living below the federal poverty line.
"The dire financial condition of the island created an outmigration movement to
"Although local mismanagement was certainly a significant factor in those crises, their root causes can ultimately be traced to the unequal treatment of the
"As the recent passage of
"It is evident that the cumulative impact of this unequal treatment and incoherent federal territorial policies were fundamental factors that limited investment in
"Recognizing the importance of addressing
"Therefore, I call on
"In doing this I commit to you today that I will lead the most transparent disaster reconstruction in American history. Toward that end I have issued an executive order creating the
"
"I would also like to speak to the immediate disaster response by this administration and specifically Administrator
"That said, the initial response from the federal government was far too slow. This delay has nothing to do with the efforts of the first responders, but rather the spirit of the Stafford Act and Congressional failure to envision a storm the magnitude of Maria hitting
"Specifically, the Stafford Act authorizes
"I would like to work with
The Task of Rebuilding Puerto Rico
"The reality of the conditions on the ground highlights the fact that the job of rebuilding
"I know that the government has the will, vision and commitment to achieve this. We are prepared to chart the course for our future, in collaboration with the Oversight Board, and the support of this Committee,
The Government of Puerto Rico Is Leading the Recovery Effort
"Despite the difficult and challenging circumstances, the Government of
"In the less than two months since Hurricane Maria, I am proud of the fact that the airports and ports are working, that the reconstruction of the water supply is over 85% complete, that over 70% of the communications and cell towers are back in operation, and almost 90% of the supermarkets and 85% of the gas stations are open. Over 42% of the power grid has been restored and, despite substantial disruption to the process, the restoration efforts met the initial targets that I established. Some approximate numbers follow:
* Approximately 15,000 federal civilian personnel and military service members, including approximately 2,000
* 35 states are supporting 143 requests for mutual aid in
* Aid relief and personnel have been put to good, constructive use.
* Approximately 85% of wastewater treatment plants are working on generator power. Improvement will come as the electrical grid is restored.
* Approximately 80% of banks are open.
* The
* Approximately 400 generators have been installed in
* Approximately 1,507 miles of
* Over 95% of hospitals are open in
"The work continues every day and progress is being made. We are working tirelessly and will not stop until the job is done.
Puerto Rico Has Implemented Compliance Measures
"In order to ensure that aid and financial resources are property utilized, I have appointed an independent compliance officer with a background in procurement for the Government. In addition, the Government is developing a Contracting and Procurement Protocol consistent with the Oversight Board's contract approval rights as adopted at its last meeting on
Financial Restructuring and the Role of the Oversight Board
"As we rebuild our infrastructure, the work of financial restructuring continues. The new facts and circumstances make emergence from Title III even more important for
"There is no doubt that the March Fiscal Plan will require significant revisions, including new assumptions and revisions to
"The Oversight Board can help
"But disaster recovery remains within the sole purview of the Government, which comprises elected officials responsible for coordination across the multiple entities and agencies that are rebuilding
"Although PROMESA provides a mechanism for the Oversight Board to be involved in emergency response, the Government is supposed to and must lead recovery efforts with the Oversight Board, reviewing and assessing Government actions to ensure compliance with the certified fiscal plans and budgets. The Oversight Board is entitled to review Government actions and to be informed of all recovery efforts in real time. However, even the Oversight Board, in an
"Despite these challenges, at the moment Hurricane Maria hit
* On
* Then in
* This past Summer, Title III cases were commenced by the
* Almost from the start of those Title III cases, the bondholders unleashed, unrelenting litigation against both the Oversight Board and Government disputing nearly every issue in the case. The Oversight Board and Government worked closely together in responding to litigation fending off attacks by a multitude of law firms and professionals representing various bondholder constituencies.
* The Government and the Oversight Board are completely aligned in defending against fundamental legal challenges raised by the bondholders concerning the legality of the fiscal plans certified by the Oversight Board and the constitutionality of PROMESA under the Appointments Clause of the
* The Oversight Board and the Government have worked collaboratively with the mediation panel of five federal judges appointed in the Title III cases to work with the bondholders to reach a consensual resolution of disputed issues.
"Clearly, the storms have altered the dynamics of the restructuring process, given the uncertainty of the impact of economic growth over the life of the Government's fiscal plans. While both the Government and Board are still assessing the impact of the storms' damage and the impact of that damage on the Island's future economic health, we have agreed that the Title III proceedings should not be delayed.
"Moreover, the Government has been completely transparent with the Oversight Board from the beginning of my administration.
* We have endeavored to respond promptly to all requests for information from the Oversight Board and have never withheld information from the Board that it requested.
* The Government has and continues to submit periodic status reports to the Oversight Board.
* In addition to requests for documents and other information, the Government and its advisors have engaged in near constant dialogue with the Oversight Board and its advisors. The Government and its advisors have joined the Executive Director in weekly meetings where tasks and assignments are given for the Government officials to produce information to the Oversight Board or to undertake necessary financial analysis. Working groups have also been formed with Government representatives and Board representatives meeting to develop long-term plans with points of agreement for PREPA and HTA.
* The Government has agreed to comply with the Oversight Board's contract compliance policy as recently announced at its tenth public meeting and is willing to give the Oversight Board transparency into Government requests for federal funds. All contracts with a value in excess of
* Moreover, I recently issued an executive order directing the appointment of an independent compliance officer at PREPA with a background in procurement.
* The Government has also worked closely with the Oversight Board to advance transparency and provide information to the creditors. To that end, thousands of documents have been made available to creditors in a data room.
"Yet I must express disappointment that in the face of the great lengths the Government has gone to cooperate with the Board, my ex officio designee to the board has been routinely excluded from executive sessions and not given the benefit of gaining insight into the Board's deliberative thinking as well as the Board hearing my positions and views on issues vital to
"I realize that there continue to be disagreements with the Oversight Board with respect to certain narrow issues under PROMESA, but the fact is that the Oversight Board and Government have been united on a vast majority of issues. I respectfully disagree with the Executive Director's statement that these "disagreements between the Oversight Board and Government have resulted in costly delay and litigation."
"PROMESA intended that the Oversight Board and the Government work together in the spirit of collaboration to return
"We believe that the Oversight Board's request that
"Require that the Oversight Board "certify all requests for liquidity advances" from federal loans or relief funds;
"Provide additional tools to monitor the expenditure of federal funds as part of a plan that makes sense for
"Grant the Oversight Board the authority to control the Government and its instrumentalities through the appointment of chief executive officers that are accountable only to the Board; and
"Grant the Oversight Board authority to veto legislation enacted by the
"If the Oversight Board's proposals to this Committee are adopted or somehow acknowledged or linked as a condition to future critical funding for
"For these reasons, I would urge that no such actions be taken by
Conclusion
"This is a transformative moment in the history of
"
"With sustained federal assistance and your leadership and support, I am confident that in time the people of
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