Puerto Rico Board vacates 24 local government expenditures

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The Puerto Rico Oversight Board declared void 24 local government expenditure resolutions dating back to early 2018 leading a representative of the governor to immediately complain that the resolutions had been legally adopted.

Oversight Board Executive Director Natalie Jaresko announced the decision Wednesday in a letter to Gov. Ricardo Rosselló.

“None of the appropriations or reprogrammings contained in these joint resolutions is contemplated by the certified budget for the commonwealth for fiscal year 2018 or 2019, nor were they approved by the Oversight Board,” Jaresko wrote.

In her letter, Jaresko said the Puerto Rico Oversight, Management, and Economic Stability Act gave the board the power to vacate local government spending measures inconsistent with the board-certified budget.

In a second board complaint, Jaresko said that some of the resolutions were enacted nearly a year before submission for review by the board. “As we have repeatedly reminded you, section 204(a) of PROMESA requires the governor to submit enacted laws to the Oversight Board no later than seven business days after enactment.”

The 24 resolutions add up to over $30 million in spending, according to Jaresko.

A few hours after the letter was released, the governor’s representative to the board, Christian Sobrino, responded, “These resolutions were approved as provided by the applicable law and were submitted to the [board], as requested…. The resolutions were presented together with a certification of compliance with the budget and the fiscal plan as required by the PROMESA law.”

A board spokesperson said the first sentence was false because the resolutions were submitted to the board as much as 11 months after they were adopted, whereas PROMESA and the board requires they be submitted to the board no later than seven days after their adoption.

He said the second sentence was false because the resolutions are outside the General Fund. Most of them reallocate unused money from earlier years for new purposes outside the General Fund. PROMESA, the current year’s adopted budget, and federal court decisions all prohibit the local government from doing this without the board’s approval, the spokesman said.

Most of the resolutions provide funds for capital works for the municipalities.

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