Dealing with Puerto Rico government agencies, needless inefficiency, time wasted, outdated information, DMV, DTOP, CESCO

A reader reports on a recent horrible experience in attempting to renew their car registration.   We would like to emphasize that this person made an extreme effort to comply with the law, but ran into numerous roadblocks.

Person received a $50 parking ticket in June 2017, paid the ticket 31 days later, was charged a $10 late payment fee, for a total payment of $60.   It was considered late after 30 days, so only 1 day late.

December 2018, person went to a CESCO site as listed on DTOP to renew their annual car registration sticker, known as the “marbete.”

http://www.dtop.gov.pr/servicios/det_content.asp?cn_id=184

METROPOLITANO (Carolina)
Dirección Física: Antiguo Edificio Baxter Bo. San Antón Carr. 887 Esq. 848, Km. 8 Hm. 4 Carolina, PR 00985
Dirección Postal: P.O. Box 41243 Minillas Station San Juan, PR 00940-1243
Teléfono: (787)757-4151 Directo
(787)701-3343 Cuadro
(787)701-3344
(787) 757-5141 Fax
Horario: L-J= 7:30am-6:00pm
V=7:30-5:00pm
S = 9:00-1:00pm

While this location is listed on DTOP’s own website, this location has been closed for OVER 4 years.  Why direct people to go to a location that is no longer open for business!?!?  Furthermore, when person tried to call the listed phone numbers, no one answered the phone.  Day 1 wasted.

Next the person was told they could go to any bank to buy the marbete.  They went to 2 banks where one said their electronic system was down and the second bank said they ran out of forms.  At the second bank, they were told they couldn’t buy the marbete anyway because there was a $50 fine on their record.  This was the same fine that the person had paid off the previous year and had a receipt to prove it.    This person was also upset that when they paid their fine in June of 2017, they were charged an extra $10 late fee for a total of $60, yet it showed $50 due on the registration paperwork.  So, not only did the person pay off their $50 fine and an extra $10 that wasn’t required, the fine never was removed from their record.  Day 2 wasted.

The person found the correct location for CESCO at

http://www.dtop.gov.pr/tramites_cesco.asp?id=17&cn_id=19

Oficina Cesco: Metropolitano
Dirección Física: Puerto Rico Industrial Park, Marginal Carr. KL 12.0 HM 5, Lote 9 Bo. Canovanillas, Carolina PR 00985
Télefono: (787) 757-4151
Horario: Lunes a Viernes de 7:30 a.m. a 6:00 p.m. Viernes de 7:30 a.m. a 5:00 p.m.Sábados de 9:00 a.m. a 1:00 p.m.

However, when they went to the second CESCO office on Saturday, they were told that the people who could remove the fines that were already paid from their record, could not complete this task, since those government employees don’t work on Saturdays.  This person asked to speak to the director at this CESCO office to relay their experience, but a worker who went to get the director said the director refused to speak with them, bringing back a blank sheet of paper saying the director needed their comments in writing.  This director should be fired for having such an uncaring attitude, unwilling to listen to feedback.  Day 3 wasted.

Furthermore, this person is not only driving with an expired registration, but also driving without insurance, since the system is making it unduly burdensome and cumbersome in their attempts to comply with the law.   This person said the car insurance company wouldn’t allow them to insure the vehicle until AFTER the registration is renewed.   Nor could they buy the required minimum $4000 liability insurance for $99 from a gas station inspection location that sells the marbetes, due to the $50 fine that they paid over a year ago still being on their record.

So, is it true as the government slogan goes, “Puerto Rico does it better?”  If “it” means wasting your time, being inefficient, then yes.

What should be done to fix these types of problems in PR?

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Posted in analysis and opinion, culture and cycle of dependency, DMV aka DTOP, government offices, incompetence and mismanagement, Puerto Ricans and Puerto Rico people, Puerto Rico necessary improvements, Puerto Rico politics and government | Tagged , , , , , , , , , , , , | Leave a comment

The Hidden Problems With Puerto Rico’s Water Supply – Pollution, groundwater contamination

https://www.atlasobscura.com/articles/puerto-rico-hurricane-water-contamination

The Hidden Problems With Puerto Rico’s Water Supply

Hurricane Maria exacerbated long-term issues, and researchers are only just starting to understand how.

Directing water from a cave spring to drinking water containers in Corozal, Puerto Rico, in October 2017.
Directing water from a cave spring to drinking water containers in Corozal, Puerto Rico, in October 2017. Jessica Rinaldi/The Boston Globe/Getty Images

In Dorado, Puerto Rico, the problems with the water began in the 1980s, when industrial solvents and dry cleaning compounds started to show up in local wells. Over the next three decades, when officials from Puerto Rico’s water authority and health department came to test the water, they kept finding contaminants. By the 1990s the problem had become troubling enough that wells began to be shut down. By the 2000s, the Environmental Protection Agency (EPA) was searching for the source of the pollution.

Whatever was leaking these compounds into the groundwater, the federal agency couldn’t find it. But the contamination was only getting worse, and in April 2016 the EPA proposed putting the Dorada water system on the national list of Superfund sites—the most contaminated places in the country.

This past October, in one of the many headline-making incidents that followed Hurricane Maria, workers from a local utility opened one of those contaminated wells near Dorado and started distributing its water to desperate people who had no other option.

For months after the hurricane, without electricity, surrounded by damaged infrastructure, Puerto Ricans struggled to find clean water after sewage, gasoline, and more was swept up in floodwaters. But the island’s underlying geography, along with a history of poor investment in the water system, have made contamination a long-standing problem in the island territory. Researchers are trying now to understand and measure just how much the storm exacerbated these issues.

Flooding in San Juan after the storm.
Flooding in San Juan after the storm. Sgt. Jose Ahiram Diaz-Ramos/PRNG-PAO

Underneath the northern coast of Puerto Rico lies a karst aquifer, a geologic formation of limestone where, over time, rain dissolves the rock to form tiny fractures, streaming rivulets, and giant caves. When rain falls, that maze of spaces collects and stores generous supplies of water. “It’s a unique geologic environment,” says Ingrid Padilla, a professor of water resources engineering at the University of Puerto Rico. “It’s highly complex and very difficult to simulate.”

Many other types of aquifers collect water that seeps through layers of the ground, which serve as a natural water treatment plant and filter contaminants out. But karst aquifers don’t have that same advantage. “The same exact characteristic that allowed water to flow through allows the contaminants in,” Padilla says. As reliable sources of water, karst aquifers attract human settlement. But even in the absence of a dramatic spill or clear sources of pollution, contaminants sneak into the groundwater as neighborhoods and industry grow.

This danger is compounded by Puerto Rico’s systems of pipes, pumping stations, and treatment plants, which has registered more drinking water violations than any other state or territory in the United States, as the Natural Resources Defense Council (NRDC) reported in the spring of 2017. According to data analyzed by the environmental group, close to 70 percent of the island’s population gets its water from sources in violation of federal health standards for drinking water.

Evaluating a water source in the wake of Hurricane Maria.
Evaluating a water source in the wake of Hurricane Maria. Environmental Protection Agency

These violations are caused in part by the degradation of Puerto Rico’s water infrastructure, which is riddled with leaks that make the system vulnerable to further contamination. “There’s been a lot of disinvestment in water treatment plants and water pumping stations,” says Mekela Panditharatne, an NRDC lawyer who specializes in water.

The hurricane had a direct, dramatic impact on these existing problems. Across the island, taps stopped running and floodwaters rushed in, covering cars and houses. Padilla, the water engineering professor, remembers the water seeping in under her door being white and brown. “I was thinking, ‘That could be contaminated water,’ right in the middle of the hurricane,” she says.

Part of Padilla’s work on the ongoing groundwater contamination is to measure contaminants in the water people use, and to see if they have any connection to preterm births, a widespread problem in the territory. But when she and colleagues first thought to start sampling the water after the hurricane, they found roads blocked and cars commandeered by federal authorities. Even when they were able to make it to test sites, it was often impossible pump water from the usual sources. “There were limitations on what we were able to do,” she says. “We finally were able to start sampling after a month.”

Surveying the damaged Guajataca Dam.
Surveying the damaged Guajataca Dam. Airman 1st Class Nicholas Dutton/U.S. Air Force

Clearly the hurricane had an impact on the island’s water quality in the short term, but Padilla is interested in its far-reaching impacts as well. “The impact by chemicals is generally longer term,” she says. “You’re not going to see that the next day.” The influx of floodwater could also have diluted the contaminants that had been a problem in the past. Those levels could be quick to return.

Now that conditions on the islands are finally starting to improve—Padilla got electricity back only in the past couple of weeks, she says—researchers are starting to think about their next steps. Another group is planning to work with local nonprofits and schools to sample water supplies around four other Superfund sites, including a battery-recycling facility and a naval training center, contaminated by munitions tests, in order to identify new risks of exposure.

In the first months after the storm, even the EPA had trouble accessing all the Superfund sites on the island—24 in total—but as of February the agency says it has assessed every one and found no major spills associated with the storm. Returning to the status quo, though, is far from ideal. Even before the storm Puerto Rico needed more than $2 billion to fix up its water infrastructure, and now the island needs billions more just to rebuild.

Posted in geography and landscape, incompetence and mismanagement | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Multi-million dollar contracts for Tu Hogar Renace, in English, Your Home Reborn

https://www.elnuevodia.com/english/english/nota/multi-milliondollarcontractsfortuhogarrenace-2462136

See this link for NY Times article referenced here.

https://puertoriconewcomer.wordpress.com/2018/12/01/3700-generators-and-666-sinks-fema-contractors-charged-steep-markups-on-puerto-rico-repairs

Multi-million dollar contracts for Tu Hogar Renace

The program concludes at the end of 2018

Tuesday, November 27, 2018 – 11:11 AM

By Wilma Maldonado Arrigoitía

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In just one year, the Department of Housing has granted two companies more than $214 million in contracts to work with the temporary assistance program after Hurricane María.

Fernando Gil Enseñat, Secretary of Housing, confirmed that Rising Phoenix Holdings Corporation (owner of Adjusters International) and Hage & Integra work directly with Tu Hogar Renace (Your Home Reborn) program.

With a $207 million contract, Rising Phoenix was entrusted with the repairs of minor damages in residences, through services provided by seven contractors throughout the island.

While at a 7.2 million cost, Hage & Integra was hired by Housing to supervise Rising Phoenix work as manager of Tu Hogar Renace, which is a local initiative paid with Sheltering and Temporary Essential Power program (STEP) funds.

Rising’s $132,849,389 original contract has been amended three times. The second amendment, made in July 2018, added just over $74 million on the grounds that the estimated 75,000 homes to be repaired increased to 117,000.

On January 4,2018, Rising Phoenix, created in 1985 in Delaware, was registered in the Puerto Rico Department of State as a foreign corporation authorized to do business on the island. The next day the contract with Housing was signed.

Stephen T. Surace, senior vice president of Adjusters International is listed in the Department of State´s registry as the official in charge of this company.

Hage & Integra is a joint venture. The first $2.1 million contract was granted on November 29,2017, before the hiring of Rising. The contract, which expires on March 31,2019, was amended five times, according to the registry of contracts of the Office of the Comptroller. Three of those amendments totaled $5 million.

The agreements have been signed by Samir El Hage Arocho, whose local professional services corporation, Hage Consulting, also had contracts – this year– with the Department of Housing and the Public Housing Administration related to engineering and consulting services, as it appears in the registry of contracts of the Comptroller.

Yesterday, The New York Times published an article questioning the charges that Tu Hogar Renace contractors impose for the purchase of some materials, a complaint also raised on the island, including Popular representative Luis Vega Ramos, who is mentioned in the article.

The article includes testimonies of homeowners that are convinced that the price of some items or materials used in the repair of their homes was overestimated.

In reaction to the article, the Secretary of Housing rejected these allegations and defended the Tu Hogar Renace project, which he said has repaired 110,000 homes.

He stated that complaints related to the project represent less than 10 percent of the cases they have worked with.

“The use of (materials) for each home is being correctly overseeing with the program’s manager, according to the inspections of the contractor,” said Gil Enseñat.

The official said, according to that alleged oversight, that the average allocation per residence was $ 10,000 and not $ 20,000. Homeowners could receive up to $20,000 in aid.

“It’s not that we do not want to use the $20,000 per house, it’s that they did not need that. We cannot use something that the house does not need because we would be in breach of contract,” he said.

However, among the concerns publicly expressed by some homeowners is the availability of some contractors to change items without checking their damage.

The official said that the prices (of the materials) are the same for each work, regardless of which contractor did the work, because they established an average among the prices submitted by seven construction companies.

 

 

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$3,700 Generators and $666 Sinks: FEMA Contractors Charged Steep Markups on Puerto Rico Repairs

 

Sounds like 80% of the FEMA funds were wasted.  Wouldn’t the money have been far more effectively spent in direct payments to the victims, with a mechanism restricting those checks payable only for home repairs?  The widespread culture of corruption, incompetence, mismanagement, and waste will prevent Puerto Rico from prospering.

$3,700 Generators and $666 Sinks: FEMA Contractors Charged Steep Markups on Puerto Rico Repairs

FEMA is spending more than $1 billion on emergency repairs to homes in Puerto Rico damaged by Hurricane Maria, but much of it is going to contractors charging steep markups and overhead.

Lisandra Oquendo and Alexis Morales Ortiz at their home in Punta Santiago, P.R.CreditSaul Martinez for The New York Times
Image

Their house had been approved for $18,000 in FEMA repair funds, but little was accomplished with the money.CreditSaul Martinez for The New York Times

SAN JUAN, P.R. — Juan F. Rodríguez had substantial damage to his house in northeastern Puerto Rico after Hurricane Maria slammed through in September 2017, but he felt better when he was told that the Federal Emergency Management Agency would pay for $5,000 in repairs.

The contractor hired by Puerto Rico’s FEMA-financed housing recovery program treated the roof with sealant, replaced four feet of cabinets and installed smoke detectors around his house with Velcro.

“I looked around and said, ‘Wait a minute, that treatment costs $100, and I can buy those cabinets for $500,’” Mr. Rodríguez said. “I know. I worked construction. Let’s say they did $2,000 worth of work, because prices are high now and you have to pay for labor. But $5,000?”

Mr. Rodríguez wasn’t the only homeowner who complained after the devastating storm — the worst to hit Puerto Rico in 89 years — that federal taxpayers were being charged far more for emergency home repairs than residents ever saw in improvements to their homes.

Extravagant markups, overhead and multiple levels of middlemen have helped lead to huge costs in the FEMA-financed repair program. Known as Tu Hogar Renace — Your Home Reborn — the program is spending $1.2 billion in Puerto Rico to repair up to 120,000 homes.

More than 60 percent of what FEMA is spending in the program, the largest emergency housing program in the agency’s history, is not paying for roofs, windows or doors, The New York Times found in a review of its expenditures. Instead, it is going toward overhead, profit and steep markups.

Homeowners, who were approved for up to $20,000 each in aid, in nearly every case received less than half of what they were approved for, while layers of contractors and middlemen took the rest, a review of hundreds of invoices and contracts associated with the program shows.

The significant costs of transportation, warehousing, insurance and other services that are built into the prices for repairs are not unusual for FEMA disaster relief programs, which reflect the substantial expense of operating in disaster zones. But in Puerto Rico those costs were often so much greater than what would have been possible if homeowners had done the work themselves that they caused a public uproar.

A local opposition legislator, Luis Vega Ramos, called the housing program, which is operated by the Puerto Rico Department of Housing with FEMA funding, a mixture of “incompetence and corruption.” He called for federal investigators to examine the contracts awarded to repair companies to make sure the government was getting what it paid for.

 

“The government’s responsibility is to watch out, to be custodians of the proper and effective use of those funds,” he said. “I don’t understand why they need to pay hundreds of millions of those dollars to middlemen who turn around and permit overpricing.”

The pricing issues and widespread complaints of long waits and shoddy work highlight the challenges of managing a billion-dollar disaster aid program in a region that is far from the mainland, with institutions that historically have had limited outside oversight or accountability.

Puerto Rico housing officials said they were proud of the repair program, and that prices were in many cases less than those paid in other disasters, including repairs after Hurricanes Irma and Maria hit the Virgin Islands, which have similar transport challenges.

Michael Byrne, FEMA’s federal coordinating officer for Puerto Rico, said the housing department had done an impressive job of getting homes repaired quickly for people who had nowhere else to turn.

“By the end of November, I fully expect them to have repaired about 120,000 homes,” Mr. Byrne said. “That’s pretty impressive.”

Records show a large gap between the amounts FEMA contractors hired by the Department of Housing were paid and the actual cost of the work that was ultimately performed. Across the board, from removing debris and cleaning mold to repairing roofs and installing appliances, the amounts for labor and materials that were paid to the people who actually performed the work were only about 40 percent of what FEMA was assessed, meaning homeowners got less help than many of them expected.

In case after case, a door worth about $50 would be billed to FEMA at perhaps $700, with a succession of intermediary contractors passing along costs and profits along the way, according to María Elena Villalobos, who worked as both an inspector and an administrator for several companies in the housing repair program. “A lot of the money went down the drain,” Ms. Villalobos said.

The Tu Hogar Renace program was intended for homes that were not damaged enough to be considered destroyed, and could be made habitable with relatively quick remedies like roof repairs, electrical work and the replacement of doors and windows, sinks, toilets and appliances.

The housing department hired seven major contractors to do the repair work and two more firms to manage the program. The job was so expansive and the timeline so tight that the companies hired subcontractors, who in turn hired smaller companies to carry out the actual repairs.

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Thousands of Puerto Ricans are still living in ruined homes.CreditDennis M. Rivera Pichardo for The New York Times
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Money allocated by federal programs was barely enough to cover repairs for many homeowners.CreditDennis M. Rivera Pichardo for The New York Times

The private company that received a separate $202 million contract to manage the overall Tu Hogar Renace program, Adjusters International, was itself run by a former senior FEMA official, Daniel A. Craig, who worked at the agency during the Bush administration and was the Trump administration’s nominee to be deputy director of FEMA last year. He was forced to withdraw after the Project on Government Oversight let some members of Congress know that the inspector general’s office had investigated Mr. Craig for going on job interviews with companies that had received no-bid contracts after Hurricane Katrina.

The investigation found no evidence of wrongdoing, but Mr. Vega, the Puerto Rican opposition legislator, questioned how Mr. Craig’s company had come to be selected to run the program. Adjusters International was chosen by the housing department after a bidding process.

Mr. Craig, in an interview, said his company won the contract as a result of its capabilities, not because of any past connections to FEMA. Contracts establishing prices for goods and services were not within the scope of his company’s management oversight, but were handled directly by the housing department, he said.

Mr. Craig’s company was not the only one with connections. One of the seven major contractors doing the repairs for Tu Hogar Renace — Excel Construction, based in Baton Rouge, La. —  donated $100,000 in 2016 to Trump Victory, a joint fund-raising committee set up by the Trump campaign and the Republican National Committee.

The bureaucracy around the housing repairs was so complex that the first repairs did not begin until more than five months after the hurricane. A full year after the September 2017 storm, a New York Times review found that thousands of Puerto Ricans were still living in ruined houses. For many of them, the FEMA money left over after trickling down through so many middlemen hardly made a dent in what they needed.

Lisandra Oquendo, who lives in Punta Santiago on Puerto Rico’s eastern coast, was told that her house had been approved for $18,000 in FEMA repair funds, and she was stunned at how little was accomplished with the money. The contractors patched up her roof, gave her a generator, replaced more than a dozen broken window crank operators, installed several appliances, two windows and a door, and cleaned mold off the walls. But because her roof is made of concrete, she said, they told her they could not repair it.

“They said, ‘We don’t do paint, we don’t do floors, we don’t work with cement,’” she said. “So what do you do?”

Contractors have said that the rates they collect cover a variety of expenses, including shipping fees, workers’ compensation insurance, vehicle and warehouse rental, taxes and profit. But prices charged for equipment and appliances often bore little relation to what was charged on the retail market, even in storm-ravaged Puerto Rico.

According to Department of Housing records, FEMA paid for about 12,400 people to receive generators at a cost of $3,700 each. The 5,500-watt portable devices and supplies they came with cost the contractors about $800 each, other documents show. FEMA paid $666 apiece for new bathroom sinks, but the contractors who actually bought and installed them paid $260 apiece. FEMA paid almost $4 a square foot to repair roofs; the work was done by subcontractors for $1.64 a foot.

The deal the Department of Housing signed required smoke detectors in every sleeping area, so each of the 122,000 houses in the program was equipped with the devices, for which FEMA was billed $82 apiece. A receipt reviewed by The New York Times showed that one subcontractor ordered them in bulk from an Ace Hardware store in the city of Aguadilla for $6.99 each.

“Fifty-eight percent is being taken off the top as overhead and profit from the two contractors above us,” said Brandon Padgett, owner of BVP Construction in Houston, which conducted repairs on 52 houses under the program. “Is there 58 percent overhead and profit needed to implement this? No, because we are doing 90 percent of the work.”

Several smaller companies, including Mr. Padgett’s, which were required to buy their materials from the middlemen, registered complaints with FEMA and with Puerto Rico’s consumer affairs agency, saying that the markups amounted to illegal price gouging.

James Little, who owns J & G Construction in Texas, a company hired as a subcontractor to carry out repairs, said that a lot of the markup was legitimate, because the principal contractors who split up the work had to rent vehicles, pay for warehouses and fly hundreds of people to the island. But some of it, he said, was just greed.

Both Mr. Little and Mr. Padgett are involved in payment disputes with LionsGate Disaster Relief, the Louisiana subcontractor that hired them.

A LionsGate official said prices charged for repairs were reasonable, given the constraints under which companies were operating in the aftermath of the storm, which left large areas of the island facing fuel and supply shortages.

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José Luis Aponte Cruz and Wanda Millán Ruiz at their home in Punta Santiago.CreditErika P. Rodriguez for The New York Times
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Ms. Millán said her husband had to reinforce the job Tu Hogar Renace did, because the workers who came did not have any wood or enough nails.CreditErika P. Rodriguez for The New York Times

“The prices in Puerto Rico are a little bit higher than what we are used to,” said Kristopher Clark, the chief operations officer for LionsGate. “It’s not a crazy high price. It’s enough for us to make a little bit of money, and enough for the subs to make a little bit of money.”

He said he paid a markup on materials to the two larger companies that hired him. He also charged markups and service fees to the smaller companies that he brought on. But he denied that the prices were unreasonable. “I know our margin is stiff,” he said. “It’s a difficult margin to navigate if we are not doing volume.”

One of the prime contractors that hired Mr. Clark, J.W. Turner Construction, is a veteran disaster relief company that has worked on a number of previous disaster relief programs managed by FEMA. The owner, James W. Turner, said that in several of those cases, the prices charged were even higher. In Puerto Rico, he said, it was insurance and local taxes that brought up the rates.

“The profit percentage is going to be lower in each house in Puerto Rico than any house we have ever done,” Mr. Turner said.

Francisco Díaz-Masso, the owner of a Puerto Rico construction firm that is another one of the prime contractors, said he had to fly in materials because of the urgency of the project, which drove up costs.

“That rate doesn’t show in that price all that’s behind it, all the logistics, the amount of effort, the amount of people putting all this together, the pre-purchasing of most of this,” Mr. Díaz-Masso said.

The Department of Housing said Tu Hogar Renace guidelines for awarding contracts and setting prices were approved by FEMA. The prices charged for equipment and services were opened to bidding and then chosen by a process called “interquartile range,” where the low and high outlier bids for each item are eliminated and all the companies agree to be paid the middle price.

A Department of Housing evaluation committee awarded contracts to all seven companies that submitted bids on time.

FEMA officials said the agency uses a nationwide construction cost database to establish prices, adjusted for “supply chain challenges” in a place such as Puerto Rico.

“Looking at individual line item prices can be inaccurate and misleading,” Mr. Byrne, FEMA’s federal coordinating officer in Puerto Rico, said in a statement. “It doesn’t take into consideration the context of actual location, difficulty of installation and other factors. We will not pay costs that cannot be justified. As with all FEMA programs, we will do a rigorous analysis of what was actually expended. We will only pay for things that were reasonable.”

In an interview with the local Telemundo station, the housing secretary, Fernando Gil Enseñat, suggested that the high prices did not matter, because FEMA was paying them.

“The people, the beneficiaries, don’t have to pay a single cent — these are federal funds,” Mr. Gil said. “If the person had to pay that, obviously that would worry me a lot.”

PR NEWCOMER NOTE:  What an ignorant comment!  Money isn’t free.  Taxpayers paid the money that goes into government coffers.  High prices matter because that leaves less money to go around for where it is most needed.  Mr. Enseñat, with that type of wasteful attitude, should be fired.

The housing department declined to make Mr. Gil available for an interview.

Mr. Craig, the ex-FEMA official managing the program, emphasized that Tu Hogar Renace will be the largest undertaking ever attempted under FEMA’s emergency shelter program. He said the program has delivered what it set out to do during a year when much of the island was without electricity and transportation connections were extraordinarily difficult.

“It has been done very efficiently,” he said. “Costwise, for the island of Puerto Rico to get that many people back in their homes that quickly is an incredible undertaking for the program itself, the government of Puerto Rico and the Department of Housing of Puerto Rico.”

Frances Robles is a national and foreign correspondent based in Miami. Before joining The Times in 2013, she worked at the Miami Herald, where she covered Cuba and was based in both Nicaragua and Colombia.

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Puerto Rico’s unlikely financial bounceback

https://www.axios.com/puerto-ricos-unlikely-financial-bounceback–cd785c49-86ef-4527-83e8-67350cda23f3.html

Puerto Rico’s unlikely financial bounceback

Puerto Rico was the poorest and most struggling part of America even before Hurricane Maria hit in September 2017. Its bonds had been in default for over a year, and were trading at around 60 cents on the dollar before the hurricane knocked them down to a low of less than 23 cents in December 2017.

Today, those bonds are back to their pre-hurricane levels, and Puerto Rican debt has proven to be 2018’s top bond investment.

Very few people are happy about this development, beyond the distressed-debt specialists who own the bonds.

  • The back-of-the-envelope math is simple: If Puerto Rico has $70 billion in debt, and it gets paid off at (say) 71 cents on the dollar, that’s $50 billion being sent off the island at precisely the moment that the Puerto Rican economy needs all the financial help it can get.
  • That $50 billion outflow will do nothing to help, and quite a lot to harm, the island’s recovery from Hurricane Maria.
  • Puerto Rico will end up receiving about $82 billion of disaster relief money — much more than most people expected it would get, this time last year.
  • As ever, official disaster-relief sums dwarf charitable inflows: The Red Cross raised $72 million for Puerto Rico, including the value of donated goods. That’s less than 0.1% of what’s going to end up being spent by the federal government.
  • Trump has accused “inept politicians” in Puerto Rico of using disaster relief money to repay their debts. And though all disaster relief money is going to be used on disaster relief, it’s certainly true that without the $82 billion coming in, there’s no way that Puerto Rico could afford to spend $50 billion paying back its debts.

Puerto Rico needs that $50 billion, even after the disaster relief inflows. Its pension liabilities alone are more than $50 billion.

  • More than 40% of the population currently lives below the poverty line, including about 60% of children on the island.
  • Since the financial crisis, Puerto Rican GNP has shrunk by 20%, labor participation has hit a record low of 38%, and the island’s population has fallen by 10%.
  • Student enrollment has declined by more than 50% since its peak in 1980, and by about 33% in the past decade.

Puerto Rico has mind-boggling amounts of debt, given its size and the fact that its population is going to continue to shrink indefinitely.

  • The island’s debt load is 55% of GDP, compared to a US state average of 2.6%. It’s also equivalent to 102% of state personal income, vs an average for U.S. states of just 2.9%.

The bottom line: Bondholders will always push to receive as much as they can possibly get. But Trump and the island’s elected politicians are right to worry about money flowing out, just when Puerto Rico needs it most.

Posted in bad businesses and organizations to avoid, culture and cycle of dependency, Hurricane Maria and after effects | Tagged , , , , , , , , , , , , , , , , , | Leave a comment

Trump gripes he gets ‘no credit’ for relief efforts in Puerto Rico

https://nypost.com/2018/11/29/trump-gripes-he-gets-no-credit-for-relief-efforts-in-puerto-rico

Trump gripes he gets ‘no credit’ for relief efforts in Puerto Rico

“You know we’re trying to save money, you know I’m cutting budgets and we’ve cut a lot of budgets,” the president told The Post in an Oval Office sitdown Wednesday when asked about the hefty price tag for upgrading the Hudson River rail tunnels.

“But you know we had a thing called hurricanes and fires that happened that had a huge impact on the numbers,” he continued.

“On the money that’s being spent, and a place where money is being spent more than anywhere else? Puerto Rico. Puerto Rico. The money we have spent on Puerto Rico is beyond belief.”

Despite those efforts, Trump said, his administration gets no gratitude from officials of the US commonwealth.

“We got no credit for it, but the money that they want, it’s a tremendous amount of money. It’s beyond anything that I’ve ever seen, far more than Florida, far more than Texas, and it has to be studied. It has to be studied, it’s a massive amount of money. And the problem is no matter how good a job you do, you don’t get credit for it,” he said.

Puerto Rico, in a report to Congress, estimated the total cost of recovery from Hurricane Maria at $139 billion. FEMA has so far authorized $60 billion in disaster relief funds.

“You have, you have a mayor of San Juan, Puerto Rico, who’s totally incompetent. And you know, no matter what you do, she was complaining two weeks before the hurricane got there,” he said about Carmen Yulín Cruz Soto, who has repeatedly criticized Trump for what she called a slipshod response to the disaster.

Luis Cosme walks in the remains of his house destroyed by Hurricane Maria, in Morovis, Puerto Rico.
Luis Cosme walks in the remains of his house destroyed by Hurricane Maria, in Morovis, Puerto Rico.AP

“She was complaining about the hurricane before it was formed. There was no sense of appreciation, and the money is massive. It’s beyond massive. And so I’m studying that very seriously,” the commander-in-chief stated, without elaborating on what kind of “study” would be conducted.

 

Posted in corruption, economic crisis, Hurricane Maria and after effects, incompetence and mismanagement | Tagged , , , , , , , , , , | Leave a comment

Puerto Rico’s $300-an-Hour Demographer Catches Heat From Bondholders

https://www.bloomberg.com/news/articles/2018-11-20/puerto-rico-s-300-an-hour-demographer-catches-heat-from-bondholders

Puerto Rico’s $300-an-Hour Demographer Catches Heat From Bondholders

Lyman Stone in Hong Kong on Nov. 6, 2018.Photographer: Xyza Cruz Bacani for Bloomberg Businessweek

Some of the most contentious numbers in Puerto Rico’s bankruptcy are population projections: How many taxpayers will be living on the island 10, 20, or 50 years from now? Any attempt to gauge the commonwealth’s fiscal prospects—and hence its ability to pay bondholders—depends in great measure on the reliability of those figures. Yet the consultant hired to calculate them has no demography degree, speaks little Spanish, and lives in Hong Kong.

Lyman Stone, 27, whose last full-time job was as an economist at the U.S. Agriculture Department, has interests that range from fertility in the Northern Mariana Islands to gentrification in Cincinnati. These are among the topics he’s addressed in a self-published blog titled “In a State of Migration.” Last year, the federal panel tasked with turning around the island’s finances took a chance on the outsider, who had been disseminating—for free—the internet’s best-read Puerto Rico population projections.

Stone bills $300 an hour to forecast one of the hardest-to-estimate variables in the $74 billion restructuring—one with implications for tax collections and ultimately the value of Puerto Rico’s debt. Some bondholders say he lacks the right qualifications and that his projections are too dire and will cost them money. Others say he’s a savant who has mastered the statistical study of populations in his spare time.

“If they can’t find an actual error in the work, then I’m not sure what the criticism is,” says Stone, who quit his U.S. government job in June and moved to China to do missionary work for the Lutheran Church. “My professional motto is Molon labe, a classical expression of defiance attributed to King Leonidas of Sparta that means ‘Come and take it.’ ” (Stone’s father is an Old Testament and ancient languages scholar.)

Natalie Jaresko, the executive director of the Financial Oversight & Management Board for Puerto Rico, says the panel is pleased with Stone’s work. “We listened to a wide variety of voices, including academic voices,” she says. “We liked the way he was measuring, what he used in terms of his analysis, the data he was willing to look at and collect.”

A line for a flight at Luis Muñoz Marín International Airport in San Juan, Puerto Rico, on Sept. 26, 2017.
Photographer: Joe Raedle/Getty Images

Puerto Rico’s population had been shrinking for years, a side effect of the economy’s long and painful decline, and Hurricane Maria accelerated the trend. Stone estimates that the number of residents fell by about 5.1 percent, to 3.17 million, in the fiscal year that ended in June, and projects it will dwindle to about 2 million by 2050.

With fewer people, Puerto Rico has diminished ability to reap tax revenue and fund debt payments. The island and its creditors reached an initial agreement on a deal involving securities known as Cofinas, which would have some bondholders taking haircuts amounting to close to half their investments. But billions more remain to be negotiated. Investors prefer a generous population estimate that could boost bond values in a settlement. By the same logic, the island’s elected government would want to tamp down expectations. The board is on the commonwealth’s payroll but operates autonomously, and its projections and policy prescriptions have managed at various times to irk Governor Ricardo Rosselló and bondholders alike.

Charles Doraine, president and chief executive officer of Doraine Wealth Management Group in Corpus Christi, Texas, believes the board is trying to paint the situation worse than it is. “Anyone who wants to make it look as bad as possible is who they’re going to hire,” says Doraine, whose firm oversees investments in sales tax-backed Puerto Rico securities. “The worse it looks, the better it is for Puerto Rico’s perspective.”

Robin Deshayes, a bondholder with Santa Barbara, Calif.-based Miltonian Capital Management, questions Stone’s credentials. “I don’t think that Mr. Stone’s background as an agricultural economist (specializing in cotton) for the USDA qualifies him as a demographics expert for Puerto Rico,” she wrote in an email.

Stone says he took classes on migration while earning his master’s in international trade and investment policy at George Washington University. He also taught himself how to mine mobile-phone location, Google search, and school enrollment data, among other things, for information on population flows.

The self-described conservative tweets prolifically. He’s used the platform to spar with opinion journalists and argue that abortion opponents who can’t stomach Trump should abstain from voting. He also writes for Vox and the Federalist, a conservative news site where he has weighed in on birthright citizenship, which he supports, and Iowa Representative Steve King, a Republican whom he says is a bad public servant but not a Nazi. (Bloomberg News has consulted Stone on Puerto Rico, Venezuela, and state-to-state migration.)

While there’s little data with which to judge the accuracy of his long-term Puerto Rico projections, Stone’s time as the board’s demographer coincided with a data input error in June that produced an overly negative estimate, as Stone and the board have acknowledged. The error drove up the 30-year projected surplus by $4 billion.

Pennsylvania State University assistant professor Alexis Santos—who has a Ph.D. in applied demography and conducts Puerto Rico research—says post-Maria population projections are fraught with peril. The event was unique, and it’s still difficult to make out the extent of effects on migration and fertility patterns.

Stone knew little about Puerto Rico in January 2016, when a Twitter follower requested he try his hand at the subject. “I was shocked by the response,” he says. “I got much more traffic than I was used to getting on my humble little blog.”

By the time Hurricane Maria swept through the island, Puerto Rico had become a recurrent theme on his blog, and Stone got a surprise invitation to the island to make a presentation at one of the fiscal control board’s “listening sessions,” which convened experts in various disciplines to discuss key issues. The Kentucky native dominated discussion at the Nov. 16, 2017, event, a video of which is available on YouTube. “I’m looking forward to reading your blog after I leave here,” said fellow panelist Mario Marazzi, the then-head of the Puerto Rico Statistics Institute. The next month, Stone signed a contract to work for the board.

Stone, who also has an affiliation with Demographic Intelligence, a Charlottesville, Va.-based consulting firm that counts JPMorgan Chase, Pfizer, and Procter & Gamble among its clients, says he’s happy to engage with critics. In August, he hosted a videoconference call in which he presented his methodology and took questions from dozens of journalists, investors, lawyers, and academics.

Two listeners questioned why gross national product data was being fed into computer models to generate population projections, rather than the other way around. Shouldn’t the economy rise and fall with the number of people making and consuming goods? At first, Stone said there were no conclusive studies on the matter that would force him to account for such a feedback mechanism. Pressed on the matter, he changed tack.

“I always appreciate more people doing good forecasting work,” Stone said. “The more the merrier is my attitude. I’d in fact rather not have a monopoly on forecasting Puerto Rico.” —With Michelle Kaske and Danielle Moran

Posted in Hurricane Maria and after effects, population changes in Puerto Rico | Tagged , , , , , , , , , , , , , , , , , , | Leave a comment
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