Confirmation Hearings for the Plan of Adjustment for the Puerto Rico Electric Power Authority Conclude
For two weeks, the Oversight Board’s legal team presented the U.S. District Court for the District of Puerto Rico with a roadmap to PREPA’s debt restructuring and evidence to satisfy the requirements for the court to confirm the Plan of Adjustment that would reduce PREPA’s debt by almost 80%.
The Oversight Board believes that the Plan will provide creditors with a fair recovery without overburdening the people of Puerto Rico.
Chairman David Skeel, who testified during the hearings, had previously said the Plan is a breakthrough. “It is a breakthrough because I firmly believe this is a viable Plan that reflects Puerto Rico’s reality,” he said. “The Plan is a key element to achieve our common goal to transform Puerto Rico’s energy system so it can provide reliable electricity.”
Click here to view Chairman Skeel’s message on the PREPA Plan of Adjustment.
The Plan has substantial support from creditors, but those bondholders who oppose the Plan argued that the court should deny confirmation because PREPA could increase the Legacy Charge the Oversight Board proposed. The Legacy Charge is what is added to customers’ bills to repay the substantially reduced debt the plan of adjustment will repay. The objecting bondholders want a larger Legacy Charge that would repay at least an additional $4 billion of debt.
The Oversight Board’s legal team argued that “tinkering with spreadsheets cannot and does not substitute for understanding how electricity prices will affect the people of Puerto Rico and the economy of the Commonwealth. This is not an excel exercise.”
“The past seven years have seen historically devastating hurricanes, earthquakes, and pandemics. Bondholders would have PREPA commit, today, to stretching itself to the utmost of what their spreadsheet says is affordable, while Puerto Rico’s people and businesses shoulder the burden and risks,” the Oversight Board’s legal team argued in their closing argument.
The hearings took place from March 4 to March 18.
Click here to view the documents filed in the case.
Mid-Year Quarterly Report Published
On March 8, the Oversight Board issued the Commonwealth’s Mid-Year Financial Report, providing a detailed analysis of Puerto Rico’s fiscal position in the first half of the current fiscal year 2024 and potential risks to the financial projections in the Government’s Fiscal Plan.
“The Government will need to prioritize any additional spending to ensure the Commonwealth can afford commitments in the long-term,” said the Oversight Board’s Executive Director Robert F. Mujica, Jr.
Risks include the uncertain long-term Medicaid federal funds and additional Commonwealth contribution to fund disaster relief projects due to inflation-based cost escalation and federal match requirements.
Click below to read the full report.
Mid-Year Quarterly Report Published
The Civil Service Reform (CSR), an Oversight Board-led initiative, focuses on improving the experiences of Government of Puerto Rico employees, so that they can grow in their careers, learn through improved training, have a more positive work experience and, in turn, feel more motivated to transform their departments and provide the best services to Puerto Rico residents.
Through the implementation of the CSR at the Department of Education, all the work charts at the administrative level were restructured, most administrative employees received an updated job description and salary and over 200 new positions were identified within the agency.
The CSR will help the Department of Education provide better services to the island’s public-school students.
Click here to read more about the implementation of the CSR in de Department of Education.
Oversight Board Defines Important Deadlines for the Approval of the 2025 Fiscal Year Budget for Puerto Rico
Working with Puerto Rico’s government, the Oversight Board outlined the timeline for the budget for fiscal year 2025, which begins on July 1.
The Oversight Board’s Executive Director Robert F. Mujica, Jr. noted that on February 27, the Executive and Legislative branches of the Government of Puerto Rico were formally informed of the timeline for the 2025 budget, the revenue forecast for developing the budget and spending targets for government entities.
According to the schedule, the Governor will submit a proposed fiscal year 2025 budget based on the forecast of revenues and budget targets by March 25, and the Oversight Board and the Government will work together on the Governor’s proposal, as it had done in previous years.
“The budget is a key element of fiscal responsibility owed to the people of Puerto Rico. It is the very core of stability,” Mujica said. “I hope that, by June 30, the members of the Oversight Board can certify a budget submitted by the Governor and approved by the Legislature, just as we did last year, so we can take another step towards PROMESA’s mandate of achieving fiscal responsibility.”
Engagement with Stakeholders:
March 21, 2024
Oversight Board Executive Director Robert Mujica met with Shawn Fain, president of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), and the presidents of the unions they represent in Puerto Rico, including school cafeteria workers at the Department of Education, and employees at the Treasury and Agriculture departments, among others.
The aim of the meeting was to start a dialogue between the UAW and the Oversight Board so that they can work together on renewing the collective bargaining agreements with the workers they represent in the Puerto Rico Government. Negotiations have been underway for more than two years since the collective bargaining agreements expired.
March 18, 2024
The Oversight Board’s Infrastructure Manager, Fausto Hernández, participated in the Puerto Rico Energy Week conference and spoke about the milestones that have been reached in the transformation of Puerto Rico’s energy sector, which include establishing the Puerto Rico Energy Bureau as an independent regulator and handing over the management of the Puerto Rico Energy Power Authority’s (PREPA) electricity grid and power plants to LUMA and Genera, respectively, as the two private operators.
March 11, 2024
The Oversight Board’s Deputy Executive Director, Arnaldo Cruz, joined Governor Pedro Pierluisi and other government officials to announce the launch of a new hiring platform to help fill vacancies within government agencies. The creation of the platform was an Oversight Board-led initiative. The platform uses artificial intelligence to identify the best candidates for vacant positions within the government, focusing primarily on the candidates’ skills and experience.
Skilled-based hiring –rather than hiring based on credentials and hierarchy– is a trend in the private and public sector, helping organizations to evaluate the full range of a job candidate’s capabilities to broaden the talent pool and lower barriers.
What makes Puerto Rico unique is that it simultaneously integrates Artificial Intelligence (AI) and the evaluation of candidates’ skills for hiring and employee growth.
Click here to view the full press conference in Spanish.
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