Articles

Mayors of the two majority parties have used the legal figure of municipal enterprises at their convenience, and have turned them into extensions of the city halls to evade regulations, and argue that they are private entities to avoid being subject to oversight, the comptroller Yesmín Valdivieso pointed out yesterday.

According to Yesmín Valdivieso, many of the mayors designate city hall employees to perform tasks at the municipal enterprises, despite the fact that, by law, those positions should not be filled by public servants. (Gerald López Cepero)

Valdivieso appeared at a public hearing of the Commission on Oversight of Public Funds of the House of Representatives, together with the deputy director of the Division of Municipal Audits, Juan Rivera, and his executive assistant, Pedro Arévalo.

According to the comptroller, many of the mayors designate city hall employees to perform tasks at the municipal enterprises, despite the fact that, by law, those positions should not be filled by public servants.

“They assign municipal employees, who maintain their status as public employees receiving their normal salaries and benefits, rendering work for the for-profit municipal enterprise”, said Valdivieso, in revealing one of the findings of the Office of the Comptroller of Puerto Rico (OCPR).

Likewise, she commented that some mayors use the municipal enterprises for the purpose of contracting services for their city halls and thus evade the requirement of a bid or of requesting three quotes. As an example, she mentioned the Municipality of Toa Alta.

Even when, for those tasks, some mayors do not seem to distinguish between the private entity and the municipal one, when they are required to render accounts, they raise the private character of these municipal entities to evade the oversight of the Office of the Comptroller, according to the testimony of the entity's officials.

The OCPR officials were summoned to testify before the House commission that is investigating the operation of the municipal enterprises and the fiscal management of the city halls.

Among the recommendations they presented is that the municipal enterprises submit annual reports under oath to the Legislative Assembly, to the OCPR and to their municipal legislatures. Those reports should have details about the capitalization that the municipality provided to the enterprise, including funds, as well as movable and immovable property and any other asset. They should also indicate whether capital was returned to the city hall and whether they have annual audited financial statements.

Valdivieso also recommended that the municipal enterprises be required to register and submit to the OCPR the contracts they grant.

She indicated that the office she directs made a kind of inventory of the city halls that have for-profit municipal enterprises or non-profit municipal development corporations.

According to the statistics of the OCPR, between fiscal years 2016 to 2021, 38 municipalities maintained 29 non-profit corporations and 62 for-profit municipal enterprises. There were 30 municipalities that did not respond to the public entity's request for information.

The city halls that had non-profit corporations and for-profit municipal enterprises contributed more than $88 million to them. That figure breaks down into $64.1 million in cash, $24.2 million in property and in the payment of salaries and benefits of 209 employees.

In Valdivieso's judgment, the elimination of the Office of the Commissioner of Municipal Affairs (OCAM) was a mistake. She also claimed that greater resources be assigned to the Office of Management and Budget, which assumed some of the functions of the now-defunct office.