Hurricane Maria continues to affect the commonwealth of Puerto Rico, shutting down basic power, water and communications services throughout the island. Over the past several days, the hurricane has pummeled homes and businesses, flooded neighborhoods and damaged landmark facilities such as the Luis Muñoz Marín International Airport and the Roberto Clemente Coliseum, turning steel and cement electric power and communications towers into twisted hulks blocking major roadways. The official death toll from the storm stood at seven, Gov. Ricardo Rosselló said Friday morning, but this figure could increase.

PROMESA oversight board Chairman José Carrión sent a letter on Thursday to Rosselló indicating that the board stands “ready to assist [the commonwealth] in ensuring the health and safety needs of the people of Puerto Rico.” According to the letter, the oversight board “wants to make sure the Government of Puerto Rico has the necessary flexibility to address the challenges left by Hurricane Maria, especially those concerning health, safety, housing, and infrastructure.” In the letter, the oversight board said that it will approve “whatever modifications or reprogramming to the allocations in the Territory Budget that you or your designee determine, in good faith, are necessary, up to an aggregate amount of $1 billion, for emergency measures to respond to the catastrophic damage caused by Hurricane Maria.”

On Wednesday, President Donald Trump approved a disaster declaration for Puerto Rico, declaring that “a major disaster exists in the Commonwealth of Puerto Rico and order[ing] Federal assistance to supplement Commonwealth and local recovery efforts in the areas affected by Hurricane Maria beginning on September 17, 2017, and continuing.”

Resident Commissioner Jenniffer González issued a tweet on Friday that included her Sept. 21 letter to President Trump asking him to “waive the local cost-sharing requirement and set the federal cost-share at 100 percent” for public assistance grants administered by FEMA that pertain to Puerto Rico. The letter addresses the commonwealth’s “serious financial obstacles,” citing the commonwealth’s Title III case under PROMESA, and points out that “Puerto Rico has limited access to the capital markets, if at all.” González continues, “For these reason, Puerto Rico will have great difficulty finding the funds to pay the 25 percent local match required for Public Assistance funding.” She warns that if Puerto Rico is unable to meet the requisite match, “a cost sharing requirement likely will cause long delays in Puerto Rico receiving the federal assistance it needs for cleanup and making emergency repairs to facilities and infrastructure.” On Sept. 21, FEMA issued a summary of key federal disaster aid programs that can be made available as needed and warranted under Trump's disaster declaration.

Earlier today, González also tweeted a copy of her Sept. 19 letter to U.S Energy Secretary Rick Perry requesting assistance in assessing the situation at the Puerto Rico Power Electric Authority, or PREPA, after Hurricane Maria made landfall, while “also identifying avenues in which the [U.S. Department of Energy] can provide funding and support for aid and timely restoration.” The letter to Secretary Perry outlines the island’s electric power grid system, noting that it was “already structurally weak when it was severely affected by the trajectory of Hurricane Irma on September 6, 2017, a category 5 hurricane that left close to 68% of the island’s population without power.”

In a radio interview Thursday afternoon, Puerto Rico Treasury Secretary Raul Maldonado said that despite the commonwealth's tight fiscal situation, it would use reserve funds to address the disaster. “We have financial commitments with the PROMESA oversight board, but we have to govern," Maldonado said, adding that the government's focus has been on saving lives during the hurricane and will shift to an “orderly recovery” from the disaster once the emergency situation ends.

The Treasury chief said the administration had built up a $200 million cash reserve during the 2017 fiscal year ending June 30 and also pointed out that revenue has beaten projections during the current fiscal year. Maldonado said fiscal issues have not been broached during emergency management meetings among government officials but noted that the storm and the resulting damage it has inflicted would result in short-term economic and fiscal harm, despite the billions in federal disaster relief funds that could pour into the commonwealth in rebuilding efforts.

The storm hit the island as commonwealth officials and creditors continue to engage in mediation sessions related to Puerto Rico's Title III proceedings in federal court, which are slated to be take place throughout September and the remainder of the year. The storm also follows two important rulings by Judge Laura Taylor Swain against creditors of the Puerto Rico Power Electric Authority, or PREPA, and the Puerto Rico Highways and Transportation Authority, or HTA.

The court is currently scheduled to hold two additional hearings over the next two weeks, one on Sept. 27 to consider the motions to dismiss the fiscal plan challenge litigation filed by Assured Guaranty and National Public Finance Guarantee and an omnibus hearing in the Title III cases on Oct. 4. Judge Swain has issued a series of orders directing the oversight board to confer with the various parties and submit an informative motion by Sept. 26 at 12 p.m. ET addressing both the Sept. 27 hearing, which was originally scheduled to take place on Sept. 19, and the Oct. 4 omnibus hearing.

Oversight Board Letter

The board’s letter noted that at the request of the governor, “before Hurricane Maria struck, the Oversight Board pre-approved reapportionment of the budget reserve and emergency fund in the Territory Budget for use in recovery efforts.” Recognizing the “gravity” of the situation, Carrión said the oversight board “understands that more flexibility is needed to respond to the devastating effects of Hurricane Maria.” As noted above, pursuant to its authority under PROMESA and section 3 of the fiscal year 2018 budget resolutions, the oversight board said that it will approve whatever modifications or reprogramming to the allocations in the territory budget that the commonwealth government determines, in good faith, are necessary for emergency measures to respond to the catastrophic damage caused by Hurricane Maria, up to an aggregate amount of $1 billion.

The letter requires the Puerto Rico government to provide the oversight “notice as promptly as possible indicating from which and to which line items funds have been reallocated, for what activities, and in what amounts.” In the event that the Puerto Rico government “determines increases to the Territory Budget are needed to respond to Hurricane Maria,” the oversight board said it will “stand ready to expeditiously approve such requests, in anticipation of much needed federal funding.” The oversight board will join the commonwealth government in “actively seeking FEMA and any other potential sources of federal funds for the recovery and reconstruction of Puerto Rico.”

Damage From Storm

The storm was being called the worst disaster in modern Puerto Rico history, but the extent of the damage was still not clear on Friday, with Rosselló acknowledging that commonwealth public safety and disaster relief agencies are losing communications with certain areas of the island, including the central highlands that caught some of Maria's strongest winds. However, damage in the metropolitan area and reports from different points of the island pointed to a "complete disaster." The governor said that initial reports from Moca show a "devastated" town, and there were reports of significant damage in eastern towns such as Humacao and southern towns such as Ponce.

Officials said that Toa Baja, a western San Juan suburb, took possibly the biggest hit. La Fortaleza Public Affairs and Policy Secretary Ramon Rosario said Friday morning that more than 2,000 residents were rescued from the rooftops of their homes amid rising floodwaters and that the rescues were continuing.

"This is a real crisis," the governor said, underlining his emphasis on human health and public safety. There is a 6 p.m. to 6 a.m. curfew in effect.

The governor said Friday morning that he and other officials would conduct inspections via helicopter this afternoon. He said there are seven official fatalities related to the storm.

However, Toa Baja Mayor Bernardo Márquez said in an interview Thursday night that eight people were confirmed to have drowned during major floods in his town. With residents still being rescued from the roofs of their flooded homes, the mayor said that the number of fatalities may rise. Rains are expected to continue through Saturday, and officials still continued to call on residents to leave floodable areas. About 400,000 residents are estimated to live in flood zones in Puerto Rico, according to the radio reports. Rosselló said that some 500 residents were rescued from the town late Wednesday, adding that the rescues were continuing so this number would surge.

Rosselló and other commonwealth officials discussed the need to rebuild intelligently after the storm, saying that better planning and construction could decrease hurricane damage and economic losses. The governor underlined that one of FEMA's goals is to mitigate future damage during storms. Maldonado said this goal would involve families living in floodplains to move out of their communities to more secure areas to rebuild their homes.