FEMA Slashes $21M from Initial Cost Estimate of Vieques Medical Facility

Jan 31, 2020
3:00 PM
Originally published at Centro de Periodismo Investigativo

The Susana Centeno Family Health Center, via the U.S. Army (Public Domain)

By Cristina del Mar Quiles

Version en español aquí.

SAN JUAN, Puerto Rico — The death of a Vieques teenager —whose relatives recounted how she died due to lack of medical services there— unleashed the rage of Isla Nena residents a week ago. The Viequenses brought cement blocks to the public square, as a protest art installation of sorts, demanding the construction of a proper hospital to provide health services to the island municipality some nine miles off the east coast of Puerto Rico.

A few days later, the Federal Emergency Management Agency (FEMA), in an effort to neutralize criticism of its bureaucracy, announced the obligation of about $39.5 million for the reconstruction of the Susana Centeno Family Health Center destroyed by Hurricane María.

FEMA has been evaluating this project since October 2018, although as of February of that same year it had already conducted a study that revealed the presence of different types of mold in the installation that represent a health risk for people with compromised immune systems. The study pointed to the need to replace the structure.

FEMA, the Central Office of Recovery, Reconstruction and Resiliency (COR3), and the municipality of Vieques announced last week that they agreed that the project’s estimated cost would be $49,323,985. Of that amount, the parties estimated that the municipality would receive $6.4 million in an insurance payout and another $1 million in federal risk mitigation and reduction funding for a total net cost of $43,966,327.57. Of that amount, FEMA obligated 90% ($39,569,694.82). The remaining 10% must be covered by the Government of Puerto Rico, which plans to use CDBG-DR funds, as allowed by the U.S. Department of Housing and Urban Development.

The new estimate represents $21 million less than what was initially estimated in 2018 by the municipality of Vieques and it comes two years and four months after Hurricane María. All this time, the Viequenses have only had a temporary clinic established in a school that is now used as a shelter, and several cargo containers that offer gynecology, dentistry and general medicine services.

The amount is also $6.5 million less from what the Resident Commissioner in Washington, Jenniffer González, announced in October as an assignment for the project, but that FEMA later denied, saying the figure was a preliminary fixed cost agreement and was not final.

When FEMA and COR3 were asked about the funding reduction, both agencies said it was an agreement that the Municipality of Vieques welcomed and accepted, and that was later validated by a Panel of Independent Experts comprised of FEMA and COR3 officials.

“The estimated $70 million was an initial and preliminary one done before conducting a more detailed analysis. After proceeding with the detailed study, the total (net) cost of the project was estimated at $43,966,327.57,” COR3 said.

“COR3 engineers and architects reviewed FEMA´s cost estimate and after an in-depth analysis, it was determined that [the new amount] is reasonable and complies with the municipality’s project development plan,” the agency added.

Congresswoman Nydia Velázquez had questioned former disaster recovery officer Jonathan Hoyes in February 2019 about the substantial reduction already anticipated in cost estimates for the Vieques Diagnostic and Treatment Center (CDT, in Spanish). Hoyes responded that the completed evaluation was being reviewed by the Panel of Independent Experts and the final amount had not yet been agreed upon.

Debate on the Nature of the Vieques Hospital

Part of the debate about the total estimate revolved around whether the medical facility should be classified as a health center or as a hospital. The difference between the two classifications has to do with the amount of money for which it would be eligible, according to FEMA guidelines, as noted by former COR3 Executive Director Omar Marrero in his testimony before Congress on April 9, 2019.

Throughout his presentation, Marrero used the word “hospital” consistently to refer to the facility. On that same occasion, the now director of the Fiscal Agency and Financial Advisory Authority (AAFAF, in Spanish) made multiple complaints about the bureaucratic and difficult process that FEMA had applied to its hospital evaluations.

Congresswoman Velázquez and the resident commissioner expressed the same concern in a letter they both signed, dated April 30, 2019, to FEMA Administrator Peter Gaynor.

“It has come to our attention that in its Memorandum of Eligibility Determination, FEMA identified the structure as a ‘medical care center’ instead of a hospital. As such, the codes and standards that are being applied may be inadequate, which could result in less funds to restore access to critical and high-quality health services for the U.S. citizens of Vieques,” the letter reads.

“Before Hurricane María forced its closure, the Vieques community health center clearly performed the duties of a hospital,” mentioning that the center had the only delivery room on the island, it had a dialysis center, and housed the veteran’s clinic.

In the letter, Velázquez and González asked Gaynor that the facility be considered as a hospital in regard to the amount that would be obligated to replace it.

Even so, upon announcing the funding allocation last week, FEMA referred to the facility as a “health center” and not as a hospital, a classification that COR3 justified when responding to questions from the Center for Investigative Journalism (CPI, in Spanish) as to whether it had followed up on the requests by the congresswoman and the resident commissioner.

“Given the services that the institution offered to the Viequenses, the COR3 staff who worked the PW together with the municipality, believed it function as a hospital. However, after developing the PW between the parties and agreeing on the cost estimate, it is believed that the obligated money will give the municipality of Vieques the possibility of rebuilding the institution with the ability to offer all hospital services to the entire island municipality,” COR3 responded.

“COR3 has never allowed a project to be cataloged and obligated for less than we believe is appropriate or reasonable,” a COR3 spokeswoman told the CPI.

After the announcement of the funding obligation made last January 21, a spokesman for Velázquez said, “this is an important step to provide adequate medical care to the island of Vieques.” He indicated that the congresswoman will follow up this project closely.

Vieques Mayor Víctor Emeric said through his assistant Elizabeth Rosario that he was satisfied with the allocation, although he expected more, but that he won’t believe it until he sees the money deposited in the municipality’s coffers.

“Given the desperation and the need the people of Vieques have for our medical facilities, the mayor says: ‘whether it’s $70 million or $39 million, we want to see it, because I haven’t even seen even a quarter,” said Rosario.

Avanti Technologies Inc. was hired by the Municipality of Vieques to handle the proposals to repair the damage caused by Hurricanes Irma and María. Its vice president in Puerto Rico, Edgar Rentas, authorized by the mayor to speak on behalf of the Municipality in this matter, said the first estimate of $70 million was reached jointly with COR3 advisors “considering the highest possibilities in each one of the line items.”

“We had estimated materials, labor, local issues, Puerto Rico project issues, the labor in Vieques, but we later went back to review the estimates that we got from FEMA,” he added.

“[The final $49,323,985 figure] is acceptable. I consulted with hospital construction and design experts and they told us that state-of-the-art facilities can be developed with that amount of money,” Rentas said. The final amount is $30 million less.

The contractor acknowledged that the amount FEMA would have allocated if the building was classified as a hospital instead of a ‘health center’ would have been higher. He explained that at the beginning, the Susana Centeno Family Health Center was licensed as a hospital, but then the Health Department changed it to a diagnostic and treatment center, and that is how the facility was being used for before the hurricane.

“We had no way of justifying that it was a hospital when the truth is that it was being used as a CDT,” he said.

According to Rentas, the FEMA funding obligation should include funds for administrative expenses, which for this project amounts to $1.4 million already invoiced. However, he said, he has not received any disbursement for that item.

He explained that the next step will be to start the request for proposals process from companies interested in developing the project. He expects construction to begin in 2021 and the facility to be ready by 2023.

The resident commissioner took credit for pulling for funding allocation, although she would not answer questions from the CPI. In a press release dated October 8, 2019 she said, “it’s not the first time I pushed for the construction of this hospital” and demanded that FEMA’s Federal Disaster Recovery Coordinator, Alex Amparo, stop “playing with the hopes of the Viequenses,” and accused him of publicly offering information different from what he told her privately.

The COR3 assured the CPI that FEMA discloses the information on funding obligations to González and Congresswoman Velázquez before issuing the official communication.