Treasury Memo On Commonwealth Liquidity

DEF EX 15
Departamento de Justicia
10
Estabilizar Derechos Presentacin
Mantenimiento Extraordinario
21
23
24
25
26
Garantias Fianzas Aceleradas (Morales Feliciano)
Confiscaciones Federales
Fondo Emergencias Ambientales
Help America Vote Act grant 39011
20
OCAM-JABG-2012
22
19
OCAM-JABG-2013
CONFISCACIONES JUSTICIA FEDERAL
18
Proteccin al Consumidor
OCAM-JABG-2011
16
17
Puente Verde Latinoamericano
Caso Morales Feliciano
15
Compensacin a Vctimas
Consejo Playa Ponce
13
14
ASSMCA - PACIENTES
11
Programa Patrimonio Natural
12
Nacional Financ. Quehacer Cultural
Fondo Especial Depto. Justicia
Acervo Des. Const. Carr. Puentes
Junta Reglamentadora de Telecomunicaciones
Departamento de Hacienda
Seguro Maestros
Comisionado de Seguros
Comisin Estatal de Elecciones
Junta de Calidad Ambiental
Oficina Servicios con Antelacion al Juicio
Policia de Puerto Rico
Oficina Comisionado Asuntos Municipales
Departamento de Salud
Administracion de Servicios contra la Adiccin
Junta Reglamentadora de Telecomunicaciones
Comisionado de Seguros
Departamento de Recursos Naturales
Ley 66 Mantenimiento de Infraestructura

Fondo Federal JAG ARRA. Grant cerrado el 2013
Mantenimiento Extraordinario
Fondo Especial
Programa Patrimonio Natural
Garantia requerida por Tribunal Federal

Garantia requerida por Tribunal Federal
Caso Morales Feliciano

Caso Ponce Playa VS Salud
Help America Vote Act grant 39011
Fondo Emergencias Ambientales
Confiscaciones Federales
Garantias Fianzas Aceleradas (Morales Feliciano)
Confiscaciones Justicia Federal
Fondos Federales OCAM 2011
Fondos Federales OCAM 2012
Fondos Federales OCAM 2013-JB-FX-0022
Tribunal Federal
Reembolso para gastos operacionales de la agencia por su
participacion en los operativos federales
Ley 269 Manejo de Aceite Usado, Recibe un 10% del
impuesto al aceite usado. Fondos para el programa de
emergencias ambientales. Nomina y otros gastos
Fondos para el Programa de Justicia Juvenil. Se asignan

fondos a instituciones sin fines de lucro y la Polica de Puerto
Rico para servicios a la poblacin joven con problemas de
delincuencia
delincuencia
delincuencia
Reembolso para gastos operacionales de la agencia por su
participacion en los operativos federales
No se generan gastos contra la cuenta
Fondo Ambiental Puente Verde Latinoamericano
Proteccin al Consumidor
Servicios contra la adiccin

Compensacion y bonificacion a las victimas del crimen.
Gasttos medicos, sicologicos, funerales, transportacion etc.
Compensacin a Vctimas
Universal Service Fund

Servicios a Pacientes
Estabilizar Derechos Presentacin
325-5308-1
325-4000-4
325-2101-4
325-2100-5
325-2059-1
325-2058-2
325-2057-3
325-2056-4
325-2051-9
325-2050-1
325-2046-5
325-0971-9
325-0736-1
251-0132-4
250-9082-1
250-2300-6
200-3490-9
200-3480-1
200-3420-7
200-3410-8
200-3320-8
Ley 96 y 73 para mantener carreteras y puentes en

condiciones optimas. Arrendamiento de equipo y adquisicion
de equipo. Cubren tambien gastos operacionales
Quinto Centenario.
Ley 150 establece que los Depositos Especiales que reciba
la agencia deben ser acreditados a la cuenta IBA.
Oficina de Comisionado cobra por adelanto servicios que
ofrecen. Estos fondos entran a la cuenta para nutrir el Fondo
de reserva para gastos operacionales ante una emergencia.
200-3250-6
200-3240-7
200-3230-8
200-3090-4
200-3080-5
Account Number
Reserva Seguro de Vida Maestros para pago a beneficiarios
USOS DE FONDOS DEPOSITADOS

Seguro por Incapacidad no ocupacional Ley 220 (SINOT) .
Funciona como una colateral (Box Safety)de la cuenta
operacional del Programa
Plan de SS para Choferes, funciona como una colateral (Box
Safety)de la cuenta operacional del Programa
Ley 74 Fondo de Compensacion al paciente. Compensacion
por reclamaciones en tribunal. Fondo transferido de agencia
inexistente.
Ley 10 Para establecer la creacion de Loteria Adicional. No
se generan gastos
Nacional Financ. Quehacer Cultural
Acervo Des. Const. Carr. Puentes
Departamento de Transportacion y Obras Pblicas
Instituto de Cultura
Plan de Seguros del Maestro
Especial de la Lotera
Compensacin al Paciente
Fondos del Seguro Choferil
Fondos para el pago de beneficios de Incapacidad
DESCRIPCION DE CUENTA
Sistema de Retiro de Maestro
Loteria de Puerto Rico
Departamento del Trabajo
Departamento del Trabajo
Especial de la Lotera
AGENCIA
Compensacion al Paciente
Benef. Incapacidad-Depto. Trabajo
Seguro Social de Choferes
FONDO
BALANCES DE CUENTAS IBAS EN BGF
DEPARTAMENTO DE HACIENDA
AREA DEL TRESORO
28,873.34
9,561,551.34
626,892.23
204,326.44
8,054,276.06
212,483.61
221,540.29
237,226.62
6,053.49
582,222.83
20,087,805.07
161,207.35
4,583,417.96
4,519,635.51
2,898,147.74
256,464.98
516,136.84
4,180,741.98
1,068,597.39
47,335.97
123,448.32
3,307,548.18
1,151,747.56
192,996.31
12,195,832.27
2,416,863.19
BALANCE A 6/15/2016
272-0280000-081-2004 grant 39011
226-0140000-780-1998
240-0240000-880/881/882-2000
297-2170000-081-1999/2000
252-0400000-780-2014
272-0360000-081-2012 grant 2011-JB-FX-0034
272-0360000-081-2013 grant 2012-JB-FX-0048
272-0360000-081-2014 grant 2013-JB-FX-0022
253-0380000-779-2012
249-0710000-779-2012
249-0250000-783-2012
712-0140000-081-2001
253-0380000-779-1999
793-0950000-081-1998
253-0380000-081-2005
223-0250000-081-2009
239-0220000-781-1998
243-0500000-883-1998
232-0820000-81A-1998
443-0490000-081-1998
731-0910000-791-1998/2009
724-0250000-081-1998
729-0220000-081-1998
785-0670000-995-1998/2013
752-0670000-881-1998/2013
CIFRA DE CUENTA
AGENCIA
Departamento del Trabajo y Recursos Humanos

30
31
32
33
34
35
36
37
38
39
40
JAG ARRA 2009 JUSTICE ASSIS GRANT
Fondo Enfermedades Catastrficas
Programa Retardo Mental

Fondo para la Educacin de Inversionistas
Auxiliar
Administracin
FOT
Comision Estatal de Elecciones
Comisionado Instituciones Financieras
28
29
Help America Vote Act (HAVA 251) grant 90401
Departamento de Recursos Naturales
Help America Vote Act (PAREO) grant 90401
27
FONDO
Fondo para Adquisicin y Conservacin
371-1017-7
Grant Cerrado
Pago de tratamientos y cirugias especializadas a pacientes
Recibe Seguro Social de beneficiarios que estan bajo tutela
del dept de salud. De aqui se suplen sus necesidades
personales
Ley 114
Contribuciones de patronos que se utilizan para gastos
Operacionales Ley 15 1931
Fondos Federales, reembolsan al Secretario por gastos
operacionales girados contra cuenta operacional del gobierno
central
Ley 52 Programa Fomento del Trabajo. Cubre gastos
operacionales del Programa
Pagos a recicladores y exportadores de neumaticos
Respuesta a emergencias ambientales relacionadas a
neumaticos
Pagos de gastos operacionales del programa de la Junta de
Licenciamiento y (abogados que ven casos, personal, serv
profesionales de examenes a medicos, etc.) Ingresos propios
Fondo Federal JAG ARRA 2009 Justice Assis Grant

Fondo Enfermedades Catastrficas
Ley 208/2012 Patentes Municipales
Junta de Licenciamiento y Disciplina Medica
Fondo de Emergencias Neumaticos
FOT
Fondo Manejo de Neumaticos
Administracin
Fondo Auxiliar Estatal
Fondo para la Educacin de Inversionistas
Para gastos administrativos de OCAM
251-0328-6
Uniformar los procesos electorales en todo los estados.
Programa Retardo Mental
Pareo de Fondos a Campaas Electorales
Help America Vote Act (HAVA 251) grant 90401
325-2055-5
48,752,174.97
1,840,034.23
1,151,776.01
985,293.89
10,577,878.65
256-0006-8
251-0327-7
17,555,365.43
256-0003-2
256-0005-9
6,537,974.98
1,728,987.59
4,004,868.85
50,692.01
4,576,265.84
259,953.98
2,833,940.23
BALANCE A 6/15/2016
371-1010-5
375-0001-2
371-1009-6
338-1203-7
328-1003-1
328-1002-2
325-5309-0
Help America Vote Act (PAREO) grant 90401
Account Number
USOS DE FONDOS DEPOSITADOS

Ley 268 Para la preservacion de nuestros recursos
naturales(compra de terrenos y proteccion de los mismos.)
DESCRIPCION DE CUENTA
Fondo para Adquisicin y Conservacin
BALANCES DE CUENTAS IBAS EN BGF
DEPARTAMENTO DE HACIENDA
AREA DEL TRESORO
CIFRA DE CUENTA
297-0710000-081-2009
793-0710000-081-2002
238-0750000-780-1998
283-0710000-081-1998
253-0380000-081-2010 grant 2009-SUB9-0053
272-0280000-081-2004 grant 90401
201-0280000-082-2004 grant 90401
281-0500000-081-2004
Commonwealth of Puerto Rico

Department of Treasury
Cash Accounts at Governmental Development Bank-(GDB)
8-Apr-16
OPE
Item
Agency
NOMBRE DE LA CUENTA
BANCARIA
BALANCE
4/08/2016
Adm Cuidado y Desarrollo de la
Programa de cuido de menores
228,377.38
Adm Desarrollo Socioeconomico
SIF
798,829.35
BENEFICIOS - SUBSIDIOS
2,817,470.91
TANF
2,731,998.79
N/A
932.27
DESEMBOLSO FEDERAL
31,820.28
ADM DE DESAROLLO
98,696.04
Administracion de Correccion
Salud Correccional - Suplidores
Administracion de Correccion
Salud Correccional - Nomina
121,698.71
11
Administracion de Rehabilitaci
OPERACIONAL
21,100.59
12
Administracion de Rehabilitaci
BENEFICIOS
417,431.44
13
Centro Judicial de Arecibo
N/A
10,405.91
1,769,985.55
14
Centro Judicial de Bayamon
N/A
79,121.03
15
Centro Judicial de Carolina
N/A
66,085.96
16
Centro Judicial de Ponce
N/A
24,470.07
17
Centro Judicial de San Juan
N/A
52,816.75
18
N/A
87,338.45
19
PROGRAMA DE TESTIGOS
44,784.19
20
Departamento de la Familia - A
Region de Arecibo
105,641.16
21
Departamento de la Familia - A
Region de Aguadilla
20,720.42
23
Departamento de la Familia - B
Region de Bayamon
82,828.80
25
Departamento de la Familia - C
Regio de Carolina
79,498.18
26
Departamento de la Familia - C
Region de Caguas
48,632.77
28
Departamento de la Familia - G
Region de Guayama
63,670.83
29
Departamento de la Familia - H
Region de Humacao
35,630.34
30
Departamento de la Familia - M
Region de Mayaguez
68,645.76
31
Departamento de la Familia - P
Region de Ponce
73,865.01
33
Departamento de la Familia - S
49,073.44
80
Departamento del Trabajo y Rec
Region de San Juan

Programa ayuda a personas de
edad avanzada
81
SINOT
3,617,305.85
198,393.43
82
Seguro Social Choferil
90,901.74
84
Guardia Nacional de Puerto Ric
MOVILIZACIONES
439,039.09
85
86
87
88
89
Secretariado del Departamento

Sistema Retiro ELA
Sistema Retiro ELA
Sistema Retiro ELA
Sistema Retiro ELA
BENEFICIOS PROG FEDERAL

N/A
N/A
N/A
N/A
380,721.08
3,769,434.51
177,173.95
747,711.55
2,041,527.44
$ 21,493,779.02
June 24, 2016
TSA Cash Flow Update
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
DRAFT
DRAFT
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
By accepting this document, the recipient shall be deemed to have acknowledged and agreed to the terms of these limitations.
This document may contain capitalized terms that are not defined herein, which may be defined in other documents or may be commonly understood. You should
make no assumptions about the meaning of such terms and are advised to consult with advisors to the Working group should clarification be required.
Any statements and assumptions contained in this document, whether forward-looking or historical, are not guarantees of future performance and involve certain
risks, uncertainties, estimates and other assumptions made in this document. Forward looking statements may relate to the fiscal and economic condition,
economic performance, plans and objectives of the Commonwealth of Puerto Rico or its agencies or instrumentalities. All statements contained herein that are not
clearly historical in nature are forward looking. All statements contained herein may relate to the economic and financial condition of the Commonwealth and its
instrumentalities is affected by various financial, social, economic, environmental and political factors. These factors can be very complex, may vary from one fiscal
year to the next and are frequently the result of actions taken or not taken, not only by the Commonwealth and its agencies and instrumentalities, but also by
entities such as the government of the United States. Because of the uncertainty and unpredictability of these factors, their impact cannot be included in the
assumptions and statements contained in this document. Future events and actual results may differ materially from any estimates, projections, or statements
contained herein. Nothing in this document should be considered as an express or implied commitment to do or take, or to refrain from taking, any action by the
Commonwealth, the GDB, or any government instrumentality in the Commonwealth or an admission of any fact or future event. Nothing in this document shall be
considered a solicitation, recommendation or advice to any person to participate, pursue or support a particular course of action or transaction, to purchase or sell
any security, or to make any investment decision.
This document does not constitute an audit conducted in accordance with generally accepted auditing standards, an examination of internal controls or other
attestation or review services in accordance with standards established by the American Institute of Certified Public Accountants or any other organization.
Accordingly, the Parties do not express an opinion or any other form of assurance on the financial statements or any financial or other information or the internal
controls of the Commonwealth and the information contained herein.
The Parties do not owe or accept any duty or responsibility to any reader or recipient of this presentation, whether in contract or tort, and shall not be liable for or
in respect of any loss, damage (including without limitation consequential damages or lost profits) or expense of whatsoever nature of such third party that may be
caused by, or alleged to be caused by, the use of this document or that is otherwise consequent upon the gaining of access to this document by such third party.
The Working Group for the Fiscal and Economic Recovery of Puerto Rico (the Working Group), the Commonwealth of Puerto Rico (the Commonwealth), the
Government Development Bank for Puerto Rico (the GDB) and each of their respective officers, directors, employees, agents, attorneys, advisors, members,
partners or affiliates (collectively with the Commonwealth and the GDB, the Parties) make no representation or warranty, express or implied, to any third party
with respect to the information contained herein and all Parties expressly disclaim any such representations or warranties. This document is being provided
pursuant to one or more confidentiality agreements, is confidential in nature, may include information that is material and that is not publicly available, and may
not be shared with or disclosed to any other person.
Disclaimer
Privileged and Confidential Prepared at the Request of Counsel and Subject to Material Change
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
(1)
No
Payment
+$131
million
June
AFI RBC
Payment
June 30, 2016

Ending Cash
Balance
No
Payment
$81
million
Full
Payment
($2 million)
$537
million
Full
Payment
($2 million)
Full
Payment
($25 million)
Interest
Only Portion
($18 million)
(See Pg. 10)
Scenario III
June
PBA Debt
Service
Set-Aside
(See Pg. 9)
(See Pg. 3)
Interest
Full
Clawbacks
(1)
Only
Payment
Only
($151 million) ($334 million) ($782 million)
Scenario II
Scenario I
July 1, 2016
GO Debt
Service
Assumptions
DRAFT
Assumes payment of only available clawback revenues deposited at Banco Popular ($143 million), accumulated April through June 2016 CRIM funds dedicated to debt
service ($5 million), and cash payment of unrestricted funds for variable rate interest ($3 million).
The IBAS and OPE account line items have

been eliminated from the 2016 cash flow
and are assumed to be paid evenly over the
twelve months of fiscal 2017
The estimated rum tax revenue for June

has been updated for Treasury's latest
projections
The collections, general line item has been

updated to reflect Treasurys revenue
projections
General Assumptions (Applicable to All

Scenarios)
The below TSA liquidity scenarios are based on Treasurys June 24th, 2016 cash flow:
Fiscal 2016 Cash Flow Scenarios
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
Non-payment of
AFI RBC debt
service transfer
Non-payment of
PBA June debt
service set-aside
($18 million rent
appropriation
included in June
for PBA
operations)
Payment of
available BPPR
clawback
deposits and
accumulated
CRIM funds to
July 1 GO debt
service
Select Scenario I
Assumptions:
51 TOTAL FUNDS INC. CLAWBACK & RETIREMENT TRUST
49 Retirement Trust Account Balance

50 Available Clawback Account Balance
48 TOTAL AVAILABLE FUNDS
46 TSA Operating Acct. Beg. Bank Cash Balance

47 Net Cash Flow
45 NET CASH FLOW
44 TOTAL DISBURSEMENTS
$21
$72
$72
51
7
$21
$21
$51
$1,306
$14
$7
$1,673
43 Other Disbursements
10
22
28
50
45
65
31
301
265
9
41
40
12
13
11
3
37
45
37
207
2
212
319
74
76
49
41 Loss of Funds Trapped at GDB

42 Proyectos CCC, Malecones y Poblados
39 Payments to Clawback Account

40 Payments to Retirement Account
37 Industrial Development and Conservation Trust

38 Medical Center
35 Tax Refunds
36 Public Building Authority
33 Accounts Payable and Other

34 Stipends, Budgetary Assignments, etc.
31 Compulsory Insurance
32 Center Municipal Revenue Collection (CRIM)
29 Integrated Transit Authority

30 Lottery
27 Highway Transportation
28 AFI RBC
25 ASES (Health Card)

26 ACAA (Vehicle Insurance)
23 Tax Revenue Anticipation Notes

24 GO (Inc. CRIM)
21 University of Puerto Rico

22 GDB Transactions
280
166
309
180
OUTFLOWS:
19 Payroll-Related
20 Pension Benefits
$1,357
$1,680
19
275
27
125
34
280
1
293
23
154
20
65
43
220
81
$555
Aug-15
$803
Jul-15
18 TOTAL INFLOWS
16 Clawback Account
17 Other Inflows
14 Other Revenues or Lines of Credit

15 Tax Credits
12 Federal Funds
13 Line of Credit TRANS
9 Lottery, Traditional
10 CRIM
11 Excise Tax (Rum), Net of Rum Producers
7 Retirement Trust Receipts

8 Lottery, Electronic
5 ERS, JRS Asset Liquidation Transfers

6 TRS Asset Liquidation Transfers
3 Sales/Use Tax
4 Excise Tax (Foreign Company)
INFLOWS:
1 Collections, General
2 PRCCDA Hotel Room Tax
($ in millions)
Fiscal 2016 Cash Flow Scenario I
$136
$136
64
$72
$64
$1,233
31
38
59
243
40
20
31
10
234
(34)
74
167
291
$1,298
35
305
19
16
51
20
17
76
$759
Sep-15
$222
$222
86
$136
$86
$1,256
27
31
49
249
40
69
37
213
47
167
293
$1,342
17
283
24
51
207
78
$674
Oct-15
$153
$153
(69)
$222
($69)
$1,108
25
32
47
181
30
12
227
65
167
287
$1,039
55
17
274
20
41
18
82
$521
Nov-15
$592
57
164
$371
218
$153
$218
$1,487
57
164
28
23
29
216
50
24
18
252
27
196
367
$1,705
50
22
384
23
11
25
142
57
10
92
$885
$248
5
36
$206
(165)
$371
($165)
$1,539
36
27
45
53
197
40
10
12
$225
0
64
$161
(45)
$206
($45)
$1,322
18
28
27
109
55
168
40
17
36
10
7
36
221
37
73
165
291
$1,277
13
256
22
56
53
187
$680
Feb-16
207
330
64
166
284
$1,374
164
18
228
52
57
17
170
$661
Jan-16
FISCAL 2016
Dec-15
$377
143
$234
73
$161
$73
$1,468
79
14
10
34
141
54
244
40
17
63
228
(34)
93
167
292
$1,541
19
340
16
55
63
64
190
$787
Mar-16
$673
$673
438
$234
$438
$1,303
55
31
51
37
295
40
11
12
203
17
75
167
280
$1,741
215
41
30
75
198
$1,174
Apr-16
$392
34
$359
(314)
$673
($314)
$1,644
(4)
34
10
31
24
45
399
40
16
251
203
89
166
309
$1,331
81
364
17
72
192
$602
May-16
$131
$131
(228)
$359
($228)
$1,789
12
100
18
56
50
307
26
16
211
151
201
14
132
168
299
$1,561
143
320
23
30
57
203
$782
Jun-16
$131
$131
117
$14
$117
$17,129
50
51
57
441
99
25
329
625
593
3,065
467
103
242
66
42
303
78
2,666
496
741
76
890
2,041
3,583
$17,246
107
307
275
400
3,541
208
103
51
167
57
337
737
500
1,558
12
$8,884
TOTALS
2016
DRAFT
DRAFT
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
WOther non-general fund (election expenses - $24 million; Health Centers 330 - $42 million;
Other - $77 million) - $143 million
WPension-related - $197 million
WFunding of lines of credit to agencies - $212 million
WPayment of interest bearing accounts and OPE balances - $199 million
WIntragovernmental AP and tax credits (PREPA/PRASA) - $191 million
Insufficient sources of non-General Fund to cover expenditures, some of which require payment
in the first six months of fiscal 2017:
However, given current General Fund revenue projections ($9.148 billion) and budgetary
reserves ($91 million) the General Fund is projected to generate $139 million of cash over the
fiscal year
Approximately 57% of General Fund revenues are not collected until the second half of the fiscal
year yet slightly more than half of the fiscal 2017 General Fund expenditures are disbursed in the
first half of the year causing an intra-year fund liquidity shortfall
Key drivers of cash flow deficit:
The fiscal 2017 baseline cash flow, utilizing the fiscal 2016 Scenario I projected cash balance,
results in a peak cash shortfall of $1.0 billion and a June 30, 2017 ending cash shortfall of
$672 million
Fiscal 2017 Cash Flow Baseline Discussion
DRAFT
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
The net cash flow of the General Fund budget is negative $474 million through January 31, 2017,
after including $400 million of TRANs
The projected cash flow for fiscal 2017 prior to extraordinary measures is negative beginning in
August and reaches a low point of approximately negative $1.0 billion in February 2017
The projected TSA cash flow indicates that the Available Funds for Public Debt Service is negative
on a prospective basis. Act 21 defines the minimum payment on public debt to be [Total Available
Resources less Essential Services Expenses (excluding debt service)]
PR Treasurys fiscal 2016 projected TSA cash balance is $131 million at June 30, 2016, after
payment of GO debt service
Minimum Public Debt Payment
Fiscal 2017 Cash Flow Act 21
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
($350)
($805)
($137)
($427)
($882)
($214)
(77)
($137)
($77)
$1,415
72
24
10
35
63
256
46
10
16
222
48
69
202
289
$1,338
295
17
14
39
83
18
92
35
26
$718
Sep-16
($571)
($1,027)
($359)
(145)
($214)
($145)
$1,444
82
24
10
35
63
289
30
10
16
222
49
69
202
289
$1,299
295
21
84
84
91
35
26
$656
Oct-16
($901)
($1,356)
($688)
(329)
($359)
($329)
$1,393
72
24
10
35
63
247
30
10
16
222
12
48
69
202
289
$1,063
295
23
83
19
93
35
26
$490
Nov-16
($1,136)
($1,591)
($923)
(235)
($688)
($235)
$1,722
76
24
10
40
73
268
46
10
24
222
30
72
48
69
232
434
$1,487
312
31
36
39
99
11
97
35
26
$796
($1,236)
($1,691)
($1,023)
(100)
($923)
($100)
$1,404
42
24
10
35
63
261
30
10
($1,258)
($1,713)
($1,045)
(22)
($1,023)
($22)
$1,329
32
24
10
35
63
235
30
10
16
6
16
222
48
69
202
289
$1,307
295
83
55
186
35
26
$628
Feb-17
222
46
49
69
202
289
$1,304
295
84
83
17
91
35
26
$674
Jan-17
FISCAL 2017
Dec-16
($1,161)
($1,616)
($948)
97
($1,045)
$97
$1,345
32
24
10
35
63
235
46
10
16
222
48
69
202
289
$1,442
295
10
39
84
67
179
35
26
$709
Mar-17
($686)
($1,142)
($474)
474
($948)
$474
$1,392
42
24
10
35
63
267
30
10
16
222
20
49
69
202
289
$1,866
295
22
84
84
78
198
35
26
$1,045
Apr-17
*General Fund expenditures based on budget as recommended to legislature*
See later pages for footnote information.
($43)
($499)
43 FY 2016 Scenario II Ending Cash Balance (Full-Interest)

44 FY 2016 Scenario III Ending Cash Balance (Full Debt Pmt)
Memo:
$169
(306)
38
($306)
$169
$38
$131
40 TSA Operating Acct. Beg. Bank Cash Balance [16]

41 Net Cash Flow
39 NET CASH FLOW
$1,682
$1,410
24
64
24
10
10
74
8
5
63
35
63
275
318
237
30
10
30
10
6
16
16
7
9
7
9
222
222
13
69
48
69
49
36 Capital Expenditures
37 Other Disbursements [15]

35 Medical Center
31 Stipends, Budgetary Assignments, etc. [14]

32 Tax Refunds & Garnishments
33 Public Building Authority Operating Expenses

30 Accounts Payable and Other [13]
27 Lottery
25 Highway Transportation [12]

23 ASES (Health Card) [11]

21 GO (Inc. CRIM) [9]

22 Other Debt Service [10b]
19 Special Projects - Capital Expenditures [8]


18 GDB Transactions [7]
289
202
289
213
OUTFLOWS:
15 Payroll-Related
16 Pension Benefits [6]
$1,103
400
295
$1,720
38
295
14 TOTAL INFLOWS [5]
84
67
83
44
87
91
90
35
26
35
$473
26
Aug-16
$655
Jul-16
12 Federal Funds
10 CRIM
8 Lottery, Electronic [4]


6 ERS, JRS Asset Liquidation Transfers [3]
7 TRS Asset Liquidation Transfers [3]
3 Debt Service Transfers (Legislation Required to Transfer to TSA) [2b]

4 Sales/Use Tax
INFLOWS:
2 Debt Service Transfers (Currently Collected by the TSA) [2a]
($ in millions)
Fiscal 2017 Cash Flow Baseline
($899)
($1,354)
($686)
(213)
($474)
($213)
$1,500
32
24
10
35
63
201
30
10
16
222
10
203
48
69
202
289
$1,287
295
25
84
51
196
32
26
$579
May-17
($884)
($1,340)
($672)
14
($686)
$14
$1,734
39
24
10
35
73
208
46
10
16
222
56
150
201
48
69
202
289
$1,748
295
29
76
10
39
84
52
207
32
26
$899
Jun-17
($884)
($1,340)
($672)
(803)
$131
($803)
$17,769
657
288
124
61
90
627
775
3,061
425
122
200
69
111
80
2,659
218
224
424
55
581
834
2,468
3,616
$16,966
400
3,553
206
113
40
157
336
1,024
486
1,608
411
308
$8,323
TOTALS
2017
DRAFT
DRAFT
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
See later pages for footnote information.
17 Supplier Payments (Pre-Measures)

18 Supplier Payments (Post-Measures)
15 Cash Impact of Electronic Lottery Measure [18]

16 Cash Impact of X-Mas Bonus Measure
Measure
$318
$311
$528
14 Cash Balance After Measures Inc. X-Mas Bonus & Electronic Lottery
Memo:
$528
13 ENDING CASH BALANCE AFTER MEASURES
13
203
16
7
28
7
32
24
29
$358
Payment of all debt service in June 2017 (ex. TRANs) (GF/Debt Fund)
Re-profiling of tax refund payments (GF)
Re-profiling Payment of Intragov. APs and Tax Credits (Non-GF)
Deferral of Supplier Payments (GF & Non-GF)
Eliminate payments related to "Other Revenue or Line of Credit" (Non-GF)
Non-payment of 2017 interest bearing account payments (Non-GF)
Non-Payment of AUCs (GF & Debt Fund) [17]
Re-profiling of capital expenditures (Debt Fund) [17]
Reduction of GDB appropriation (GF)
12 TOTAL MEASURES
3
4
5
6
7
8
9
10
11
(306)
$528
$131
38
Aug-16
Jul-16
$275
$268
98
$411
$314
$92
9
(51)
16
7
20
7
32
24
29
$256
$249
$443
$345
$109
9
(51)
16
7
36
7
32
24
29
(77)
$314
Sep-16
Liquidity Measures (Fund Impacted by Measure Described in Parethesis - See Footnote [17] for more detail):
2 Net Cash Flow Before Measures
1 Beginning Cash Balance
($ in millions)
$289
$282
(48)
$340
$290
$90
9
(51)
16
7
17
7
32
24
29
(145)
$345
Oct-16
$247
$240
$104
$54
$94
12
(51)
16
7
18
7
32
24
29
(329)
$290
Nov-16
CASH FLOW WITH MEASURES
$268
$261
145
$253
$59
$239
102
16
7
23
7
32
24
29
(235)
$54
$261
$261
$245
$51
$92
46
(16)
18
7
32
(24)
29
(100)
$59
FISCAL 2017
Dec-16
Jan-17
$235
$235
$245
$50
$22
(16)
14
7
32
(24)
(22)
$51
Feb-17
$235
$277
$327
$132
($15)
(16)
(42)
19
7
32
(24)
97
$50
Mar-17
$267
$267
$813
$618
$12
(16)
4
7
32
(24)
474
$132
Apr-17
$201
$201
$610
$416
$10
10
(16)
1
7
32
(24)
(213)
$618
May-17
$208
$208
$402
$208
($223)
(236)
(16)
14
7
32
(24)
14
$416
Jun-17
$3,061
$3,061
50
145
$402
$208
$880
212
81
387
200
(803)
$131
2017
TOTALS
The projected TSA bank cash balance at the end of August 2016 is negative $137 million and declines to
negative $1.0 billion by February 2017. The proposed extraordinary measures outlined below show a plan
to maintain positive liquidity through the fiscal year, provided these actions or other actions yielding the
same cash savings are taken.
Proposed Extraordinary Measures
Appendix
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
DRAFT
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
Full payment of
AFI RBC debt
service transfer
Payment of
interest-portion of
PBA June debt
service set-aside
($18 million rent
appropriation
included in June
for PBA
operations)
Variance in
clawback account
receipts (line 16)
compared to
Scenario I is due
to clawback of
AFI RBC
revenues
Payment of
interest to GO
debt
Select Scenario II
Assumptions:


47 Net Cash Flow
45 NET CASH FLOW
$21
$72
$72
51
7
$21
$21
$51
$1,306
$14
$7
$1,673
10
22
28
50
45
65
31
301
265
9
41
40
12
13
11
3
37
45
37
207
2
212
319
74
76
49



38 Medical Center
35 Tax Refunds


30 Lottery
28 AFI RBC


24 GO (Inc. CRIM)

22 GDB Transactions
280
166
309
180
OUTFLOWS:
19 Payroll-Related
20 Pension Benefits
$1,357
$1,680
19
275
27
125
34
280
1
293
23
154
20
65
220
43
81
$555
Aug-15
$803
Jul-15
18 TOTAL INFLOWS
16 Clawback Account
17 Other Inflows

15 Tax Credits
12 Federal Funds
10 CRIM


3 Sales/Use Tax
INFLOWS:
($ in millions)
Fiscal 2016 Cash Flow Scenario II
$136
$136
64
$72
$64
$1,233
31
38
59
243
40
20
31
10
234
(34)
74
167
291
$1,298
35
305
19
16
51
20
17
76
$759
Sep-15
$222
$222
86
$136
$86
$1,256
27
31
49
249
40
69
37
213
47
167
293
$1,342
17
283
24
51
207
78
$674
Oct-15
$153
$153
(69)
$222
($69)
$1,108
25
32
47
181
30
12
227
65
167
287
$1,039
55
17
274
20
41
18
82
$521
Nov-15
$592
57
164
$371
218
$153
$218
$1,487
57
164
28
23
29
216
50
24
18
252
27
196
367
$1,705
50
22
384
23
11
25
142
57
10
92
$885
$248
5
36
$206
(165)
$371
($165)
$1,539
36
27
45
53
197
40
10
12
$225
0
64
$161
(45)
$206
($45)
$1,322
18
28
27
109
55
168
40
17
36
10
7
36
221
37
73
165
291
$1,277
13
256
22
56
53
187
$680
Feb-16
207
330
64
166
284
$1,374
164
18
228
52
57
17
170
$661
Jan-16
FISCAL 2016
Dec-15
$377
143
$234
73
$161
$73
$1,468
79
14
10
34
141
54
244
40
17
63
228
(34)
93
167
292
$1,541
19
340
16
55
63
64
190
$787
Mar-16
$673
$673
438
$234
$438
$1,303
55
31
51
37
295
40
11
12
203
17
75
167
280
$1,741
215
41
30
75
198
$1,174
Apr-16
$392
34
$359
(314)
$673
($314)
$1,644
(4)
34
10
31
24
45
399
40
16
251
203
89
166
309
$1,331
81
364
17
72
192
$602
May-16
($81)
($81)
(440)
$359
($440)
$1,990
12
98
36
56
50
307
26
16
211
334
201
14
132
168
299
$1,550
132
320
23
30
57
203
$782
Jun-16
($81)
($81)
(95)
$14
($95)
$17,329
50
51
57
439
99
25
347
625
593
3,065
467
103
242
66
44
303
78
2,666
678
741
76
890
2,041
3,583
$17,234
107
295
275
400
3,541
208
103
51
167
57
337
737
500
1,558
12
$8,884
TOTALS
2016
DRAFT
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
Full payment of
AFI RBC debt
service transfer
Payment of total
PBA June debt
service set-aside
($18 million rent
appropriation
included in June
for PBA
operations)
Variance in
clawback account
receipts (line 16)
compared to
Scenario I is due
to clawback of
AFI RBC
revenues
Payment of full
debt service due
to GO debt
Select Scenario III

Assumptions:


47 Net Cash Flow
45 NET CASH FLOW
$21
$72
$72
51
7
$21
$21
$51
$1,306
$14
$7
$1,673
10
22
28
50
45
65
31
301
265
9
41
40
12
13
11
37
45
37
207
2
212
319
74
76
49



38 Medical Center
35 Tax Refunds


30 Lottery
28 AFI RBC


24 GO (Inc. CRIM)

22 GDB Transactions
280
166
309
180
OUTFLOWS:
19 Payroll-Related
20 Pension Benefits
$1,357
$1,680
19
275
27
125
34
280
1
293
23
154
20
65
220
43
81
$555
Aug-15
$803
Jul-15
18 TOTAL INFLOWS
16 Clawback Account
17 Other Inflows

15 Tax Credits
12 Federal Funds
10 CRIM


3 Sales/Use Tax
INFLOWS:
($ in millions)
Fiscal 2016 Cash Flow Scenario III
$136
$136
64
$72
$64
$1,233
31
38
59
243
40
20
31
10
234
(34)
74
167
291
$1,298
35
305
19
16
51
20
17
76
$759
Sep-15
$222
$222
86
$136
$86
$1,256
27
31
49
249
40
69
37
213
47
167
293
$1,342
17
283
24
51
207
78
$674
Oct-15
$153
$153
(69)
$222
($69)
$1,108
25
32
47
181
30
12
227
65
167
287
$1,039
55
17
274
20
41
18
82
$521
Nov-15
$592
57
164
$371
218
$153
$218
$1,487
57
164
28
23
29
216
50
24
18
252
27
196
367
$1,705
50
22
384
23
11
25
142
57
10
92
$885
$248
5
36
$206
(165)
$371
($165)
$1,539
36
27
45
53
197
40
10
12
$225
0
64
$161
(45)
$206
($45)
$1,322
18
28
27
109
55
168
40
17
36
10
7
36
221
37
73
165
291
$1,277
13
256
22
56
53
187
$680
Feb-16
207
330
64
166
284
$1,374
164
18
228
52
57
17
170
$661
Jan-16
FISCAL 2016
Dec-15
$377
143
$234
73
$161
$73
$1,468
79
14
10
34
141
54
244
40
17
63
228
(34)
93
167
292
$1,541
19
340
16
55
63
64
190
$787
Mar-16
$673
$673
438
$234
$438
$1,303
55
31
51
37
295
40
11
12
203
17
75
167
280
$1,741
215
41
30
75
198
$1,174
Apr-16
$392
34
$359
(314)
$673
($314)
$1,644
(4)
34
10
31
24
45
399
40
16
251
203
89
166
309
$1,331
81
364
17
72
192
$602
May-16
($537)
($537)
(896)
$359
($896)
$2,445
12
98
43
56
50
307
26
16
211
782
201
14
132
168
299
$1,550
132
320
23
30
57
203
$782
Jun-16
10
($537)
($537)
(551)
$14
($551)
$17,785
50
51
57
439
99
25
354
625
593
3,065
467
103
242
66
44
303
78
2,666
1,127
741
76
890
2,041
3,583
$17,234
107
295
275
400
3,541
208
103
51
167
57
337
737
500
1,558
12
$8,884
TOTALS
2016
DRAFT
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
(256)
(256)
400
400
144
Change in cash
Cumulative Change in Cash
TRANs Adjustment
TRANs Adjustment (Cumulative Cash Impact)
Cumulative Change in Cash Inc. TRANs
(32)
400
(432)
(176)
752
254
49
69
48
2
74
30
100
63
34
8
15
576
384
87
67
38
Aug-16
12
400
(388)
44
752
254
49
69
48
3
74
30
100
63
34
8
15
796
631
92
18
23
14
17
Sep-16
(62)
400
(462)
(73)
754
254
49
69
49
2
74
30
100
63
34
8
15
680
560
91
8
21
Oct-16
(271)
400
(671)
(209)
755
254
49
69
48
5
74
30
100
63
34
8
15
545
411
93
19
23
Nov-16
(391)
400
(791)
(120)
963
381
58
69
48
47
74
30
104
73
38
8
27
842
675
97
11
23
6
31
Dec-16
(474)
400
(874)
(83)
774
254
49
69
40
40
74
30
92
63
34
8
15
691
583
91
17
Jan-17
(427)
400
(827)
47
735
254
49
69
39
2
74
30
92
63
34
8
15
782
541
186
55
Feb-17
(272)
400
(672)
155
735
254
49
69
39
2
74
30
92
63
34
8
15
890
612
179
67
23
10
Mar-17
218
400
(182)
489
756
254
49
69
40
20
2
74
30
92
63
34
8
15
1,245
947
198
78
22
Apr-17
57
(200)
200
(143)
39
738
254
49
69
39
3
2
74
30
92
63
34
8
15
777
505
196
51
25
May-17
139
(200)
139
283
847
254
49
69
39
1
96
74
30
92
73
34
8
22
1,130
809
207
52
23
10
29
Jun-17
139
[c]
139
139
9,523
[b]
3,173
598
834
526
24
210
885
30
361
1,151
775
613
90
52
201
9,662[a]
7,229
1,608
486
93
40
206
Total
DRAFT
[a] Represents $9.1 billion revenue projection, $514 million of income tax refunds, $48 million of additional electronic lottery inflows assuming a contract is not signed under the current terms.
[b] Represents $9.1 billion budget recommended to legislature, with $514 million of income tax refunds, less $91 million budgetary fund.
11
[c] Represents $91 million budgetary fund and $48 million of additional electronic lottery inflows assuming a contract is not signed under the current terms.
963
254
53
69
49
7
74
30
100
63
236
8
15
707
571
91
44
Jul-16
Total disbursements
Payroll-related
Pension benefits
University of Ruerto Rico
GDB transactions
Tax revenue anticipation notes
G.O. debt service
ASES (Health card)
ACAA (Vehicle insurance)
Highway Transportation
AFI RBC
Bus system
Lottery
Compulsory insurance
Center Municipal Revenue Collection (CRIM)
Accounts payable and other
Stipends, budgetary assignments, etc.
Tax refunds
Public Building (Rent)
Industrial Development and Conservation Trust
Medical center
Capital expenditures
AP paydown
Other
Disbursements
Total collections
Collections, general
Room tax clawbacks
Sales/use tax
Excise tax (Foreign company)
ERS/JRS
TRS
Lottery, electronic
Lottery, traditional
CRIM
Excise tax (Rum)
Federal funds
Other revenue or line of credit
Government Development Bank transactions
Tax credit
Line of credit TRANs - FY2016
Debt payment
COFINA
Other
Collections
($ in millions)
Fiscal 2017 Baseline Cash Flow General Fund Segregation (Preliminary Draft)
DRAFT
Working Group for

the Fiscal and
Economic
Recovery
of Puerto Rico
[1a]
[1b]
[2a]
[2b]
[3]
12
Includes inflows of $725 million that are typically paid to the Trustee of COFINA bondholders. The use of this is $312 million of AP reductions, $280 million in capex and $133 million of debt service
Assumes that Sales Tax revenues continue to be paid to the Trustee of COFINA bondholders.
Includes revenues pledged to 1968 Resolution and 1998 Resolution HTA bonds. These funds currently flow through the TSA and do not require action to redirect the collections to the TSA.
Includes revenues pledged to PRIFA "Crudita", PRDCC, UPR, ERS and are assumed to be transferred to the Department of Treasury. These funds do not currently flow through the TSA and require action in order to redirect the collections to the TSA.
Net assets liquidation from ERS and TRS, net of Employee and Employer Contribution.Excludes Additional Uniform Contributions.Estimates provided by Hacienda and corroborated with ERS and TRS schedules. This excludes paydown of
approximately $200 million that ERS owes to the TSA from FY 2016. The esimated asset liquidiation transfers are preliminary and subject to review and approval from ERS and TRS.
[4] General Fund revenue estimate of $93 million assumes that an agreement with the current vendor is not signed. As a result, an advance from the current vendor of $150 million and an increase in vendor revenue sharing will not occur. As per the
current terms of the agreement, the GF's revenue share of lottery proceeds will increase by $48 million as compared to what is contemplated in Treasury's $9.1 billion revenue estimate.Assumes an additional $70 million in non-General Fund
revenue is collected and partially offset by $64 million of outflows to CRIM.
[5] General Fund revenue totals $9.59 billion, including $9.1 billion of net revenue in addition to $490 million of tax refunds.Also assumes that an agreement with the current vendor is not signed to advance $150 million, thus $48 million was added to
electronic lottery.
[6] Net pension benefits - $2.081 billion and $387 million of Additional Uniform Contributions
[7] General Fund - $375 million for escrow and deposits accounts, $76 million for operating, restructuring and litigation, $20 million other assignments. Non-General Fund - $111 million Act 30/31
[8] Comprehensive Cancer Center ($40 million) and other infrastructre projects ($15 million)
[9] GO payment $111 million; CRIM payment to GO's of $113 million
[10a] General Fund - $99 million - GDB ($59 million), PBA ($30 million), PFC ($3 million), APLA ($3 million), and PRIFA BANs, GO notes, and GSA (collectively, $3 million)
Non-General Fund - $119 million - COFINA ($133 million), ERS ($63 million), PRHTA ($24 million), PRIFA ($12 million), Convention Center ($4 million), UPR ($2 million), PRIDCO ($1 million), and Reserve ($13 million)
[10b] General Fund - $99 million - GDB ($59 million), PBA ($30 million), PFC ($3 million), APLA ($3 million), and PRIFA BANs, GO notes, and GSA (collectively, $3 million)
Non-General Fund - $119 million - ERS ($63 million), PRHTA ($24 million), PRIFA ($12 million), Convention Center ($4 million), UPR ($2 million), PRIDCO ($1 million), and Reserve ($13 million)
[11] ASES payments include $885 million of General Fund appropriations and $1,774 million of federal funds
[12] Act 30/31 - $221 million is split between HTA ($111 million) and GDB ($111 million). Requires legislation in order to disburse the amount to PRHTA and GDB. Without legislation the full amount will be sent to GDB.
[13] Accounts payable include the following:
General Fund - $1,151 million including legislative operating expenses ($109 million), Dept. of Education operating expenses ($251 million), other agency operating expenses ($550 million), appropriations to Prepa and Prasa ($165 million),
liquidation of trusted employees ($12 million), accounting and financial system ($24 million), and election process ($40 million)
Non-General Fund - $438 million
Non-General Fund - Other Lines of Credit - $212 million
Federal Funds - $1,260 million
[14] Stipends and budgetary assignments include the following:
Judiciary Formula - $323 million
PRIMAS (Insurance) - $16 million
Third Party Appropriations - $55 million
Legislative Appropriations - $31 million
Agency Special Appropriations - $202 million
Appropriations Managed by OMB - $73 million
Operational Subsidies - $75 million
[15] General Fund Act 105 Expenses - $201 million; Non-General Fund - $456 million, including $24 million for the election process, $81 million IBAS risk, payment of deferred outflows from 2016 for IBAS/OPE balances of $118 million, $42 million
Health Centers 330 and $191 million of intra-government expenses. IBAS and OPE disbursements are distributed evenly over the year, actual disbursements are dependent on judicial and agency requirements.
[16] Based on Treasury's June 24, 2016 cash flow, see FY 2016 - Scenario I.
[17] GF - General Fund; Non-GF - Non-General Fund; "Debt Fund" represents special budgetary fund - Debt Service, Economic Development and Retirement System Fund; FF - Federal Funds.
[18] Agreement with the current vendor is signed to advance $150 million (65% - TSA; 35% Municipalities, unless a law is established). This advance is estimated to reduce electronic lottery revenue by $48 million.
Footnotes
Commonwealth of Puerto Rico

Validation of Fiscal Year 2017 General Fund
Revenue Projection
By: Conway MacKenzie, Inc.
VALIDATION OF FISCAL YEAR 2017 GENERAL FUND REVENUE PROJECTION
MAY 2016
Background and Scope of Work

The Puerto Rico Fiscal Agency and Financial Advisory Authority requested Conway MacKenzie, Inc.
(CM) to validate the FY 2017 Revenue Projection for the Commonwealth of Puerto Rico1. CMs scope
was limited to the General Fund revenue projected by PR Department of Treasury (Treasury) for the
period of July 1, 2016 through June 30, 2017 (FY 2017). The validation process consisted of analyzing
Treasurys revenue projection methodology and application of the methods used to project FY 2017
revenue for the General Fund.
Analysis Performed
1. The procedures used in the validation of the Revenue included, but were not limited to, the
following activities:
a. Met with the Planning Board to discuss their macroeconomic forecast for FY 2017
b. Discussed revenue projections with the Office of Economic and Financial Affairs within
the Puerto Rico Department of Treasury (Treasury)
c. Analyzed actual revenues for the period of July 1, 2016 through April 30, 2016
d. Analyzed Treasurys May through June 2016 revenue projection
e. Analyzed Treasurys FY 2017 revenue projection
f.
Analyzed variances between projected FY 2016 and FY 2017 (See Appendix A)
g. Inquired about significant court rulings impacting the General Fund revenue
h. Analyzed new laws or changes in laws that might materially impact the revenue
projection of the General Fund
i.
Analyzed historical error rates
2. CMs activities did not (see limitations):

a. Analyze of macroeconomic models or assumptions
b. Analyze the revenue impact of Treasurys ongoing compliance efforts
to the extent that the Puerto Rico Fiscal Oversight and Economic Recovery Board has not been constituted, to
validate or select the independent consultant that will validate the revenue projections of the Commonwealth for
any given fiscal year prior to such revenue projection being submitted to the Legislative Assembly as part of the
Commonwealths budget pursuant to Article 4(a) of Act No. 147 of June 18, 1980, as amended (Act 21, Puerto Rico
Emergency Moratorium and Financial Rehabilitation Act, Section 603 (f)(5))
MAY 2016
Revenue Projection Process

Treasurys revenue projection is short-term and covers a one-year period. Treasury uses various
forecasting techniques to project revenue including; econometric models, trend analysis, microsimulation
models. The Revenue Projection also considers macroeconomic projections provided by the Puerto Rico
Planning Board (Planning Board), changes in tax law and court orders. A summary of the process is
below:
FY 2016
Projection
General Fund Revenue July 2015 through April 2016 (Preliminary Actual)
Revised estimates for May through

June 2015
(+ / -)
Adjustments related to one-time

revenue, credits, amnesty
One-offs,
nonrecurrent,
and
incremental
revenue
items
Changes in tax law or court rulings
Macroeconomic assumptions
FY 2017 General Fund Revenue

Budget
FY 2017
Projection
FY 2016 and FY 2017 General Fund Revenue Projections

Treasurys projects that revenue in FY 2016 will be $9.292 billion, decreasing to $9.1 billion in FY 2017.
The net reduction of $192 is based in Treasurys assessment of both favorable and unfavorable
considerations between projected revenue for FY 2016 compared to FY 2017, as shown below.
FY 2016 TO FY 2017 REVENUE PROJECTION VARIANCESS ($MM) (SOURCE: TREASURY)
+63
-126
+67
-75
+70
$9,292
-70
-58
-25
General Fund
Net Revenues
FY 2016
Annualized
Sales Tax/B2B
Act 154 &

Cigarette Trend
Credit
Adjustments
One-time
Revenue
Economic
Factors
Transfer
Pricing Tax 1
Traditional &
Electronic Lottery
Tax Amnesty
(Non-Recurring)
-28
Increase to
COFINA Debt
-10
$9,100
Other
General Fund
Net Revenues
FY 2017
MAY 2016
Summary of Findings
The error rate of General Fund revenue since FY 2014 has been above average.2,3 The variances that
occurred in FY 2016 are primarily attributable to two factors; (1) tax legislation related to Act 72, which
increased sales and use tax from 7% to 11.5% among other changes; and (2) the original FY 2016 revenue
projection estimates from May and June 2015 included one-time amnesty revenue. Since Treasury is not
anticipating any significant one-time revenue in May and June or changes to tax legislation these risk
factors are significantly reduced for the FY 2017 revenue projection.
CM noted that there was a varying quality of data supporting the assumptions in the projections (see
Appendix A). The detail ranged from actual data with detailed support (more reliable) to estimates of
segments of historical data (less reliable). Overall, based on the information available to Treasury, it is
CMs opinion that the supporting data was used properly (when available), and that the estimates used
when data was not available were reasonable.
CM analyzed the assumptions and the process used by Treasury to project FY 2017 General Fund
revenue and concluded these are reasonable. CM concludes that as long as FY 2016 revenue is
approximately $9.292 billion, the FY 2017 revenue projection of the General Fund totaling $9.1 billion is
reasonable. CM recommends that Treasury monitor the General Fund revenue for May and June 2016
and update FY 2017 revenue projections if material variances occur.
Limitations
This report is based on CMs analysis of the General Fund revenue only. Additional revenue for the
Commonwealth of Puerto Rico including, but not limited to; Public Corporations, Component Units,
Federal Funds, and other Non-General Fund revenue is not within the scope of this report.
CM relied upon Treasurys FY 2016 projected revenues to validate the FY 2017 revenue projection.
Actual revenue for the months of May and June 2016 may be significantly different from the projections
and CMs conclusion, as a result may change.
CM did not perform any economic analysis and relied upon information provided by both Treasury and
the Planning Board.
From 1987 to 2013 the error rate of over 1,300 State revenue forecasting observations had a mean of 1.0% as a
percentage of actual revenue. (State Tax Revenue Forecasting Accuracy: Technical Report (Rockefeller Institute,
pg. 7)
3
Variances from actual results to the original budget for FY 2014 and FY 2015 were (-5.4%) and (-6.7%),
respectively as a percentage of actual revenue. The FYTD April 2016 variance is (-3.2%) as compared to the original
projection.
MAY 2016
Treasury relied on significant assumptions in developing the FY 2017 revenue projections, which are out
of their control. If these assumptions change there may be a material impact to the estimated amounts.
1) Impact of legislation the FY 2017 revenue projection assumes that sales and use tax will
continue at a rate of 11.5% and business-to-business tax at a rate of 4%. The projection also
assumes that the current exemptions for sales and use tax remain consistent. Further it is assumed
that there are no amendments to current tax laws. Compliance measures are anticipated to offset
any unfavorable economic factors for sales and use tax.
2) Impact of judicial rulings Treasury has appealed the decision related to the Wal-Mart case.
There is no ruling on the appeal at this time and a replacement tax has not been considered for the
FY 2017 revenue projection.
3) Electronic lottery Treasury has assumed a contract will be signed relating to the electronic
lottery and a $45 million reduction in electronic lottery revenue as a result.
4) Use of estimates Treasury has estimated the impact of revenue related to Transfer Pricing and
assumes the full amount will be collected in FY 2016. Estimates on the macro-economic impact
of the economy of the Planning Board were also included in the FY 2017 revenue projections.
5) Compliance efforts Compliance efforts have been widely reported, however, the impact of these
measures on FY 2016 revenue has not been quantified by Treasury. Treasury assumes that
compliance efforts will continue in FY 2017.
Disclaimer
This report represents a summary of Conway MacKenzie, Inc.s (CM) findings and should not be used
for any purpose other than that for which it has been designated.
CM, including its officers, directors, employees, agents, attorneys, advisors, members, partners or
affiliates, makes no representation or warranty, express or implied, with respect to the information
contained herein; and we hereby expressly disclaim any such representation or warranty. CM assumes no
responsibility with respect to the accuracy or completeness of the information contained herein and shall
have no obligation to update or correct any of the information. CM neither owes nor accepts any duty or
responsibility to any reader or recipient of this presentation, whether in contract or tort, and shall not be
liable for or in respect of any loss, damage (including without limitation consequential damages or lost
profits) or expense of whatsoever nature which is caused by, or alleged to be caused by, the use of this
presentation or which is otherwise consequent upon the gaining of access to this report.
CMs work did not constitute an audit conducted in accordance with generally accepted auditing
standards for Fiscal Year 2016 (FY 2016) or prior years revenue, an examination of internal controls
MAY 2016
or other attestation or review services in accordance with standards established by the American Institute
of Certified Public Accountants or any other organization and as such, recipients shall acknowledge the
reports limitations. Accordingly, CM does not express an opinion or any other form of assurance on the
financial statements or any financial or other information or the internal controls of the Commonwealth of
Puerto Rico (the Commonwealth).
Any statements and assumptions contained in this report, whether forward-looking or historical, are not
guarantees of future performance and involve certain risks, uncertainties, estimates, and other
assumptions made in this report. The economic and financial condition of the Commonwealth and its
instrumentalities is affected by various financial, social, economic, environmental, and political factors.
These factors can be very complex, may vary from one fiscal year to the next, and are frequently the
result of actions taken or not taken, not only by the Commonwealth and its agencies and instrumentalities,
but also by entities such as the government of the United States. Because of the uncertainty and
unpredictability of these factors, their impact cannot be included in assumptions of this report. Future
events and actual results may differ materially from any estimates, projections, or statements contained
herein. Nothing in this report should be considered as an express or implied commitment to do or take, or
to refrain from taking, any action by the Commonwealth, the Government Development Bank for Puerto
Rico (GDB), or any government instrumentality in the Commonwealth. Nothing in this report shall be
considered a solicitation, recommendation or advice to any person to participate, pursue or support a
particular course of action or transaction, to purchase or sell any security, or to make any investment
decision.
By accepting this report, the recipient shall be deemed to have acknowledged and agreed to the terms of
these limitations.
(70) C
(58) C
(25) D
(28) D
(10) C
(392)
$
$
$
Wal-mart case 2
Traditional and Electronic Lottery
Tax Amnesty (non-recurring)

Increase to COFINA Debt
Other
Sub-total Decreases to FY 2016 Revenue
Total Variance from FY 2016 to FY 2017
General Fund Projected Net Revenues - FY 2017
Source: Treasury
9,100
Wal-Mart Puerto Rico, Inc. v. Juan C. Zaragoza-Gomez, Case No.

3:15-CV-03018, declared this tax invalid.
Footnote:
(75) E
Economic factors
(192)
(126) A
63 B
200
Credit adjustments
Sub-total Increases to FY 2016 Revenue
Decreases to FY 2016 Revenue:

One-time Revenue
67 C
Act 154 and Cirgarette trend
9,292
70 C
Revenue 1
General Fund
Increases to FY 2016 Revenue:

Annualized Sales Tax/B2B
Treasury Adjustments to Project FY 2017 Revenue:
General Fund Projected Net Revenues - FY 2016
($ in millions)
Treasury Methodology
Adjusted electronic lottery based on anticipated

agreement and traditional lottery based on historical
trends
Removed one-time revenue from projection
Reduction to revenue related to increase in debt service
payments
Increase income tax refund reserve
Assumes that certain large payments will not occur in FY

2017
Applied economic factors to individual and corporate
income tax, and motor vehicle excise fees. The
economic impact related to sales tax is offset by
compliance efforts.
Estimated based on historical corporate tax returns,
actual data to quantify the impact of the tax or if it was
collected in FY 2016 is unavailable
Annualized historical FY 2016 revenue. The economic

impact related to sales tax is offset by compliance
efforts.
Adjusted based on input from Act 154 tax payer and
recent revenue of excise taxes on cigarettes
Normalized revenue for credits taken during FY 2016
Actual data for July 2015 through April 2016, projected

May and June
Appendix A: FY 2016 AND FY 2017 REVENUE VARIANCES
Historical refund data from individual tax returns
Actual amnesty revenue received in FY 2016

Based on loan documentation
Anticipated agreement with electronic lottery vendor

and historical revenue
Micro-simulation model of historical
Planning Board and Treasury Economic Analysis
Historical revenue data
Credits taken in FY 2016
Historical revenue and data from certain tax payers
Actual revenue for FY 2016
Historical trends
Supporting Data
Projection is reasonable
CM could not determine whether or not the tax has

been paid or the accuracy of the estimate. Potential risk
if the actual amount paid in FY 2016 is higher than $70
million.
If these do recur this item represents a potential

opportunity to the projection
CM relied upon Treasury's application of the economic
factors
Projection is reasonable for SUT and B2B, pending

compliance and economic targets are met.
Projection is reasonable, pending May and June 2015

revenues are on target
Comments
MAY 2016

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DEF EX 15

Estabilizar Derechos Presentacin

Garantias Fianzas Aceleradas (Morales Feliciano)

Fondo Emergencias Ambientales

Help America Vote Act grant 39011

CONFISCACIONES JUSTICIA FEDERAL

Puente Verde Latinoamericano

Caso Morales Feliciano

Consejo Playa Ponce

Programa Patrimonio Natural

Nacional Financ. Quehacer Cultural

Fondo Especial Depto. Justicia

Acervo Des. Const. Carr. Puentes

Junta Reglamentadora de Telecomunicaciones

Comisin Estatal de Elecciones

Junta de Calidad Ambiental

Oficina Servicios con Antelacion al Juicio

Policia de Puerto Rico

Oficina Comisionado Asuntos Municipales

Oficina Comisionado Asuntos Municipales

Oficina Comisionado Asuntos Municipales

Junta de Calidad Ambiental

Administracion de Servicios contra la Adiccin

Junta Reglamentadora de Telecomunicaciones

Departamento de Recursos Naturales

Ley 66 Mantenimiento de Infraestructura

Programa Patrimonio Natural

Garantia requerida por Tribunal Federal

Caso Morales Feliciano

Help America Vote Act grant 39011

Fondo Emergencias Ambientales

Garantias Fianzas Aceleradas (Morales Feliciano)

Confiscaciones Justicia Federal

Fondos Federales OCAM 2011

Fondos Federales OCAM 2012

Fondos Federales OCAM 2013-JB-FX-0022

Fondos para el Programa de Justicia Juvenil. Se asignan

No se generan gastos contra la cuenta

Fondo Ambiental Puente Verde Latinoamericano

Servicios contra la adiccin

Universal Service Fund

Estabilizar Derechos Presentacin

Ley 96 y 73 para mantener carreteras y puentes en

Reserva Seguro de Vida Maestros para pago a beneficiarios

USOS DE FONDOS DEPOSITADOS

Nacional Financ. Quehacer Cultural

Acervo Des. Const. Carr. Puentes

Departamento de Transportacion y Obras Pblicas

Plan de Seguros del Maestro

Fondos del Seguro Choferil

Fondos para el pago de beneficios de Incapacidad

Sistema de Retiro de Maestro

Loteria de Puerto Rico

Departamento del Trabajo

Departamento del Trabajo

Benef. Incapacidad-Depto. Trabajo

Seguro Social de Choferes

BALANCES DE CUENTAS IBAS EN BGF

272-0280000-081-2004 grant 39011

272-0360000-081-2012 grant 2011-JB-FX-0034

272-0360000-081-2013 grant 2012-JB-FX-0048

272-0360000-081-2014 grant 2013-JB-FX-0022

Departamento del Trabajo y Recursos Humanos