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@ GOVERNOR OF PUERTO RICO Ricardo Rossellé Nevares ‘BY ELECTRONIC MAI, ‘April 11,2019 Mr. sé B. Caen It Chairman ‘The Finacial Oversight and Management Board for Puerto Rio P.O. Box 192018 San Juan, PR 00919-2018, Re: Recommendations regarding the Puerto Rico Public Browdcasting Corporation ear Chairman Carvin: “The Financial Oversight and Management Boatd for Puerto Rico (the “Oversight Board” of “Board” has recommended tothe elected Government of Puerto Rico (the "Government" that the rights and ownership ‘ofthe Puerto Rico Pubic Broadcasting Corporation (“PBC”) be transfered toa private non-profit ent. ‘According to the Oversight Boar, this wil increase growth opportunities, enhance the programming ‘offering, and save the Government money. As required by section 205(0) ofthe Puerto Rico Oversight, ‘the Government accepts in principle said recommendation and wll stat the process fo implement ito the extent permite by federal la. I Management, and Economic Stability det *PROMESA”), 48 USC. 8§ 2101-2241, | wit o notify that For over sisty yeats, fiestas a subsidiary of the Puorto Rico Telephone Authority, and chen as an independent public corporation, PBC has provided the People of Puerto Rico valuable non-commercial caluclate snd educational quality programming. These stations have also payed a critical role ding emergencies, as they have served asthe main communication channels for government officials to provide ‘valuable information tothe residents of Puerto Rico, including those that live in remate parts ofthe island, Currently, PRC owns and operates two TV stations (W.LP.R, TL. 6 and WLPM,'TN. 3) and two radio statins (040 AM and 91.3 FM). The programming of PBC is also avalable online at its website sow ip PBC ts partly funded by the Government and by the Corporation for rublc troadeasting, a nonpront corporation erated by the Public Broadcasting Act of 1967, 47 U.S.C. § 396, PBC’s budget has been significantly reduced during the past 10 years. Specifically, PBC's budget for fisal yer 2008-2009 was $24,535 million, while for fiscal ear 2018-2019 It was reduced to $14,912 millon. This represents» 40% redvction, As previously mentioned, suid budget includes appropriations from the General Fund of the Government, as well as federal funds and income generated by PBC. It must be emphasized that the Government General Fund appropriations to PBC have also decreased significantly as for fiscal year 2008 RICARDO ROSSELLO NEVARES OFFICE OF THE GOVERNOR GOVERNOR LA FORTALEZA 2009 were $20,083 million’ and for fiseal year 2018-2019 were reduced to $8,126 million’, which represents a 60% reduction. Given the current fiseal ers, the Government is commited to continue adjusting its operations and to further reduce its expenses. Sui reductions will require PBC to adjust its ‘operations, transform its business model to increase its revenues and become less dependent on Government appropriations. In iat ofthe foregoing reated a Special Committee in charge of implementing the Oversight Board's recommendation. Said Commitee shal be in charge of drafting a bill to amend Act 216-1996, as amended, 2ILPRA. §§ 501-513, to enable the creation ofa new private non-profit corporation and the transfer of rights and ownership of PAC to said entity. Moreover, the Special Commits must also work together with ‘he Fedecal Communications Commission (FCC), given tat the transfer of right and awnership of FBC will probably require the approval of said Federal agency. The expectation i tha this recommendation is {ally implemented on or before June 30, 2020, subject to the approval of appropriate state and federal government entities. “The members ofthe Special Committee ar: 1) Philippe Mesa Pabn, Secretary of Public Policy at Fortaleza, 2) Brie Delgado Santiago, President of PBC; 3) Sandra Tores Lépez, Commissioner ofthe Puerto Reo Telecommunications Bureau; 4 Christan Sobrino Vega, Excoutive Director of the Puerto Rico Fiscal Agency and Financial ‘Advisory Authority (‘AAFAP"; by its Spanish acronym, | am also requesting the Oversight Board to appoint an addtional ith member tothe Special Commitee. also request that the Oversight Board provides the Special Committe with the resouresit can afford to sit in peparing implementation materials nd execting the same "Notwithstanding the above, iis the Governments position tht appropriations to PBC andor grants to the new private non-profit entity that receives the ownership and rights of PRC, should continue at sustainable level, so thatthe services provided to the People of Puerto Rico are not interrupted, This isthe same model Implemented in other states and jurisictions ofthe United States, For these reasons, the Government has concluded tht the forogoing recommendation is adequate nd accepts in principle to adope it, subject tothe aforementioned. ‘Very truly yours, Ri . Governar of Puerto Rico ce: Members ofthe Financial Oversight and Management Boa of Puerto Rico "ee Joint Resolution 6.2008 and Joint Resolution 57-2007 * see Certified Budget for fiscal year 2018-2019, as cetfed by the Oversight Board

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