HUD No. 05-037
March 30, 2005
HUD ISSUES VIRGIN ISLANDS HOUSING AUTHORITY STATUS REPORT
Receiver teams make steady progress on road to recovery
WASHINGTON - A status report of the Virgin Islands Housing Authority, issued by the U.S. Department of Housing and Urban Development today, cites past problems at VIHA and lays out key areas the agency and its federal receivership team will address over the next 12 months.
"This report illustrates how very troubled VIHA was when HUD took control just 18 months ago," said HUD Assistant Secretary Michael Liu. "Now that the receivership team has addressed the immediate financial and management concerns to keep the agency solvent, we are ready to put in place policies and practices that will stabilize the agency over the long term."
The report, which was shared with U.S. Virgin Islands Governor Charles Turnbull's office, U.S. Delegate Donna Christian-Christensen and the U.S. Virgin Islands State Legislature, identifies the critical problems found at VIHA when HUD assumed control August 2003. Problems ranged from crucial health and safety violations in poorly kept public housing units to serious financial deficiencies that left VIHA operating under a budget deficit of approximately $3.5 million. Specific findings identified in today's report include:
- Hurricane damage to public housing properties from 1995 and 1996 had not been repaired. Several communities had severe termite and rat infestations and both routine maintenance and emergency repairs were minimal.
- Documentation and supporting records of several VIHA financial transactions did not corroborate with the general ledger balances of those accounts. Proper classification of various transactions could not be validated.
When the initial HUD receivership team, headed by Donna Ayala, arrived at VIHA, its primary task was to take steps to stop the hemorrhaging that was destroying the agency. The team made significant progress addressing many of those critical issues, including:
- Reconciled bank statements for a two-year period. This gave the agency vital information regarding cash balances, which was an important step toward developing a strategy to pay on long-standing unpaid invoices to vendors for services performed.
- Negotiated a repayment agreement with the Water and Power Authority (WAPA) to satisfy a $4.2 million debt to ensure resident water services continued. To date $2.1 million has been repaid and full repayment is expected by year end.
- Reviewed all procurement contracts and cancelled those deemed non-essential. This resulted in savings of $2.8 million. The elimination of redundant staff positions also saved the agency $1.4 million annually.
Finally, the report identifies key actions the current receivership team, headed by Jose Bosque, will address in the coming months. The focus will be to establish policies that will get VIHA on solid footing for local control. Planned activities include:
- Establishing new public housing vacancy reduction plan and the development of a public housing homeownership initiative.
- Hiring of key senior staff - chief financial officer and executive director - to build internal capacity needed for successful future operation and to establish the foundation for returning the housing authority back to local control.
- Commissioning a study on the flat rent structure to assess the viability of implementing a new rent structure based on the current housing market in St. Croix and St. Thomas. The study will be conducted first in St. Croix to gauge VIHA unit competitiveness with the local low-income housing market.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.