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VIHA FORCED TO CUT SPENDING, MAY FACE LAYOFFS

Dec. 2, 2002 – Federal housing officials are demanding that major changes be made to streamline the operation of the V.I. Housing Authority. As a result, an undisclosed number of VIHA employees may soon face layoffs.
The authority's newly appointed executive director, Ray Fonseca, says changes already under way will have to include a cost reduction in its 400-member labor force. Fonseca said he spent part of the holiday weekend developing a plan to bring that reduction about.
The reduced spending plan calls for a cutback by the end of the year in services provided by the V.I. Housing Authority Police.
"All is not well at VIHA, but I pledge that I will make fair decisions to improve employee morale, prevent financial failure and eliminate the budget deficit," Fonseca said in a release issued late Friday. He pledged to "restore full confidence in the VIHA" by the U.S. Housing and Urban Development Department, the VIHA board, housing residents and the V.I. community.
When Fonseca took office in mid-October, HUD had just approved the VIHA spending plan for 2002 — almost a year behind schedule. The territory's public housing system was carrying a deficit of about $3 million, and talk of a federal takeover of its operation, long rumored, was once again being heard. Then, Fonseca said, a letter came from Washington ordering the authority to streamline its operations.
VIHA gets almost all of its operating funds from the federal government.
The federal government gave the housing authority poor performance evaluations for two consecutive years in the late 1990s. At the time, Washington had a "three strikes" policy that would have resulted in a loss of financial aid with the next bad rating. Then HUD changed its public housing assessment system.
Where funding once had continue to flow regardless of how a public housing program was run, a new system based on performance and accountability was put in place. At the time the Virgin Islands was switched over to the new system, its public housing performance profile looked grim. Operating reserves were down, the ratio of income to operating expenses was poor, annual utility consumption was unacceptably high, and so was the length of time it took to fill vacant apartments.
Approval of the 2002 budget came after a series of cost-cutting measure were put in place. As a first step, Fonseca retrieved dozens of cellular telephones used by VIHA personnel. He also set restrictions on the use of the housing authority's fleet of about 125 vehicles."That's a major cost that I can control," he said. "The emergency men still need them. It's not something you can eliminate, but you can definitely control them."
The 2003 budget — due for submission in December — still has a deficit of $874,000. "That's not all going to be labor, but HUD has mandated that we come up with a balanced budget," Fonseca said.
The plan Fonseca comes up with must be approved by the VIHA board of commissioners. The board has a special meeting tentatively scheduled for Dec. 10, although Fonseca said the date could change.
Any housing authority employee subject to layoff or other change of work status will be given 30 days' notice prior to the action taking effect, he said.

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