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HomeNewsArchivesVIHA COST CUTTING BITES INTO BUREAUCRACY

VIHA COST CUTTING BITES INTO BUREAUCRACY

Dec. 10, 2002 – Some of the highest-ranking officials of the V.I. Housing Authority found themselves out of work Tuesday as the agency's new executive director began implementing a get-tough plan to cut back radically on personnel costs.
Ray Fonseca began taking action shortly after his plan was approved Tuesday at a special meeting of the Housing Authority board of commissioners. VIHA is a semi-autonomous agency and as such sets its own policies. He said more layoff notices would be going out on Wednesday.
Appointed to head VIHA in mid-October, Fonseca came on board right around the time that the U.S. Department of Housing and Urban Development approved the agency's budget for Fiscal Year 2002 — almost a year late and laden with mandates to whittle down a $3 million deficit. He brought to the authority's top job some 17 years of experience with VIHA, including stints as financial accounts manager, in the Office of Planning and Development and in the Modernization Division.
With agency revenues having dropped severely, Washington was pointing the finger at a top-heavy management structure and calling for a $1 million cutback in payroll costs.
Fonseca said Housing Authority managers submitted a plan that would have cut up to 40 jobs of maintenance workers.
He, on the other hand, thinks the solution is to swing high and hire low. One of his first acts as executive director was to scrap the plan to send the maintenance workers home and consolidate housing districts. Instead, he submitted a cost-cutting proposal aimed squarely at the management structure.
In a written statement issued shortly after Tuesday's VIHA board meeting, Fonseca said:
"To eliminate the deficit, an analysis was done of the management structure and efficiency at VIHA. We have a structure where the executive director supervises five super-directors. The five super-directors supervise 11 department directors. Those 11 department directors supervise nine chiefs and six managers, who supervise eight superintendents that supervise maintenance foremen, and we also have 22 housing managers."
And, he said, "That is six levels of supervision and a wholesale waste of public funds."
Loss of units reduces subsidies, rental income
The statement said the Housing Authority has lost more than $6.3 million in operating subsidies as a result of the removal of over a thousand housing units from its inventory. "These thousand units represent the entire Warren E. Brown Community, Estate Donoe Community, Louis E. Brown Community, and one building in Estate Tutu Community and several homes that were sold as home-ownership," Fonseca wrote.
In addition, he said, VIHA has lost nearly $1.35 million a year in rental income that it would have collected from those units, had they remained in use. "That is a total loss of rental income and HUD subsidies of $7,673,000," he said.
"HUD pointed out to us that as we were losing inventory, the VIHA was increasing staff at high-salaried positions," he wrote. One of HUD's greatest concerns, he said, was depletion of the Housing Authority's cash reserve, which plummeted from an estimated $13 million to $1.3 million in a recent two-year period.
Under the plan approved Tuesday by the VIHA board, Fonseca said he wants to put more responsibility into the hands of the housing managers. From now on, "If you live in Kirwan Terrace, you're going to call your housing manager in Kirwan Terrace," he said.
The nine-member board is made up of two administration cabinet members, three private-sector representatives and four public housing residents.
Among the first upper-echelon employees to receive hand-delivered notices of termination was VIHA chief of staff Debra Watlington. "She got fired today," her husband, attorney Arturo Watlington Jr., said on Tuesday. "I don't know what the basis is, but I think it's made-up and make-believe."
He said Tuesday's firings "seemed like a raid" on close associates of Fonseca's predecessor, Conrad "Ricky" François II, who resigned unexpectedly in April at a Housing Authority board meeting.
Al Simmonds, who had been François' assistant director, and who served as acting executive director until Fonseca's arrival, also was reported to have received a termination notice. Telephone inquiries directed to Simmonds on Tuesday night were not answered.
François, who had been VIHA executive director for 12 years, caught many by surprise with his resignation, but there was speculation that his relationship with the board had been strained.
Fewer is bureaucratically better
Fonseca says that by merging the two top levels of management, he can streamline the reporting process on what has been done and needs to be done to run the Housing Authority. In its current state, he said, the process not only makes it hard for managers to figure out what's being handled by whom; it also stifles tenants who have to run a bureaucratic gauntlet in order to get someone to answer their questions or address their complaints.
After that, he said the rest comes down to simple mathematics: One super-director draws $80,000 in salary. That same amount of money can provide wages for four maintenance workers.
Fonseca says he grew up in the Bovoni projects and thinks it's time the little guy got a break. His intention is to hire more maintenance people along with additional electricians, carpenters, mechanics and community-service workers — and he wants to hire whenever possible from within the housing communities themselves. He said job opportunity notices already are appearing in some local publications.
According to Fonseca, the $3 million deficit is due largely to the failure of the V.I. government to reimburse the Housing Authority for services provided, including nursing care for some elderly residents of the Lucinda Millin Home.
Fonseca said he expects at least some of those terminated to go running to Sen. Celestino White, who chairs the Senate Housing Parks and Recreation Committee. So, after Tuesday's meeting, he wrote his statement and sent it off, along with backup documents, to all 15 members of the 24th Legislature.
Fonseca said he will not curtail services at Lucinda Millin, but he has asked the government to pay the $3,602,949.51 it owes the Housing Authority. "I understand the local government is having cash flow problems. Any efforts that can help us to receive these funds are appreciated," he said.
He was to fly to Washington, D.C., on Wednesday to discuss details of his plan with HUD officials.

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