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Jan. 8, 2004 – After a review of its operation under federal management, the V.I. Housing Authority appears to be on the verge of adopting its first balanced budget in years. According to a top official of the U.S. Department of the Interior, if a $23 million spending plan is approved by the Department of Housing and Urban Development, it will be largely funded by revenue generated by VIHA itself.
Interior Undersecretary Michael Liu met Thursday on St. Thomas with HUD receiver Donna Ayala, who has been in charge of the Housing Authority since last August, and representatives of Government House and Delegate Donna M. Christensen. They discussed progress being made in turning around an agency which six months ago was top heavy with management and unable to pay back millions of dollars in loans from the federal government.
"Despite tremendous challenges — and even more challenges than we had anticipated — over the last 20 weeks, there has been significant progress, and it's been positive," Liu said on Thursday. "We now have a proposed budget for '04, which is now. We have an idea of what expenses will be, and we have an idea of the fact that we will have income to cover those expenses."
Liu said it's uncertain how long the federal receivership will remain in place in the Virgin Islands, but given the progress to date, it's likely to continue through calendar year 2004.
Most of the funding for the Housing Authority budget is expected to come from the collection of rents and fees from housing residents. Those revenues got a boost when the receiver management made repairs to about 80 units that had previously been uninhabitable and moved residents formerly living in substandard quarters into more suitable ones.
Liu called development of the budget a significant step forward. For the last several years, he said, the Housing Authority had operated on a management plan that listed priorities for the agency but offered no means by which to meet them.
Objectives of the new management included reducing expenses and sorting out tangled financial records. Much of the work was done with the help of HUD financial experts, Liu said, but Ayala now plans to post a Request for Proposals locally, seeking financial technical assistance "to bore down into some of these more intricate issues that we have to sort out."
As a result of the work already done, Liu said, HUD uncovered a previously unrecognized expense — a fleet of 153 vehicles assigned to the Housing Authority. The management is in the process of reducing the fleet dramatically from a size the undersecretary called "totally unacceptable."
There also have been reductions in the VIHA staff. But after a first round of cutbacks in the agency's upper management, Liu said, it appears no further layoffs will be required. He also said that as details of the proposed budget are worked out, there is a good chance that some of the community-oriented programs long associated with the Housing Authority will remain in place, although they may have to be reconfigured to fit the new spending plan.
Among those present on Thursday to receive the progress report from Liu was Juel Molloy, the governor's chief of staff and a former Human Services commissioner. Prior to the federal takeover, the Housing Authority was under the direction of a board of commissioners, with one of the seats held by the Human Services commissioner.
"Mr. Liu first expressed appreciation for the cooperation he has received from the governor and his staff regarding the transition to the receivership," Molloy said after Thursday's meeting. "We expressed our appreciation for the progress that has been made thus far, and I conveyed to him the fact that the governor wants to work in partnership with him to ensure that housing units are brought back on line [and that] all the things that need to be done are done as expeditiously as possible so we can resume normal operations."

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