HFA: New, Streamlined Federal Home Repair Program Slated for September Start

Housing Finance Authority Executive Director Daryl Griffith visits a home repair site (VIHFA Photo)

The $225 million Envision Tomorrow home repair program could knock on home owners’ doors as early as September, Housing Finance Authority Executive Director Daryl Griffith told The Source in a recent interview, with a simpler, more streamlined structure designed to avoid issues like the delayed contractor payments that plagued its post-hurricane emergency counterpart.

“[Housing and Urban Development] makes you go through a lot of the requirements before the program starts,” Griffith said. “So there’s a lot of compliance that you have to do in terms of making sure that the authority has the policies and procedures in order and all the procurements are done in advance.”

The bulk of the funding, roughly $200 million, would go toward home reconstruction and rehabilitation, Griffith said. In September, construction managers would start making site visits to the homes of 1,245 applicants, according to the authority’s latest data as of Aug. 1. The site visits would determine the nature and extent of damage to homes, as well as the scope of work, and repairs would soon commence on homes that fell through the cracks of the massive recovery effort right after the 2017 hurricanes.

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Envision Tomorrow comes on the heels of the Sheltering and Temporary Emergency Power program, funded by the Federal Emergency Management Agency. The STEP program, locally known as Emergency Home Repairs VI, began a few months after Hurricanes Irma and Maria as a temporary roofing repair program for hurricane-stricken homeowners and morphed into permanent home repairs. But the STEP program ran on a reimbursement system, and with the Virgin Islands government lacking the hundreds of millions in upfront cash, it sometimes took weeks, even months, before vendors and workers saw their money.

A number of issues dogged the STEP program throughout its duration. The confusing hierarchy of subcontractors under prime contractors AECOM and APTIM resulted in problems related to delayed payments, accusations of abusive practices by lower-tier construction workers against their hiring companies, as well as incidents of fraud, at least one of which was successfully prosecuted by the U.S. Attorney’s Office.

In contrast, the Envision Tomorrow program is funded by the U.S. Housing and Urban Development, which works with the local government in a slightly different way that may alleviate the cash flow issue.

“The key difference is after you get approved from [Housing and Urban Development], the funding is made available right away,” Griffith said.

According to Griffith, while Envision Tomorrow is still technically a reimbursement program, the Housing Finance Authority gets paid on invoice. As long as the authority submits an approved invoice, he said, it can draw down the funds, which would become available within two business days. The Housing Finance Authority would then need only three business days to get the funds out of its account and into the contractor’s hand.

Simpler Structure

Housing Finance will also exert more control in the program’s administration, Griffith said, by eliminating the multiple layers of contractors that caused chaos in STEP. In a March Senate hearing, Griffith testified that AECOM alone had 89 subcontractors, with only six of them being the main subcontractors. APTIM, which was brought onboard months after AECOM, had its own set of subcontractors.

“The lesson that we learned was to limit the number of subcontractors underneath the prime contractor,” Griffith said.

“We’re going to act as the construction manager, and we’re going to contract with the small contractors ourselves,” Griffith said about Envision Tomorrow. “There will be no layer of separation between Housing Finance and the person swinging the hammer.”

Through its Community Development Block Grant – Disaster Recovery Division, Housing Finance will hire construction managers, actual agency employees who will oversee the program. These construction managers will supervise a construction management firm that will deal directly with individual contracting companies, according to Griffith. After sending out requests for qualifications, Griffith selected a firm two weeks ago and will present the candidate to the agency’s board of directors in mid-August.

Progress-based Payouts

Payments to contractors will also be broken up into five installments. When a contractor comes up with a price for a particular project, Housing Finance will pay out 10 percent in advance, a process called a “mobilization payment.”

“We give him the money upfront to make sure he has the money to get supplies and also to pay his employees right away,” Griffith said.

The rest of the payout consists of “progress payments” disbursed when the contractor hits certain milestones.

“Once construction is completed on the site or a task line item is complete, the contractor can request payment on that activity,” said Antoinette Fleming, the authority’s Community Development Block Grant program manager.

At that point, the contractor will submit an invoice, and then the construction manager will review the invoice and the work done. Progress milestones vary from one project to the next based on the predetermined scope of work, which can range from the number of windows installed to the area of roof laid down, Fleming said.

According to Fleming, Housing Finance staff will also actively monitor its contractors to make sure they are paying their employees.

Contractors

According to Griffith, the authority uses a rolling system for reviewing and approving contractors that wish to be involved with Envision Tomorrow. Requests for qualifications have already been sent out, he said, and of the contractors who responded correctly, 19 have been accepted into the program. When the scope of work for a qualified home has been determined, these approved contractors can then bid on that specific project.

Some 11 contractors, however, have been denied for reasons as simple as lack of a valid license to operate in the Virgin Islands, said Fleming. These errors can be remedied, and contractors can resubmit their applications during the rolling quarterly requests for qualifications, Fleming said.

More information on the Envision Tomorrow program can be found at www.vistormrecovery.com.

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