V.I. Government regains control of Housing Authority


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After almost 11 years in federal receivership, the Virgin Islands Housing Authority is back under local control.

In a signing ceremony Friday afternoon at Government House on St. Thomas, the U.S. Department of Housing and Urban Development officially transferred control of the agency back to the local government.

"It feels good," Gov. John deJongh Jr. said in a short interview after the ceremony.

HUD seized control of the troubled V.I. Housing Authority on Aug. 20, 2003, after finding the agency in default on its contractual requirement to maintain complete and accurate financial records. HUD officials said there was long-standing and severe financial mismanagement.

The majority of the funding for V.I. Housing Authority operations comes through HUD. However, the V.I. Housing Authority is a local agency and, before going into federal receivership, it was overseen by a local board.

It now has a local board once again.

In July 2013, deJongh nominated new board members for the V.I. Housing Authority, and the following month, the 30th Legislature confirmed his nominations of George Blackhall, Daphne Edwards, Noreen Michael and Luis Sylvester.

They were to act as an advisory board to the federal receiver, Kimberly Wize, until the transfer. Officials said the new board members have received training in governance.

Sylvester has been selected as board chair.

At Friday's ceremony, Sylvester pledged that the board will never allow the V.I. Housing Authority to get to the point where federal intervention will be necessary again - a statement that drew big applause from those gathered for the ceremony, mostly senior Government House staffers and cabinet members, along with some HUD officials.

"Frankly speaking, I like the progress that I have seen over the past years. And we as board members intend to continue that progress," Sylvester said. "Too much time, too much work, too much effort has been expended to bring us to this point where we are today. Failure is not an option."

Two of the board members are set by statute. Human Services Commissioner Chris Finch and Housing Finance Authority Executive Director Adrienne Williams will be on the Housing Authority board by virtue of their positions.

The final appointee to the board is Colette Jones, who still has to go through the Senate confirmation process.

The federal takeover in 2003 came after six weeks of political wrangling, during which HUD repeatedly pressed for the Housing Authority board to voluntarily relinquish control of the authority and the local government fought back, steadfastly refusing to give up control.

Instead, local officials tried other tactics - including dissolving the authority's existing board and appointing an interim board that Gov. Charles Turnbull thought would be in a better position to negotiate with HUD - in an attempt to stave off the federal takeover and maintain local control of the agency.

Ultimately, though, the tactics failed, the takeover occurred, and the local board was no more.

The loss of control of the Housing Authority was a thorn in the side of the V.I. Government for years, although in recent years, the local government has worked more closely with HUD in an attempt to make improvements in the territory's aging public housing stock and get long-vacant apartments refurbished and back online.

DeJongh said Friday that HUD's plan has always been for the territory to take back the Housing Authority as soon as possible. For the last several years, he said, officials have been working to "come up with a pathway that would return it back to local control."

HUD Assistant Secretary for Public and Indian Housing Sandra Henriquez said that the first thing the agency looks at when trying to turn a troubled agency around is governance.

She said she had seen first-hand that the governor's leadership and involvement was "integral" to the turnaround.

She said that the turnaround is an example of what can be accomplished by working together.

The agreement that officials signed Friday states that the Housing Authority has satisfactorily resolved the defaults that were noted in 2003 and has improved significantly.

Although the Housing Authority is now back to local control, there will be a two-year transition period, during which HUD can take the agency back if the Housing Authority is not meeting goals.

The agreement includes a transition and oversight action plan to ensure the sustainability of the Housing Authority's recovery. That agreement is to last for two years, and the Housing Authority must complete the actions in the plan within the time frames it lays out.

In addition, the agreement calls for HUD to name an Oversight Point of Contact for the duration of the two years, who will provide consultation and technical assistance to the Housing Authority board and monitor progress in completing the goals of the transition plan.

Wize, the federal receiver, is to be that point of contact.

If the territory fails to comply with the agreement, HUD could retain possession of the Housing Authority's assets, projects and programs, it says.

The action plan includes objectives and target dates and performance measures.

"All the parties have worked very hard to improve the conditions of the properties, but we still have a lot of work to do," Housing Authority Executive Director Robert Graham said in an interview. "I think under the leadership of this board, the Housing Authority will continue to progress."

- Contact reporter Joy Blackburn at 714-9145 or email jblackburn@dailynews.vi.

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