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Virgin Islands Housing Authority Independent Agency 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance FY 2026 Budget Hearing Testimony Monday July 21, 2025 By: Dwayne Alexander, CPM Executive Director Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 2 - Introduction: Good afternoon, Honorable Novelle E. Francis, Jr., Chairperson, Committee on Budget, Appropriations and Finance of the 36th Legislature, Vice-Chair Senator Marvin A. Blyden, Committee Members: Senator Dwayne M. DeGraff, Senator Ray Fonseca, Senator Marise C. James, Senator Kurt A. Vialet, and Senator Hubert L. Frederick. Good afternoon to all other distinguished Senators present today, legislative staff, ladies and gentlemen in the chambers, listening and viewing citizens of the Virgin Islands, and my dedicated VIHA team. I am Dwayne Alexander, Executive Director of the Virgin Islands Housing Authority (VIHA). I am honored to be here today as the Authority’s representative and for this face-to-face discussion with the Committee on Budget, Appropriations, and Finance. I am joined today by Mrs. Lydia Pelle, Chief Operating Officer; Mrs. Cecile Tonge-Fahie, Chief Financial Officer; Mr. Robert Protho, Director of Administration; Mrs. Akala Anthony, Director of the Housing Choice Voucher Program; Mrs. Emmanuella Perez-Cassius, Director of Resident Wellness & Empowerment; and Mrs. Wean Williams-Farrell, Interim Director of Asset Management. Our mission at the Authority is to create sustainable communities that support economic growth and enhance the quality of life for residents through safe and affordable housing. Additionally, we provide various services designed to empower our public housing residents, promote self- sufficiency, and establish Resident Councils for our valued tenants to have a “united voice” within each community. Before I begin my testimony, I want to extend my sincere gratitude to the VIHA family, who are the backbone of VIHA for their commitment, dedication, and contributions thus far, with the long-term goal of making this agency a high-performing public housing authority in alignment with the standards and rules set by our U.S. Department of Housing and Urban Development (HUD), Puerto Rico Field Office. In addition, I would like to recognize VIHA’s Board of Directors for providing strategic guidance and oversight. The agency is better as a direct result of the Board’s commitment, governance, and guidance led by the Board Chair, Mr. Simba Abiff. The Virgin Islands Housing Authority continues to have clean audits, with no financial audit findings. HUD’s Public Housing Assessment System (PHAS) scores public housing agencies (PHAs) on four key indicators: physical condition, financial condition, management operations, and the Capital Fund program. The financial condition indicator assesses a PHA's financial health and stability, with a maximum score of 25 points. For FYE 2022, based on the Authority’s last audited financials, VIHA received a score of 22 out of 25. The FYE 2023 scores have not been received. The financial condition indicator, along with the other three, contributes to the PHA's overall PHAS score, which determines its performance designation (High, Standard, Substandard, or Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 3 - Troubled). VIHA currently has a designation of Troubled. However, we are optimistic that we will move from the Troubled status to a Standard performer. Today, we will present and discuss the Authority’s four (4) major programs: (1) Low-Income Public Housing (LIPH); (2) the Capital Fund Program Grants; (3) the Central Office Cost Center (COCC); and (4) the Housing Choice Voucher Program (HCVP). We will also discuss other financial reporting areas of the Authority that are critical to VIHA’s ongoing daily operations. During today’s presentation, I will provide an analysis of the U.S. Department of Housing and Urban Development's (HUD) budget trends and their financial implications for the Virgin Islands Housing Authority’s current year and fiscal year 2026 funding. It is essential to note that VIHA's fiscal year differs from that of the Government of the Virgin Islands, which begins on January 1st and concludes on December 31st. VIHA’s Board of Commissioners approved the agency’s 2025 annual budgets on December 18, 2024. To establish a budget framework each year, we assess federal funding trends from HUD. Funding received is based on congressional appropriation. The VIHA team will continue to monitor and assess the potential impact on its funds to be received from HUD. HUD Program Funding The President’s 2026 proposed Budget includes significant cuts aiming for a 44% reduction in funding for HUD. These cuts will directly affect VIHA’s annual funding from HUD. The proposed budget cuts to HUD’s programs include rental assistance, homelessness assistance, and community development initiatives. The proposed federal budget would cut billions in funding for Tenant-Based Rental Assistance (TBRA), public housing, Project-Based Rental Assistance (PBRA), housing for the elderly, and housing for people with disabilities. The proposal also includes converting these programs into a block grant to states, known as the State Rental Assistance Program. What does this mean? The State Rental Assistance Program would transform public housing from a federally administered system to a state-based funding. Under this approach, local governments would have greater responsibility for providing safe, decent, and affordable housing to their very low and extremely low-income residents. It would transform funding agreements between HUD, PHAs, and landlords to the state and landlords. Considering this information, we will closely monitor any changes to the Housing Choice Voucher rental assistance program. In the subsequent segment, I will focus on and discuss VIHA's current allocation of HUD’s FY 2025 and FY 2026 projected federal funding. Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 4 - PUBLIC HOUSING AUTHORITY PROGRAMS Locally, for the current fiscal year, HUD will provide an estimated $50.1 million to the Housing Authority to assist families with housing in the Territory and meet the agency’s operational needs for its four (4) major programs: 1, the Low-Income Public Housing (LIPH) $20 million, 2, the Capital Fund Grant Program (CFP) $11 million, 3, the Housing Choice Voucher Program (HCVP), Housing Assistance Payments and Administrative Fees, $17 million and $1.9 million, respectively, and 4, the Central Office Cost Center (COCC) ($1.1 million included in the CFP grant). These budgeted and authorized allocations will be used to support the Housing Authority's activities and initiatives, laying the foundation for continued progress. The Virgin Islands Housing Authority will face a challenging budget season for FY 2026 with the unknown potential HUD budget cuts. Knowing this, as VIHA is heavily reliant on HUD for funding, the agency is prioritizing current and future spending to address any funding shortfall. Low-Income Public Housing (LIPH) The Public Housing operating 2 0 2 5 B u d g e t provides funds to manage approximately 2,129 public housing units in eighteen (18) communities. VIHA's Public Housing inventory consists of twelve (12) property groupings called Asset Management Projects (AMPs). The inventory is grouped into five AMPs in the St. Thomas/St. John district and seven in the St. Croix district. VIHA directly operates ten (10) AMPs; the other two, Louis E. Brown Villas I and Louis E. Brown Villas II, which have public housing units, are privately managed. The Estate Tutu community has no tenants. The Celestino A. White Senior Home and the Louis E. Brown Villas III, which are also privately managed, are not designated with public housing units and therefore are not in the Asset Management Projects groupings. These funds are specifically for the Asset Management Projects (AMPs) operations and management, and to serve our low-income families. The AMP's significant revenue streams are operating subsidies, tenants' dwelling rent, and the Capital Fund Grant operations funds. Next, we will provide a brief overview of how the remaining Capital Grant funds will be used to advance the Authority’s goals for new developments and revitalization of its current portfolio. Capital Fund Grant Program PHAs may use the Capital Fund Grant funds for major repairs to old building systems, development financing, comprehensive modernization of public housing developments, physical improvements for reasonable accommodations, and improvements in management operations. HUD authorized $11.3 million for the 2024 Capital Fund Program (CFP) Grant funds to be expended in fiscal year 2025 to maintain the Authority’s public housing inventory. This year, the Authority was awarded its 2026 fiscal year funds of $11.2 million for the Capital Fund Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 5 - Grant 2025. VIHA will use these funds to achieve the Authority’s goals as they relate to improving dwelling units for our residents, increasing public housing occupancy, reducing water costs, preserving existing assets, and partnering with developers to build new affordable housing. Over the last four (4) years, HUD provided $44.7 million in Capital Fund Program (CFP) grants. As of May 2025, VIHA has expended $18.4 million, or 41% of its authorized funds, with $26.4 million unexpended. B y p r i o r i t i z i n g t h e u s e o f a v a i l a b l e f u n d s , VIHA has consistently met HUD's obligation and expenditure deadlines for all its CFP grants. See Table 1.0 below for a list of CFP Grants. Table 1.0. – Capital Fund Program Grants VIHA has 24 months from each grant’s start date to obligate a minimum of 90% of the authorized amount of each Capital Fund Grant and 48 months to expend 100% of each grant. The remaining $26.4 million in unexpended Capital Fund Grants (CPF) funds will be used to rehabilitate vacant units, pay architectural and engineering fees, repair hurricane-damaged roofs, cover relocation costs, upgrade or modify Section 504 units, address external property deficiencies, remediate mold issues, repair water lines, and pay other eligible capital expenses. Next, we will provide a brief overview of the Housing Choice Voucher Program. Housing Choice Voucher Program The Housing Choice Voucher Program (formerly known as the Section 8 program) is the federal government’s primary program for assisting very low-income families, the elderly, veterans, and people with disabilities in affording decent, safe, and sanitary housing in the private market. Eligible families receive vouchers that can be used to pay for all or part of their rent in a home of their choice. Eligibility is based on the family’s adjusted monthly income and size. VIHA’s annual budget authority of $16 million for FY 2025 serves 2,092 eligible families. Of this total, 1,364, representing 65.2% of all vouchers, are project-based and currently leased. In May 2025, monthly Housing Assistance Payments (HAP) to private landlords totaled approximately $1.6 million to support affordable housing. Utility Assistant Payments (UAP) were issued to 412 participants, totaling $111,214. Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 6 - Year to date through May 2025, the Authority has received $7,535,395 from HUD and has paid $7,367,774 to landlords. The program’s goal is to maintain at least 99% voucher utilization. However, due to the severe shortage of available rental units in the territory, families continue to face challenges in locating apartments. This dynamic contributes to the shortage of available units for eligible families on the waiting. Combined, the program’s tenant-based and project-based waiting lists total 3,577: 2,532 in the St. Thomas/St. John district and 1,045 in the St. Croix district. Within the Voucher Program, there are five (5) smaller but significant grants with allocations totaling $754,528 for special needs families, which are as follows: 1. Foster Youth to Independence ($154,650) – Currently, the Voucher Program receives twenty-four (24) Foster Youth to Independence vouchers, which are tenant-based vouchers to partner with Public Child Welfare Agencies. These vouchers are designated only to assist youth aging out of Foster Care and are at risk of becoming homeless. VIHA has housed three (3) participants. Working with the Department of Human Services and other partners, we expect to utilize all available vouchers within the next twelve months. 2. Mainstream Vouchers ($20,433)—These Tenant-based vouchers are designated to assist non-elderly persons with disabilities. The funding provided 75 vouchers effective January 1, 2021. To date, seventeen (19) families have been housed. 3. Emergency Housing Vouchers ($398,023) – These twenty (20) vouchers are designed to assist the following family types: homeless, recently homeless, at risk of homelessness, and families fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking, or human trafficking. VIHA has thirteen (13) families housed. We are working with our Continuum of Care (CoC) partners to ensure families receive the help they need to find units. 4. Single Room Occupancy ($45,539) – This program provides funding for eight (8) vouchers; there are five (5) families housed. To use these funds, the Authority has partnered with the Meeting the Needs of the Community Program to house families or individuals. 5. Veterans Affairs Supportive Housing (VASH) ($37,000) – These twenty-four (24) vouchers are designated for homeless veterans through the Veterans Administration. Five (5) families are housed, with three (3) families projected to be housed within the next 60 days. The Authority is working collaboratively with the Veterans Affairs office to improve recruitment to the program. 6. Resident Opportunity & Family Self Sufficiency ($98,883) – This funding pays the salary and benefits of VIHA’s Family Self Sufficiency (FSS) Coordinator. The FSS program has Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 7 - thirty-one (31) individuals participating, seventeen (17) in public housing and fourteen (14) in the Housing Choice Voucher Program. A five (5) year plan of action consisting of immediate and long-term goals is developed with the participants tailored to their specific needs. Before I begin the overview of the revenues and expenses for the Housing Choice Voucher Program, I would like to acknowledge and commend Mrs. Akala Anthony, Director of the program, and her exceptional team for achieving a perfect score of 140 out of 140 from HUD on the agency’s FY 2024 Section Eight Management Assessment Program (SEMAP), thereby earning a HIGH PERFORMER ranking. The “High Performer” status is the highest rating from HUD to public housing agencies (PHAs) for financial management, operations, and regulatory compliance. Achieving such an outstanding performance is a testament to the meticulous effort and collaborative spirit exhibited by every team member. HUD evaluates the performance of Public Housing Agencies (PHAs) in administering the Housing Choice Voucher Program using 14 indicators. These indicators cover areas such as waiting list management, rent reasonableness, income verification, and property inspections. PHAs self-certify their performance on these indicators, which HUD field offices then verify. This is an excellent accomplishment that reflects their hard work and dedication. And, as the Director of this agency, I am very honored and proud to be a part of this team. Overview of the Housing Choice Voucher Program FY 2025 and FY 2026 Revenues and Expenses The Housing Choice Voucher Program (HCVP) budgeted operations revenue and expenses for FY 2025 are $1.9 million. The revenue and expenses for FY 2026 are also projected at $1.9 million based on 2025 actuals. See Table 2.0 below. This funding is needed for operational needs and to cover salaries for the program's employees. Table 2.0. – Three Year Comparison – HCV Program Admin Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 8 - For FY 2024, the Housing Choice Voucher Program received Housing Assistance Payments (HAP) from HUD of $16.3 million. Based on payments received, year-to-date through May 2025, the HAP payments annualized may be approximately $17 million. See Table 3.0 below. Table 3.0. – Three Year Comparison – HCV Program HAP Next, we will provide a brief overview of the Central Office Cost Center Central Office Cost Center (COCC) The Central Office Cost Center (COCC) provides fiscal, operational oversight, and Information Technology services to the Asset Management Projects (AMPs). In exchange for these services, the COCC charges the AMPs fees. These fees fall into three basic categories: Asset Management, Property Management, and Bookkeeping Fees. HUD restrictions exist on how the fees are calculated and when they can be charged. The COCC has five component units: Executive Office, Accounting & Procurement, Information Technology (IT), Human Resources, and the Modernization & Development Department. Overview of the COCC FY 2025 and FY 2026 Budgeted Revenues and Expenses The total fiscal year 2025 revenues and expenses for the COCC are $4.8 million. The central office's primary revenue source is earned from asset management fees received from managing the communities. The other primary revenue driver is the administrative fees earned from the Capital Fund Program. Under HUD’s asset management rule, the COCC earns ten percent (10%) of the total annual Capital Fund grants. For FY 2025 and FY 2026, the total grants authorized by HUD were $11M for each fiscal year. The COCC also receives management fees from the Housing Choice Voucher Program. The higher of: (1) 20% of the PHA's annual administrative fee or (2) up to $12.00 monthly per voucher leased. Additionally, the PHA may earn $7.50 monthly per voucher leased as a bookkeeping fee. Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 9 - Table 4.0. – Three Year Comparison – COCC Personnel For FY 2025, VIHA’s staffing level was approved at 200 full-time employees. There are 168 positions filled and 32 vacancies, with eighty-five (85) exempt and one hundred fifteen (115) nonexempt roles. At this time, VIHA must realistically consider how the current administration’s funding decisions may impact staffing levels in 2026. However, despite the uncertainty of future HUD decisions, the Authority remains committed to hiring and retaining qualified individuals to meet the demands of maintaining the current public housing portfolio and the ongoing development of new and affordable housing. Other Federal Grant Funds The Authority has entered into loan agreements totaling $101.5 million to develop the Walter IM Hodge community and for the redevelopment of the Donoe development. To date, the Authority has received from the Federal Emergency Management Agency (FEMA) and Community Development Block Grant-Disaster Recovery (CDBG-DR) funds totaling $73,208,683. See Table 5.0 below. Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 10 - Table 5.0. – Loans VIHA’s FY 2026 Goals and Objectives The Virgin Islands Housing Authority (VIHA) has articulated a robust set of goals and objectives for Fiscal Year 2026, carrying forward the accomplishments and strategies from FY 2025. These objectives are to further our mission of rejuvenating and enhancing public housing within our community. Committed to addressing the agency's current challenges, VIHA is refining its performance metrics to achieve standard performer status under HUD guidelines. At the core of this effort is the ongoing execution of VIHA’s Portfolio Repositioning strategy. This initiative is revitalizing housing developments on St. Croix and St. Thomas, while ensuring alignment with federal regulations and control standards. In partnership with prestigious developers, VIHA is advancing six critical projects: • Continuing the construction of the Donoe Redevelopment Project, which encompasses Phase I of the Tutu High-rise Replacement with 84 rental units, closed on May 30, 2025. • Progressing with the extensive rehabilitation of 106 units, a 4%/9% LITHC structure at D. Hamilton Jackson, groundbreaking was in March 2025. • New construction is planned for Tutu North Senior, which will be a 60 senior unit development with a projected closing date of October 2025. • Plan rehab for 18 units at Alfonso “Piggy” Gerard. The Virgin Island Housing Authority will self-develop this specific property with an expected financial closing date in November 2026. To support these redevelopment projects, several actionable goals have been delineated: • Continuing collaboration with the Virgin Islands Housing Finance Authority (VIHFA) and the Office of Disaster Recovery (ODR) to use Community Development Block Grant-Disaster Recovery (CDBG-DR) funds. This collaboration aims to preserve and create affordable rental units and explore viable homeownership opportunities. • Continue to implement the Bright Path initiative model effectively across communities. Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 11 - • Continue enhancing preventive maintenance operations across all active public housing sites to ensure safety and functionality. • Rolling out visual enhancements to improve the curb appeal and community atmosphere across housing sites. To increase property management opportunities, the Virgin Islands Housing Authority (VIHA) is implementing a multi-faceted approach designed to enhance efficiency and expand our reach in property management across the community. Diversification of Services: Expand the range of services offered by property management teams to include specialized services like landscaping, renovation, and maintenance programs. This will not only meet resident needs but will also attract new clients seeking comprehensive property solutions. • Technology Integration • Training and Development • Marketing and Outreach • Improving Resident Services Leveraging funding opportunities to utilize available funding from federal and local sources to invest in infrastructure and property upgrades, thereby making our properties more attractive to potential residents and investors alike. By implementing these strategies, VIHA aims to create a robust framework that not only increases property management opportunities but also enhances the overall quality and reputation of property services provided to the community. VIHA's commitment to fostering household self-reliance and improving communication through strategic initiatives. The "Stay in the Loop" campaign is designed to keep residents and community partners engaged and informed, building a stronger sense of community. Active efforts are underway to establish elected resident councils throughout the territory, with preparations for Phase III elections intended to empower these councils to advocate effectively for their communities. To promote homeownership and comply with the Housing Opportunity Through Modernization Act (HOTMA), VIHA has organized educational work sessions and focus groups to help residents gain the tools and knowledge they need to achieve homeownership. Additionally, a grant from AARP has been secured for 200 residents aged 50 and above, identified as vulnerable through wellness assessments. The grant aims to improve their quality of life with features such as multi-sensory doorbells that promote safe, independent aging in place. These strategic initiatives underpin our unwavering commitment to enhancing residents' lives and their overall quality of life within our communities. Virgin Islands Housing Authority FY 2026 Budget Hearing Testimony 36th Legislature of the Virgin Islands Committee on Budget, Appropriations and Finance - 12 - The Housing Authority is well-equipped to achieve these goals by focusing on effective day-to-day operations, maintaining public housing conditions, and leveraging funds from FEMA, HUD, and private financing sources. These efforts are aimed at delivering sustainable, energy-efficient, and aesthetically appealing affordable housing that prioritizes residents' well-being. All adhere strictly to federal regulations, directives, and notifications. I want to take this time to reiterate that next year will be a very tight budget year for many affordable housing programs, including VIHA, caused by President Trump’s potential elimination of funding in his 2026 Budget. Before I close, I want to again take this opportunity to thank the VIHA team for its dedication to the Authority and to ensure our residents have a place to call home. Lastly, thanks to the members of the Committee on Budget, Appropriations, and Finance for allowing us to appear before you today. We welcome your questions.