At Thursday’s hearing of the Committee on Budget, Appropriations and Finance, the executive director of the V.I. Housing Finance Authority announced he expected to receive a check for $100 million on Thursday and $45 million on Friday from U.S. Housing and Urban Development to reimburse the V.I. government for covering the V.I. Water and Power Authority’s obligation for fuel and propane terminal facilities.
“The good news for the Virgin Islands is that we get that moving. It has been an Achilles heel,” Eugene Jones Jr. said.
The VIHFA applied for the $145 million in Community Development Block Grant mitigation funds to buy out Vitol’s propane terminals at the WAPA plant on St. Thomas. HUD approved the application in December. The negotiated agreement will settle the authority’s debt to Vitol and terminate the agreement that required WAPA to buy its fuel from Vitol.
WAPA was delinquent on payments to Vitol partially due to government agencies not paying their utility bills. The cash-strapped utility has been operating under a local State of Emergency that Gov. Albert Bryan Jr. declared on April 22, and which the V.I. Legislature voted to extend for 90 days on June 24. As part of the effort, Bryan approved more than $10 million to be drawn from the Budget Stabilization Fund to offset the bills owed by the V.I. Waste Management Authority and the territory’s two hospitals.
Most agree that WAPA needs to lower the cost of power. It costs 55 cents to create a kilowatt hour, but they sell it for 41 cents. Additionally, rates paid by Virgin Islanders are significantly higher than those of other Americans.
Meanwhile, Kevin Williams, chief policy advisor and head of the governor’s Incident Command that is overseeing the state of emergency, said maintenance on gas turbines is usually conducted every two years, but WAPA has not performed maintenance in more than 10 years.
After he discussed the $145 million Vitol payment, Jones, appearing alone before the Legislature, discussed the VIHFA’s 2025 proposed budget.
“We haven’t built enough homes,” he admitted. “We haven’t built anything in the last five years. We talk, talk, talk but don’t have anything to show for it.”
Jones has been on the job for three months and said the department would pick up the pace and be on target “by this time next year.” He testified maintenance bills and leases are up to date. He also said the 2022 audit has been completed and the 2023 audit is almost finished.
The governor’s budget request for the department is $26,574,629, with $2 million from the General Fund. The fund allocates $1,293 for personnel and $707,000 for fringe benefits. Additional income for VIHFA is projected from stamp tax collections of $600,000, $1.8 million from home sales and funds from leases and mortgages, and $21.6 million from federal reimbursements.
The governor’s budget lists $8.6 million for personnel, $785,000 for capital outlays, almost $4 million for fringe benefits, almost $13 million for other services and $375,000 for utilities and almost $170,000 for supplies.
A few senators asked why and chided Jones for appearing alone. Sen. Ray Fonseca advised him to be transparent and “lay out all the issues.” He said staff tutored him with the information he would need.
Senators wanted to know about contractors and payments, staff shortages, anticipated income and departmental needs. Sen. Donna Frett-Gregory, committee chair, asked for personnel numbers and how much is owed to contractors.
“People really need homes. We need numbers,” Sen. Javan James said.
Also testifying in support of funding for 2025, Shelby King Gaddy, executive director and Damian Sanders and Kenneth Gaye spoke on behalf of the Legal Services of the Virgin Islands. The governor has recommended $1,643,700 for 2025.
In her testimony, Gaddy requested an additional $375,001, which would equal the same budget amount for fiscal year 2024 and would allow the agency to maintain the status quo.
Learning of the proposed lower budget, Gaddy said, “It will affect us drastically as we will not be able to fill two positions and fund salary increases.”
She said Legal Services employs five attorneys in the territory and manages several programs and community outreach. The Rental Assistance Program supports people on the verge of losing their homes, and the Senior Medicare Patrol has helped adults learn to use Telehealth.
Frett-Gregory requested budgets that include potential income/revenue and data to define staff positions and responsibilities. Sen. Marvin Blyden requested outstanding vendor payments and a list of contracts.
Sens. Frett-Gregory, Blyden, James, Fonseca, Dwayne DeGraff, Carla Joseph and Samuel Carrión attended the hearing.
Editor’s Note: A previous version of this story misstated the amount of the Vitol payments. They total $145 million, not $175,000 and not $175 million.
