VIHA BOARD FIRES EXECUTIVE DIRECTOR FONSECA

July 29, 2003 – On what apparently was its last working day, the Housing Authority board of commissioners on Tuesday fired the executive director it brought on last fall to help institute management reforms and revive a failing financial system.
The decision to terminate Ray Fonseca came a day after the 25th Legislature granted Gov. Charles W. Turnbull's request for authorization to dissolve the housing board and set up an interim board in its place. The board named Lorelei Farrington, its legal counsel, as interim executive director.
Fonseca's ouster and the pending dissolution of the board are the latest in the Housing Authority's ongoing upheavals. But some persons who have had a hand in the decision-making process question the need for such extreme actions to reform the agency that provides public housing to thousands of low- and middle-income Virgin Islanders.
Fonseca was appointed executive director in mid-October, six months after his predecessor, Conrad "Ricky" François, unexpectedly resigned at a board meeting. Fonseca came on board around the time the U.S. Department of Housing and Urban Development approved the agency's budget for Fiscal Year 2002 — almost a year late and laden with mandates to whittle down a $3 million deficit.
He brought to the authority's top job some 17 years of experience with VIHA, including stints as financial accounts manager and in the Office of Planning and Development and the Modernization Division.
In early December, Fonseca and the VIHA board appeared to be on the same page, with the board approving his plan to lay off officials at the top to radically reduce personnel costs. (See VIHA cost cutting bites into bureaucracy".)
Ten days later, Fonseca and board chair Fitzgerald Rowe exhibited solidarity as they met the media upon their return from Washington, D.C., where they had met with Michael Liu of HUD. (See "VIHA chief: HUD pleased with financial cutbacks".)
Early this year Fonseca also made headlines when he announced the canceling of a $6 million contract with a consulting company hired a year and a half earlier to oversee two major affordable housing developments.
Sen. Emmett Hansen II, who chairs the Legislature's Housing Parks and Recreation Committee, said Tuesday that he will call a hearing next week in an attempt to get some answers.
"Something is going on, and I can't say what," Hansen said. "I don't mean to suggest there is something untoward or nefarious going on, but I certainly don't think that everything has been revealed. There has to be something larger than just a shift in management, and accounting numbers not coming up, for this massive effort for receivership … There has to be something else going on, and we need to find out exactly what it is."
Hansen said that from a hearing last week before his committee, it would be hard to ignore signs that Fonseca was on thin ice with the VIHA board.
At Tuesday's meeting, Rowe alluded to his reportedly having told the committee earlier that he felt betrayed by Fonseca. The comment came as board members began expressing dissatisfaction with the executive director's performance.
Rowe questioned the use of $400,000 from a special account last November to cover the agency's payroll at a time when Fonseca said HUD had suspended federal subsidies. Rowe also told his fellow board members that he had ordered the money repaid as soon as possible, and that this was done in January.
Fonseca pointed out that his immediate predecessor, interim executive director Al Simmonds, had made a similar move in October. But Rowe chastised Fonseca, saying the action was taken without seeking the proper signatures and that he was hired to correct financial missteps, not to repeat them.
Board members cited several instances of federal funds commingled with other funds, one of the concerns raised by Liu, HUD assistant secretary for public and Indian housing. HUD is now talking about placing the Housing Authority in federal receivership.
Fonseca cited information he received in April at a meeting with independent accountants and said most of the commingled accounts had been cleared up, although some remained because the V.I. government still owed the agency money.
Rowe was unimpressed. "Don't tell me some stopped. They all have to stop," he said.
Rowe recalled the trip he and Fonseca made to Washington in December. When he asked federal officials to forgive a $12 million disaster loan, "we knew the two things we had to do in this agency," Rowe said. "Today, the 29th we're still doing the same two things, although we are hearing the board is causing these problems."
His reference was to directives from HUD to straighten out the agency's finances and to stop commingling funds.
Hansen said he believes Fonseca's dismissal resulted from a disconnect between Fonseca and the board. Even if the Legislature had not voted Monday night to dissolve the board, he said, Fonseca would have been on his way out.
In Hansen's view, relations began to sour late last year, when Fonseca fired close to a dozen members of the Housing Authority's senior staff.
Tuesday's board meeting began with a closed-door executive session where board members reportedly were told formally that their duties had come to an end.
Two-term tenant board member Carmencita Donovan declined comment on details of the discussions but said: "This is my last day."
Government House spokeswoman Rena Roebuck said she had no information on when the governor would name the members of the interim board — who do not require Senate confirmation — or who they would be.
Liu said in an interview on Friday that time for the Virgin Islands to act on straightening out the Housing Authority problems was running out, and that the territory would be hearing from HUD shortly.

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