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HomeNewsArchivesSenate Wrestles with Community Development Block Grant Issues

Senate Wrestles with Community Development Block Grant Issues

June 19, 2007 — While senators and local officials work aggressively to make sure the federal government doesn't cut the territory's share of community development block grant (CDBG) funding, several other issues — such as a failure to properly manage and monitor the program — came to light at a hearing Tuesday.
The Committee of the Whole hearing was called primarily to discuss a bill recently submitted to the Legislature by Gov. John deJongh Jr., which shifts approximately $2.3 million in CDBG funding to the V.I. Housing Finance Authority (VIHFA) to cover the cost of buying land on St. Thomas and making certain infrastructure repairs to the Calabash Boom project on St. John.
The bill hinges on VIHFA's ability to repay the loan, since the $2.3 million is getting transferred from a number of previously approved CDBG projects, according to Alicia Barnes, assistant commissioner of the Department of Planning and Natural Resources. The projects will not move forward if the funds don't get reimbursed, she added.
Some of the projects date as far back as 1986, while others were approved as recently as last year. While senators had no qualms about shifting CDBG funds awarded more than 10 years ago, they expressed concern that projects approved in 2006 have not yet been given the opportunity to get off the ground.
Funds shifted from projects approved in 2006 will be "expeditiously reimbursed" by money garnered from the fiscal year 2007 CDBG grant award, Barnes said.
Others, such as Sens. Usie R. Richards and Ronald E. Russell, also expressed concern that the loan to VIHFA will not get extended for land acquisition or economic-development opportunities on St. Croix.
"We're just taking care of one district," Russell said. "You have to find some money for St. Croix."
Attempting to assuage the concerns, Barnes explained that the proposed loan would make sure that a specified amount of CDBG funding — about $3.8 million — gets spent before August. If the funds are not used by then, she said, they will revert back to the federal government and possibly reduce the amount of CDBG funding awarded to the territory in the future.
So far DPNR has been able to earmark about $1.4 million, Barnes added, and VIHFA will take over the remaining amount. Then the money will get repaid by funds the agency will collect soon from the local government, according to VIHFA Executive Director Clifford Graham.
Local law stipulates the VIHFA is entitled to 30 percent of the territory's annual stamp-tax revenues, which are intended to subsidize the costs associated with building local housing communities. An outstanding $8.5 million in stamp-tax revenues should be remitted to the agency within the next two months, Graham said.
Barnes added that collaborating with the Housing Authority was advantageous, since the agency has been working to close a deal to purchase several acres of land in Estate Donoe on St. Thomas. With the project almost complete — Graham said VIHFA will close on the purchase by the end of July — there is no chance of the CDBG funds not getting spent by the August deadline, she said.
Delays in expending CDBG funds have historically proved problematic, resulting in a buildup of approximately $7 million in federal block-grant money over the past few years, Barnes explained. While organizations receiving the funds should partly be held accountable for not being able to spend the money, a lack of proper fund management within DPNR also contributed to the problem, she said.
"We found several deficiencies within the department's CDBG program," Barnes said. "Things such as a lack of proper on-site monitoring, site visits, a lack of communication and the untimely draw down of CDBG funds really contributed to what you see here today."
DPNR's new CDBG program director, Bernadette L. Richards, added that money has generally gone to several smaller organizations and programs instead of larger projects that are more likely to get finished at a faster pace.
"I think that if we were, in the future, to concentrate on funding these major projects, it would eliminate a lot of the problems we've been experiencing," she said.
Since senators are not able to vote on bills while in the Committee of the Whole, the proposal will most likely get special ordered to the floor during Wednesday's full Senate session, Richards said.
"It's clear that we have to act on this," he said. "Otherwise, we are in jeopardy of losing this federal money, and affecting our ability to receive more money in the future."
However, Richards also cautioned DPNR officials that the bill, as currently written, may get changed during the approval process. "I'm not about giving back money for projects that have just been sitting there for more than a decade," he said. "I'm just not comfortable with that."
Present during Tuesday's hearing were Sens. Carlton "Ital" Dowe, Liston Davis, Juan Figueroa-Serville, Louis P. Hill, Neville James, Norman Jn Baptiste, Shawn-Michael Malone, Terrence "Positive" Nelson, Basil Ottley Jr., Richards, Russell, James Weber III and Carmen M. Wesselhoft.
Sens. Celestino A. White Sr. and Alvin L. Williams were absent.
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