During a special meeting on Monday, the board of the Public Finance Authority (PFA) approved a decision to increase the bond threshold for construction projects. This change is designed to alleviate the financial requirements for smaller contractors engaging with the PFA on various projects.

Historically, construction projects exceeding $250,000 required contractors to obtain bonds—a financial safeguard that ensures contractors fulfill their contractual obligations in terms of quality, timelines, and terms.

The shift in the PFA’s focus from predominantly procuring professional services to incorporating procurement construction projects has led to this adjustment. This shift is partly due to integrating the Office of Disaster Recovery into the PFA’s framework. Lorelei Farrington, staff counsel, highlighted the agency’s involvement in the EnVIsion Tomorrow program, which focuses on rebuilding and rehabilitating homes damaged by hurricanes. She noted that smaller contractors, who are often pivotal to these projects typically under $350,000, struggle to secure bonding due to stringent evaluations of their financial health by bonding companies.

Farrington proposed an amendment to the procurement procedure manual to exclude projects under $350,000 from the bonding requirement. This adjustment aims to streamline operations and accommodate the financial realities of smaller contractors who might have negative working capital.

Addressing potential risks associated with non-bonded projects, Adrienne Williams-Octalien, Director of the Office of Disaster Recovery, outlined measures such as enhanced PFA oversight through more frequent site visits and reviews, and bolstered construction management. Williams-Octalien emphasized that increasing the bond threshold allows for greater flexibility in managing project complexities and expanding the contractor base in the Virgin Islands.

She also acknowledged the economic challenges facing the construction sector, with rising costs necessitating an adjusted approach to project financing. The PFA plans to support these adjustments through training and additional support, ensuring project completion and mitigating potential risks.

The Donoe Estates public housing project, which had been suspended due to various complications, is set to resume under the stewardship of a new contractor, as reported by the Consortium. Originally breaking ground in January 2021 with an anticipated budget of $58 million for the 84-unit development, the project encountered significant setbacks that led to a halt in progress.

During a recent Public Finance Authority Board meeting, questions regarding the project’s status were raised. Adrienne Williams-Octalien, Director of the Office of Disaster Recovery, reported a request for an additional $35 million. Subsequent discussions revealed that initial developers Pennrose and GEC exited the project last September after facing prolonged challenges, including delays in material procurement and necessary environmental remediation efforts, which escalated costs to $65.9 million.

Williams-Octalien hesitated to specify the current progress of the development but confirmed the selection of J. Benton Construction as the new contractor. This contractor has proposed an additional $47 million to complete the project, potentially doubling the original budget to $105 million. This proposal is currently under review to confirm the legitimacy of the escalated costs.

The director clarified that the extra funding would be sourced from the Community Development Block Grants for Disaster Recovery (CDBG-DR), allocated by the Department of Housing and Urban Development. Some funds initially earmarked for other uninitiated projects may be redirected to ensure sufficient capital for the Donoe Estates project’s continuation.

Despite an interruption that will undoubtedly extend the project’s timeline, Williams-Octalien expressed optimism about its completion. She mentioned that the project’s financing strategy includes utilizing remaining funds from the initial budget in conjunction with the anticipated new funding.

The bond issued for the initial contractors remains unpaid, as the bond company did not accept the Housing Authority’s claims of contractor fault, leading to an amicable contract termination. Williams-Octalien emphasized the importance of validating the new contractor’s cost estimates to expedite the project’s resumption.

Attempts to contact the VI Housing Authority for further comments were unsuccessful.

Eugene Jones Jr., the newly appointed executive director of the V.I. Housing Finance Authority, has been exploring the intricacies of his role for the past three weeks. In a discussion with the Consortium during his initial media engagements, Jones chose to focus more on his leadership philosophy and approach to institution management rather than the minutiae of his current position.

Having served as an auditor for the HUD Office of the Inspector General, Jones transitioned to housing authority roles, driven by a desire for less travel and more stability. He shared an anecdote about losing his way home after a stint in Las Vegas, a pivotal moment that steered him toward a career change. Jones started as the chief financial officer at the San Francisco Housing Authority but found the finance role unfulfilling, prompting him to seek a more community-oriented position. This quest led him to Kansas City, Missouri, where he took the helm of the first housing authority under federal receivership, stabilizing it within two years.

Jones’s extensive experience spans several major cities including Indianapolis, Detroit, Toronto, Chicago, and Atlanta. He noted the unique topographical challenges of the Virgin Islands, which vary significantly across St. Thomas, St. John, and St. Croix, necessitating innovative and collaborative approaches to housing development.

Despite his new surroundings, Jones is no stranger to managing housing agencies through crises, having coordinated relocation efforts after Hurricane Katrina in 2005. His firsthand experiences with disaster recovery highlight the resilience of the Virgin Islands community.

When questioned about his immediate priorities for VIHFA, Jones emphasized that he is still in the observational phase but acknowledged the Authority’s stable foundation, which he intends to enhance. He cited the homeowner assistance funds program as a particularly successful initiative. Despite recent revelations about the Authority’s substantial debts to the Water and Power Authority, Jones remains optimistic, focusing on resolving ongoing disputes and ensuring compliance with federal regulations to prevent the recapture of funds.

Jones is committed to increasing transparency within VIHFA’s operations, utilizing both social media and traditional media outlets. He teased a forthcoming homeownership initiative slated for June in St. Croix and St. Thomas and encouraged public engagement in discussions about future housing solutions, such as the potential for integrating commercial and residential spaces.

Throughout his dialogue, Jones conveyed a dedication to understanding the unique challenges of his new role and leveraging available resources to benefit the Virgin Islands community. He stressed the importance of humility, authenticity, and interpersonal skills in achieving the goals of the VIHFA.