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Chattanooga Housing Authority payroll rises $645,000 in one year

By: Yolanda Putman
(Contact)

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Between 2006 and 2007, Chattanooga Housing Authority’s payroll increased by almost $650,000, but the authority’s board didn’t approve much of the funding.

“The raises never came to the board,” CHA Board Chairman Eddie Holmes said.

CHA’s total payroll jumped from $8.5 million in 2006 to $9.1 million in 2007, documents show. Representatives from the U.S. Department of Housing and Urban Development are investigating the increased payroll.

“It’s a significant issue,” said Mark Brezina, HUD’s field director in Knoxville. “We don’t know exactly how it happened for sure. We hope to find something out in the next few weeks.”

CHA officials said the payroll jump is the result of one-time performance-based bonuses given to some employees, a cost-of-living adjustment and severance packages for three terminated employees. The authority also hired more employees in 2007, officials said.

Housing officials at one time reported a $2.2 million administrative salary increase from 2006 to 2007, but now say that information was incorrect, the result of an accounting error made by CHA’s former chief financial officer.

Staff Photo by John Rawlston — Dogwood Manor, a 136-unit apartment building owned by the city of Chattanooga and managed by the Chattanooga Housing Authority, is located on Gateway Avenue overlooking downtown Chattanooga.

Former Chief Financial Officer Kari Blakney resigned shortly after the April housing authority board meeting when board members questioned the last financial report she presented.

In 2007, about $218,000 was distributed to selected employees as bonuses, called performance-based compensation payments in CHA records. The highest amount given to a single employee was about $3,300, housing officials said.

Mr. Holmes said the decision to give the one-time bonus pay was made by Bob Dull, CHA’s executive director who resigned on May 15. Mr. Dull’s resignation was announced along with 29 other employees who were laid off.

CHA’s Chief Information Officer Bill Lord said CHA officials gave the performance-based bonuses instead of merit increases, which permanently raise employees’ base pay, because they were trying to keep salaries stable.

CHA officials also allocated $189,000 for a cost-of-living increase in 2007 and spent $127,747 in severance packages for three employees.

Since January, the authority has laid off 56 employees and reported a $4.5 million budget shortfall. The increased payroll seems to have led to the shortfall, Mr. Brezina said, and “that’s why you’ve seen 56 people losing their positions.”

The reduction in force is expected to save the agency about $2.8 million a year, according to information recently sent to HUD.

Members of the Chattanooga Community Council, a nonprofit citywide neighborhood association with about 100 members, visited Mr. Brezina this week to express their concern about the housing authority and the board’s lack of oversight on funds.

“Residents could have used that money to have a better quality of life,” said Kalid Hashmi, one of three members of the council who met with Mr. Brezina.

Mr. Hashmi asked Mr. Brezina to consider a citizen’s review panel to prevent similar problems in the future.

“This board failed the citizens of Chattanooga. There needs to be a new and impartial board,” he said.

Housing officials hope to sell various pieces of property owned by the authority as well as money saved from reducing or eliminating some service contracts to return the agency to financial viability.

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