The $217,955 in bonuses given to Chattanooga Housing Authority employees in 2007 — pay that helped contribute to the authority’s recently announced $4.5 million shortfall — never should have been handed out, the chairman of the authority’s board said.

Although the board gave its approval for the bonuses early in 2007, the money wasn’t handed out until late in the year when the authority’s financial problems should have been apparent to its chief financial officer at the time, CHA board Chairman Eddie Holmes said.

“There should have been some assurance that we had funding to give to ‘X’ number of employees,” Mr. Holmes said.

The biggest bonus — about $3,300 — went to Chief Financial Officer Kari Blakney, according to authority records. Ms. Blackney resigned after the housing authority’s April board meeting, when board members questioned the authority’s financial situation.

About three months after the bonuses were awarded, CHA officials laid off 26 employees and a few weeks later announced a $4.5 million budget shortfall, laying off an additional 30 employees. The bonuses and salary increases for employees were a part of the problem that caused the layoffs, officials from the U.S. Department of Housing and Urban Development have said.

HUD officials have been reviewing the Chattanooga Housing Authority’s financial records for several weeks, trying to find out what led to the $4.5 million shortfall.

Bonuses were given to 201 employees, housing authority records show, with the average being about $1,066. Bonuses ranged from Ms. Blakney’s $3,309 to $300 for Jerred Gooden, who worked for the authority’s Youthbuild program for high school dropouts and did repair work on various CHA properties, records show.

Development Executive Naveed Minhas, who helps find funding for housing developments, received a bonus of $3,248 while 11 employees got more than $2,000 and 88 got $1,000-$1,900, records show.

The housing authority’s former executive director, Bob Dull, who resigned in May after the $4.5 million shortfall came to light, did not receive a bonus, records show.

Board members say their goal isn’t to micromanage the housing authority, but they want new safeguards to better oversee the housing authority’s financial situation.

“We want prior notification if there is an increase given in the future,” Mr. Holmes said. “We need to have assurance that the funds are available.”

CHA’s Chief Information Officer Bill Lord said the board was notified and approved the plan for a one-time pay per performance increase in January or February 2007.

Betsy McCright, CHA’s interim executive director, said the board was informed in the past and that it will continue to be informed in the future.

Mr. Holmes said board members approved a policy to award the bonuses at the beginning of the year when they believed funds were available. But the bonuses were not distributed until November or December, he said.

Members of the Chattanooga Community Council, a nonprofit, citywide neighborhood association with about 100 members, visited the HUD field office in Knoxville this month and called for the CHA board to disband because of its lack of oversight.

Richard Beeland, spokesman for Chattanooga Mayor Ron Littlefield, said the mayor is satisfied with the board’s performance.

“We’re waiting on the report from HUD, but, as of right now, we’re happy with the board’s makeup,” Mr. Beeland said. “They’re the ones who brought this to light anyway.”

Comments