Despite threats by the Chicago Housing Authority of severe program cuts later this week, federal housing officials refused Monday to be rushed into considering nearly $68 million in CHA requests for an emergency bailout.
But U.S. Department of Housing and Urban Development (HUD) officials went ahead with a private meeting with CHA leaders and former chairman Renault Robinson to discuss federal findings of pervasive mismanagement of the housing authority.
After the meeting, Robinson, in his first public comments since resigning under pressure on Jan. 16, defended his tenure as chairman, saying, ”I always thought I was doing my job.”
Asked about recent disclosures that indicate the housing authority is facing the worst financial crisis of its 50-year history, Robinson said, ”I don`t have any comment on that at this time. I`ll wait until the release of the HUD findings.”
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CHA officials, who are seeking $67.8 million in emergency aid from HUD, have warned that they will shut down the controversial scattered-site rehabilitation program Thursday unless the agency gets at least $9 million.
But Adolph Slaughter, a spokesman for Gertrude Jordan, the regional HUD administrator, said Jordan isn`t going to be swayed by such pressure.
”She`s not going to make any snap decisions,” Slaughter said. ”She`s not going to be buffaloed.”
Last Friday, CHA interim executive director Brenda Gaines and Ernest Barefield, Mayor Harold Washington`s chief of staff, said a meeting was scheduled between them and Jordan for Monday.
But on Monday, Slaughter said, ”There will be no meeting with Mrs. Jordan today. They requested one. There was never one set.
”There`s no indication at this time when Mrs. Jordan will meet with the CHA. It will occur when she feels familiar with the information we have received from the CHA. She will set the time and date of the meeting.
”There will be no meeting tonight. I can almost guarantee that there will be no meeting tomorrow.”
CHA spokeswoman Helene Colvin said housing authority officials were surprised that the meeting wasn`t held Monday.
”We are eager to sit around the table with the regional administrator and her staff to share with her our proposals and seek her support,” Colvin said. ”When George Ray, the deputy administrator, was here, we impressed on him the need to meet as soon as possible–any hour of the day or night
–whenever Mrs. Jordan`s available.”
Meanwhile, CHA`s money problems continued to escalate Monday as one of the six companies servicing elevators said it would pull out of service within the next two weeks because it isn`t being paid as quickly as expected.
”It isn`t really a threat,” said Robert Bailey, owner of Mid-American Elevator Co. Inc., Chicago. ”I don`t have a choice. I don`t have any more money so, if they don`t pay me, I can`t do any more work for them. I can`t afford to finance them any more.”
Bailey said his firm is owed about $275,000.
Preparations have been made in the City Council for joint hearings Wednesday by the budget and finance committees on a temporary plan under which the city would make a HUD-guaranteed loan of $25 million to the CHA. The loan would tide the CHA over until HUD funding could come through.
Ald. Lawrence Bloom (5th), Budget Committee chairman, said the loan can`t be made unless HUD guarantees to reimburse the city. ”The city does not have $25 million to give out,” he said. ”The aldermen are going to want to see and hear those assurances.”
Ald. Timothy Evans (4th), Finance Committee chairman, said, ”We can`t take any action if we don`t have collateral.”
Both men said the council will give the proposal a thorough examination.
”It`s not going to be perfunctory,” said Bloom.
HUD investigators, headed by Phyllis Griffith, a specialist in troubled housing authorities, gave CHA officials and Robinson an opportunity to respond to findings of widespread mismanagement that were uncovered during a 5 1/2-month review of the agency. Those findings originally were presented to the housing authority officials at a private meeting last Wednesday.
Slaughter said the review focused on the role of the CHA board as well as on the areas of purchasing, finance, maintenance, the high vacany rate and the Section 8 program, under which the CHA issues rent subsidy certificates to low-income people.
Robinson was present at both meetings because, when he was still chairman, he was the one who asked for the management review, Slaughter said. ”He did not have much to say in last Wednesday`s meeting,” he said.
”He did make some comments today.”
Robinson said, ”I was there just to listen. I think that, when the report is issued, you`ll have an opportunity to see my comments.” Asked if the report vindicated his actions as chairman, he said, ”I`ll let you determine that.”
Neither Zirl Smith, the former CHA executive director who fought Robinson for control of day-to-day operations of the agency, or Lynne Borrell, the former deputy executive director for special housing programs, were invited to the meeting.
Sharon Gist Gilliam, city budget director and chairman of the city`s Community Development Coordinating Committee, said the CHA`s request for a six-month HUD-guaranteed $25 million loan from the city`s federal Community Development Block Grant money would not adversely affect other city projects for which those funds are earmarked.
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Gilliam said the money the city got from the federal government this year –$85.4 million–is sitting in the U.S. Treasury until the city draws it down to pay for a specific program.
This would not be the first time the city used block grant funds to float a loan, she noted. The city did it in the case of the Chicago Theatre to provide the developers with start-up construction capital.
The CHA`s request for an outright $5.6 million community development grant to rehabilitate vacant apartments also would not adversely affect the money the city has earmarked for neighborhood housing rehabilitation, she said, because the money for the grant would be taken from unspent funds appropriated in past years for rehab projects that are no longer feasible.
The city will try to avoid being burned by a loan to the CHA the way it was when it provided the Chicago Transit Authority with $20 million in 1981.
Because of the wording in the agreement between the two governments, the city has yet to see repayment of $17 million it gave the CTA.
At issue is whether the money was a grant or a loan. The contract used the word ”grant” to describe the money, but said that the funds should be repaid if the CTA`s revenues ever exceeded expenditures.
The transit authority got the infusion at the height of a financial crisis that gripped the entire Regional Transportation Authority and the cash helped keep buses and trains running.
The RTA subsequently repaid $3 million of the $20 million, deducting the amount from subsidies it was to have provided the CTA in 1983.
The remaining $17 million has been in contention ever since. The CTA has sought the money from the RTA so the city could be repaid, but so far to no avail.