In a deep cost-cutting move, the financially distressed Chicago Housing Authority announced Wednesday that more than a third of its 800 administrative employees will be laid off.
And in a move that could have far-reaching impact on the CHA and its 145,000 residents, Mayor Harold Washington is preparing to name as many as four new members to the authority`s board. Current board members have acknowledged that their failure to monitor the CHA`s spending, in particular during the last year, resulted in the worst financial crisis in the agency`s 50-year history.
Testifying before a joint hearing of two Chicago City Council committees, Brenda Gaines, the CHA`s interim executive director, said 256 probationary employees–one of every three in the administration department–will be let go Thursday. And 35 others are to lose their jobs ”forthwith,” said CHA spokeswoman Helene Colvin.
Gaines said the job cuts would occur even if the agency got the nearly $68 million in emergency federal funding it has requested. But Colvin warned, ”If we don`t get any funding, there will be many more cuts among the administrative employees.”
The layoffs follow reports last week that the CHA gave its administrative employees a 9.2 percent pay increase as of Jan. 1 because of a union contract negotiated last May during the chairmanship of Renault Robinson.
Last summer, more than 150 CHA employees, most from administration, were let go because the agency was facing a growing deficit.
Even with those cuts and other cost-saving measures, the agency finished the year with a $13.3 million deficit.
Gaines did not speculate on how well the agency would be able to run with a reduced administrative work force, but mid-level CHA officials have complained about being short-staffed since last summer`s layoffs.
Gaines said she is eliminating 375 administrative positions, 84 of which are now vacant. The 256 probationary employees would have attained permanent full-time status if the budget crunch had not occurred. The CHA, which has a total work force of about 2,500, has operated with a hiring freeze since March.
Among other developments Wednesday were the following:
— Officials of the U.S. Department of Housing and Urban Development promised to provide the CHA with enough funds to forestall a shutdown of the agency`s controversial, court-ordered scattered-site program.
”We`re going to give them what they need now. Nothing is going to be shut down,” said HUD spokesman Adolph Slaughter. He said the CHA could get as much as $4 million by Friday, but CHA officials continued to assert that they needed at least $9 million by Thursday.
— The Chicago City Council`s Budget and Finance Committees began hearings on CHA requests for a $25 million city loan and a $5.7 million grant. The committees are expected to approve those requests Thursday.
The requests are in addition to the $68 million in emergency funding that the CHA is seeking from HUD. The housing authority is hoping to pay back the city loan with those federal funds.
— CHA officials disclosed that garbage collections were stopped temporarily at three housing developments because scavenger services, which had not been paid by the agency, could not pay a dump to take the garbage they collected. The problem was solved when the CHA paid the scavengers.
— Federal officials indicated that a highly critical management review of the CHA, due out within two weeks, will require the agency to follow strict guidelines and regulations to eliminate mismanagement at the agency. ”The review, when it comes out, will indicate the direction HUD is going and the direction that HUD is demanding–almost–that CHA go in,” Slaughter said.
— Illinois House Minority Leader Lee Daniels (R., Elmhurst) filed a resolution Wednesday in the General Assembly that would order a ”full and complete” investigation and financial audit of the CHA by state agencies. The resolution, which must be approved by the full House, would require that the investigation and audit be completed by Aug. 15, with preliminary findings released by June 1.
Two years ago, Daniels sponsored a resolution ordering an audit of cost overruns at the McCormick Place annex that helped lead to the passage of numerous reforms at the Metropolitan Fair and Exposition Authority.
— A 25-member advisory council appointed by Washington to make recommendations for the CHA`s long-term future held its first meeting. Philip Klutznick, council cochairman, said members will be visiting CHA developments in the next two weeks.
More Top Picks Best Pillows For Reflux Sufferers
During his first term as mayor, Washington had control of the CHA board and was criticized for allowing mismanagement, permitting the agency to be used for political purposes and failing to improve conditions.
Washington has blamed most of the agency`s troubles on a lack of federal funding, but some CHA board members acknowledged at least partial
responsibility for failing to monitor the agency`s budget adequately.
”As a board member, I would do anything–including resigning, including continuing–if it would do anything to help the housing authority,” said attorney Earl Neal, who has been on the CHA board since 1983.
Rev. B. Herbert Martin, the mayor`s pastor who has been on the board since September and chairman since January, said, ”The board recognizes that it has been relaxed, has not fully understood its role, not fully executed its duties.”
Rev. Martin has contended that a new CHA board would be able to develop
”a partnership with the city.”
But local housing experts warned that dumping as many as three present members and filling one vacancy on the seven-member board won`t be enough.
Unless the mayor is willing to remove politics from the agency and end pervasive mismanagement there, little will change for the people who live in the deteriorating, crime-ridden CHA developments, they said.
In an apparent gesture of good faith, Washington sent assurances to HUD officials Wednesday that he is moving quickly to reconstitute the CHA board and to find a new executive director.
”There are four appointments, and he expects to make them soon,” said Ernest Barefield, Washington`s chief of staff, after a meeting with HUD officials.
In addition, a source indicated that the CHA plans to have a new executive director and deputy executive directors for finance and special housing programs in June. Gaines, Washington`s deputy chief of staff, has been interim executive director since January. Two top city officials have been on loan from the city to serve in the deputy executive director positions.
HUD has agreed to provide training for the new board members and executive staff, explaining their duties and responsibilities, according to a federal source.
The CHA board now has one vacancy, because of the resignation Jan. 16 of Robinson, who left in the midst of a controversy over the CHA`s loss of $7 million in federal funds because of a missed deadline.
In addition, three board members–Neal, Letitia Nevill and Leon Finney Jr.–can be replaced at any time because their terms have expired. Robinson, Finney and Neal originally were appointed to the board by Mayor Jane Byrne. Nevill was appointed in 1968 by Mayor Richard J. Daley.
The three members whose terms are still running were appointed by Washington–Rev. Martin in September, Patricia Crowley in November and Artensa Randolph in May.
Rev. Martin, who reportedly strongly favors the appointment of four new members, has promised that the newly constituted CHA board would have ”a partnership with the city” that has been ”unknown” in previous years.
He and Crowley have indicated that this new CHA board must operate differently from the way the board has in the past.
During Washington`s first term, Robinson, a close political ally of the mayor, controlled the board. He worked closely with Finney, president of The Woodlawn Organization. With the exception of Neal, who was Finance Committee chairman, other board members had little or no influence on the agency`s decisions.
Though the board often was described as a policy-making body, Robinson used it instead as a platform from which to become involved in the day-to-day operations of the authority. He gained control of those operations, lost it after a series of controversial actions and then regained it at the expense of then-executive director Zirl Smith.
Neal and other board members, as well as present and former CHA officials, said Robinson`s meddling in the day-to-day operations hurt the authority and helped cause its financial crisis.
Under Rev. Martin, the CHA board is expected to stay out of day-to-day operations and focus instead on policy-setting and working to get the tenants and the city`s business community involved in addressing the agency`s problems.
”The job of this board is policy making,” said Crowley. ”You`re not supposed to do that day-to-day running of the agency.”
But she added: ”It`s very difficult for a board member to know what`s going on because you`re not supposed to get into the daily operation. Of course, I think we should pay our bills. When something comes up, you have to ask, `Is it in the budget?` and you have to trust the person you ask.
”There`s got to be new board members. I think there should be a financial person and a housing person on it.”
Rev. Martin agreed: ”We recognize that we need new expertise on the board, and we`ll be moving in that direction.”
But finding new board members reportedly has been difficult for the mayor`s aides.
Edward Marciniak, urban studies professor at Loyola University, said he was approached twice about possibly serving.
”I might consider it,” he said, ”if I had a one-on-one with the mayor. I`d want to know what he`s planning to do with the high-rise buildings, with all the problems they`ve caused for families and kids.”
More Top Picks Best Cabinet Pulls
The new board members, Marciniak said, must be open to innovative ideas for solving the housing needs of low-income families and also be free of political influence.