July 13, 2012 09:55 AM
CHA Execs Get Around Salary Cap
Public housing CEO makes $216,000 a year, and could qualify for an additional $32,400 annual bonus. How are he and two aides getting around a $155,500 pay ceiling imposed by the federal government?
Numerous taxpayers have seen their salaries drop in this economy, but the head of the Chicago Housing Authority will be spared that pain.
The Obama administration recently put in place a salary cap of $155,500 for top officials at public housing agencies amid reports that executives in Los Angeles, Atlanta and other cities were making more than a half-million dollars a year.
CEO Charles Woodyard, who joined the CHA in October, has an annual salary of $216,000. That’s more than the federal cap but Woodyard won’t be taking a pay cut. Instead, the CHA took advantage of a loophole allowing agencies to use non-federal funds to pay the portions of salaries that exceed the cap – in Woodyard’s case, that’s roughly $60,000 a year, according to the CHA.
There’s nothing improper about tapping other funds for executive compensation, says Jereon Brown, a spokesman for the U.S. Department of Housing and Urban Development (HUD). The salary cap, which took effect in March, deals only with the appropriation of federal dollars.
But it’s questionable whether the CHA, which has roughly $10.1 million in non-federal funds, could put that precious cash to better use.
"It raises a question of what their priorities are," says public housing expert Janet Smith, an associate professor at the University of Illinois at Chicago. "Are they just another developer or are they committed to the public good?"
The CHA, a taxpayer-funded agency that answers to Chicago’s mayor but is largely supported by the federal government, is facing a myriad of financial challenges.
In this era of public belt-tightening, Congress is looking for ways to reduce spending as it wrestles with a national debt of more than $15.8 trillion.
In this year’s budget, Woodyard wrote that the "CHA is confronting $91.1 million in unrealized federal funding" and can expect softer federal aid in the coming years.
"This projection will adversely affect the agency’s availability to adequately meet the needs of low income Chicagoans in need of affordable housing," he wrote.
For more than a decade, the CHA has been redeveloping its housing stock but a decline in federal spending is one factor slowing that progress. The CHA plans to redevelop 845 units this year, compared to 916 in 2011, says CHA spokeswoman Wendy Parks.
What’s more, credit rating agency Standard & Poor’s lowered the CHA’s bond rating in December from AA to AA-. Among the reasons for the downgrade, which increases the CHA’s borrowing costs, was "reduced appropriations of capital fund program monies by Congress," according to S&P.
Parks defended Woodyard’s pay as fair and competitive, compared to other, similar-sized agencies. The CHA oversees 21,000 housing units and serves 37,000 people through its Housing Choice Voucher program, commonly called "Section 8," she says.
"We are being very wise about how we utilize our funding," she says.
CHA executive vice-presidents Scott Ammarell ($178,500) and Pamela Mitchell-Boyd ($157,500) also earn more than the cap but Parks says their salaries will be paid in part with non-federal funds, too.
In the suburbs, top executives at the Housing Authority of Cook County, DuPage Housing Authority and Lake County Housing Authority all make less than the cap, records show.
Woodyard’s compensation includes a salary of $216,000 a year, plus an annual bonus of up to $32,400, or 15 percent of his salary, according to a copy of his employment contract. He was hired in October to replace Lewis Jordan, who left the CHA in mid-2011 after a Better Government Association/FOX Chicago investigation found he made questionable purchases on his government credit card. Jordan’s salary was $185,000.
Parks says Woodyard was unavailable for comment.
Going forward, HUD wants the cap to apply to total cash compensation – not just salary – because some agencies have awarded large bonuses with federal dollars, Brown says.
"We think that’s in the best interest of our budget and in the best interest of the folks who reside in public housing," he says.
This column, a weekly feature in the Chicago Sun-Times called "Public Eye," was written and reported by the BGA’s Andrew Schroedter. To reach him, email email@example.com or call (312) 821-9035.