Agency paid staff bonuses despite debt Baltimore Housing Partnerships added $300 to $10,000 to pay

'All depended on the year'

Former top provider of affordable housing struggling to survive

March 10, 1997|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN STAFF

Even as it was sinking deeper into debt, the nonprofit Baltimore Housing Partnerships was paying thousands of dollars a year in bonuses to members of its staff.

The bonuses were paid through 1995 before being halted, and ranged from about $300 to as much as $10,000 a year, depending on the performance of the individual employee and the agency as a whole, past and present officials said.

Disclosure of the bonus payments comes as the partnership is trying to renegotiate the terms of millions of dollars in loans with the state Department of Housing and Community Development and two private lenders. The bonuses turned up in financial reviews triggered by the negotiations.

The nonprofit corporation, set up more than a decade ago to promote private homeownership in Baltimore, has lost nearly 50 properties through loan defaults and mortgage foreclosures and has been placed on probation by state officials because of continuing financial problems.

Once billed as the pre-eminent player in local nonprofit housing, the organization is struggling to survive. It has put up for sale its 25th Street headquarters and has laid off about a half-dozen employees.

Patricia A. Massey, who was executive director of the agency until September 1995, said the size of the annual bonus pool ranged from about $20,000 to as much as $60,000. She said the bonuses went to all of the approximately 25 agency employees.

"It all depended on the year," said Massey, who now works for Roizman Development Inc., the firm rehabilitating Renaissance Plaza in Reservoir Hill.

She said the factors in determining the bonus pool included the number of housing units produced on time and on budget and whether periodic budget goals were met.

"It was not an entitlement," Massey said. "Because you got it one year didn't mean you'd get it the next."

A source familiar with the partnership's financial difficulties said the bonuses were paid for with a $250,000 line of credit that the corporation has with Signet Bank. The corporation's financial reports show the balance due on that line of credit jumped from $135,000 on June 30, 1995, to $162,000 on June 30, 1996.

The interest rate on the line of credit was prime plus 1 percent.

Massey and David F. Tufaro, board chairman, said they did not know whether the bonus payments were paid from the line of credit.

According to the corporation's tax return for the fiscal year ending June 30, 1995, salaries for all employees totaled $399,536, with the highest amount, $82,862, going to then-executive director Massey. She left the partnership post three months later.

The tax return for the year ending June 30, 1996, has not been completed, according to Tufaro and John G. Brandenburg, the current executive director. They said that the corporation filed a request with the IRS for an extension for filing the return, which would normally have been due late last year.

Brandenburg said that while he knew none of the details of past bonuses, the practice has been abandoned. "During my administration, there have been no bonuses," he said.

Although Massey said the bonus payments were reviewed and approved by the agency's board of directors, board members contacted by The Sun either declined to discuss the matter or referred all questions to Brandenburg and Tufaro.

"All comments have to come through the president. I could comment on all sorts of things, but I'm not going to," said board member David Fishman.

Tufaro said that while the board discussed the bonuses, he could not recall details. And he said that as an unpaid volunteer on the board, he did not have time to research the matter.

"I know we had discussions about it," said Tufaro, adding that he is focusing his attention on trying to resolve the nonprofit's fiscal problems.

Pub Date: 3/10/97

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