Raleigh Housing Authority hosts $3,000 Christmas dinner for board members

ccampbell@newsobserver.comNovember 22, 2013 

Raleigh Housing Authority Director Steve Beam leads meeting in Raleigh on Aug. 22, 2013.

COREY LOWENSTEIN — newsobserver.com Buy Photo

— The agency charged with providing housing to Raleigh’s poorest residents treats its governing board to dinners that have cost as much as $3,000 each December at one of the city’s most upscale restaurants, records show.

The Raleigh Housing Authority holds an annual Christmas dinner for board members, their spouses and nine agency department heads at Second Empire Restaurant on Hillsborough Street, which carries a four-diamond rating from AAA. The tradition started in 2004 and includes board members from the housing authority’s affiliated nonprofit, Capitol Area Developments.

With an annual budget of $50 million, the agency oversees 5,700 public housing units for low-income residents as well as federal Section 8 housing vouchers.

Last year, the public housing leaders had a four-course meal with a variety of wines, beer and bourbon. The bill came to $77 per person for food – 25 people attended – and the alcohol cost a total of $254. The agency, which gets three-quarters of its budget from federal housing dollars, footed the entire bill, which came to $3,082 including tax and tip.

The housing authority’s executive director, Steve Beam, says no federal funds are used to pay for the dinners. “I don’t think it is unreasonable at the conclusion of a successful year at RHA to offer a single token of thanks which wouldn’t even replace the board’s personal expenses, much less compensate them for the time they invest,” Beam wrote in an email.

Beam points out that his board members aren’t reimbursed for their mileage to and from monthly meetings at the agency’s headquarters. The cost of gas from the board members’ Raleigh homes, he said, would likely come to far more than the Second Empire bills.

That might be true – if board members didn’t bring their spouses to the Christmas dinners. Board chairman Kyle Dilday lives in North Raleigh, about 10 miles from the housing authority’s office downtown. So at the federal mileage rate of 56.5 cents per mile, he’d be owed about $135 per year for driving to and from 12 meetings a year. The 2012 Second Empire dinner cost $246 per couple.

Dilday defended the annual dinners and the inclusion of spouses in the festivities.

“All of us take away from our families to go to a board meeting at 5 p.m.,” he said. “We thought it was a nice way to say thank you to our spouses for giving up family time in order to be on the board.”

Both Beam and Dilday said the practice of annual board appreciation dinners is common among nonprofits. “We totally agreed that it’s very much consistent with industry practice,” Dilday said.

Not in Durham

But the agency’s counterpart to the west, the Durham Housing Authority, does not provide meals to its board, director Dallas Parks said. A spokeswoman for the Charlotte Housing Authority says its board also doesn’t receive meals.

Raleigh and Wake County don’t have any appreciation meals for elected officials or employees, according to spokespersons for both governments. In the wake of the recession, Wake County canceled its annual employee appreciation picnic.

DHIC, a Raleigh nonprofit that builds and manages affordable housing, will have its annual board of directors luncheon meeting next month. “We’ll have more than sandwiches, but it won’t be much,” executive director Gregg Warren said, adding that he’s budgeting about $15 per person. No spouses will be in attendance, and no alcohol will be served.

The Christmas dinners aren’t the only times Beam books a table at Second Empire, records show. The board of the housing authority’s nonprofit, Capitol Area Developments, conducts all its meetings over dinner at the restaurant.

The five-member CAD board meets twice a year to oversee market-rate housing units for low- to moderate-income residents. The board consists of one housing authority board member, a former housing authority board member, two current agency employees and one former employee.

The costs from those meetings range from $411 to $726. Board members order items such as foie gras, tuna tartare, lamb and grouper while conducting the nonprofit’s business over $15 glasses of wine. In October, the $546 bill came to $78 per person for the board, Beam and a staff member.

Beam says he started the practice when he reactivated the Capitol Area Developments organization 17 years ago. “We initially started when we were trying to find volunteers to be on the board; we decided to take it off site, and we took it to a restaurant,” he said.

Capitol Area Developments has a separate budget from the housing authority and does not receive federal funding. Several of its apartment and townhome complexes are on former housing project sites converted to mixed-income communities.

‘A little too cozy’

Danny Coleman, a community leader in Southeast Raleigh, says the dinners raise concerns because the housing authority is grappling with federal budget cuts. Sequestration, the series of automatic spending cuts, led to a loss of $1.6 million earlier this year – prompting the agency to reduce Section 8 voucher payments to many participating landlords.

The landlords were required to accept a cut of up to $100 in monthly rent payments or tell their low-income tenants to find new homes.

“You have to wonder where their priorities are, especially after this issue with sequestration,” Coleman said, adding that he worries the long-serving board members might be getting “a little too cozy” with the agency’s administration.

Meeting minutes show the board rarely questions Beam’s leadership. Nearly all of its votes in recent years have been unanimous; one board member has served for 18 years, while most others have served for at least eight.

The board has approved annual raises and bonuses for Beam that have brought his total pay as high as $280,690. His annual pay dipped to $271,812 last year after the board gave him a smaller bonus.

Octavia Rainey, a frequent critic of the housing authority, said the high salary and lavish dinners are inappropriate for an agency that has more than 10,000 people on its waiting list for subsidized housing.

“I think that’s wrong,” Rainey said. “You have people living in public housing with no food on the table. They don’t have those types of luxury accommodations.”

Rainey called on Mayor Nancy McFarlane, who’s responsible for appointing the housing authority’s board members, to dismiss the current board and install new leadership. City leaders, she said, “are not providing oversight to the Raleigh Housing Authority, and they hold the charter.”

Reached Friday, McFarlane said she was unaware of the dinners. “I don’t have any oversight authority over their budget,” she said, adding that she will have an opportunity to appoint several new members next year. “It might be time to look at who’s on the board.”

Despite the criticism, Beam said this year’s Christmas dinner is still on. He says the invitations to Second Empire will be going out soon.

Staff writer Dan Kane contributed.

Campbell: 919-829-4802; Twitter: @RaleighReporter

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