Mildred Pagan gets a monthly phone bill from AT&T. What she doesn't get is phone service.

Pagan is one of several residents of Lathrop Homes, a North Side Chicago Housing Authority development, whose home phone service either is marred by crackly static that makes conversation impossible or has stopped working altogether. Meanwhile, the bills keep coming.

AT&T supplies the development's phone service. A repairman from the company left a note for a resident on March 26 implicating the CHA in the problems.

"The trouble on your line is on CHA-owned wire," the note says. "As soon as a conduit is placed across Hoyne (Avenue), we will install the new cable."

The existing conduit - a pipeline in layman's terms - is so packed with telephone cables AT&T employees cannot reach the wiring inside which needs to be replaced, says company spokeswoman Meghan Roskopf. The CHA needs to enlarge the conduit or install a new one.

CHA and AT&T workers recently visited the site and identified the seven-foot piece of pipe that must be excavated so AT&T can replace its wires, says CHA director of operations Duwain Bailey. The agency plans to award a contract for the construction work this week. It is expected to be complete in a month, at which point AT&T will complete its own repairs.

Roskopf says the phone company notified the agency about the problem nine months ago, but AT&T declined to say who at the agency was contacted.

CHA officials say they first learned of the problem when Juanita Stevenson, president of the Lathrop Homes local council, spoke about it during a public meeting in February.

"AT&T never said anything to us," Bailey says.

The static-filled connections date back two years, but they have worsened since last fall, Stevenson says. When there's rain or snow, the sound quality deteriorates even further.

Neither the CHA or AT&T knew how many people were affected, but an informal survey on the 2600 and 2700 blocks of Hoyne Avenue found 12 people who had experienced bad connections. The problem appears to be concentrated in the parts of the development south of Diversey Parkway.

Last month Gloria Figueroa's $60 in telephone company charges bought her a phone that won't allow her to call her son or grandson, yet rings sporadically when no one is calling. It also picks up others' telephone conversations, says her daughter, Jade Perez.

"We've even argued with (the other callers) because they're on our lines," Perez says.

Eileen Castanon has encountered the same problem, once overhearing someone order take-out and then later seeing a delivery driver arrive at her neighbor's apartment.

The situation has prevented Wanda Navarro from buying Internet service, which she wanted so her three children could use it for school assignments. She tried in 2006 and again in 2007.

"They came out twice to try to hook it up, but they said in this particular area they can't do it," she says.

If residents have received poor service, AT&T should compensate them, Bailey says. But so far only a few residents say they've been able to negotiate some compensation for the erratic service.

Lisa Jones says she received a prepaid cell phone with $25 of airtime from AT&T, and Pagan received a $5 credit after threatening to cancel her service.

A customer service representative talked her out of canceling with the credit and a promise the problems would be fixed.

In the meantime, Pagan shares a cell phone with her sister who lives next door. It's only for important calls. She worries about exceeding her minutes, so she tells friends and acquaintances not to call her. Though she says she spent plenty of time on the phone with AT&T in the past, she doesn't call them much anymore either.

"I got tired," she says.