Hidden audit shows big budget hole at union for Miami Dade schools lowest-paid workers

By William Gjebre, Florida Bulldog.org 

Miami-Dade Superintendent of Schools Alberto Carvalho and AFSCME, Local 1184 President Vicki Hall at a meeting in November 2016.

An embattled union representing the lowest-paid Miami-Dade public schools employees is facing new problems that include a $210,000 budget deficit, possibly driven by compensation paid to a handful of top union officials.

The shortfall at the American Federation of State, County and Municipal Employees Local 1184 is a huge hole in a budget that in past years has typically ranged from $200,000 to $250,000 – funding primarily collected from union dues.

The large deficit was disclosed in an audit by AFSCME international headquarters in Washington, D.C. that’s dated May 2, yet only made public this month.

A former union official who ran for president of the local said the suppression of the audit could have cost him the May 18 election.

“Why did the international allow someone to run for office with a $200,000 deficit?” said Terry Haynes, a former union vice president who was defeated by incumbent Local 1184 president Vicki Hall.

Aside from the union’s budget issues, Haynes said, there was a lack of disclosure of information by Local 1184 regarding union finances as well as failure by the union to obtain approvals of the full executive board. Increased expenditures in light of the union’s precarious financial problems are not justified, Haynes added.

Terry Haynes, former senior vice president of Local 1184 of the American Federation of State, County and Municipal Employees

Hall, Local 1184 president since May 2015, did not respond to an email and phone calls for comment on the audit and related issues. Jeffrey Taggart, director of accounting and auditing, AFSCME international in Washington, whose office conducted the audit under his signature, also did not respond to a request for comment. Andy Madtes, executive director of Florida Council 979, which oversees AFSCME locals in the state, maintained that the audit is a matter between the international and Local 1184 and does not fall under the council’s purview.

AFSCME international “does not comment on an internal issue,” said Mark McCullough, a spokesperson for both the international and Local 1184. He would not discuss what measures have been taken by Local 1184 to address the financial and other issues referenced in the audit.

‘A deficit of $210,667’

“The 2016 and 2017 annual budgets approved by the Executive Board do not provide the net income/net loss,” the audit stated. “Total budgeted income for 2017 less the total budgeted expenditures for 2017 results in a deficit of $210,667. Additionally, the expenditures on the annual budgets do not total correctly.”

Audit information, as well as an apparent union tentative budget document for 2017, provides some answers to the funding imbalance.

“The 2016 budget for payroll was $121,620 and the 2017 budget payroll is $146,820,” the audit stated. Those numbers, however, appear to be far less than the actual union payrolls for 2016 and apparently for 2017.

The audit stated that Hall’s total compensation and payments for 2016, funded by union dues, were $116,572, including $50,915 in union salary (called “allowance”) and another $10,276 in reimbursements; $43,443 from her district annual salary as a bus driver, and $11,938 for fringe benefits, unused sick time and vacation pay. The union’s agreement with the Miami-Dade public schools system calls for the union to reimburse the district for Hall’s district salary and other benefits so she can do union business.

During 2016, Haynes, at the union’s request, was also on full-time release from his district job as a custodian, and his total compensation and payments were $68,944, including $44,373 from his district salary and another $12,958 for fringe benefits, unused sick and vacation time; $11,150 in his union salary, and another $463 in union reimbursements.

In addition to the $185,516 in compensation for Hall and Haynes, the union in 2016 paid allowances to 12 other union officials for about $50,000 — or a grand total of $235,516.

Local 1184’s budget totals for 2017 were not identified in the audit. But Haynes provided a document he said was a working tentative union budget for this year that showed the union’s income from dues, normally the main funding source, would amount to only $159,523 for the year. Haynes said that as far as he can recall the 2017 union payroll was not reduced from the previous year.

A drop in membership dues coming?

The tentative budget document Haynes provided projected that Local 1184 would collect a total of $974,590 in dues for the 2017 budget. Most of that is sent up to the Florida Council and AFSCME international. Local 1184’s $159,523 share of the total is 16.4 percent of the total.

In the last reports to the state of Florida regarding yearly dues from members, Local 1184 stated it collected $1.128 million in 2015 and $1.182 million in 2013. This indicates Local 1184 is facing a drop in membership dues for 2017.

The audit report was also critical of Local 1184 in other areas, noting that certain cash allowances and increases for officers were not approved by the membership and that the local bought 14 new cellphones for its executive board members at a price that was higher than what had been approved.

The issue of union finances is the latest controversy surrounding the union. Haynes had criticized Hall for failing to challenge the school system when the School Board approved two contracts totaling $1.8 million outsourcing lawn service work usually done by union employees.

Haynes also was critical after it was learned that the school district gave Hall a $16,000 pay hike, raising her base annual salary to $42,000 from $26,000, two months before the November 2015 outsourcing contract was approved.

Controversy continued at the end of the May 18th union election when member votes were being counted. Haynes said his unofficial count had him leading when an election committee official left the area and returned with papers in hand. Shortly afterward, he said, Hall was declared the winner. “They stole the election,” he said.

Haynes contested the election, but AFSCME international denied it saying he filed the appeal too late.

Haynes said he believes that the international, despite its claim of opposing outsourcing, did not support his call for a new election because “they want her [Hall] there” rather than someone like himself who speaks up about problems.

Miami-Dade Schools, union push costly private loan program for lowest paid workers

By William Gjebre, FloridaBulldog.org 

Terry Haynes, senior vice president of Local 1184 of the American Federation of State, County and Municipal Employees

A union representing the lowest-paid Miami-Dade Public Schools employees has endorsed a proposed private loan program for its members that would charge 24 percent interest with the school district collecting loan repayments by deducting them from employee paychecks.

The proposal, which did not go before the Miami-Dade School Board for public discussion and approval or review, has drawn criticism from an outspoken union official who will seek to become president of the American Federation of State, County and Municipal Employees, Local 1184, in a May election.

“The interest rate is high” for the union employees and “puts them in harm’s way,” said controversial Local 1184 Senior Vice President Terry Haynes. Haynes was suspended by the loca’s executive board last month but reinstated March 28 by AFSCME’s national headquarters in Washington, D.C. following an investigation.

Critical of the union and the school district for backing a contract change that allows for a private company to set up the loan program, Haynes said, “If they want to do something, why not something more manageable” than 24 percent interest? “If we have people going out for those loans,” he said, “it means they are not being paid enough.”

The loan program proposal arises from a modification to the labor contract that was agreed to by the school district and the union Jan. 31. The change allows for the union to have another payroll deduction slot for “other economic services” to be used by “entities or businesses” as designated, with the school district being held harmless under the plan.

Vicki Hall, Local 1184 president who signed the agreement on behalf of the union, Hall did not respond to requests for comment, including a question about what benefits the union might receive for backing the BMG loan program. Union draft documents about the program, however, state that BMG would provide financial literacy training to union workers; support union membership drives and make an unspecified contribution to the union.

But Tom McCormick, chief growth officer for BMG Money Inc., said in an email, “We do not plan on offering any incentives to AFSCME based on any milestones.”

Two school district officials — Vivian Santiesteban-Pardo, assistant superintendent in charge of Labor Relations and Compensation, and Jose Dotres, Chief Human Resources Officer, who signed the “Memorandum of Understanding” on behalf of the district – also failed to return calls for comment.

A new payroll slot

But in a district email response, Santiesteban-Pardo said that in September the union had requested the payroll department to “add a payroll slot for Loans at Work, a program offered through BMG Money… The Union has not presented the District with the agreement in order to begin the program. The terms and conditions of the program are subject to the agreement between BMG and AFSCME. At this time, no other union in M-DCPS has requested a payroll slot for BMG Money.”

A draft letter from AFSCME Local 1184 backing the BMG loan program states: “Sometimes when savings aren’t available and neither banks nor credit unions can help, these expenses can create true financial hardships in our lives…

“Though the interest rate is somewhat higher than what our more fortunate members might pay, 23.99%, it is definitely reasonable in comparison to payday loans that charge anywhere from 200%-400% APR… The availability of the [BMG] LoansAtWork program is in the best interest of our members – another tool in times of need.”

Haynes, however, said there is something wrong when only the lowest-paid employees are being offered the loan program at what he considers a high rate. The union should not be a party to this, he said, adding he told Hall it was not good for union employees.

The school district will, in effect, become a “collection agency” because loan repayments will be made through the district’s payroll deduction system, said Haynes.

BMG’s McCormick declined to comment on any talks with the district and Local 1184, but did discuss his company’s program.

“BMG Money’s LoansAtWork program is a fixed-rate, fixed-payment employee emergency loan program,” McCormick stated. “When facing an expected expense, too many good people with good jobs are left with few options except predatory payday lenders… Payday lenders in Florida offer short-term loans with absurdly high interest rates of 265% and repayment terms that make the loans exceedingly burdensome on borrowers.”

But a Tallahassee-based consumer group that strongly opposes predatory payday lending says BMG’s 23.99 percent interest, while considerably lower, is no bargain, either.

“I would say it is a pretty high interest rate,” said Alice Vickers, director of the Florida Alliance for Consumer Protection. “I certainly would call it not very risky [for BMG] with an interest rate that high and guaranteed repayment through paycheck deduction…I advocate they lower the rate.”

BMG Money

BMG Money Inc., incorporated in September 2009 in Delaware, began operations in Florida in 2010 and has an office on Brickell Avenue. The company’s majority shareholder is an affiliate of Banco BMG S.A. of Sao Paulo, Brazil, according to bid documents it presented to Broward County government, where the company is under consideration for establishment of a loan program for county employees.

Banco BMG S.A., according to Bloomberg Private Business Information, “provides commercial and credit, financing, and investment products and services primarily in Brazil.” It also provides “salary account deductible loans … personal direct debit loan accounts for civil servants, retirees … and pensioners,” according to Bloomberg.

In its short time in Florida, BMG has been busy. In its documents to Broward County government, BMG stated it has 42 governmental or public entity clients, all in Florida, and has issued “over $107 million of loans to employees who otherwise would have fallen victim to predatory payday loans.”

Among the 42 clients are Broward County Public Schools and the cities of Fort Lauderdale and Miami Beach. The loan programs with these other government agencies were offered to all employees working for those agencies after being reviewed and or authorized by the governing bodies.

BMG’s bid documents to Broward County give a glimpse of how the loan program operates: Loans do not compound, do not require credit reports, do not require fees, will be “unsecured” (not require the backing of homes, cars or savings as collateral), will be in amounts from $500 to $5,000, will be repaid through payroll deductions over six to 24 months, and can be paid back early without penalty. BMG also provides financial literacy training for borrowers.

The controversy involving the loan program is another sharp difference between Haynes and Hall. Led by Hall, Local 1184’s executive board on March 7 suspended Haynes from his duties as Senior Vice President, but on March 28 he was reinstated by AFSCME’s headquarters after an investigation.

Haynes said he was told by Hall that he was suspended for talking to a reporter for the FloridaBulldog. In an article appearing one day before his March 7 suspension, Haynes questioned why Hall received a huge annual pay hike from the school district two months before the School Board began approval of two contracts totaling $1.8 million, over a five-year period, to outsource lawn service normally done by union employees. Haynes linked the pay boost to the two contracts that the union failed to challenge at the time of School Board approvals.

Miami-Dade schools gave union boss fat pay hike before outsourcing work

By William Gjebre, FloridaBulldog.org 

Miami-Dade Superintendent of Schools Alberto Carvalho and AFSCME, Local 1184 President Vicki Hall at a meeting in November 2016.

The Miami-Dade public schools administration gave a 60 percent pay hike to the president of the union that represents the district’s lowest-paid employees months before the school board approved one of two contracts that outsourced lawn maintenance work traditionally performed by union workers.

A top official of the American Federation of State, County and Municipal Employees Local 1184 is questioning why president Vicki Hall got such a large pay increase and linked it to the two contracts that went unchallenged by the union before they were approved. The raise brought Hall’s annual school district salary from $26,141 to $42,000, records show.

“Why would they change her pay status … and give her a $16,000 increase? I tie it to the two contracts,” said union senior vice president Terry Haynes, adding that Hall’s pay raise exceeded promotion provisions of the labor contract by more than $14,000.  “She cut deals” related to the district’s outsourcing contracts, he said.

AFSCME officials have complained that the outsourcing, which could pay private firms up to $1.8 million over five years, violates the union’s labor agreement with the district and will result in loss of work for employees represented by the union. The controversy has exposed sharp differences between Hall, who was elected president of the local in May 2015, and Haynes, the local’s second in command.

Hall was asked to comment on her salary hike and how it came about. “You want me to incriminate myself,” she said before hanging up.

Re-contacted again a few days later, Hall declined to comment.

In an earlier interview several months ago,  Hall maintained that “no deals” were made and that she was “still a bus driver.” She also said that her annual salary increase was only from $36,000 to $42,000 – numbers different than those provided by the school district.

The union also provides Hall a separate salary stipend for her service as president, and reimburses the school administration for her school district salary so she can carry out union duties full time. The union represents about 7,900 employees, including custodians, bus drivers, cafeteria workers, maintenance employees and some staffers at WLRN, the public radio and TV station whose license is owned by the Miami-Dade School Board.

A comparison

By way of comparison, Haynes said the district never gave longtime union president Sherman Henry a large pay increase or a better pay grade. Instead, Haynes said, Henry got the same increases negotiated for all union employees. Henry retired from the school district two years ago after serving as union president for 24 years.

Superintendent of Schools Alberto Carvalho, who union officials say backed the two outsourcing contracts, did not respond to a call for comment. School Board Attorney Walter Harvey did not return calls for comment, or to an email asking him whether the outsourcing contracts violated the union’s labor agreement with the district, as union representatives contend. Chief Human Resources Officer Jose Dotres also would not comment.

School district Chief Communications Officer Daisy Gonzalez-Diego, however, maintained that the outsourcing contracts don’t violate the board’s contract with AFSCME, and that an agreement has been reached with the union to clarify outsourcing procedures. She added that the settlement resolves all grievances filed about the two contracts that outsourced lawn service.

The settlement, signed by Hall and district officials, calls for the district to do what the district’s labor agreement called for it to do: give notice to the union when it plans to outsource work, outline the scope of work and allow the union time to decide if it wants to challenge.

Union officials complained that had not been done. “I think downtown is in control’’ of the union, said Haynes, who disagreed with both the settlement and any claim that it resolves two grievances he filed about district outsourcing work.

School district officials refused to provide Hall’s annual salary on Jan. 1, 2015 and on July 1, 2015 when she and union members received a union-district negotiated pay increase. Andrea Williams, executive director in the Office of Labor Relations, said the district only provides hourly rates for 10-month school bus drivers; Hall’s official job with the district on those dates was that of a 10-month bus driver.

An analysis of school district information, however, shows that as of July 1, 2015, Hall’s salary was $26,141 a year. Three months later, Hall’s annual salary jumped 60 percent to $42,000 after the administration changed her status to a 12-month school bus driver. The change put Hall on a more lucrative salary schedule.

According to Haynes, Hall’s salary should have increased only by about $1,600 a year under promotion provisions in the district’s labor contract with AFSCME.

Outsourcing followed union president’s big raise

In November 2015, two months after Hall’s salary hike to $42,000, the first of the two lawn maintenance outsourcing contracts was approved by the School Board. The five-year contract authorized 11 companies to provide lawn services totaling up to $1 million. The type of work includes tree, palm and shrub trimming, pruning and stump removal, according to board records.

The contract was approved two days after the union withdrew a related previous grievance and a request for arbitration. The union filed the grievance in June 2014 after discovering that a private firm was doing lawn service work at Krop Senior High School in North Dade.

According to documents provided by the school district, the district paid about $273,000 to the companies it contracted with to outsource lawn services. the district contacted with as of Nov. 29, 2016. The union did not file a grievance at the time the contract was approved.

The other contract, for up to five years, was approved by the School Board on Feb. 3, 2016. Thomas Maintenance Service will be paid up to $800,000 to mow vacant lots and clear fence lines.

According to documents provided by the school district, nearly $82,000 was paid to Thomas Maintenance as of last November. The union did not file a grievance at the time that contract was approved, either.

Haynes accuses Hall of failing to take a strong stance against the district’s efforts on outsourcing. “It’s her responsibility to watch board items” and guard any actions detrimental to employees represented by the union, he said.

Haynes criticized the union’s withdrawal of the Krop High grievance. “She ordered the grievance pulled in a deal cut with Labor Relations,” he said.

“I told her not to pull it because it can result in a pattern,” Haynes said.”The grievance should never have been pulled because they may try to do it again.” And they did, he added.

In the interview months ago, Hall had a different version. She said that in November 2015 she ordered the Krop grievance withdrawn because she was given assurances from an official in Labor Relations that the union would be notified in the future of any outsourcing proposals.

It was “based on a good faith” promise, Hall said.

Miami-Dade union leaders fear more outsourcing of members’ work at district schools

By William Gjebre, FloridaBulldog.org   

Miami-Dade Public Schools Superintendent Alberto Carvalho Photo: NBC6 South Florida

The Miami-Dade School Board has agreed to spend up to $1.8 million to outsource lawn service maintenance long done by unionized workers, and union leaders now say they fear Superintendent Alberto Carvalho is eyeing more privatization that could lead to additional work cuts for its members.

The two, five-year outsourcing contracts stand to eliminate tasks generally assigned to maintenance workers and custodians represented by the American Federation of State, County and Municipal Employees (AFSCME), Local 1184.

“It’s work the employees are supposed to be doing,” said AFSCME local president Vicki Hall. AFSCME workers are generally the lowest-paid union members working for the school district; they include custodians, maintenance employees, bus drivers and food service personnel.

“It weakens the union when they outsource and take away jobs from the employees who should be doing the work,” said Terry Haynes, the AFSCME local’s senior vice president. He estimated the two contracts cost 10 to 15 school district jobs.

Both pointed the finger at Superintendent Carvalho for the outsourcing. “He’s aware of it; all falls under him,” Haynes said, adding the superintendent “backed the first two” contracts.

“I believe this is the start of outsourcing of all of lawn service,” Haynes said.

“He’s trying to outsource lawn service. He’s trying to privatize,” said Hall.

District officials did not respond to calls for comment on the issue, so reasons for the outsourcing were unknown, including whether they claim it was for cost reasons. Carvalho also would not discuss the matter when a reporter attempted to talk with him at the Dec. 14 board meeting.

A day after the meeting, however, district spokeswoman Daisy Gonzalez-Diego released this statement: “Recently, there was misunderstanding regarding the District’s procedures for contracting out. In an effort to provide clarity, the District and the Union are working on an agreement to ensure that all parties understand the process and protocols to be followed.”

Outsourcing a management right?

Union officials Hall and Haynes complained that in recent years district officials have taken the position that outsourcing is a management right that can be invoked unilaterally and they do not have to confer with the union.

But Haynes said the district is overlooking a ruling in a case years ago in which the union prevailed in arbitration. The ruling in that matter stated the district had to notify the union if it sought to outsource work that could be performed by union employees and the parties had to negotiate the impact of the proposed work. If the parties did not come to an agreement, the union could move ahead with arbitration.

After that case, the district generally followed that ruling, until recently, Haynes said, adding the two contracts are indicative of the district’s changing policy.

The first of the two contracts was approved by the School Board on Nov. 18, 2015 for up to five years for 11 companies to provide lawn service totaling up to $1 million. The type of work includes tree, palm and shrub trimming, pruning and stump removal, according to board records.

The contract was approved two days after the union withdrew a grievance and the request for arbitration. The union had filed the grievance in June 2014 after discovering that a private firm was doing lawn service work at Krop Senior High School in North Dade.

According to documents provided by the school district, approximately $273,000 has been paid to the companies as of Nov. 29, 2016. The union did not file a grievance at the time the contract was approved, according to Haynes.

The other contract, for up to five years, was approved by the School Board on Feb. 3, 2016. Thomas Maintenance Service will be paid up to $800,000 to mow vacant lots and clear fence lines.

According to documents provided by the school district, nearly $82,000 was paid to Thomas Maintenance as of Nov. 21, 2016.

Haynes said the union filed a grievance related to the Thomas Maintenance contract in April regarding work done at the district’s North Dade maintenance facility. Two more grievances were filed in September after the union learned about other outsourced lawn work at a high school and an elementary school, both in the northwest section, Haynes added. All three grievances remain pending.

New union deal at Miami-Dade Schools to begin push toward $15 hourly minimum wage

By William Gjebre, FloridaBulldog.org minimumwage15

A tentative agreement between Miami-Dade Public Schools and the union representing its general employees raises the minimum pay for some of district’s lowest paid workers to $10 an hour, marking what a top union official says is the start of a drive to obtain a minimum hourly wage of $15.

The deal also provides for an immediate average pay hike of about four percent to the district’s food service employees, custodians, bus drivers and other workers.

Negotiators for the Miami-Dade school system and the American Federation of State, County, and Municipal Employees, Local 1184 reached the agreement Nov. 13. It goes to the School Board for approval today.

“We will be pressing for $15 an hour” in future negotiations, said Local president Vicki Hall.

“I think it is a very good deal for the union considering they are the lowest paid,” said James Haj, Assistant Superintendent in charge of the school district’s Labor Relations Department. He added that the district will look at the $15 an hour wage minimum, but only as an idea to be phased in over time.

“It does not happen overnight…We will keep moving on it,” Haj said.

Government agencies in various states around the country have joined the $15-an-hour minimum wage movement.

Last week, outside County Hall in downtown Miami, several hundred workers joined a $15 wage minimum rally headed by the Service Employees International Union, part of a nationwide demonstration in more than 200 cities that day.

New York Governor Andrew Cuomo this month unilaterally established a $15 hourly minimum wage for all state workers in New York City by the end of 2018, and the end of 2021 for state workers outside the city. Other cities that have approved a $15 an hour minimum, to be reached over the next two to five years, include Seattle, San Francisco and Los Angeles.

The Miami-Dade School Board will be asked to ratify the agreement subject to union members endorsing the pact at a Nov. 23 vote.

BOARD MEMBERS LOBBIED

Sources said the agreement came after union officials lobbied several school board members for a pay boost higher than the 2.4 percent that district officials had been offering. Union officials said the board members they lobbied were chairwoman Perla Hantman, Marta Perez Wurtz, Lawrence Feldman and Wilbert Holloway.

The pay boost for the union’s 7,300 workers is slightly more than the percentage boost accepted earlier this year by unions representing teachers, professional/technical workers and skilled craft employees. The AFSCME union gained much of the increase with a step advance on salary schedules — providing a nearly 4% average hike — rather than a flat rate hike.

According to district figures, the AFSMCE new contract’s total would cost increase salary costs by $4.5 million, though that number is proportionally less than its labor agreements with other unions. For example, the deal with the United Teachers of Dade, representing 31,000 teachers and other support personnel, is $50.1 million more.

If approved, the AFSCME accord would cover terms and conditions for three years, with the wage increase set for the first year, retroactive to July 1. Union officials said additional improvements to health insurance benefits would actually provide a wage improvement of 5 percent in the first year of the new contract.

About 714 employees represented by the union, including some food service and bus aides, will have their hourly salary hiked from about $9 to the new $10 minimum, Hall said.

Hall said the agreement also provides for joint union-management committees to study increasing the minimum hourly work guarantees for bus drivers to seven hours from the current six hours and evaluating staffing of food service workers and custodians to possibility add workers and reduce part time employees in these categories.

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