Sunday, February 5, 2012

The Solution To Milwaukee County's Furlough Problem

Milwaukee County has a big problem thanks to Scott Walker.  One that could cause real fiscal mayhem to the county.

But first, for those that haven't been following the goings on in Milwaukee County under the Walker regime, some background.  And for those that have been following, please consider it a refresher.

In 2009, from the onset of the fiscal year, then Milwaukee County Executive Scott Walker was claiming that the county was in a fiscal crises due to his budget.  The problem was that he was demanding a lot of concessions from county workers, but refused to sit down and negotiate said concessions with the unions.

Reports at the time calculated that Walker was squandering anywhere from a third to half a million dollars a month due to unseen savings because of his posturing.

In other words, he constructed his own artificial crisis and now was running around crying that the sky was falling.

At midyear, Walker said that the only way to resolve the supposed fiscal crisis was to put all county workers on an indefinite five-hour a week work reduction.

As one might imagine, the unions protested this and took it to arbitration, claiming Walker violated good faith bargaining and that this stunt was a violation of the contract.

The arbitrator heard the case and ruled in favor of the unions and then some.  During the hearing it came out that Walker exceeded his authority in trying to impose an indefinite reduction of pay, that he acted illegally when he made this unilateral decision, and that it was indeed in violation of previous arbitration decisions which limited the reduced work time by 45 hours.

The real kicker was when it was also revealed that Walker was lying through his teeth when he claimed there was a $15 million deficit.  His own fiscal guy, Steve Kreklow, said that it was $5 million and the County Auditor, Jerome Heer, found it to be under a million dollars.  Neither of those numbers would qualify as a crisis in a budget of more than $1.5 billion.

Unthwarted, Walker took the ruling to circuit court, where a Republican judge ruled in his favor and voided the finding of the arbitrator.  The union responded by appealing this ruling.  In a ruling written by the Honorable Ralph Adam Fine, the appellate court ruled that according to the law, the arbitrator's decision was final unless fraud could be proven and thereby voided the lower court's ruling.

During all of these court hearings, Walker devised his 2010 budget and guess what, did the same illegal thing.  This time, instead of shortened work weeks, he decided to just implement full day furloughs.

And not only did he follow the same illegal actions, he doubled down by implementing them illegally.  Besides just exceeding the allowed amount of time, he treated various employees differently.  He gave deputies eight days of furlough, some other workers like the staff at the mental health complex 12 days and others, such as myself, a full 26 days.  Sometimes, people in the same Local were getting the different treatment.

(Ironically, the money that Walker claimed would be saved by this illegal action was eaten up by having to pay other workers overtime to make up for the loss of work hours.  Some workers were able to actually come ahead on this deal, making more money than they lost due to the overtime and still getting days off.)

So the unions took their complaint to the Wisconsin Employment Relations Commission (WERC), and well, as I told it at the time:

Walker and the County Board continued to pass budgets that presumed these savings despite the fact these concessions were never negotiated.  Milwaukee County First warned at the time that the budgets were illegal and that the tax payers would be on the hook for them. 
The unions would in turn file complaints with the Wisconsin Employment Relations Commission (WERC).  The county asked WERC to drop the complaints saying that it belonged in arbitration.  The unions agreed and dropped the complaints.  However, Walker then backstabbed the unions by refusing to go to arbitration. 
So the unions, with no other alternative, went back to WERC and refiled their complaint.
Last Friday, WERC handed out there ruling regarding the complaint about furloughs and about whether the county was participating in bad faith bargaining. 
In a nutshell, the furloughs were done illegally and the county was found to be guilty of bad faith bargaining.

WERC ruled that the county had to pay the workers back pay for all the furlough time in excess of the 45 hours allowed through arbitration.  Not only did they have to pay it back, but WERC also imposed a penalty of 12% interest, compounded daily, for every day until they do pay it back.

And that is where the problem comes in.  The ruling means that the county owes the workers millions in back pay. With the interest figured in, it's probably about $5 or $6 million by now, maybe even higher.

But thanks to Walker's dishonest budgeting as county executive and his slashing funding to the county as governor, Milwaukee County just doesn't have the money to pay this debt.

Over a year ago, I had written something that seems rather prophetic today, suggesting a way for current Milwaukee County Executive Chris Abele and the Milwaukee County Board could meet its obligation without sticking it to the taxpayers or endangering our most vulnerable citizens by cutting services even further:

This means that the original arbitration is indeed to be held up.  This could the cost the County millions of dollars in back pay for excessive furloughs given to county workers. 
Because the County cannot afford such a large payout, it is possible that this will instead weaken the County’s position in contract negotiations, with the unions holding it as a bargaining chip. This, of course, could end up costing the tax payers dearly. 
Using the Mercer trial as a precedent, where Mercer had to pay the county for giving bad advice regarding the pension scandal, Scott Walker’s campaign should have to pay the county back for the damages it occurred directly due to Walker’s campaign stunt.  As further evidence that this was nothing more than a political stunt, Walker’s campaign regularly touted his use of these furlough days to gain the supposed surplus for that year.
The Mercer decision was one where the county sued Mercer for giving bad advice regarding Tom Ament's pension scandal.  Worth noting is the fact that Walker, who has spent years badmouthing his predecessor and the County Board for "their greed," changed his tune for this and blamed everything on this company, thereby, in effect, declaring his predecessor and the board innocent.  (Of course, like all things Walker, even this has a scandal involved with it.)

When I wrote the above passage, I didn't really think that the county would proceed with suing Walker and/or his campaign.  After all, even though Walker's actions were obviously a campaign stunt, there was no proof of it.

Until now.

Cory Liebmann, one of the most knowledgeable people in all things Walker, put up a post regarding some of Walker's emails from 2009.  Most notable of these was this one which Liebmann accurately describes (emphasis his):
An email that appears to be from Cynthia Archer to Walker at his campaign email address (and copying other staff...including Walker campaign consultant RJ Johnson). In that email she spells out their various "options" after a greatly anticipated arbitration hearing. It looks like Walker then takes that Archer email and forwards it from his campaign account to his county account.
You can see the actual email (starting on page 5) in a Scribd format, again thanks to Liebmann.

In summary, Walker imposed these excessive furlough days despite having a ruling deeming them illegal and despite refusing to negotiate with the unions creating an artificially constructed fiscal emergency.  And Walker did these things knowingly and what is obvious from the above email, as I had correctly stated all that time ago, he did so not for the purposes of saving the county taxpayers any money nor to fix any fiscal crisis, but he did this only to enhance his image as a candidate for governor. This is shown in the concerns expressed by Archer in her email and the fact that it was sent to his campaign email and included a campaign consultant.

I once again urge County Executive Abele and the County Board to look into this and consider trying to recoup the losses Walker forced onto Walker for illegal purposes. They could do so by suing Walker and the Friends of Scott Walker, which has ample funds to pay the bill.

Granted, they probably couldn't get everything they owe the workers, due to the interest accrued as they stalled paying what they were ordered to pay, but it would still be a large chunk of it.  It would be worth at least looking into.


  1. Great, great post.

    IANAL, nor any kind of insurance expert. I'm confident though, that Milwaukee County has some kind of business insurance. Whether it's self funded, in whole or in part, I don't know. It's probably in conjunction with other County governments in Wisconsin. AFAIK, the underwriter may have some liability to reimburse the unions. It seems to me it would have been their job to see the risk in the litigation and advise Walker accordingly. If they Walker ignored their advice, if they thought he was acting recklessly, they had the option to cancel the coverage. Since I do not recall that happening, maybe they have some liability?

  2. Thanks for the background synopsis. I had heard about some Whakenhut snafus by the county exec, but not this story of furlough assignment gone completely awry.

    Per linkedin, I see that Mr Johnson is now a philanthropist with the human fund or something. I wonder what was the fate of the consulting firm and did any more contacts persist between the Walker Camp (and/or Tim Russell) have any contact with JR since 2010 or has his IP address maintained internet activity to aide in the perpetual campaigning?

    1. *RJ

      Actually, RJJohnson Consulting is still active and he is sitting president on the firm. Do they have any ongoing national projects currently concentrated on Wisconsin?

    2. This comment has been removed by the author.

    3. "The World Orphan Fund is a 501C3 Charitible organization dedicated to supporting orphans and orphanages worldwide"

      compare with this little snippet of a mission statement

      "The Heritage Guard Preservation Society is a 501(c)(3) dedicated to preserving the stories and histories of..."

    4. This comment has been removed by the author.

    5. Did Kevin Kavanaugh use all the money he stole just to pay off personal debts or did he ever find the charity to deposit "donations" in the interest of one or several of RJ's 501 3c bulk stewardship?

  3. Well, it would seem that after the current contract runs out Governor Walker has adressed this problem. No more union bargaining.

    1. Actually, the ruling came after the contracts expired. You still can't take away proprietary rights. It's still a free country, even if the state is less free.

  4. I guess I should actually thank Walker. I never would have met my husband if I wasn't laid-off from the County Park system in 2004. I was finally hired as a permanent full-time Park Maintenance Worker in the Spring of 2004 after 10 summers as a seasonal worker(while in school). Of course the appreciation was short lived since we all got laid off in September of that same year along with many custodial staff members from the courthouse. Strange how none of our supervisors got laid-off. I was confused back then about how 180 front line staff members could be let go with no reduction in management. I moved out of state about 6 months later. I was shocked when I found out that Walker was elected Govenor. After destroying Milwaukee County, how did anyone think he was a good choice for the state? Laying-off hundreds of low paid employees is not the correct way to fix a budget.

  5. He also won a national award for our park system after he outsourced the maintenence. I wouldnt actually call that destroying the county. Also odd that you went to school for ten years and then were excited to work full time for the parks department. makes me think they may have been paying to much.

    1. Three things:

      1) It wasn't the parks that won, it was a video. The judges never came to Milwaukee.

      2) Walker left us with nearly $300 million in undone maintenance and repairs. Are you going to pay that with your "big tax cuts?"

      3) If you're going to try to slam someone on IQ, make sure you know the difference between to and too.

    2. Undone maintenance including inspections e.g. of the O'Donnell Park Garage -- where a heavy upper level side panel finally fell off, injuring a woman and killing a teenage boy, near the end of Walker's service as County Executive.

      THEN inspections were done, showing the panels were unsafe, and all were removed, small consolation to the bereaved.

      But Walker had saved money those prior years!

  6. Was the award for the parks or for saving money on the parks?

    1. He didn't save money, he just kicked the can down the road.

    2. When you "save money" by not doing maintenance on park buildings, pools, roads, etc. -- either that money is still going to have to be spent in some other year (thus not really "saved", just "deferred" into someone else's budget, can-kicked, burden-shifted) -- or the building/pool/road is going to deteriorate beyond usability, and then have to be either simply demolished (lost to the public) or entirely rebuilt at a much greater cost.

      And "kicking the can down the road" is practically embezzlement in itself: you're entrusted with tax funds to solve problems and maintain the infrastructure during your own term, not to keep the money for yourself and let the next fellow solve your problems and repair what you neglected.

  7. 1)Thats the best you have? a video? Would it kill you to be proud of what 80 years of democrat/socialist leadership has produced?

    2)Nobody has even mentioned tax cuts yet. So far, just keeping them from going up seems to be enough to raise the hairs on your neck. We have more parks per capita than any large city, and the county shouldnt be running golf courses and fish hatcheries. Seems it would be easy to balance that budget.

    3)Would never insult a commentors IQ, She's obviously smarter than me. She left! No, I'm used to being attacked, its why imustberacist. I'll try to keep it above that. And for you, I'll watch my grammar closer.