Saturday, June 4, 2016
Pacifica CFO: Dark skies ahead
As WBAI's Spring marathon entered its final lap and the GAME OVER sign loomed on the stormy horizon, the PNB Finance Committee met in a phone conference to hear CFO Agarwal's immediate predictions.
It was, of course pro forma, for not a single member is naïve enough to expect anything but bad news, but they went through the routine and came out of it none the wiser. Chronic, widespread denial has done much to shove the truth into recesses of small minds, but even the most naïve among these Committee members knows that managers and schemers have run out of balls to juggle and the only checks coming in to Pacifica and its stations these days are reality checks.
You will hear the alarm as CFO Agarwal tries to explain, but what we get from our spot in the shadows is a partial view of the wreck. Details are not even available to donors whose wallets have been Pacifica's lifeline—such minutiae are conveniently the stuff "executive sessions" are made of, but one has a strong feeling that much vital information was pushed aside to accommodate distortion and now lingers or dissipates in confused, front office minds.
We have our good friend, indigopirate, to thank for this and the other attached audio clip. Here is his brief summary of the meeting:
"The immediate question raised is as to the sudden rise R. Paul Martin had noted with respect to the appearance of a sharp, sudden rise in Pacifica’s network-wide deficits.
The CFO notes that WBAI and WPFW in particular are ‘alarming’ and that there is, generally speaking, 'no prospect of their going away.’ He says in the case of the other stations, ‘perhaps’ deficits can ‘go away’, but points out that he is not getting positive signs from KPFA, and that KPFT is 'not out of the woods'.
He states that overall the trends are declining throughout the network and that he sees no prospect of hopeful news on a combined basis.
‘There is hardly any cash.’
‘It’s kind of widespread…’
And here, with a more detailed summary by indigopirate, is an audio glimpse of the follow-up meeting.
‘The situation looks very bleak.’ ~ Sam Agarwal, Pacifica Chief Financial Officer
The Chief Financial Officer’s report indicates impending collapse, with a projected inability to meet payroll at one or more stations likely by late June or early July, with no financial reserves or resources available anywhere within the network to cover the shortfall.
He also reports there are no monies available to pay the remaining money due for the FY2014 audit and, therefore, it appears impossible to fund a FY2015 audit.
He reports that WPFW has used funds from a restricted grant account in violation of the terms of the account, and that those funds must be repaid, though it is unclear how this would be possible.
He reports that the newly appointed National Election Supervisor has requested an open authorization of $100,000, which money does not exist.
He further reports that many are anxious to draw on the revolving credit line although there appears to be no means to repay such draws.
He states that WPFW must be directed to immediately repay the monies taken from the restricted grant account.
He states that Pacifica must be prepared for the furlough or the layoff of people at any unit swiftly upon it becoming clear that that unit will not be able to meet its next payroll.
He states that a task force must be immediately put in place to raise at least $100,000 to pay the auditors.
His summary is fairly straightforward: He states that there are no credible cash flow projections that will keep the network alive, and there are no remaining areas to reduce expenses that might be enough to make any difference – the core problem is simple – Pacifica shows no sign of any ability to generate enough revenue to stay alive.
He then expresses a belief that it might be possible to address the catastrophic shortfall, but provides no detail or description of how this might be attempted.
Brian Edwards-Tiekert then proposes a motion granting the CFO authority, if any unit or units were clearly unable to meet its next payroll, to furlough or lay off the relevant employees, in consultation with human resources and any relevant unions, so as to avoid failing to meet payroll and insurance payments, which would have catastrophic legal implications.
This motion was discussed, then tabled, as was a possible substitute motion.
No comparable motion was presented, leaving the issue unaddressed and unresolved for another day.
A motion was then made to hold the next Pacifica National Board meeting promptly, urgently, within a week, since some stations may fail to make payroll before the next regularly scheduled meeting. The chair rules that such a motion may be considered later in the course of the meeting, which appears never to have happened. As of this writing the next Pacifica National Board meeting is scheduled for 7 July.
There was a free-floating discussion and debate as to why all problems were network problems, and needed to be addressed as such.
There were then a series of motions and much lengthy discussion as to why, when, or how the meeting could, should or would end, which consumed the remainder of the meeting, and after some considerable time, the meeting ended.
You may not wish to hear the above clip in toto, so here is
CFO's Agarwal's formal statement from the June 2 meeting.