Saturday, July 16, 2016
End of the road up ahead?
They Figure They Better Pay For The Audit
Berkeley-After a literal slew of "special meetings on finances", the Pacifica National Board finally came to the conclusion they had to pay the fiscal year 2014 audit fee - 22 months after the end of that fiscal year. At a few minutes to midnight, in a bit of a hysterical rush, they agreed to snatch money from anywhere in the network they could find it, starting with a $50,000 bequest gift to KPFK that reportedly came in just a few days ago. The motion was amended repeatedly, most significantly to authorize another grab for a $38,000 payment to the contractor for the board elections. The total amount will range from $68,000 to $117,000, depending on what portion of the $67,000 remaining balance due on the audit fee will be enough to pry the audit from the unpaid audit firm. The motion may have been motivated by the looming August 11 deadline on the third extension of board liability insurance that protects the assets of board members from litigation directed at Pacifica.
The network's financial crisis is summarized in this bullet point list prepared for the Pacfica National Board.
The premise of the motion is that prying the audit report free of the auditor would allow Pacifica to take out a mortgage on the network's squat little national office which is attached to a long-abandoned Thai restaurant beside the large two-story KPFA facillity. The building is in some state of disrepair with structural problems and at least a few years ago, a vermin infestation in the abandoned portion. The board optimistically concluded the intended mortgage would pay for any remaining balance due on the 2014 audit, the 2015 tax preparation fee, the 2015 audit fee, repay the stations from which the funds are taken, pay for the rest of the 2016 board election, pay off the $50K or so balance on the company credit card, finance a direct mail appeal, and upgrade the national accounting servers before they fail. The motion then goes on to suggest the property should be sold as quickly as possible afterwards. Both the proposed mortgage and the proposed sale would have to come back to the board for approval prior to execution.
The interim executive director when the 2014 audit should have been prepared, Margy Wilkinson (March of 2014 - June of 2015) reversed previous declarations the audit delay was no big deal and described it as a "top priority". Both she and KPFA staff rep Brian Edwards-Tiekert objected to including election contractor expenses in the money snatch from the stations. What the board did not discuss was the recent loss in union arbitration to the SAG-AFTRA bargaining unit, which will impose financial compensation for two dozen employees subjected to involuntary pay cuts at KPFK in the fall of 2015.
The burst of activity began when minority directors Grace Aaron, Jan Goodman and Bill Crosier called for an urgent discussion of the looming financial emergency on June 26th. Their call was ignored by the entire 14-person board majority, but they were joined by CFO Sam Agarwal and invited the long-excluded WBAI directors to join them. The full audio of that meeting can be heard here, a summary version here, and a list of recommendations that came out of the meeting can be seen here. The effort drew the wrath of the board majority who called the unsupervised talking "a breach", and threatened dire consequences, an intent that seemed to fizzle after board majority members admitted they had all received calls at the time of the meeting and declined to take them.
Not to be outdone, a series of official special meetings on finances followed including a session of the national finance committee on July 6th, which was derailed by Houston listener rep Adriana Casenave, who confused the term "underwriter" when applied to radio program sponsorship, and objected to public service announcements, which she characterized as "secret underwriting". You can hear a clip from that meeting here. The next day the full national board met for more than three hours in open session, where they primarily engaged in an undignified scrum for the projected receipts from the network's national coverage of the Republican, Democratic and Green Party political conventions. They finally concluded the national office should bear all the production costs and the receipts should go to the five stations. You can listen to a clip from that meeting here.
Finally they met again on July 14th and at 11:30pm Eastern time decided to pay for the FY 2014 audit.
In a rare moment of sanity, a bylaws amendment proposal which sought to limit directors inspections (and violated the California Corporations Code) has been voted down by local station board members in Texas and Berkeley, ensuring the amendment won't pass. Houston board vice chair Ted Weisgal described the amendment as "stupid" during KPFT deliberations on Wednesday night. The amendment was put forward by six directors: KPFT's Wesley Bethune and Adriana Casenave, WPFW's Jim Brown and Tony Norman, KPFA's Margy Wilkinson and Janet Kobren and KPFK's Michael Novick.
At New York's WBAI, the station is entering its fourth week without a telephone, a situation that violates FCC regulations for FM radio stations. The station's license has still not been renewed by the agency, more than two years after it expired in June of 2014. WBAI is going back into fund drive in a few days. It is experiencing a steady decline in daily receipts from the on-air fund drives, which now average less than $10,000 a day. The station has historically relied on alternative health host Gary Null to raise a substantial amount of the operating funds, but has been unable to come to an agreement with him about the station's backlog of 5,000 undelivered premium gifts. Null filed a lawsuit earlier in the year about the undelivered premiums and allegations of unauthorized duplicating and piracy, but withdrew it without prejudice. In yet another letter to WBAI GM Berthold Reimers, Null commented:
"I had hoped that you would communicate with me on the upcoming fund drive. To highlight my earlier suggestions: I am more than willing to help the station raise funds . However there is the matter of the outstanding premiums. We guestimate these are more than a thousand for my audience. You stated in our conversation more than seven months ago that the station had more than 5,000 unfulfilled premiums. This past Saturday I was lecturing to about 500 people. I asked how many people in the audience had not received a premium from WBAI. Nearly three quarters raised their hands. Many told me they stopped listening or supporting the station. One woman stated that she was owed five different premiums over the past three years. She also stated that calling, writing and emailing to get some feedback or answers was fruitless. I would recommend that you send each listener who has not received their premium a legally mandated FTC compliance letter. Let them know why they have not received their premiums. I would welcome you onto my program to explain the stations predicament, apologize, and offer them some insights as to what you and the hosts are doing to make the station more financially stable and get them their premiums. I know of no one in the WBAI family who wants to see the station put into bankruptcy . If the summer drive is no more successful than the spring I fear that members of the national board will take the station into bankruptcy"
At Houston's KPFT, the local Siegel/Brazonites have been attempting to get rid of long-time manager Duane Bradley, whose almost 15 year tenure as GM at KPFT is twice as long as any Pacifica management figure has lasted in the past few decades. KPFT local station board chair Dewayne Lark helpfully offered to personally replace Bradley as a new "volunteer" general manager for KPFT last fall, but has taken umbrage at the suggestion he should recuse himself from the personnel committee, whose job is to do a performance evaluation on the current GM and select a replacement if a change is made. The local station board in Houston has been an exercise in retaliation with the July 13th agenda featuring only 4 pieces of new business: all 4 of them consisting of investigations, censures and suspensions. Nothing much came of the rumbles at the Wednesday night meeting, but you can listen to a meeting clip here.
At LA's KPFK, the second of three summer fund drives to be held between May 3 and August 30, has just been extended a week due to low receipts. The station is averaging $18,000 a day, about 60% of the daily average a few years ago, as listeners revolt against unpopular program changes and a large amount of undelivered premiums. The two program changes that have been most controversial with the station's listeners: the reduction of Rising Up to only twice a week broadcast and the ejection of Something's Happening from the weekday midnight to 3am slot, continue to wreak financial havoc on the station with the replacement programs far less productive than those they replaced. Something's Happening booked 5 times as much per hour as replacement program Safe Harbor and Rising Up with Sonali booked 2.7 times as much per hour as replacement program Uprising. This spreadsheet contains the detail for the first 10 days of the current fund drive, by day and by amount.
In Berkeley, the local station board met on July 9th with the general manager in absentia. You can listen to a brief highlights reel here. The financial discussion centered on the station's budgetary snafu, with management projecting income based on exaggerated pledge fulfillment figures which have led to cash flow shortages and a 30-day notice for layoffs. The board also discussed the outsourcing of the station craft fair to the private company of a former employee.
Former ED Wilkinson expressed concern about the use of restricted funds to pay operating expenses, apparently forgetting she had presided over that kind of transaction as ED in June of 2014, when a grant from the Material World Foundation to renovate KPFK's music studio was redirected to Pacifica's National Office to pay for health benefits. The Material World Foundation has requested the return of grant funds from KPFK as a result of Wilkinson's action. No repayment has yet been made.
The board then moved on to a discussion of the state of Pacifica and a motion from KPFA employees Joy Moore and Frank Sterling to dissolve the "KPFA Foundation" incorporated by Wilkinson in 2013 and headquartered at the office of Siegel and Yee. You can hear some of the discussion on the meeting clip. The Siegel/Brazon majority on the board did not agree to dissolve the corporation, and said they might want to use the KPFA Foundation as a conduit for donations. Somewhat defensively, Wilkinson and co-conspirator board chair Carole Travis said sequentially that they had "forgotten about the KPFA Foundation", the filing was not a secret, they just didn't tell anybody about it just like they might not tell anyone if they went to buy a sandwich, and that they didn't talk about the secret filing because "it would have been the only thing anyone wanted to talk about".
All 5 Pacifica stations are in the midst of another election cycle. Many feel this election is the last chance for Pacifica. Please vote beginning on August 15th. You can visit elections.pacifica.org for more information. For any ballot related question at any station, you can contact King Reilly, a KPFK member, for assistance at firstname.lastname@example.org