Can Florida real estate bail out the United Teachers of Dade union?

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MIAMI – Ten years ago, the FBI raided the headquarters of the United Teachers of Dade, bringing to public view the theft of millions of dollars of dues money by UTD president Pat Tornillo.

eiaThe embezzlement was disguised by a series of late dues payments, bank loans and the collateral of the union’s real estate holdings. When the truth came to light, UTD was placed in the unenviable position of making good on the debts Tornillo left behind.

Since 2003, UTD has been able to avoid the bald-faced larceny that marked the Tornillo years, but it hasn’t exactly been smooth sailing financially, either. It sold its headquarters building for $22 million and has leased space in it since then. Despite the election of reform-minded officers, the union has had more than its share of internal problems.

Today, with the election of a new president, who was the sitting secretary-treasurer, UTD would appear to be poised to finally escape its debt-ridden history and reestablish itself as a major teachers’ union local. But the numbers don’t lie, and UTD is still a ward of its parent affiliates ten years after Tornillo’s arrest.

UTD owes AFT more than $2.4 million of an operations loan, and another $2.1 million in back dues. It also owes the Florida Education Association almost $1.5 million in back dues.

Six million dollars of debt is substantial for a $10 million enterprise, but the picture is worse because UTD continues to budget based on unrealistic membership projections. The 2012-13 budget was crafted with the expectation of 12,000 full-time equivalent members. But the union only has 11,554 FTEs – a shortfall of $365,000 that has to be made up somehow.

Nevertheless, UTD drafted an optimistic 2013-14 budget based on 11,650 FTEs.

UTD can bumble along this way indefinitely, but it will never be able to pay off its debt. And so it once again has turned to dumping property.

The senior housing building the union’s non-profit subsidiary owns is apparently under contract to a seller for $14 million, though there is some controversy over why UTD turned down a more lucrative offer last year. The union still owes money on this building, but has promised to turn any profits from its sale over to its foundation for teaching excellence.

Additionally, though UTD sold its headquarters building on Biscayne Boulevard, it still owns the 71,000 square foot empty lot that sits behind it. UTD recently decided to put that lot up for sale. It has been assessed at more than $2.1 million.

A source tells EIA that AFT was directly involved in the decision to make the sale, suggesting the proceeds might be targeted to loan or dues repayment. Just as with NEA, the national union will naturally intervene to keep its state and local affiliates afloat. But it could become problematic if the number of fiscal basket cases continues to grow.

By Mike Antonucci at EIAonline

 

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