May 192020
 

by Arnaud and Naja Girard

One month after the Keys shut down due to the Covid-19 epidemic, residents were stunned to learn that Monroe County was about to pay 1.5 million dollars in bonuses to its staff. At the time hundreds of businesses had shut down and thousands of residents were out of work.

Caught in the spotlight, county officials scrambled to provide an explanation. The story was that the declaration of emergency had automatically activated the county’s emergency response pay policy. Under county resolution 146-2013, there was no choice but to pay double-time-and-a-half to staff members who had performed Covid-19 related work even if it was regular desk work.

The City of Key West also declared a state of emergency but when we asked City Manager Greg Veliz whether Key West had to activate its emergency pay plan he said, “The city has an emergency pay policy, however at no time was it activated. We did attribute approx. $17,000.00 in straight overtime, to rank-and-file, hourly employees in response to the emergency.”

So how did 489 Monroe County employees become eligible for a bite at 1.5 million dollars in one month; some of them claiming tens of thousands of dollars on top of their normal salary? According to County Administrator, Roman Gastesi, there’s really nothing to worry about because FEMA and the State of Florida will be reimbursing 87.5% of it.

We decided to look into it. We obtained internal memos, emails, minutes of meetings, spreadsheets.

This is what we found:

On March 15th, following the Florida Governor’s orders, Monroe County Mayor, Heather Carruthers, declared a COVID-19 state of emergency for the Florida Keys.

On March 18th Roman Gastesi, sent a memo to the Clerk of Court and Controller, Kevin Madok, informing him that the county emergency pay plan had been activated.

Madok must have been pretty incredulous. He told The Blue Paper that he was already worried about the County’s financial position. “So, 1. I wanted a budget and 2. the resolution requires a pre-authorized list of emergency responders.” Gastesi sent Madok a second memo on March 20th. “The [March 20th] memo was a response to my request for a pre-approved list and I think the memo said, ‘everyone is approved’.”

Gastesi had also divested himself of the responsibility for deciding who should be placed on paid administrative leave. In both memos to Madok he delegated that power to the department heads.

From that moment, employees timesheets began showing work somehow related to COVID-19 being claimed as “overtime emergency response work.” Employees were directed to fill out Form 214 which was to be used to support reimbursement by FEMA.

Even high level administrators, lawyers, planners filed for double-time-and-a-half. Almost 30% of the money went to employees who earn an average $100,000/year. The number of employees who would claim to be “emergency response workers” quickly climbed to 489.

Incidentally, on the other hand, 61 low level employees were later furloughed without pay, although the 2013 emergency pay policy would have required they receive paid administrative leave.

But there were rumblings in the guts of the beast: concerns about bonuses being paid in a time of crisis; jealousies maybe. At the Human Resources office, the Director, Bryan Cook, was trying to clarify the standards for employee’s eligibility for special pay during the COVID-19 crisis. But it would take a month before the county commission managed to gather together again.

At that April 15th meeting Cook proposed that employees who must leave home to go to work should be eligible for pay at time-and-a-half. Mayor Heather Carruthers did not mince words: “It boggles my mind to think that somebody who could be sitting in an office for most of the day would get time-and-a-half for the whole time of that day …. I think it is irresponsible given our financial constraints” … “I have to say, I wanted to see a lot more due diligence on this before this was brought forward.” The commission unanimously rejected the proposal.

The bureaucrats felt the headwind coming from the commission and interestingly forgot to reveal the one dirty little secret: in a month’s time they had already paid themselves an extra $1.5 million. They went home leaving the commission in the dark about what was to come.

A few weeks later, while dealing with the public outcry over the $1.5 million, Mayor Carruthers blamed the bureaucrats for their lack of transparency: “I’m disappointed that we didn’t have this information at the last meeting which quite frankly we should have.”

Kevin Madok would be the first to sound the alarm. In an email Commissioner Cates reported that, “The clerk of court informed all commissioners that the county does not have the money to pay [the $1.5 Million] and what if we get hit by a hurricane the county could go insolvent.”

Madok told The Blue Paper that he didn’t exactly say the County “does not have the money to pay” (The county has about $30 million in emergency reserves). Madok told us he spoke to each commissioner individually and expressed great concern over spending this kind of money when facing an unprecedented and unpredictable crisis.

In a sense it was a repeat of the same emergency pay scandal most of the sitting commissioners had to deal with after Hurricane Irma. At the time another spreadsheet of employees’ emergency response pay revealed that salaried employees who earned $100,000/year received tens of thousands of dollars in hurricane emergency response pay.

Those commissioners had no public reaction to Madok’s fire alarm. However, as a newly appointed commissioner, Craig Cates did not disguise his outrage. He asked for the spreadsheet for the special Covid-19 pay and for more details on the so called “emergency response work.” He came back with a proposal to rescind Gastesi’s emergency pay plan activation and freeze the money. His resolution became Item B1 on the agenda for a special commission meeting scheduled for April 30th.

In county corridors things began to heat up. In the week leading up to the B1 meeting Gastesi offered to resign. But the perspective of a county cast away in a storm with no pilot at the helm proved too much for most commissioners. David Rice, Heather Carruthers, and Michelle Coldiron publicly reaffirmed their support for Gastesi, “but he’s got to fix this,” said Mayor Caruthers, in an interview with The Weekly, ”if he doesn’t, then we will have a different discussion.”

On April 28th Gastesi seemed to back-paddle on his emergency pay plan activation. In an internal email he claimed, “the $1.5m spreadsheet was NOT applicable to this Covid-19 event… this is a work in progress, [the money] has not been paid, and will never be paid.”

But even he would be unable to undo what he had started.

The Teamsters Local Union 769 came out strongly against Cates’ proposal to rescind. On April 28th they passed around a ‘vote no to B1’ letter. The union expressed their support for the county’s emergency double-time-and-a-half pay plan and promised they were lobbying Congress to get “hundreds of millions” in stimulus money for local governments.

The county attorney, Bob Shillinger, also opposed Cates’ proposal. Before the discussion of item B1 at the special meeting began, Shillinger sent around a memo arguing that, “the government cannot retroactively reduce pay after it has been earned.” As to the fiscal emergency, he said the government has “the ability to reorganize its obligation under chapter 9 of the bankruptcy code….” After waving the “B word” he concludes: “In my opinion we would spend considerable time and resources defending a decision to retroactively change the county’s emergency pay plan and would likely lose in the end.”

At the April 30th special meeting Cates nonetheless defended his motion to rescind: “Thousands of people out of work, hundreds of businesses closed down and we are paying our staff double-time-and-a-half which would have to be paid for by taxpayers at the end of the year …. we should not pay this.” He also questioned whether or not all the desk work hours constituted emergency response: ”There’s someone in the building department that’s 70 some hours of overtime, COVID overtime in the 80-hour pay period.”

For example, the emergency management director, who receives an annual salary of $125,000, made an extra $26,457 in the month following the declaration of emergency. [Final cost to taxpayers after adding employer’s share of taxes = $30,722]

29,000 hours in a one-month period that’s gonna be charged – and paid time and a half too,” Cates said during the meeting, “Maybe this is a philosophical difference … [This money] comes out of taxpayers’ pockets – no matter what government it’s being tossed on.”

But Cates was alone: “I can see I don’t have much support here in my philosophy.” The other commissioners agreed only that those employees who “may not feel that they should be paid at this rate” should be able to refuse the money.

Since then, forty-four of them did, including Christine Hurley, the Assistant County Administrator, who turned down $10,572.57 [a savings to taxpayers of $12,276.87 after taxes].

Liz Lustberg, a senior planner, chose not to return the pay to the county but asked if she could somehow give it to one of the 61 county employees who were furloughed without pay.

Aside from Commissioner Cates the commissioners voted to allow the clerk to pay the $1.5 million of Covid-19 emergency response pay.

How to Fix This

According to a whereas statement in the 2013 resolution, the goal was to provide equal treatment for “essential employees” who must respond to emergencies like hurricanes while the other “non-essential employees” are safe somewhere receiving full paid administrative leave. In other words, if an employee is called upon to do dangerous work while everybody else is paid to stay home he should earn more. The commission decided that those pre-approved essential first responders would make time-and-a-half on top of their normal salary.

To make sure there would be no abuses, the pre-approval document was to be signed by the employee’s supervisor, then by the head of department he works for, and finally by the county administrator. And the special pay would not apply unless the county had placed employees on paid administrative leave.

We asked for proof of pre-approval of emergency response workers. The county responded by stating there was no record of pre-approved emergency response workers.

We asked to see documentation showing which employees had been put on paid administrative leave at any time due to the COVID-19 crisis. After 7 requests and lots of back and forth the county informed us that they didn’t have this documentation.

Arguably a system designed to bring fair compensation for those who stay behind while the rest of us run away was allowed to go astray and become a free-for-all.

After the special meeting some of the long-seated commissioners who had gone through the Irma disaster pay scandal made their mea culpa. Commissioner David Rice told The Weekly, “Any one of us commissioners or Gastesi could have modified the pay structure. We knew we had to do it after the hurricane.” The commissioners have now pledged to do it right, this time. Don’t hold your breath though.

These repeated financial scandals are part of a deeper issue: The feeding frenzy over federal money. “FEMA will pay for it” has become the motto of the county’s management style. The key justification offered during the April 30th special meeting was that ultimately FEMA and the state of Florida would pay 87.5% of $1.5 million. Mayor Carruthers observed that stopping the payment now would also mean no reimbursement from FEMA: “If we try to stop it it’s going to cost even more money and with the lack of ability to get reimbursed, you know, if we jam this up.”

I have 16-years’ experience at this,” Gastesi assured commissioners, who appeared in awe of his expertise. Yet the master himself had already admitted the 1.5-million-dollar spreadsheet “does NOT apply to Covid-19.” But if we’ve understood this correctly he is still going to try to get FEMA to pay for it.

FEMA Reimbursement of the $1.5 M

The main issue is that FEMA only reimburses for employees emergency work if the work qualifies as “overtime.” Most the work documented as COVID-19 related was done during the normal 8 hour day. “Only the actual hours worked beyond the regular duty time can be claimed for emergency work.” [see FEMA document here].

There are a few exceptions. One of them kicks in when employees are on paid administrative leave. If an employee on paid administrative leave is “called back” to do emergency work then the emergency work qualifies as “overtime” even if it does not extend beyond normal work hours. [see FEMA document here].

So, this is the trick of the trade: The county pays its employees regular pay for their normal duties, whether performed at home or in the office, but everytime the employee does something related to COVID-19 he is automatically put on fictional “administrative leave” for those hours and becomes entitled to double-time-and-a-half.

This “switch” system was confirmed by the county clerk’s analysis of the time sheets: “If they work 4 hours on their normal job and then 4 hours on Covid stuff, they get 4 hours regular pay, 4 hours would be administrative [leave pay] plus 4 hours of Covid pay [time and a half].

Is FEMA going to agree with this? Commissioner Cates is questioning the method. Maybe this just makes Mr. Gastesi the smartest man in the room. He certainly made sure to put the responsibility for his trick on the department heads when, on Mars 18th and March 20th, he delegated to them the power and discretion to determine who was to be placed on administrative leave.

On May 20th (tomorrow) the commission intends to tighten up its emergency pay policy. Staff is proposing the commission amend the pay plan to make salaried employees (who typically earn between 60,000 and 170,000 annually) ineligible for emergency response pay. The amendment would also reduce the pay for emergency responders from double-time-and-a-half to time-and-a-half (by eliminating the administrative pay for those first responders).

The proposed amendment however does not address the real issue – which is lack of control and accountability. At the April 30th emergency meeting Bryan Cook the county’s Human Resources Director admitted not having reviewed the spreadsheet data: Mayor Carruthers stopped him in his tracks: “You haven’t seen the spreadsheet and you’re HR director?” “I have not gone through the detail with the clerk’s office on how they pull that from the timesheets to the spreadsheet,” said Cook… “That needs to happen,” Mayor Carruthers retorted. And arguably Roman Gastesi cranked up the drunken party when he waived the pot of FEMA gold in the air and told employees to start filling out those “overtime” Form 214s that support FEMA reimbursement.

Rather than slashing the pay of the true first responders, the commissioners might try to narrow the definition of emergency response work and conduct an in-depth audit of what just happened.

You can find out how to view/participate in the Board of County Commissioners meeting by CLICKING HERE. The agenda item, brought forward by Commissioner Cates, to create a new emergency response pay plan that will apply to future disasters is set for approximately 2:30 pm.

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