UNION MEETING 9/5/15
Oh What an Interesting Meeeeeeeting…
Before the meeting, in discussion with a couple of Local 47 members,
one told us: You watch, they’re going to try to call this a “Club 47”
meeting and not a “Local 47” meeting”.
“Why?” we asked. The words “Club 47” didn’t appear on the post card
that was sent nor the four page special “Overture” (Official Publication
of Local 47), though references to Local 47 were blatant and prominent.
The only use of the words “Club 47” were on the inside cover of the
printed Overture, where few would see it,… and the electronic version
of the Overture (With the only direct reference to “Club 47”) came out
just YESTERDAY, one day before the meeting.
As Comedian Billy Connelly would say, “How Convenient!”
Yep, they knew exactly what they were doing.
“In any case, what difference does it make?” we said.
“A big difference”, he explained, “Because, the members have far
fewer rights to speak at a Club 47 meeting. The board controls it
completely, and you cannot make motions”. “Just wait, he said.”
Boy was he right. The first words out of the President’s mouth after
the pledge, once the meeting was called to order, were that it was a
“CLUB 47” meeting. They hadn’t even got out of the introductory
remarks and a bait and switch was pulled to shut down the membership
participation by way of motions. The chairman was called on it by a
member bigtime, but it made no difference, they simply ignored him.
Everyone there, however, took note of the willful deception. It would
not be the last of the evening.
In fact, the membership had been disenfranchised by the action, to
keep participation to a minimum in some ways. And certainly not
the best way to get the membership to trust an already very murky
Below you will find a synopsis of the meeting with the more
important comments framed by “**”
Meeting called by President Acosta at 7:31.
Roll call taken.
The Chairman tried to introduce the meeting s a “club” meeting,
which would limit the members participation.
Member: “It is not a meeting of the club, nothing about club
47 was on any of the mailings”. Members at Club meetings
have far fewer rights than at a Local meeting.
“Yes is was”, said the President.
Counsel says the same right for members in either type of meeting.
Meeting will proceed with Robert’s rules.
EXPLAINING THE VOTING
•Board Member- All members in good standing are eligible.
Inactive life members cannot vote nor can suspended members•
Local has rented PO Box to accept ballots, board member will
pick up ballots from the box.
*Need over 3200 ballots to have a legit vote. Need 50% plus 1 for
the vote to be legitimate, of that 50% Plus 1, 50% plus one must vote
Ballots will have bar code to verify identity. Locked box will be
kept in a locked cabinet in the Secretary’s Office.
On a weekly basis election board will gather and store ballots
without being opened.
If 50% of ballots are not reached the ballots will not be opened.
The Local cannot decide to change the bylaws to 50% plus one of
those who vote. It is federal law.
•Election Board will be counting ballots, not an outside company.•
There can be witnesses to the counting. Anyone who wants to
observe can. Counsel requests requesting to observe.
Member: All members of Local 47 are members of the club. Club
owns the real estate. Is there conflict of interest in officers sitting
on both boards?
Answer: Club has been set up so the board mirrors both organizations.
It’s always been that way.
Theory is if the Local is sued, the building is protected by the Club’s
ownership of the building. Also, AFM cannot take the Local.
How does the membership benefit from the sale? Member benefit by the
new building being bought and the use of it by members.
Member: When will the ballots be back in?
Answer: hopefully middle of December.
Member: How did you arrive at the decision to sell the building?
Who is the realtor, etc.
Asked to wait till after the president’s presentation.
[EC: Realtor is Hilton and Hyland]
•Member: Local has not set up a specific cut off date for the voting.
The board could wait till they DO have enough, since they will not
CLOSE the voting. Will keep it open till they get the votes.
Member: Create cutoff date. (EC: This sentiment was repeated several
times throughout the night, but since no motions could be made, it
could not be fixed. How convenient.)*
PRESENTATION BY PRESIDENT
1950 - 14,000 members, 52 Employees
2015 - 7,000 members, 22 Employees
In the 50’s the whole building was used
Now less than 50%, of the building is rented.
$ 761,000 deficit in 2014, though Local is in the black now.
2015 – Voluntary wage freeze for the Officers, cut salaries and expenses.
Building looks crappy - $80,000 to spruce it up.
Electrical is at capacity using $50,000
Roof needs to be replaced - $200,000 needed.
Elevator would cost $200,000.
Reserves are low, less than 1mil in bank.
One major lawsuit can break us.
Shows rendering of new building
Concentration around 134 Freeway, majority of members are in that area.
Sound treated rooms.
Credit union on 1st floor
ADA Compliant (Handicap accessible)
Modern office space.
State of the Art Recording Studio
Location near studios and sister unions.
130 parking spaces.
WHAT WILL BE DONE WITH THE MONEY?
Money goes into bank account.
24 million sale price
5-8 million to buy new building
3 to renovate the building
11 million in bank
Currently the local has $975, 806.
After sale $11,975.806
From $186,366 to $891.790 annual earnings
QUESTION AND ANSWER
Member: Capitol Gains? Don’t we have to pay that?
Counsel: Not required to pay Cap Gains as long it’s reinvested or put
into another non-profit organization.
Member: What’s the breakdown to the use of the money.
Answer: Trustees would continue to oversee it, but an investment
manager will be brought in.
There’s no plan for where that money can go before we vote…
Once the money is transferred a plan would be created.
TRUSTEE: When you vote you vote for 3 trustees, 6 directors and officers.
History of the investments of this local are CD’s. We’d stagger the dates
of the cd’s. As of now we’re lucky to get 1 percent on those investments.
If we get them money they will invest as wisely as we can.
Talks up the sale.
Member: Sale has to be done. Bid is from a company called 5 points. Realtor
team is at the meeting. Some years ago, Red Studios offered to build new
union building. They were approached again and passed.
1) Is a big deal. It’s a boat load of money that comes in. I’d prefer to see IN WRITING a prospectus of what will be done. A Legal document
that shows all of our protections against the misuse of this money.
All laid out.
2) Good idea to clean up this election process.
Counsel: Officers of the local are financially responsible for misuse. Prohibited
by Musicians Club; Laws in California; Federal Labor Law; Prosecution by the
DOL if there is misconduct.
Member: Full court press to get the sale. What was the process to get you here?
Been in discussion for years. More acutely in the last year. Board was unanimous
to pursue a sale.
Member: Thanks the board. What is ecofriendly? Lots of the companies are
attached to the utility companies. Much more beneficial to BUY solar panels,
not rent. Other group was in same situation. Arranged with County to have
their forensic accountants to be involved to guarantee transparency. To
watch out for scams.
Member: Loves the idea. But will not vote for it unless we know what the
renovation will cost.
Answer: Cost was estimated to be 3 million dollars, 11million in profit is
after the renovation.
Member: Have any members been asked what they want in the new
rehearsal rooms? Because this place sucks. Need more members.
Member: Question of confidence in the leadership. Not so worried
about corruption, more concerned with cluelessness, follow through
on proposals, project management.
We do not have a great record on oversight. CONVINCE ME!
Member: Elephant in the room, unions way of doing business is not working.
If we sell building, and we have all this money, they’ll be even more
disconnected from the needs of the members. When model stops working,
the proceeds are sold and the profits go to that union. Are we best served
as members through the sale of this building?
Member: Just 12 folks are making these decisions for all the members. Never
came up when I was involved. Local has a history of deficit spending. Taken
in 24 million over 6 years, but spent 26 million. $290,000 last year. Building
brings in enough money to pay our bills. It’ a lot of trust,.. don’t have enough
trust to vote for the sale.
Member: Two issues - Transparency and Trust. Never had a board of
directors entrusted with 11 million dollars. We have to protect that investment
for a worst case scenario.
Transparency: Engage the members. Member must believe.
One meeting doesn’t cut it. have more meetings. We had three on non-union recording.
Member: In favor of sale. There have been many conversations. Everything will
be decided by the membership. [EC: Except the listing of the building last July and the finding of the new building.]
Member: Many things are wrong with the picture. Has been worked on for a couple
of months now (since July). No deadline set. Set a deadline. What’s the hurry?
RESOURCEFULNESS: No one has asked us what we want? No Survey.
Governance should come from the members, not thrown at the members.
Member: Property Tax? What will that be?
Realtor’s team answered - 1.25 percent of purchase price.
Income is 130-135 thousand from 3 surrounding restaurants.
No cap gains taxes.
Member: What is property tax hit on new building? What’s the
hit here? Tenants come and go, cannot count on them being there.
Answer: One of the restaurants has a 10 year lease.
Ballots are coming out too soon, we don’t have the info we need.
Member: At the local in Phoenix, money problems, partnered with
ballet company and created a Bingo night. Indian gaming came in the
whole thing left the bingo game high and dry,..
Local was looking at insolvency.
We need to explore. Not just look to a pot of money.
Member: Verify salary freeze – YES, Officer’s salaries are frozen.
Members were not told that the building was being listed, nor that
A building search was already happening.
The mailing, the board paid $5,000 of our dues money to a pr firm to
design, And an additional 5-6 thousand to mail, had no balance at all.
Was a total sales pitch. The Overture that came out today didn’t have
ANY letters to the editor, Nothing from the members on the sale.
Said there should be a Motion to have voting cut off date of March 1st,
2016. According to the Secretary, they’d not received any comments
from members about the sale.
Member: In the budget are you including - realtor fee? It comes off the
24 million. Budget: Cannot estimate till the members say what they want.
OFFICER: Realtor has schooled the board on the cost of a renovation.
* Address of proposed new building - 1011 Alameda in Burbank*
A block away from Team music. Insistent on having totally union labor.
$120 per square foot to renovate, building is over 30,000. One-story building.
Can make it what we want. Surrounding ourselves with the best team out there.
Go by and check it out! Parking is 50 spots for employees, 120 in the front.
AAA and School will provide extra spaces on the weekend.
The realtor is a member of Local 47 member. Him being a musician is an asset.
Realtor donating back $100,000 of their fee. $50,000 to the relief fund and $50,000 to music performance trust fund.
Member: We don’t know enough. One information meeting is not enough. It’s just not enough. We live by feelings, we can’t live that way about real estate.
One property suggestion? Really? Need more. Ballot should be delayed by 60
days while we find out where the skeletons are buried.
Member: Who gets the commission, and is that a conflict of interest?
The procedure is tying the membership’s hands.
•Member: “What’s the sense of the room?. Of the folks who are here who wants a delay?” President won’t let a vote take place.
The president is eventually forced to allow a show of hands.
Vast majority of those in attendance support a delay in the referendum (Over 95%)*
Member: Thought it would be a debate,.. not a one sided presentation.
Want to hear both sides.
Member: 4 or 5 bids, highest of which one is 24 millions.
The PROJECTION is not accurate. We’re being asked to vote on a projection.
I see a lack of trust, didn’t give enough info, not allowing motions, only a show
Want to know about rehearsal rooms. Get the info out and you might build
Do not have an open-ended ballot, need a cut off date.
If we weren’t hurting, would we be asking to sell?
Officer: Absolutely. We’ve done our due diligence.
Member: Have you gotten a 2nd opinion?
Answer: We had four different real estate firms.
You still need to get more options.
Member: Is there an expiration date on the 24 mil offer?
Was hoping presentation had more info, pictures of the neighborhood, SOMETHING. Should have had the meeting 6 months ago.
Member: I’m a realtor. Can understand this confusion. I’ve sold commercial, cathedrals.
1) Interest rates go up, sellers market will dry up.
2) Realtor has a good reputation
3) In my opinion, if you can sell for 24 mil, and buy for 10 and renovate for 3 million, move ahead now.
4) All these people are honorable.
•Member: Have total respect for all involved, but also lots of concerns. You’ve
spent months working on this when you SHOULD be working to improve our
work situation. Also, the contractor who did the auditorium rehab was non-
union. Why are we consulting the same company that used non-union on the auditorium?•
Answer: All companies give both union and non-union quotes.
Zip codes were used to chose a location? But how many of them are active musicians?
Need to do more research on locations.
Member: Am worried about the recording studio. WHY MAKE A STUDIO? $250,000 - $500,000 for board and nothing else…. Need more info and hard numbers.
Board Member: Whole board was put in by your votes. Everything is coming into place, time is now is valid. The Burbank building is our little gold mine. Prices for renovation could escalate. Send your proposals to the board. Timing is everything, and this is the time. The moment is valid.
Board Member: You elected us,… go forward. Four sets of realtors, talked to attorneys.
You want a budget… but we’ll present more at the next meeting. If you think starting voting 5 days is to soon, you might be right. Go ahead and let’s do it.
Member: In my retirement I had to look at a middle set of numbers, low sets of numbers and high sets of numbers. We need more and more info if you want an informed opinion.
Member: If there was not a height restriction here it could sell for far more.
Member: Musicians Club is in the black, can you separate it out.
Club borrowed $584,000 from the Local for Rehearsal Rooms
and auditorium. How can you say we’re fine with a 584 thousand unsecured
loan on the books?
We need outside agency to do the counting.
Officer: 50-100,000 a year goes back to Local to pay back the loan.
Board Member: Have before us a unique opportunity. It’s about the relationship
of our musicians, finding new opportunities. Been a lot of effort and thought
put into trying to move this forward. It’s hard to see 14,000 members in 1950
but only 7,000 now.
We should have a building we have pride in. There are 1000’s of members that
are not here.
*Lease back option?: Realtor: We were told what you wanted to ask the buyers
to have a free lease back option for six months to give us time to renovate the
new building. If longer than 6 months, a small rent of $50,000 per month will
be asked for. There is a real estate attorney involved.•
Member: Don’t want an open ended ballot. Set a deadline 4 months. Count the
ballots, if they have the numbers have the vote. If not give it up.
Member: Deadline should be 4 to 6 months.
Member: Should set deadline to March 1st, 2016
Member: We need to get comfortable with the idea of leaving and selling.
Adjourned at 9:57