UAW may have more answering to do…

There are apparent irregularities in the financial statements of the UAW holding companies. One of which operates the Black Lake golf course and education center in Cheboygan county Michigan.  It has been reported that the Black Lake property has suffered losses of Tens of Millions, however records indicate the numbers might hide something more questionable.

Chetly Zarko of Zarko Reasearch,  and LaborPains.org have revealed some (publicly available) information which might put the UAW’s Black Lake operation on the radar.  The First part is the equalized value as brought up by Dennis Lennox and the waverly township assessor.  Chetly maintains there is a significant difference, ($770,000 not collected as a result of the tribunal ) but as the “equalized values” go (Half) I believe the difference in the amount should be $385,000 in property taxes which would certainly be helpful to the township in any event.

But as Chetly also points out, THAT is hardly the potential bombshell.

Mr. Zarko points out the biggest loss in the financial statements of this “for-profit” enterprise is the pension losses of $5,910,000.00.  This number eclipsing the wages for the operation?

“its clear that pensions are the largest reason for the losses, which laborpains.org suggests isn’t “unusual for UAW pensions” which have been in disarray even for the larger union itself and with GM and Chrysler, which recently went through a pension buyout among the rank-and-file.”

Zarko makes comparisons which demonstrate how far out of line the number is in comparison to the other figures, and to those in other for profit enterprises.

“First, if you compare the golf course wages ($274,095.34) to golf course health insurance ($57,689.04, or about 20%, similar to medical costs anywhere) and those same wages to the pension trust fund investment ($17,269, or about 6% of wages), you get numbers you’d expect to find in a normal workplace.  But when you look at the education center’s ratios, pensions are 182% of wages.  The golf course verifies that something strange is going on at the education center.”

So the new question is…  Who had a really good Christmas this year?

5 comments for “UAW may have more answering to do…

  1. January 4, 2009 at 5:15 pm

    The $770,000 is J. Justin Wilson’s estiimate from Laborpains.org, which is based on the Waverly Township estimate of the difference. I presume – but am not sure – of that already factoring the “halving” the SEV formula measures, since Wilson was interviewing the Waverly Township collector.

    But your correct – I think the bombshell in this data is that pensions exceed wages in half the operation. As you suggest, someone is having a merry Christmas.

  2. Reader
    January 4, 2009 at 11:39 pm

    Will someone file a complaint with the AG for an investigation?

  3. jgillman
    January 5, 2009 at 8:13 pm

    Congratulations on the Malkin attention! She has done a fine job of bringing attention to the things us lil folk dig up..

  4. leonard page
    January 12, 2009 at 6:12 pm

    let me save you some time:

    UAW Walter and May Reuther Family Education Center

    Cheboygan County’s newly elected drain commissioner, Dennis Lennox, issued a press release in late December, entitled “UAW refuses to pay taxes on lavish lakeside resort“. Lennox campaigned for the drain commissioner job with lawn signs falsely implying that he was the incumbent- a violation of state law. His platform was based on a stated desire for low taxes and getting the state legislature to abolish what he calls the “do nothing” drain commissioner job which pays $600 a year.

    For almost 40 years, the UAW has run the Walter and May Reuther Family Education Center for UAW members on the south side of Black Lake in Waverly Township near Onaway. The Center has a first-rate public golf course and grille; the main center has almost 250 rooms, with a gym and a pool for UAW members and their families. Members attend mandatory weeklong education/training programs on such subjects as civil rights, grievance handling, health and safety, substance abuse, UAW history and the UAW Constitution. There is also a camp ground for UAW members. There is a large auditorium with a dining hall were food is served cafeteria style. The sleeping rooms are small and some even have shared bathrooms. The setting is northern Michigan beautiful and the décor is rustic, but certainly not lavish.

    The UAW Center operations are almost self-contained, requiring little township or county assistance. The Center has its own fire department, security, road maintenance, water and waste treatment, etc and no school-age children live at the Center.

    Property assessment are made by each township on an annual basis and are subject to taxpayer challenge at a local board of review and then before a state tax tribunal. For some years, the UAW has been able to successfully challenge the Waverly Township assessment at the state tax tribunal level. In 2007, the UAW again challenged the township assessment of $13.7 million and the parties settled that matter that same year at $12.3.million.

    Lennox says he is astonished that the UAW would argue that the current market value of its property is more than 50% less than its book value. (Book value is what you have paid for the property and improvements though the years; market is what it is worth now considering depreciation on improvements and the current real estate market) Apparently Lennox has not noticed that value on property generally and golf courses in particular, have been rapidly declining. The Lennox release also falsely suggests that I, as a Cheboygan County Commissioner represented the UAW in this matter and refused to make any effort to resolve it. However, I have not represented the UAW in any of these assessment disputes.

    When the 2007 assessment challenge was brought to my attention, I arranged for a lunch meeting at the Center with the township board, the UAW Center Director, its tax attorney and a high level administrator from UAW Solidarity House in Detroit. The Waverly Township Board declined this offer. (Neither county commissioners nor for that matter, the drain commissioner, are involved in the property tax assessment process or appeals.)

    Since this matter had been resolved by the parties, why does the new drain commissioner regurgitate it now almost two years later? Every taxpayer has a right to appeal a tax assessment. The only issue in any assessment dispute is the appraised value of the property in contrast to other comparable properties. There is no discussion of this issue or of past tax tribunal decisions in the Lennox release. You would think a self-proclaimed advocate for low taxes would support any taxpayer’s right to appeal any assessment. The Lennox argument– that merely appealing a tax assessment amounts to a refusal to pay a fair tax rate is just politically-driven balderdash. Indeed given the fact that the UAW has obtained relief every time it has appealed suggests that the original assessment may have been too high.

    The right wing media is going bananas over the idea that a union can operate a “lavish resort with premier golf” for its members because of the recent $17 billion auto industry loans. Fox News and other rightwing commentators have suggested that the taxpayers should now demand that the UAW Center be closed or sold as a wasteful and unnecessary perk. But this union-bashing has an obvious logical flaw — none of this taxpayer money goes to the UAW. The UAW supported the Big 3’s request for bridge loans to deal with the current credit crunch which has killed auto sales. However the UAW neither sought nor received any federal loan funds to maintain or subsidize UAW operations. UAW expenses for the Center are paid by interest earned on the UAW Strike Fund – (membership dues).

    The UAW Center has been good for the community for over 40 years, and its continued UAW ownership should be encouraged. Rumors have circulated for years that the Center, or at least the golf course, are for sale. I hope the UAW realizes that most do not share Mr. Lennox’s views and the UAW hangs on to the property. The UAW has maintained a beautiful, low impact resort operation which strives to preserve the property’s natural environment. The Center’s 145 employees are locals earning a decent living and enjoying the benefits of union representation. Even though the Center is a seasonal employer, the UAW does NOT exercise its right to challenge unemployment benefits when it shuts down over the winter. The UAW Center attracts almost 13,000 golfers and 10,000 well-behaved UAW members and their families annually, who spend a good deal of their money in the local area. (Some even come back to vacation and retire here!) The facility has also been made available for many public meetings and the UAW has been a generous supporter of community events and programs.

    In contrast with some resorts, the UAW does not use low pay foreign workers on temporary work visas. Nor has the UAW asked either the township or county for any subsidy, despite the fact that the Center operations have apparently been a steady drain on the UAW’s declining resources–reportedly requiring a $23 million UAW subsidy over the last 5 years.

    The sad irony in all this is that a forced sale now of any of the Center property is almost guaranteed to establish a much lower taxable value with greatly reduced property tax payments. A new owner might also not wish to hire a local workforce at union rates and benefits, let alone permit unemployment insurance payments for seasonal workers. How does forcing a sale or closing the Center help the community?

    Perhaps the new township board may wish to pursue a better relationship with the current property owner and one of the county’s largest and best paying employers. If so, I will try to set up another meeting. Regardless, Lennox’s attack on the UAW is stale, false, devoid of relevant facts, hypocritical, unprincipled, and totally unrelated to his “extensive” duties as drain commissioner.

    Leonard Page

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