The American Federation of Government Employees-Local 2741 is not finished fighting Fenty and Co. over his decision to privatize daycare duties within the Department of Parks and Rec. The union’s case had been dismissed in federal court on jurisdictional grounds. Today, the union filed its civil suit in D.C. Superior Court.

Just maybe AG Peter Nickles celebrated a little too soon.

Last week on Kojo, Nickles crowed about his alleged big victory in U.S. District Court. His office even posted a press release after the District Court judge dismissed the union’s complaint. In the release, Nickles and Fenty both give statements:

“The Administration is pleased with yesterday’s ruling. This decision allows the District to move forward with its commitment to provide residents with the best possible day care options,” said Mayor Fenty.

Peter Nickles said, “I am particularly gratified by the court’s prompt resolution of this outstanding litigation. The decision essentially supports the District’s prerogative to assert sound operational principles in an effort to effectively and successfully manage the Department of Parks and Recreation.”

I doubt we will see another press release from the OAG announcing that the case has essentially just been moved to D.C. Superior Court.

Some quick background: The D.C. Council passed legislation in May forbidding Fenty from privatizing DPR’s daycare. After Fenty made the move, this infuriated key members of the council and may have been one of the reasons why the council blocked Ximena Hartsock from becoming DPR’s director.

The new lawsuit brings forth a substantial compliant. It was filed by one the District’s top civil attorneys Donald Temple. Nickles was either silly or ignorant to think that Temple and the union would quietly go away.

The new complaint presents a pretty serious list of charges. I doubt another judge is going to quickly dismiss this case.

The complaint reads in part:

Prior to their termination, Plaintiffs on behalf of DPR operated approximately twenty-two (22) Early Care and Before and After School Care centers throughout D.C.  The daycare and child development program operated by OES is recognized as the highest rated program of its kind in the nation, providing affordable subsidized day care services to economically disadvantaged families and particularly for children who qualify for federal Headstart funds.   Hundreds of local families, especially single women seeking to re-enter the workforce and women in the welfare-to-work program, benefitted significantly from the services provided by OES.

OES has successfully provided daycare and child development services for more than twenty-five (25) years; some of its employees had been      employed for over forty (40) years.   OES institutionally and through Plaintiffs herein had developed a level of expertise recognized throughout the industry.

Defendant, by its privatization and illegal reduction in force, has illegally terminated Plaintiffs’ jobs.  In so doing, Defendant executed a callous, dispassionate and deliberate three-pronged attack designed to destabilize and ultimately destroy OES.

The first prong of Defendant’s offensive attack was to manipulate enrollment in DPR’s daycare program so it would appear that participation by affected families and children in the  program was declining.  This began around August or September, 2008 when Defendant, through its officials, ordered Plaintiffs to stop taking further applications for daycare services from interested families despite that there were funds appropriated and available to provide daycare services, and there were numerous qualified families seeking daycare services for their children.

As a result, Defendant excluded a substantial number of economically disadvantaged and prospective  applicant families, who were otherwise qualified, from participation in the OES program.

Upon information and belief, there were a number of known waiting lists of children from these centers.  At least two hundred seventy-five (275) families were known to be on waiting lists for seven (7) of the twenty-two (22) centers.

Further, Defendant knew that funds appropriated to provide daycare and child improvement services for economically disadvantaged families through OES could potentially be redirected to other budget items.

Upon information and belief, Defendant intentionally and maliciously suppressed, or caused to be suppressed, enrollment numbers for the OES program by excluding economically disadvantaged families and individuals known to have been wait-listed for the program.  Defendant denied eligible families’ participation in order to justify the privatization of day care services originally provided by OES; in the process Defendant eliminated 165 positions within OES.

The OES budget is funded by local and federal dollars.   Accordingly, the OES budget is approved by the D.C. City Council, the United States Congress, and the President of the United States.

The second-prong of Defendant’s malicious plan to destabilize and eliminate OES occurred when the District intentionally and callously failed to apply for federal block grant funds for the care of eligible children.  Rozalind Ferguson (“Ferguson”), former Acting Chief of OES supervised the twenty-two (22) centers and prepared DPR’s annual application for block grant funds on behalf of OES.

Upon information and belief, Ximena Hartsock (“Hartsock”), Acting Director of DPR, ordered Ferguson not to apply for federal block grant monies for FY 2010, despite both the apparent need for such funds and the prior repeated award of such funds to the District.

The District’s failure to apply for federal block grant funds for FY 2010, particularly during a time of fiscal hardship and dwindling municipal revenue, was intentionally and maliciously designed to achieve the ultimate goal: privatization of the OES program, without compliance with D.C. privatization laws.

At all times referenced herein, Defendant decided that it would dictatorially privatize the daycare workers jobs and/or transfer those positions to the District of Columbia Public School System or a private contractor.  Any action by Defendant to privatize said jobs is governed by  D.C. Code § 2-301.05b (2009).  Further and without consulting Local 2741 or the Council, DPR decided to  terminate affected OES employees by no later than September 25, 2009, sounding the death knell for the program by the end of FY 2009, i.e., September 30, 2009.  Once the District established these termination dates for the purportedly underfunded program, the District disdainfully continued to solicit bids from private contractors to provide the daycare services currently provided by Plaintiffs.  Upon information and belief, Defendant has awarded a private contract to United Planning Organization (“UPO”) to provide daycare services previously provided by DPR/OES.

Among other things, OES employees have not enjoyed the right of first refusal by the successful bidding contractor as required by D.C. Code § 2-301.05(b)(d)(2).  That section provides in relevant part: “Any contractor who is awarded a contract that displaces District government employees shall offer to the displaced employee a right of first refusal to employment by the contractor, in a comparable available position for which the employee is qualified, for at least a 6-month period during which the employee shall not be discharged without cause.”

Moreover, OES employees had no guarantee that the wages and benefits derived from their current employment would continue pursuant to D.C. Code § 2-301.05(b)(d)(3).

On or about July 15, 2009, Hartsock testified before the City Council’s Committee on Libraries, Parks and Recreation that “beginning in Fiscal Year 2010, DPR will no longer be a direct provider of Early Care and Education, Head Start, and Out of School Time…”

According to Hartsock, the total cost to operate educational services was approximately $7.9 million in FY 2009 but revenue amounted to only $3.9, thus creating “a funding gap of $4.0 million that cannot be bridged.”

On June 24, 2009, Attorney General for D.C., Peter Nickles (“Nickles” or “Attorney General”), wrote that  “[O]ver the course of a fiscal year, the shortfall between revenues and expenditures for the operation of childcare services will add up to almost $4 million.”   In so doing, Nickles noted that:  “…children’s daily attendance has been much lower than the projected enrollment numbers.  Therefore, the cost of staffing the day care centers is much higher than the reimbursed  funds DPR receives for the program.”Further, the Attorney General said that “this substantial shortfall triggers D.C. Official Code § 1-301.47a(b).”  According to the Attorney General, due to the $4 million shortfall, the Council’s emergency legislation could not become operative “until the Council and Congress appropriate that amount for the program.”

Upon information and belief, approximately $6.499 million was appropriated and approved by the Council for daycare services, passed by Congress and signed into law by the President.

By letter dated August 17, 2009, Eric J. Goulet (“Goulet”), Budget Director for the Council, refuted the Attorney General’s assertions: “Funds should still be available within the [Office of the State Superintendent of Education] budget, unless they have been re-directed for another purpose that has not been explained by either the Office of the Chief Financial Officer or the Executive, nor has been approved by the Council.”

According to the Council’s Budget Director, “it appears that Clark Ray (“Ray”), the former Director of DPR and Deborah Gist (“Gist”), State Superintendent agreed to reduce the MOU from $6.2 to $4.5, contrary to the budget approved by the Council and Congress.”   Hence, their respective decisions may have violated existing law.

Goulet further noted that the Council “subsequently learned that the budget for the child care subsidy was reduced again by [Defendant] at some later point, to $2.5 million.”

At no point did either Clark or Gist consult the Council with regards to any possible reprogramming of allocated funds, nor did the Council approve any reprogramming of allocated funds away from DPR to other undisclosed governmental units. Further, when Council staff inquired of  OSSE’s (“Office of the State Superintendent of Education”) CFO (“Chief Financial Officer”) as to what happened to the $4 million dollars, OSSE staff was unable to explain or respond.

Defendant’s unapproved and clandestine reprogramming of allocated funds away from DPR did not conform to D.C. laws and regulations and ultimately led to the supposed lack of appropriation to which Attorney General and Defendant cite as the reason for not adhering to the Council’s aforementioned emergency legislation.

The FY 2010 budget in OSSE for daycare services was $9 million dollars.  The Defendant’s justification for its reduction in force was manipulated and pretextual.  There was no budgetary justification for Defendant’s reduction in force and terminating 165 jobs in OES.

But for Defendant’s acts of intentionally manipulating participation levels, not applying for federal grant funds, illegally privatizing DPR’s  daycare program and jobs, and possibly illegally reprogramming appropriated monies and positions, Plaintiffs’ jobs would not have been terminated, and federal and state funds would still be available for  FY 2009 and FY 2010.