BURLINGTON, Vt. — Former Koffee Kup Bakery workers are in line to get more than $800,000 in unused paid time off, more than two months after that pay was cut from their final paychecks when the Vermont company closed.
Vermont Superior Court Judge Samuel Hoar ruled Wednesday that Koffee Kup employees — about 500 people, including 91 at Vermont Bread Co. in Brattleboro — must receive that compensation.
The unused PTO was dropped from workers’ last paychecks in early May, due to a dispute over who was responsible for paying it between the New York investment firm that owned Koffee Kup at the time and a court-appointed receiver managing the bakery’s financial assets. In addition to the withheld pay, Hoar ruled that the disbursement must include $16,000 in interest on that sum.
Former bakery workers will likely be issued their unused PTO within the next week, according to Justin Heller, an attorney for the New York-based receiver, Ronald Teplitsky.
“We’re already in the process of working with the payroll company,” he said Thursday.
The investment firm — American Industrial Acquisition Corp. — shuttered Koffee Kup and its subsidiaries on April 26, less than a month after acquiring them, citing “substantial financial losses” at the bakery in each of the past four years. Workers were then given their final wage and salary obligations, but the PTO dispute got ensnared in a lawsuit between Koffee Kup and its primary creditor, KeyBank, that led to Teplitsky’s appointment.
Frank Machado, a former Koffee Kup route driver based in Massachusetts, said the court ruling Wednesday means he’ll finally receive about $2,000 in unused PTO he had accrued after nearly six years with the company.
Machado, who found work for another bread distributor shortly after Koffee Kup’s closure, said that while the payout delay didn’t affect him much, it left others in a precarious financial spot.
“It put a bunch of people into the red, so hopefully this money will help out,” he said. “Some people were owed a lot more than me.”
Koffee Kup workers’ unused PTO will be paid with proceeds of the company’s ongoing sale to the Georgia-based firm Flowers Foods, which also owns Nature’s Own, Wonder and Dave’s Killer Bread, among other bakery brands.
Terms of the deal are confidential under a court agreement. Heller said, however, that Flowers Foods’ offer exceeded those of other bidders, including Mrs. Dunster’s Bakery in New Brunswick, Canada, which had announced plans in late May to restart Koffee Kup and Vermont Bread Co.
Flowers Foods President and CEO Ryals McMullian has said his company has “no immediate plans” to reopen Koffee Kup, which also owned Superior Bakery in North Grosvenordale, Conn.
Proceeds from the bakery’s sale will also be used to reimburse its contractors, according to Heller. Among others, those companies include Bernardino’s Bakery and Lily Transportation Corp., both based in Massachusetts, which have argued in court filings that they’re owed $673,000 for a packaging contract and an estimated $3.7 million for trucking services and a contract breach, respectively.
Heller declined to say Thursday whether Koffee Kup’s sale will fully cover those claims, citing the confidentiality agreement with Flowers Foods, though he said the total figure exceeds $6 million.
In a court hearing earlier this month, a Lily Transportation Corp. attorney argued that giving former workers their unused PTO before reimbursing Koffee Kup creditors would “dilute the distribution” available to those businesses, The Brattleboro Reformer reported.
Hoar rejected that argument in his ruling, however, according to Heller, who said the bakery workers won’t have to wait for that “claims-administration process.”
Vermont Attorney General T.J. Donovan hailed the ruling in a news release Wednesday, saying he was “pleased” that Koffee Kup workers will receive their unused PTO with accrued interest. Donovan had filed a legal brief in May arguing that the workers were owed that pay.
“These hardworking Vermonters are entitled to these funds rightfully earned,” he said in the release.
The contractors’ claims will be handled by a new court-appointed receiver, according to Heller, who said Teplitsky’s role was to liquidate Koffee Kup’s assets on behalf of KeyBank in order to refund $7 million in loans from the bank that it said the bakery owed. With that debt now settled using funds from the Flowers Foods sale, Heller said “the purpose of his receivership has really been achieved.”
Flowers Foods already owns Koffee Kup’s supplies and intellectual-property holdings, Heller said Thursday, adding that he expects the Georgia conglomerate to also acquire its properties and equipment by the end of July. At that point, Koffee Kup’s remaining financial assets will be transferred to the new receiver, he said.
Koffee Kup’s closure also prompted a class-action lawsuit in the U.S. District Court for Vermont alleging the bakery didn’t give employees sufficient notice of their layoffs. That lawsuit, which seeks to recover wages and benefits for former workers, remains ongoing.
Machado, the former route driver, said Thursday he’s “not holding [his] breath” on getting money from the class-action case since it’s unlikely to be resolved soon. But with some extra dough coming in from his unused PTO, he said he’s looking forward to “summertime fun” with his kids, who are 14 and 15.
“Hopefully we can go somewhere,” he said. “Maybe Six Flags or something.”
As Pfizer and federal agencies argue over the need for a COVID-19 booster shot, an associate professor of medicine at the Dartmouth Geisel School of Medicine sees a different priority: getting more people vaccinated now.
“I think what we really need to think about is the order in which this is (done),” said Dr. Michael Calderwood, who is also chief quality officer at Dartmouth-Hitchcock Medical Center. “We need to get over 90 percent of the U.S. population fully vaccinated, and that means individuals who have not yet stepped forward to be vaccinated need to really be encouraged. If we’re not even getting those first doses in, the boosters are going to have a muted effect.”
Fifty-five percent of the state is fully vaccinated, according to the state Department of Health and Human Services. Evidence, Calderwood said, is the best argument for vaccination: 99 percent of people dying of COVID in the United States are unvaccinated. A recent study by the Kaiser Family Foundation found that conversations with family members and friends have been particularly effective in persuading people to be vaccinated. Concerns about side effects was the most common reason cited for not getting vaccinated.
The next step, Calderwood said, is getting more vaccines to countries with short supply.
“Viruses don’t recognize international borders,” he said. “We need to push really hard to make sure that we are getting vaccines out to countries around the world because we will continue to see the emergence of new variants that might break through ... the vaccine protection that we have.”
The state is working on that first part with Thursday’s start of the N.H. Mobile Vaccine Van, which communities and groups can request to visit their locations and events. The van, a partnership with ConvenientMD, will run throughout the summer.
That effort is in line with a Biden administration recommendation announced in early July intended to increase the vaccination rate. However, the state has no plans to take up a second White House suggestion that got pushback from state Republican leaders: taking vaccinations door to door.
House Speaker Sherman Packard, a Londonderry Republican, tweeted his opposition to a door-to-door campaign, saying vaccinations are already available to those who want them, a point Gov. Chris Sununu also made. “Legislators in New Hampshire,” Packard tweeted, “will continue the fight to protect patients’ privacy and fight against federal overreach.”
The mobile van, though, has Sununu’s support.
“It’s important to note that the van only goes out into the community on a requested basis,” said Sununu spokesman Ben Vihstadt. He said the new mobile van is an extension of the state’s existing practice of taking vaccinations to homebound individuals and school-based clinics.
Meanwhile, next steps for a vaccination booster are unclear.
Pfizer is pressing for swift federal approval of a coronavirus booster vaccine against the recommendations from the Centers for Disease Control and Prevention, the federal Food and Drug Administration, and the World Health Organization, all of which have said there is insufficient evidence a booster is needed. Additionally, a third dose will further limit the vaccine supply available to areas with low vaccination rates. Calderwood said the answer to the booster debate probably falls in the middle and won’t be known without further research. Research has shown the mRNA vaccines, which includes Pfizer and Moderna, are estimated to be 94 percent effective against severe illness, according to the CDC, and only slightly less effective against variants like the more contagious Delta variant.
Early data, however, suggests a booster may be beneficial to those with severely compromised immune systems, Calderwood said. (Israel just began administering third doses of the Pfizer vaccine to this group.) Still, the focus should remain on getting unvaccinated people vaccinated, Calderwood said.
“I think there are many ways to do it,” he said, “but we need to bring the vaccine to people rather than trying to bring people to the vaccine.”
The Keene City Council approved new water and sewer rates Thursday, despite one councilor’s concerns about the hikes to residential water customers’ fixed meter fees.
During their meeting that night, the council voted 14-1 to approve an ordinance with the new rates, which include a slight increase to the volumetric rate for water — which pertains to the amount of water consumed — and varying increases to the fixed quarterly rates assigned to different-sized water meters.
The sole vote in opposition was that of Councilor Mike Remy, who pointed out that the fixed rates for the smallest water meters will about triple, while those for large meters are rising by a smaller margin.
“It ends up where your lower water-usage residential [customers] could be seeing [bill] increases like 26, 27 percent ... because that fixed increase is so much,” he said. “Where everybody who’s in the higher usage area and [has a] larger size meter really is more of a 12 percent increase.”
The city needs to raise water revenues this year by about 20 percent and sewer revenues by about 6 percent, according to Public Works Director Kürt Blomquist. The volumetric rate for sewer service is going up from $5.31 to $6.29 per 100 cubic feet, or nearly 750 gallons, while fixed meter rates are going down.
For water, the smallest meter sizes used in the city are five-eighths and three-quarters of an inch and are generally used in smaller residential buildings. The fixed quarterly rates for these meters are going up from $7.29 and $10.50 to $24.36 and $36.53, respectively.
Meanwhile, the largest two meter sizes are 4- and 6-inch meters, and serve larger commercial operations. The fixed rates for those meters are going up from $297.97 and $671.86 per quarter to $608.88 and $1,217.76, respectively.
Customers’ meter size will be part of what determines exactly how much their water bill goes up, according to Blomquist. But for an average residential customer, he said the change won’t amount to much more than a few dollars per month.
At first, Remy moved to amend the rate ordinance to include a flat increase for water meters of all sizes in whatever amount would meet the needs of the water and sewer budgets.
However, Mayor George Hansel recommended that Remy instead move to send the rate ordinance back to committee for further discussion, saying it would be difficult to amend the ordinance on the spot without having time to crunch the numbers. Remy declined to do this and, citing concerns that the rates wouldn’t be approved in time for the next billing cycle, withdrew his suggestion.
“I know, from a budget perspective, we need the increase in there, “ Remy said. “I’m just disappointed that we’re taking a whack at the small residential [consumers].”
The question of how the city would bill for its water and sewer services has taken a number of turns in recent months. Originally, city staff put forth a proposal that would have included a so-called “lifeline rate,” charging a lower volumetric amount for residential water use under a certain threshold and a higher amount for any subsequent use.
However, that idea was defeated, and councilors decided to go forward with a flat volumetric water rate instead, which the council approved last month. That rate is going up from $4.78 to $5.06 per 100 cubic feet.
Another earlier amendment was suggested by Councilor Mitch Greenwald, who raised concerns about increasing the fee for fire-protection lines, which provide water to the sprinkler systems in larger buildings. Councilors voted to amend the ordinance to exclude increases for fire protection lines.
Though she ultimately voted in favor of the rate ordinance presented to the council Thursday, Councilor Bettina Chadbourne sympathized with Remy’s concerns. She said she wasn’t sure the council had done its due diligence.
“I don’t think we looked at it thoroughly enough or asked the right questions,” she said.
For the second year in a row, a group studying the chasm between declining wages and soaring rents found that nowhere in the U.S. can a minimum-wage worker afford a two-bedroom apartment at the fair market rent.
In its signature Out of Reach report released this week, the National Low Income Housing Coalition determined that a full-time hourly worker would need to earn $24.90 an hour, more than three times the $7.25 federal minimum wage, in order to afford a $1,295-a-month rental home. That’s the average “fair market rent” in the U.S., according to the U.S. Department of Housing and Urban Development.
“It keeps telling the same story,” said Anne Ray, manager of the data clearinghouse at the University of Florida’s Shimberg Center for Housing Studies. “Housing costs have really just come unhinged from wages for a lot of jobs and a lot of common jobs like retail, hospitality, customer service, in some early career teaching, pre-school, in part child care.
“Somehow things are to the point where even though there’s that huge demand for relatively low-cost housing, the units aren’t getting produced.”
According to the report, Florida is one of the states where the gap between the minimum wage and what’s actually necessary to afford modest housing is widest.
The state minimum wage is $8.56, equivalent to $17,804 a year and, after Amendment 2 was passed last November, will increase to $10 in September. But to be able to afford a two-bedroom unit at the $1,290 fair market rent, you’d need to make $24.82 an hour, which amounts to $51,619 for a yearly salary.
Put another way, a minimum-wage worker would have to work 115 hours a week.
“This report affirms the sad truth, what we already know about Florida’s housing crisis: The average person is priced out of the market,” said Sen. Victor Torres, who was elected to the Legislature in 2012 and represents Osceola County and parts of Orange County. “When it comes to rents, they’re $1,300, $1,400, $1,500 a month depending on if you need a two-bedroom or a three-bedroom. It’s just not fair.”
In New Hampshire, which has the 13th-highest housing wage in the nation, but among the lowest minimum wages, the situation is even more stark. According to the coalition’s numbers, the average cost of a two-bedroom apartment in the Granite State is $1,286 per month. The coalition says at the state’s $7.25 minimum wage, a worker would have to work 136 hours per week to afford even a one-bedroom space.
“For people who can work, one full-time job should be enough,” the NLIHC contested in its report.
But the affordable housing shortage doesn’t just affect working families. Florida’s seniors who are on fixed income also struggle.
In the Orlando metropolitan area, Ray said there are about 240,850 people who get Social Security retirement benefits. The average benefits are between $1,341 and $1,559 per month, meaning they’d have to find a two-bedroom rental for $402 to $468 a month in order to avoid spending more than 30% of their income on rent. Otherwise, a one-bedroom “fair market rent” apartment would eat up as much as 75% of their Social Security.
The result is a state with millions of households, of various ages and income levels, that spend a big portion of their pay on rent, making it more difficult to save, handle an unexpected expense or break into homeownership. The Shimberg Center has found that 1.4 million renter households spend at least 30% of their yearly income on rent, and of those, 938,957 pay even more.
During the pandemic, when droves of workers were suddenly laid off or furloughed, that had devastating effects. With no income and not much savings, paying rent simply became impossible, and despite eviction moratoriums and rental assistance programs set up to help, thousands of people were evicted while the coronavirus was spreading.
As the report points out, most new rental housing that gets built is for high-income renters to balance out high development costs and landlords can “virtually never, without state or federal subsidies” afford to rent out their units at a price that the lowest-income renters can afford.
That’s led to a shrinking supply of affordable homes — for renters and buyers.
But aside from building to fix the shortage, the National Low Income Housing Coalition and the Biden administration is pushing for a massive expansion of housing programs for the poor, including universal rental assistance to increase the funding for housing vouchers programs, which allow people to rent from the private market while only paying a portion of the rent. The rest is offset by the housing voucher, which is administered by the local housing authority directly to the person’s landlord.
Right now, only 1 in 4 very low-income renters who are eligible for voucher programs receive one.