802’s Financial Position Continues Strong
Volume CI, No. 10October, 2001
For the six-month period ended June 30, 2001, Local 802 recorded a gain of $186,724. This compares with a gain of $353,254 recorded during the comparable period of the prior year. The audited financial statements for the period appear on page 20-21 of the October issue.
The decline in the current six months’ results versus the prior year is substantially due to the fact that the gain recorded last year included a write-up, amounting to $162,710, of the local’s investment in Union Labor Life Insurance Co. If this favorable item is excluded from the prior year’s results, the gains for each of the two periods were essentially equal.
Excluding the investment write-up noted in the preceding paragraph, Total Income for the 2001 period increased by $50,356, or 2 percent, over 2000. Approximately $40,000 of this increase is attributable to increased Basic Dues and Application Fees. In addition, increases were realized in Rental Income, for portions of the headquarters building, and in revenues from Journal (Allegro) Advertising. These increases were offset, in part, by declines in Work Dues collected in the Recording and Single Engagement Club Date fields.
Total expenses for 2001 increased by $54,176, also 2 percent, over 2000. Departmental Costs increased $115,083, an amount that includes spending for the Audience Awareness Live Music Campaign, the Hearing Conservation Program, studies of the recording industry and of jazz artists, and seminars for union leadership training and strategic planning. Offsetting these costs, in part, were reductions in Legal Fees (which had been unusually high in 2000 due to contract negotiations), in Members’ Life Insurance (due to a negotiated rate reduction) and in Mortgage Interest (due to a prepayment of mortgage principal in September 2000).
Cash flow for the six-month period ended June 30, 2001, was $218,008, compared with $308,140 for the comparable period a year earlier. In the current period, the favorable cash flow that was generated by liquidating the union’s investment in Union Labor Life Insurance Co. was substantially offset by increased investments in United States Treasury Bills. Negatively affecting cash flow for the current period, but a favorable factor in the union’s overall finances, is that Basic Dues were collected earlier for 2001 – i.e., during late 2000 – than was the case for the prior year. Such earlier collections do not enter into cash flow for the period. However, the union had the use of the funds for a longer period of time.
Net Assets of the union increased to $4.5 million at June 30, 2001, up 2 percent compared to the prior year, and reflective of the continued strong financial position that Local 802 enjoys.