Controller’s Report

Volume CVIII, No. 5May, 2008

Ira Goldman

In my last column in Allegro, I noted the challenges that we faced in 2007. During 2007, we filled many open positions. We incurred legal expenses of $332,000 due to Broadway negotiations, which were $68,000 over budget but contributed to our success during the negotiation process. The strike fund incurred $189,000 in expenses (net of reimbursement of $168,000). There may be an additional $150,000 of expenses in 2008 due to benefits lost, which has been provided for in the 2008 budget.

Offsetting these expense increases, our new telephone system has enabled us to save almost $30,000 in telephone cost and our real estate taxes have been reduced in excess of $11,000.

Our income during 2007 was higher by $400,000 due to several factors. Our investments netted $60,000 over budget due to higher than anticipated yields. Our work dues and basic dues were favorable by $200,000. We have achieved an increase in net assets of $530,000. Over the past two years, net assets have increased by $1,155,000 (or 11 percent), for a total of $6,807,000. This increase helps secure our financial strength as a union in case of future strikes and a difficult economy.

The 2008 budget projects an increase in net assets of $33,000. We have budgeted for the increased potential benefits lost to members during the strike as well as a major consulting project to bring our computer systems up to date and enable them to be completely interfaced with each other. The cost is unknown at this time but we are monitoring these expenses very carefully. Investment yields for 2008 are projected to be much lower than the actuals of 2007 due to lower rates and balances; therefore, we have budgeted a reduction. Our largest expenses continue to be for salaries and benefits; this budget has increased by $235,000 and will still be a challenge to achieve in light of health care costs which continue to increase at alarming rates. Lastly, we also have a few staff positions left to fill.

The 2007 LM-2 was filed on a timely basis in March 2008. Please note that the 2006 financial statement numbers have been restated due to a change in accounting method proposed by our accountants, Gould, Kobrick & Schlapp, PC. Further details are provided on page 19 of the printed version of Allegro. Look for note 9: “Restatement in our Financial Statements,” which explains the reason and provides the changed results. 

In conclusion, the 2007 financial results of $530,000 were very favorable. We do not expect the same degree of positive results in 2008. The 2008 budget shows a bottom line of $33,000 as a result of these anticipated challenges.