Investment Write-Ups Strengthened 2000 Finances

Controller's Report

Volume CI, No. 4April, 2001

Jonathan Bogert

For the year ended Dec. 31, 2000, Local 802 recorded a gain of $261,079, a substantial increase over the gain of $36,509 that had been realized in the prior year. The audited financial statements for the period appear on page 20 of this issue.

The gains for both 2000 and 1999 were significantly improved by write-ups of the local’s investment in Union Labor Life Insurance Co., as explained in Note 8 to the financial statements, and by recognition of income from the Recording and Claims Funds amounting to $100,000 in each year. If these favorable items are excluded, the 2000 gain is reduced to a loss of $1,631, while the 1999 gain is reduced to a loss of $108,082.

Excluding the items pointed out in the preceding paragraph, Total Income for 2000 increased $309,573, or 6.7 percent, over 1999. Substantially all of this increase is attributable to increased Work Dues, primarily in the concert field and from Broadway. The increase in rent income in 2000 reflects the lease for a full year of the portion of the sixth floor of the headquarters building which was improved during 1999.

Total expenses for 2000 increased $203,122, or 4 percent, over 1999. The most significant change was for Legal Fees expense, which increased $102,853 (or 59 percent) due to payments for contract negotiations and organizing.

Departmental Costs, in total, increased only $39,915, or 1.1 percent. Employee compensation costs increased 3.2 percent. In addition, General Office costs included increases in Public Relations and Depreciation expenses, while Organizing costs reflected a decrease in strike and picketing expenses in 2000.

The increase in Occupancy expense includes increases in electricity, fuel oil and property taxes, while Members’ Life Insurance expense reflects an increase in premium rates. However, Local 802 made savings in mortgage interest expense due to prepayments of principal amounting to $100,000 and $250,000 in December 1999 and September 2000, respectively.

Cash flow for the year 2000 was $392,227, compared with a negative $412,682 for 1999. Among the reasons for this improvement were transfers during 2000 from the Recording and Claims Funds for investment purposes, and a reduction in capital spending during 2000 versus 1999, when the expenses were incurred to improve the 6th floor of the headquarters building. Local 802’s Net Assets at Dec. 31, 2000, were just over $4.3 million, up 6 percent over Dec. 31, 1999.