It’s hard to believe another year has gone by. The financial statements reflect an increase in net assets of $477,303 for 2008 as compared to $529,519 for 2007. The income side was primarily responsible for this surplus.
However, as good as some things were at the beginning of 2008, a reversal was occurring at the end of the year and continuing into 2009.
The expenses were very close to budget for 2008. Benefit costs continue to go up and were $57,000 above budget. There was $47,000 in consulting expenses for the computer projects that we did not budget. Investment income has gone down $97,000 from 2007 to 2008 due to sharp decreases in yields and market conditions; this continues into 2009.
Over the past three years, net assets have increased by $1,632,303 for a total of $7,284,057. This increase helps secure our financial strength as a union in case of future strikes and a difficult economy.
Speaking about a difficult economy brings us to 2009. The preparation of the 2009 budget was very difficult. The problem was not on the expense side but the unknowns on the revenue side.
Aside from the normal increases in payroll and benefits there was a reduction of two positions due to attrition and redistribution of duties that created some savings.
The revenue for 2009 was particularly difficult due to the economy. Using very conservative income numbers, we came up with a budget for 2009 that was basically break-even.
Now that three months of 2009 have taken place, we have seen the first quarter of 2009 reflect a drop of $100,000 in revenue to budget. It does raise some concerns for the remainder of 2009.
The loss in the first quarter of 2009 is almost $40,000. Our largest expense is reflected in salaries and benefits. Our budget for 2009 is $142,000 more than our 2008 budget and still faces increases in health benefits costs and payroll taxes. Our unemployment taxes went up $10,000 alone from a state rate increase.
With the possibility of further losses in 2009, the officers, board and I are looking for ways to reduce costs and to break even for the year or reduce the loss. The revenue is being evaluated and we will determine what the trend is for 2009. I will try to keep all members abreast of any new developments.
In other financial news:
- The 2008 LM-2 was filed on a timely basis in March 2009.
- The strike fund was funded an additional $1.5 million in 2008 from the general fund to bring its fund balance to $2 million.
In conclusion, the 2008 financial results were very favorable and thus further strengthens us financially. I indicated in my 2007 letter that I did not expect these results for 2008.
However a very difficult economy is facing us in 2009. It’s hard to say what will happen and how events will affect Local 802. I can say we will act proactively to address these issues as they occur and to keep the union strong.