In the printed issue are the audited financial report for the period Jan. 1, 2012 to Dec. 31, 2012. Members will note a modest increase in nearly every asset category. In the revenue category, work dues and basic dues are up by nearly a half million dollars. Our investments have grown, reflecting the recent stock market rise and an overall increase in Local 802’s cash position. The details of the investment data are well explained in Cathy Camiolo’s article below One other thing to mention: the financial reports are not designed to track Local 802’s actual budget. Instead, they form a snapshot of our position at year’s end. However, I can report that we are ahead of our 2013 budget projections.
In previous audit articles, I mentioned that the entire Local 802 accounting system has changed over the past year. The new system provides for more consistent and accurate reporting and avoids certain prior practices which tended to exaggerate fluctuations. Thankfully, this audit reflects those positive changes, and shows Local 802 to be in a stable economic state. Considering the overall national economy, stability really equals success.
There is an important aspect of Local 802’s investment policy that does not appear in the financial report, which all members should be aware of. Local 802 employs Morgan Stanley to advise us on investments. Without explicit direction from a client, Morgan Stanley would, of course, maximize returns to the best of its ability. Over time, Local 802 has informed Morgan Stanley about our acceptable risk assessment. Those risks, especially as to the Strike Fund, are dictated by the Local 802 bylaws, and prohibit the local from placing any of those assets at serious risk. The Strike Fund is covered by FDIC insurance. All other investments are diversified in a way that minimizes risk as much as possible.
We have also asked Morgan Stanley to respect ideological and political limitations as to potential investments that we, as a labor organization, cannot support. Thus, our current instructions to Morgan Stanley include a prohibition of investment in Cablevision and Walmart, as well as restrictions regarding a few categories of international investments that specifically refer to human rights violations. (Why don’t we invest in Cablevision, by the way? It’s owned by James Dolan, who also has interest in Madison Square Garden and Radio City Music Hall. It’s too close for comfort, since our musicians play in both of those venues.)
Having drawn those ideological lines, it seems that Local 802’s return on investments has not been affected to any observable degree. In fact, our return has been excellent. Apparently, an institution can be respectful of its members’ money, can be conservative in placing that money at low risk, can take an ideological stance, and can still see a substantial and positive return!
We all live in a professional music world that, to many members, seems to be declining. Considering the financial report in this issue, I would advise members to keep the faith – Local 802 is in good shape. And if we are in good shape, we will always be able to provide dedicated service to our members. That is always our pledge. Best to all.