As we entered 2010, the financial outlook was grim. The prior year was very challenging for Local 802. We were running a $17,000 deficit in the middle of 2009, which increased to a deficit of $180,000 by the end of the year. The 2010 budget looked even worse, with a projected deficit of over $300,000. While Local 802 does have the resources to absorb this kind of loss on a short term basis, doing so repeatedly over the long term would be untenable.
JANUARY TO JUNE 2010
Now let’s fast-forward to 2010. As we worked our way through the year, containing our costs was paramount to ensure against a ballooning deficit, which could easily have blown through the already disconcerting projected loss of $300,000.
While not a direct correlation, there tends to be less work for Local 802 staff employees when work is down for our members. This resulted in an opportunity to reduce our staff when vacancies occurred through attrition. As staff salaries and benefits are a large part of our expenses at Local 802, saving the expense of filling some positions is particularly effective in controlling costs.
Savings were also generated during the new administration’s search for new legal counsel, a public relations firm and a political action representative. These firms were engaged during the second quarter of the year, resulting in an unforeseen savings during the first quarter.
The income for the first half of the year improved slightly. Recording, Lincoln Center and Broadway each did a little better than expected. The combination of stabilizing income and cost control resulted in a General Fund surplus of $100,053.30 at the end of June 2010 instead of a mid-year projected loss of $187,809.50
JULY TO DECEMBER 2010
Recording Department income softened during the second half of the year. However, Broadway continued to outperform expectations (slightly).
The silver lining came from an unexpected source – our investments.
Due to the uncertainty of the stock market, we can never budget for an increase or decrease in the valuation of our securities. That said, our securities did well through the end of 2010, contributing $132,000 to the bottom line. This number is a combination of realized and unrealized gains. Realized gains (gains actually received) and unrealized gains (gains on paper only – not actualized) are both reported on the financial statement. While you have to account for them, unrealized gains can disappear just as quickly as they occur.
THE BIG PICTURE: ALL OF 2010
Performance for the entire year ended positively with a gain of $514,557 as compared to a loss of $180,538 in 2009.
Contributing to the positive performance was an increase in work dues of $372,310 over the previous year.
Also, our investment performance improved significantly, adding $237,256 to our bottom line in interest, dividends, and realized and unrealized gains.
Our strike fund remains robust at $2,072,214. The Local 802 bylaws require the monies in this fund to be deposited in interest-bearing, insured accounts. Various certificates of deposit with varying maturities (laddered CD’s) are used for this fund. These investments provide safety and easy access when needed.
There is yet another investment that is Local 802’s “jewel in the crown” – our building at 322 West 48th Street in the heart of NYC. No other investment matches what our building does for this union. Our location is perfect. It is within walking distance of where many of our members perform (Broadway, Lincoln Center and Carnegie Hall). The size of the building allows us to utilize six of our seven floors (including the basement) and rent out the top floor. Finally, we paid off our mortgage many years ago, which eliminated that monthly expense. As a practical matter, our building pays dividends, providing meeting and rehearsal space while increasing in value due to NYC’s rising real estate market.
The Local 802 Executive Board recently decided to create a capital budget in addition to our operating budget. In the past, small projects that address the building’s wear and tear issues have been performed on an as-needed basis. Since the building is our most valuable asset, having a long-range plan in place to upgrade and maintain the building is necessary and prudent. When created, the new capital budget will take building upgrades and preventive maintenance into account. Some of the projects will be costly, like replacing some of our plumbing and renovating our bathrooms. Planning is essential. After we assess and prioritize our needs, I will of course inform the membership.
Finally, our LM-2 report was filed with the Department of Labor. You can view it at http://erds.dol-esa.gov/query/getOrgQry.do.