Looking Back at the First Six Months of 2008

Controller's Report

Volume CVIII, No. 11November, 2008

Ira Goldman

The increase in net assets of $393,163 in June 2008 compared to $513,884 in June 2007 is a sign of tightening the belt. The income of $3,182,480 compared to $3,173,222 for June 2008 and June 2007, although showing a small increase, does not keep pace with the growing expenses.

Membership has decreased by 485 members in 2008, thus causing a decline in basic dues revenue. Work dues, although also showing a small increase from last year, are less than budgeted and are of some concern for meeting the budget for the remainder of 2008. Other income has decreased $44,802 from 2007 to 2008 as well. Investment income has fallen due to some losses in investments and lower yields. We had taken most of our investments out of equities to avoid any additional losses from this volatile market and put them primarily in money market accounts and T-bills for safekeeping. Although not receiving high yields, they are not subjected to this economic crisis.

Expenses for 2008 are pretty much in line with the budget. Total expenses are $22,482.62 under budget in the general fund. Although this is the overall number, there are line items of concern. The benefit expenses are $29,035 over budget due to increased health care costs. Also, consulting costs for the computer projects were not budgeted for 2008 because they were unknown at the time. Other items of interest are increased electrical and fuel costs due to rate increases and more usage due to a colder winter. Our legal expenses thus far are $24,124 under budget due to less need at this time.

The differences in expenses between 2007 and 2008 are primarily due to salary and benefit increases. Legal expenses are reduced by over $75,000 due to fewer contract negotiations in 2008 as compared to 2007.

The outlook for year-end 2008 is cautious. Although the first six months have been better than budget, but not as good as last year, the next six months still pose challenges. On the income side, there is uncertainty surrounding both work dues and basic dues. Investment income will continue to be below budget for 2008 due to low yields.

It is hoped that expenses will continue to be in line with the budgeted numbers and are being well monitored and controlled.

The first six months of 2007 show an increase in net assets of $513,884 compared to the annual result for 2007 of $529,519. The first six months of 2008 had an increase of $393,163.

The next six months is budgeted for an increase of $33,532 in net assets.

No one has a crystal ball into the future, but all seems good for 2008. Of course the income is never a given and there is always some uncertainty.

Planning for 2009 began in October. Once again, salary and benefits will go up. And, as usual, the income is not a certainty. Recording income is facing some decline and there are significant computer projects for 2009. I will be working with the officers and department heads to have a balanced budget for 2009.