I am pleased to report that Local 802 finished the year with a net gain at the end of 2007. This positive year-end position was far from a slam dunk in that the interruption of work on Broadway during the labor dispute between the League and IATSE Local 1 left a big question mark concerning its impact on our finances. As we all know, the dispute lasted longer than anyone would have liked, resulting in a considerable depletion of our strike fund.
Nevertheless, we ended 2007 with a surplus of $529,519. While not as robust as 2006, all things considered we had a respectable year.
An additional expenditure from the strike fund will occur in 2008 as a result of the Executive Board’s decision to ensure that Local 802 musicians will not fall off the health benefits plan as a result of the stagehands’ strike.
That strike underscored the need to increase our strike fund. The fund has now been replenished back to the $500,000 level (as established in the bylaws). However, this level of funding has not been increased for many years. Our goal should be to increase the fund so it can provide musicians with an adequate amount of support during a prolonged labor dispute. The Strike Fund Subcommittee will soon be proposing a change in the strike fund bylaw language that will do just that. The proposed change will provide a meaningful benefit which is expected to bridge the seven-week gap between the initial loss of wages and unemployment eligibility. The subcommittee will be making a recommendation to the Executive Board shortly. It is my expectation that we will be offering a change in the strike fund bylaw language to the membership for your consideration at a future membership meeting.
In the past we have had a significant amount of breathing room between anticipated revenue and budgeted expenses. This year (2008) we are running very close to budget. We anticipate the January to June and year-end net assets to be lower than recent years due to the filling of most job positions here at the union. Also, we are paying increased health premiums for our employees, resulting in additional expenses.
This year we are also incurring some capital expenses.
Recently we have upgraded our computer servers and we brought in a T1 line for greater capacity and speed.
In addition, we have engaged a computer consultant to assess our software needs. His charge is to prepare a request for proposal to determine whether an outside firm can bring us to our goal of meeting our software needs while providing increased interdepartmental compatibility and supportability well into the foreseeable future.
All this does not come cheap, but it is required if we are to continue to serve our membership properly. While struggling to upgrade our proprietary software we have come to the realization that a more comprehensive approach is necessary. It is our goal to move this project forward in an efficient and timely fashion.
You may notice in the financial reports on pages 18 & 19 (in the printed version of Allegro) that the 2006 financial numbers have been restated. In an effort to be more transparent, we have now included “work dues receivable” in our financial statements, which were not stated in the financials previously. This is due to our moving from a “modified accrual” basis of accounting to an “accrual” basis as recommended by our accountants, Gould, Kobrick and Schlapp, P.C. Please see an explanation of the resulting effects in the financial notes (specifically, on note #9). Should you have any questions, do not hesitate to give me a call.
While Local 802 is currently in good financial health, the effects of a potential recession remain unknown at this time. We shall continue to monitor the economy and its effect on the music industry. In the event a mid-course correction is required, we remain prepared to act.