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By MAF MISBAH UDDIN
Treasurer, DC 37

The $34.5 million 2004 budget approved this summer addresses our deficit and holds down costs while enabling the union to maintain all the services we provide to our members. After becoming your treasurer on Jan. 27, I engaged in the budget process. This starts with many discussions with the executive director regarding the goal of delivering a budget to the Executive Board. In the process, I met with all the department and division heads to obtain their input and direction for identifying areas where we could achieve savings.

Once this process was completed, I presented the budget to the council’s Committee on Budget on April 21. After lengthy deliberations, the Executive Board approved the 2004 budget on July 7. The 2004 budgeted net loss is about $250,000 below the 2003 actual net loss.

Cutting our deficit
While we continue to face a deficit, we managed to reduce the shortfall from over $1 million last year to $840,000. This was done while DC 37 faced a membership decline and a corresponding decrease in dues. In spite of fixed costs comprising about 70 percent of the budget, we were able to reduce overall expenses by $640,000.

The membership has declined from 127,061 in 2002 to 117,859 today due to the attrition over the last few years and layoffs the union has endured as a result of the city budget cuts caused by conservative public policies of the federal, state and local governments. The decline in membership has resulted in the loss of about $2.6 million in dues from 2002 to 2004.

As treasurer, my goal is to have a balanced budget while maintaining the union’s vital services. As I mentioned earlier, we have a deficit in the current budget; however, members should not worry because this shortfall does not present an immediate problem since we have a cushion of nearly $9 million in reserves.

By monitoring our spending very closely, instituting strict hiring practices, slashing expenses from conventions and conferences, reducing contributions for politics and community organizations, requiring prior approval of new expenditures exceeding $2,000 and adopting tighter administrative control over our day-to-day expenses, we have placed the union on the road to a balanced budget.

The budget deliberations were heated at times. But I would like to thank the Executive Board members for their hard work during this painstaking process. I would also like to thank the Accounting Dept. staff and the directors of the union’s divisions and departments for their participation and cooperation.

Next year, I want to revisit some suggestions for addressing the deficit that the board rejected this year. First, we need to examine whether we can reduce the amount allocated for future obligations for retired employees’ health and welfare benefits.

Under rules adopted by the Financial Accounting Standards Board in 1992, employers must budget for the post-retirement liabilities of their employees. DC 37 is now meeting this obligation to its employees on a pay-as-you go basis. It is also meeting the FASB requirement by allocating $1.8 million a year. In this area alone, we have already accumulated nearly $13 million in liabilities.

Second, since 1999 the AFSCME per capita has increased by $1 for full-time and 75 cents for part-time employees. DC 37 has been absorbing this expense on the locals’ behalf, costing over $7 million to date.

Third, as a result of agreements reached years ago, there are union locals that receive dues rebates from DC 37 to provide some services to their members. As a matter of fairness, those rebates should be renegotiated to reflect the decline in their respective memberships.

Budget earlier next year
Fourth, in 2003, the union expanded the Executive Board from 20 to 25 members, adding $90,000 a year to the expense of board stipends. We should eliminate that extra cost by reallocating the $360,000 originally set aside for the 20 positions to the current 25 members.

I plan to present next year’s budget far earlier than it is traditionally presented. This will give the Committee on Budget ample time to discuss and decide on the newly proposed budget for 2005.

The budget challenges we face are similar to those confronting other unions during a period in which the public sector is under attack and the labor movement struggles to survive in a hostile political climate. But I am confident that the tough decisions we are making will ensure DC 37’s long-term financial health and protect the membership services that are the envy of the union movement.