Public Employee Press

A tight budget for a tough year

By MAF MISBAH UDDIN
Treasurer, District Council 37

In light of the bleak outlook for the economy, we are making a special effort this year to impose tight spending controls.

The $41.3 million operating expense for 2009 represents a modest 3.5 percent increase over the previous year. The budget growth, which is in line with the rate of inflation, is less than the two annual 4 percent pay hikes in the union’s new economic agreement with the city.

The DC 37 Executive Board,which serves as the union’s Budget Committee, approved the new budget Nov. 6. I believe that this is the earliest the council has ever approved its spending plan.

We anticipate running a small deficit of $485,815 this year. This is a consequence of the country’s deteriorating economy. But it is not a cause for alarm because the union’s finances are fundamentally strong.

Specifically, the shortfall is the result of a projected decrease of slightly more than $750,000 in short-term investment income for this year. Unlike other institutional investors and 401(k) account holders, our short-term investments are fully secured. But the dramatic fall in the interest rate has led to a substantial decline in our interest income compared to previous years.

Overall, our union is very healthy, fiscally speaking, with a $25 million safe and secure reserve, enough to cover the deficit. We have a net worth of $9 million after covering employees’ health, pension and other liabilities.

No dues increase
Long-time members should remember that about a dozen years ago, before DC 37 Executive Director Lillian Roberts and her team assumed office, the reserve was virtually depleted and DC 37 had to increase dues, something the union hasn’t needed to do since.

Though I would characterize our spending plan as “conservative,” I want to assure members that we have adequate funding to guarantee that DC 37 will be able to continue the good services it has provided in recent years.

Importantly, we are continuing new services and projects initiated under last year’s budget. The Organizing Dept. has a number of “targets” where it is working to expand our membership. The Jobs Training Program Division will continue to assist members enrolled in the city’s JTP program who hope to find permanent positions in the municipal workforce. A full-time paid managerial-level employee was added to the housing programto make it more accessible to members, especially those who are working to benefit from the program immediately.
The budget, of course, continues the union’s long-standing support for its traditional services and activities, including political action, communications and publications, research and negotiations, legal defense, quality of work life programs, workplace protection and safety, and grievances.

Our spending plan anticipates that the membership will be the same as it was in 2008, when we had 124,500 members. This may be a risky assumption given the city’s fiscal troubles. But if city cuts lead to a significant reduction in membership, we should be able to make up for the decreased dues by drawing from our reserves and further tightening our spending controls.

Because of the uncertain economic times and our ongoing effort to incorporate new fiscally responsible procedures into our day-to-day operations, we have taken a number of important steps and adopted innovative practices to safeguard the union’s financial health and encourage greater efficiency in providing services. Incidentally, we have also encouraged our locals to adopt more prudent practices. Last year, 18 locals took advantage of treasurers workshops, and we are encouraging others to participate in the training this year.

In October, Executive Director Roberts, recognizing the economic crisis, announced a hiring freeze at the union, and we established a Job Vacancy Committee. Under this policy, new hiring remains frozen, and the committee is responsible for recommending any back-filling of vacancies to the executive director, who has the final say on increases in personnel costs.

The 2009 budget also includes a “poor economy contingency plan,” which allows for budget modifications to operating and personnel costs.

Capital budget
In addition to approving the operating budget, the Finance Committee in November passed the $900,000 capital budget for 2009.

We now have an “Obsolescence Control” plan. This establishes a schedule for replacing capital equipment, such as photocopying and fax machines, as well as furniture and computers. Under our recently established criteria, we are requiring three bids for major purchases.

Besides copiers, faxes and furniture, the capital budget largely funds major information technology items. This year, we will also be making important expenditures to upgrade our Microsoft exchange software from 2003 to 2007. In addition, we will be purchasing Enterprise E-mail archiving and encryption software.

Before the budget approval in November, we worked very closely with the accounting and executive staff to evaluate spending proposals from our division and department heads. We are very appreciative that everyone involved took the budget process very seriously and searched for savings in these difficult economic times.

I’m positive that with everyone continuing to work together, we will be able to overcome any financial difficulties during the nationwide ecconomic downturn.