PEP, September 2011: DC 37 2011 budget: Despite deficit, DC 37 maintains strong services

Public Employee Press

DC 37 2011 budget
Despite deficit, DC 37 maintains strong services

By MAF MISBAH UDDIN
Treasurer, District Council 37

The DC 37 Budget Committee, which is composed of the council's Executive Board members, approved a $43.9 million expense budget for 2011 earlier this year, a 4.37 percent increase in spending over 2010's budget of $42.1 million.

Although we expect to run a $4.5 million deficit this year in the operating budget, the union will be able to maintain the same quality services members have enjoyed for years.

We have been putting our expenses under the microscope throughout the year to find savings. To offset the deficit, we can rely on our healthy reserves, which we have accumulated over the years.

Membership down

What accounts for the deficit?

A major factor is the decline of the membership that we expect to hit the union this year because of attrition and layoffs under Mayor Michael R. Bloomberg's austerity budget.

Two other factors are contributing to the shortfall:

the loss of the portion of a nationwide dues increase that is ordinarily allocated to us by our parent union, the American Federation of State, County and Municipal Employees. We won't get that extra assistance, which was nearly $500,000 last year, because AFSCME has not raised the dues in 2011.AFSCME bases its dues hikes on the average wage increases of its 1.6 million members throughout the United States. Because of the recession, AFSCME projects that members' wages will not rise enough in 2011 to justify an additional per capita (per member) dues amount.
a $4.8 million increase in the "post benefits obligations" that we must set aside under accounting rules to guarantee that the union can cover future health insurance and pension obligations to our employees.

DC 37 is taking a number of steps to control costs without hurting members' services.

DC 37 Executive Director Lillian Roberts continues to maintain a hiring freeze. The union will not increase its staffing level and will only decide on filling vacancies resulting from resignations or retirements on a case-by-case basis.

As we prepared the budget, Roberts insisted that all department and division heads reduce their operating expenses by 10 percent, which they generally succeeded in doing. That step has saved nearly $1 million.

Cutting costs

We are also limiting our expenses on conventions and conferences and continuing the policy of controlling the costs of staff training, except where the union is obligated under employee contracts or mandatory skill maintenance or upgrading requirements.

This year, the union's capital budget is $626,874, about $21,500 less than last year. Most of our capital expenditures are for information technology items.

We expect to earn 1 percent in interest income from our $31 million in secured short-term investments. Following AFSCME rules, the union has a conservative investment policy and does not invest in the stock market.

With our earlier savings and our continued monitoring of expenses, the union is on firm financial ground despite the deficit we face this year.