2006 FINANCIAL REVIEW COMMITTEE REPORT
2006 FINANCIAL REVIEW COMMITTEE REPORT
MEBA Headquarters
Washington, D.C
April 24 to April 26, 2006
Dear Brothers and Sisters.
The elected 2006 Financial Committee convened at the MEBA Headquarters from April 24 through April 26, 2006, to review the finances of the MEBA District l-PCD in accordance with the bylaws detailed in Article 6. Section 9(d).
The following elected members were in attendance:
Charles Feist, New Orleans (Chairman)
Dominic Walsh, Baltimore
Robert Fauveil, Houston
Gerald Bellows. San Francisco
Larry Brown, Seattle
Joseph McElhinney, New York Alternate)
The FRC reviewed the previous three years FRC reports. Many of the recommendations of these reports have been implemented. The 2005 LM-2 Report and the audited financial statement were also made available and examined. The audit was conducted by the firm of Buchbinder, Tunick & Company, LLP, for the Independent Auditor Report. The report was issued without qualifications as a fair representation of the Union’s financial situation. A status of “Unqualified Auditors Opinion” was issued.
MEBA Net Worth and Budget Projections
The Revenues of $10,586,436 and Expenses of $10,196,716 result in the Union finishing the year in the “black” with $389,720. This increase includes a one time windfall of $314,972 in Sealand/Crowley interest.
The Union Net Assets at the end of 2005 are reported as $12,521,524. This figure is an increase from $12,057,685 from the previous year.
These figures are based on Total Assets reported of $17,057,099 with Total Liabilities reported of $4,535,575 at the end of 2005.
The 2306 Budget Projections are as follows:
Estimated Revenue: $10.283,698
Estimated Expenses: $10.283,698
In 2005, $3.9 million in vacation dues were projected, with an actual amount of $3.4 million received. For the year 2006, a figure of $3.6 million is used for budget projections.
The Sale of the San Francisco Union Hall
The process of the sale of the San Francisco Hall and subsequent move to a new hall in Oakland continued in 2005.
A business loan of $2.8 million was obtained. $1.7 million was used for the purchase of the Oakland hail. $960,141 was used to pay off the New Jersey Hall. which is now owned by the MEBA. This transpired as follows:
On March 24, 2005, the District refinanced this loan (New Jersey Hall) with a term loan single payment for $2.8 million. This loan is due in full when the District obtains a mortgage loan secured by the Oakland property, the date the District sells its Union hall in San Francisco, CA or May 24, 2010. This loan bears interest at 1.5% plus LIBOR and the interest is due monthly and is secured by a first priority security interest in all securities, financial assets and other investment property of the District.
There are additional restrictions in this loan including debt service coverage and the making of loans and advances. Also, the District pledges 24 months of debt service reserve in the amount of $168,000 of side collateral for this loan.
The sale of the San Francisco Hall is scheduled to be finalized this summer. The sale price has not been determined at this time, due to San Francisco Planning Commission regulations which may lead to a higher sale price.
The minimum amount for the sale of this Hall should not be lower than $4.8 million, with the possibility of $6.8 to $7 million, pending approval of the building plans by the City Planning Commission.
Joint Employment Committee
The sum of $3,605.581 was disbursed from the JEC Fund to the MEBA. This fund was
depleted approximately $2.6 million for the purpose of running the union halls.
The estimated contributions from contractual negotiations were close to $1 million.
The remaining principal in the JEC fund is just under $9 million.
Summary
The FRC has determined that the union is operating on solid financial footing. The expenses are reasonable considering projected revenues and recent history of expenses.
FRC Recommendations
1)All members are encouraged to Continue contributions to the Political Action Fund. These contributions will greatly assist in organizing efforts and obtaining new work. Current income is about half of what is necessary for effective political action.
2)The FRC recommends that the union keep in mind the impending higher costs of travel and plan accordingly considering the necessity of early booking, where possible. This includes electing the FRC one month earlier to book travel at lower rates. The use of conference calls should be considered as an alternative to frequent travel for face to face meetings. Travel expenses should be looked at for savings.
3)The FRC realizes the increasing costs of operating union halls, which are primarily funded through the JEC. With this is mind, all future negotiating on contracts must address contributions which will cover these expenses without reducing the principal of the JEC. The union has done a commendable job in the recent past in obtaining funding for this.
4)The intent of the DEC is to set aside $250,000 of the income from the sale of the San Francisco Hall for the Good & Welfare Fund and $250,000 for a Strike Fund. It is recommended that these funds be monitored by the FRC during the annual reviews.
DEC Compensation
By a vote of 5-0, the FRC has voted to increase the wages of the DEC (President, Secretary-Treasurer, and three Vice-Presidents) by 3%.
The FRC would like to extend many thanks for the following people for their support and efforts with this committee: Ann Holmes, Eric Pittman. William Doyle. Marco Cannistraro, Joe Musher, and all Headquarters Staff.
Fraternally Submitted:
Signed and dated by FRC Committee Members and Alternate
posted by wff @ 9:04 AM
3 comments
3 Comments:
Let us do a little dissecting and highlight a few points.
2006 Financial Review Committee Report
MEBA Net Worth and Budget Projections
All of the information under this section is available on line or at the Union Halls as reported in the LM-2 Documents required by the Federal Government for all Unions to file and make public.
The Sale of the San Francisco Union Hall
The process of the sale of the San Francisco Hall and subsequent move to a new hall in Oakland continued in 2005. Estimated move to be in late summer of 2006
The LM-2 for 2005 show the as of 12-31-05 $2.2 million had already been spent on the new Hall site in Oakland. Total total cost of the new facility to be split between proceeds from sale of SF Hall property, JEC Fund, The National MEBA, and the Medical Plan. Not sure how the split will be divided but this was my understanding of how the new Hall and Medical Clinic would be financed when the subject was brought up at the January and February meetings in San Francisco.
Joint Employment Committee
The remaining principal in the JEC fund is just under $9 million.
At one time the value of this JEC fund was close to $20 million dollars. If indeed it cost $3.6 to run the Halls in 2005 while contributions were only $2.6 million then this fund will not last much longer. The effort by the DEC to share certain Hall properties with the MMP may solve this funding problem.
Summary
The FRC has determined that the union is operating on solid financial footing. The expenses are reasonable considering projected revenues and recent history of expenses.
While honorable and well intentioned individuals the FRC members are shown what the DEC wants them to see and most of that information is public knowledge.
FRC Recommendations
2) The FRC recommends that the union keep in mind the impending higher costs of travel.
Basic expense account reimbursement for 2005 was $$89,225. This ranged from Bud Jacque at $28,769 to Lou Marciello at $1,566. This total does not include cash reimbursements and other listings on the LM-2 report that add up to about $160,000. Then add in direct charges to Airlines through the Travel agents that are used either in Baltimore or Washington and the Union Credit Card that they all carry then the sky becomes the limit in the expense account category.
3) The FRC realizes the increasing costs of operating union halls, which are primarily funded through the JEC.
See comments under JEC Heading.
4) The intent of the DEC is to set aside $250,000 of the income from the sale of the San Francisco Hall for the Good & Welfare Fund and $250,000 for a Strike Fund. It is recommended that these funds be monitored by the FRC during the annual reviews.
At the San Francisco Union Meeting along with the recommendations sent to Davis regarding the Medical Plan prior to the February Trustees Meeting the Brotherhood recommended that $250,000 from the sale of the SF property go to Good and Welfare and $750,000 go to the Medical Plan.
DEC Compensation
By a vote of 5-0, the FRC has voted to increase the wages of the DEC (President, Secretary-Treasurer, and three Vice-Presidents) by 3%.
Current Salary:
Union President: $191,754
Sec-Tres: $152,348
Exec. VP: $136,501
The FRC would like to extend many thanks for the following people for their support and efforts with this committee: Ann Holmes, Eric Pittman. William Doyle. Marco Cannistraro, Joe Musher, and all Headquarters Staff.
Fraternally Submitted:
Rollover Ron and his band of Deceipticons
After several attempts and inquiries, I was finally able to obtain a copy of the Financial Review Committee report that will be presented this week at the various meetings around the country. I also attended the Seattle Meeting where this FRC was presented to the Membership.
Several items should be of great interest to all members.
First, as in the past years of the Davis administration, the FRC voted to increase the wages of the DEC by 3%. When Ron Davis became president, the annual salary of the D1 president was approximately $150,000 and now Davis's salary will be approximately $190,000. How many Chief Engineers or Captains have received a $40,000 increase over the past 3 years.
Next, I notice that the JEC fund (Joint Employment Committee) which was over $19 million when Davis took office is now under $9 million. Where did $10 million of our money go?? Before Davis took office, the JEC fund due to investment income was self-funding and required no contractual contributions.
Now, all the Davis contracts call for JEC funding in the amount of $1 per man per day plus
Feinberg.
According to the FRC report, the 2005 JEC funding was approximately (it is May of 06 they don’t know the amount) $1 million from contractual negotiations. In my opinion, this was money that should have gone into the medical plan where it would serve ALL members and retirees. But Davis and crew have spent this JEC fund down so that it only has about 4 years left.
The FRC report further states that many recommendations of pasts FRC reports have been implemented but I find it very interesting that NONE of these "implemented recommendations" are mentioned or listed for membership review.
The report offers some details concerning the sale of the San Francisco Union Hall. This includes the intent of the DEC to use $250,000 from the sale of the hall to set up a Strike Fund. With the 10 year contracts that the current regime negotiated and the NLRB ruling(region 20 San Francisco) that MEBA officers are a Union of Supervisors and not covered by National Labor Relations Act, what is the "real" purpose of the Strike Fund?
I have many other questions for the Financial Review Committee. I hope you do also. Get the answers you deserve and remember, it's YOUR money and YOUR union.
Mike Jewell
It sounds like the Admiral is setting himself up with another bank account to loot. The AMC will move to the HQ Building and come under his direct control.
So next year the FRC will find that the Union is well-run because once again they will be deprived of the complete picture. At some point in the future the Members will find out that years of FRC reports have been nothing but a sham and the once considerable wealth of the MEBA has been squandered.
The Masked Skulker
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