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1 Per capita dues
2 Federation work dues [FWD]
3 Federation initiation fees [FIF]
4 Booking agents’ fees
5 Fines and penalties
6 Interest/dividends and royalties/other income
7 Unclaimed new use monies
8 Revenues (net)
Personnel:
9 Gross wages
10 Statutory payroll taxes
11 Medical and life benefits
12 Pension contributions
13 Leased employees
14 Consultants [Emeriti]
15 Total Personnel
Operating Expenses:
16 IEB meetings
17 Field/local visits
18 Per Capita (affiliation tax) payments
19 AFM convention
20 Printing
21 Donations
22 Office supplies/expenses
23 Postage
24 Rent, utilities and storage
25 Premises maintenance
26 Telecommunications
27 Public relations
28 Conferences/meetings/departmental
29 Bonding/insurance
30 Legal
31 Auditing
32 Negotiations [fees, meetings and materials]
33 Outside services
34 Trusteeship
35 Special projects
36 Depreciation
37 Equipment/systems expense
38 Miscellaneous
39 Total Operating Expenses
40 Net Cost International Musician Publication
41 Total Expenses
42 Surplus (Deficit) from operations
43 Transfer of interest to Reserve Account
44 Add back: Depreciation, a non cash transaction
45 NET SURPLUS [DEFICIT] |
$3,721,400
4,488,800
223,400
22,000
15,000
213,700
225,000
8,909,300
3,327,000
340,000
705,000
335,000
12,000
21,000
4,740,000
75,000
190,000
300,000
280,000
50,000
15,000
170,000
75,000
690,000
25,600
160,000
105,000
220,000
95,000
550,000
75,000
310,000
73,000
25,000
220,000
130,000
35,000
6,000
3,874,600
380,000
8,994,600
(85,300)
(25,000)
130,000
19,700 |
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We
begin this commentary on Florence Nelson’s report with a question:
Why doesn’t the budget document contain a summary of 2002 actual
income and expenses, either in the table or in the text? Having such information
might have helped to put the three year projections in perspective. It
is possible, of course, that this is the very point of not including that
data.
The Secretary-Treasurer’s explanation of the budget begins:
A number of factors were considered before the 2003 budget was adopted
by the IEB in late 2002. In preparation for this budget, consideration
was given to trends, economic conditions, work place problems and all
of those matters that impact on revenue. Second, a complete analysis
of all items related to expense were reviewed. Cuts were made where
appropriate, line items were readjusted, contracts were reviewed, and
other containment measures were considered. The result is the budget
presented on this page.
Cuts, readjustments, containment measures.
It sounded so soothing up until that point. Is this just routine avoidance
of waste? Or are we in a crunch? The Secretary-Treasurer never comes out
and says as much.
Does any reader recall a general alarm having been sounded? Have we had
anything but HappyTalk from the administration in recent memory? A review
of the past fourteen months of the International Musician (not just a
colorful rag, but the Official Journal of the AFM) reveals no talk of
shortages, belt tightening, layoffs, etc.
The only clues we have found are contained in Florence Nelson’s column
in the January issue. First she makes the ludicrous suggestion that each
current member recruit one new member this year. That, she says, will
give us 200,000 members (the actual resulting number depends on how one
counts, but that’s another subject). She suggests this, though, mainly
in the context of gaining legislative influence, not saving the Federation
from financial ruin. Florence also mentions, in that column, that almost
half of the 1154 student members recruited since the 1999 Convention have
dropped out. (Did anyone talk to them to ask why? We do have their phone
numbers, after all.)
That article is the only thing printed in the International Musician that
could be said to point in the general direction of a problem, although
she does not actually say we have a membership crisis.
If everyone did recruit another member, one might wonder what the AFM
will do with another eighty to one hundred thousand, no doubt freelance,
musicians who will get almost nothing in return for joining the union
but a dues bill, a monthly International Musician, and a few discounts
and "benefits," many of which are available elsewhere.
While even the best analysis cannot take into account unforeseen events,
the 2003 budget allows for the continuation of those programs that are
so vital to the Federation. With the continued analysis of staff assignments,
reorganization of work loads and modernization of office practices the
services provided to locals and members should not suffer as a result
of budget cutbacks.
Vital programs? What good would a budget
be that did not allow for continuation of an organization’s vital
programs? What, exactly, ARE those programs? And which ones are not vital?
REVENUES: The revenue projection for 2003 is reduced as a result of
lower interest returns on investments, increased competition from European
orchestras in motion picture scoring, the negative impact of economic
conditions on many symphonies, lower FIFs as a result of local membership
drives and a small reduction in membership.
Revenue projection reduced from what?
From the actual 2002 revenue (as yet unrevealed), from the projection
for 2003 made a year ago, or from something else? No figures are given
for comparison.
To further obscure the extent of the apparent problem, $225,000 that ought
to have been accounted for elsewhere (a transfer of funds from one AFM
account to another) was included as income in this year’s budget, inflating
total projected revenue by that amount.
"lower interest returns on investments"
OK. It’s the market and all that. Benefit of doubt given until we see
the paperwork. (And how much did we have in ULLICO, and why was that not
so minor disaster not reported in the I.M.? Perhaps because it was a NOT
nice story, about some union officials this time, not CEOs, helping themselves
to returns from inflated stocks.)
"increased competition...in motion picture scoring"
Except for the Kirov debacle, a one time outrage, we have not been kept
up to date on the extent of this alleged problem. (No, by “alleged” we
don’t mean it isn’t a problem; we do mean that the AFM has not adequately
provided facts and figures to match the rhetoric.)
"negative impact [of economy] on many symphonies"
Florence gets 10 points for not verbing "impact."
If, as a result of an actual loss of work in these two areas, there was
a negative effect on Federation finances, what would that effect be? Reduced
work dues collected, as a result of less work, would be the correct answer.
In that case, the projected loss should show up in the budget, right?
Let’s go to the map.
In the 2003 column of the three year budget, we find an entry for Federation
work dues. Apparently the AFM expects that only $4,488,800 will be coming
in (on account of aforementioned reduced employment).
How much less is this than what was collected in 2002? Again, we don’t
know, since the Secretary-Treasurer has not revealed those figures. How
much less is it than what was predicted for this year in last year’s forecast?
In the three year budget prepared a year ago, the projection for 2003
was $4,217,724. The amount that same document predicted for 2002 was $4,135,023.
We’re not real sharp with numbers around here, but both of those figures
seem to be LESS than the $4,488,800 projected for, and during, these tougher
times in which we live.
Apparently the Secretary-Treasurer finds the economic outlook sunnier
today than it looked to the 2002 Secretary-Treasurer and the crack analysts
then in the hire of the AFM.
The last hard data we have for work dues income is from the 2001 Annual
Report (not released until late in 2002) According to the report, the
Federation took in $3,955,536 in work dues that year.
But this year we are expecting significantly MORE income from that source.
How does less work translate into more dues collected?
If more dues will likely be collected, how is it that this will lead
to reduced revenues?
"lower FIFs as a result of local membership drives"
The IEB waives the FIF (Federation Initiation Fee) routinely in order
to help locals recruit new members.
If the FIFs are down because new members are joining who don’t have to
pay the FIF, we would still have an increase in new members for whom their
locals will be paying more per capita to the AFM. If no one is joining,
or if the recruitment numbers are extremely low, then waived FIF has nothing
to do with the problem.
"a small reduction in membership"
How small a reduction? Did the number of people leaving seriously exceed
the number of people joining during the recruitment drives?
What ARE these numbers? How many new members signed up? Of those, how
many did not pay FIFs? How many left the AFM? How many members did we
have on the first of the year (2002)? How many on December 31? How many
do we expect to join (with/without FIFs) this year; how many do we expect
to leave this year? Are we talking members, or memberships? If some poor
sucker plays in five orchestras in five different locals and belongs to
all five, then stops working in one orchestra and quits the corresponding
local, does the AFM count that as losing a member? (We have reached Code
Orange on the Migraine Meter)
PERSONNEL: Due to a reduction in staff, reassignment of duties, and
reorganization of office responsibilities, personnel costs were reduced
approximately $430,000 from the 2002 actual costs.
An officer of a small local told the editor
a couple of months ago that the Federation had recently cut five people
from the staff. There must have been more laid off than that. $430,000 (even
taking into account taxes, benefits, etc.) does not equal five average employees’
compensation at the AFM.
How many people were let go, and how does that add up to a savings of $430,000?
Factoring in the savings from layoffs, we are still expecting a deficit
this year. Will there have to be similar staff cuts the next two years to
minimize those even-worse negative numbers? Not that there should be, of
course; we’re just curious.
OPERATING EXPENSES: This budget is based on a number of cost containment
measures that have been implemented to reduce expenses. IEB meetings
have been reduced to three days. In addition, Executive Officers no
longer travel at Federation expense to conferences. Staff travel to
Board meetings has been reduced and lease contracts for office equipment
have been renegotiated. Cell phones have reduced the cost of long distance
calls from employees who travel. Continued monitoring of printing costs,
insurance premiums, special projects, office supplies and travel expenses
have further focused us on additional areas from which to make reductions
in expenses.
Why do the Executive Officers go to local
conferences? Is that an essential part of their job? If so, then we ought
to be paying their expenses. If it’s not official business, though,
why are they there?
The following notes will clarify some of financial lines for the 2003
budget. Please feel free to address any questions you may have on this
budget to the Secretary-Treasurer’s office.
The editor suggests that those taking
Florence up on the offer not wait around for an answer.
History suggests she won't reply any time soon.
April 13, 2003 |
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Following are
the Secretary-Treasurer’s notes that accompany the budget projections.
In the absence of more information, and because some of this is covered
in the commentary to the left, we annotate only one, but we create our
own note for line number 7, which item SHOULD have been explained..
1 2003 Per capita revenue is forecast at 5% less than 2002, based on previous
5-year trend. 8 We anticipate a 3% reduction in total revenue from 2002.
7 (Note by UnionMuse) Unclaimed New Use
Monies have previously been accounted for in the last section of the table,
along with added-back depreciation and interest transfer. It is not income,
it is a transfer from one account to another, but the AFM has counted
it as income in this year's budget, apparently to make the shortfall appear
to be smaller than it actually is.
15 Due to reduction in staff and re-organization of office
responsibilities, personnel costs were reduced approximately $430,000.
18 AFL-CIO [$206,700], DPE [$41,500], FIM [$43,000], CLC [$5,000] and
others [$3,800]
19 $175,000 is required to fully fund June 2003 convention. Total estimated
cost is $420K per convention.
It's a relatively minor point,
but what does this mean? Not enough budgeted? Why not? If $420K is what
it costs to throw a convention, shouldn’t that number show up in the
budget?
In 2004 and 2005, each year has $210,000 budgeted for the convention.
Since the convention occurs every other year, that clearly means that
the cost is split between convention years and non-convention years
(210,000 x 2 = 420,000).
For some reason, the amount budgeted for 2003 is $280,000. That, plus
the $175,000 supposedly still needed, equals $455,000, not $420,000.
Or is this year’s convention paid for with budgeted funds from 2003
and 2004? That would total $490,000, not $420,000. In 2002, according
to projections in the 2001 annual report, $170,000 was budgeted. In
that year’s three year projection, 2003 was budgeted for $175,000.
Why do we need an additional $175,000 to fund the 2003 convention?
Or is that not what the footnote means? In that case, what DOES it mean?
There is undoubtedly some information missing. Otherwise these numbers
don’t add up.
24 Includes rent, LA staff parking, storage, and electricity.
27 Expenses related to trade shows, exhibits, ads, promotional materials,
public relations & press announcements.
28 Players and regional conferences, AFL-CIO/CLC/FIM, staff meetings,
organizing and education.
30 General counsel fees, collection fees, intellectual property rights,
other legal expenses.
32 Printing of contracts and ballots, Pamphlet B and electronic negotiations,
expenses for Bredhoff & Kaiser (fare and accommodations).
33 AFM website [$30,000], NewUse/Receipts/Solomon [$28,000], In-Tune/Wage
chart/ Membership [$9,000].
35 Audio-Video-$80,000; Leadership Conf.-$65,000; Casual-Club-$30,000;
Diversity- $25,000; Canadian-$10,000 and Futures Committee-$10,000.
39 1% less than anticipated total expenses for 2002.
45 Net revenue minus expenses, after adding back depreciation and transferring
out interest to reserve account. |
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