10.27.21 – Treasurer’s Department Update

Wednesday, October 27, 2021

During the Treasurer’s Department report at the Fall Board Meeting last week, the membership was updated on APFA’s financial status. March 31, 2021, concluded the first fiscal year since this administration took office. One of this administration’s primary goals was to restore the fiscal responsibility and financial well-being of our Union. We want to highlight the improvements we have accomplished in how we spend our Union’s dues money. Our success has been a collaborative effort by your APFA Leadership and Representatives, and fiscal responsibility continues to be at the forefront of everything we do.

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Required Financial Reports

The 2021 LM-2 (what is an LM-2?) and the annual audit were completed this summer. Below are some key points of what was reported to the U.S. Department of Labor (DOL). The LM-2 and the audit may be found on the APFA website here.

Highlights of our financial status for the fiscal year ending March 31, 2021:

• 34% increase in assets- increase in value of the Negotiations and Negotiations Related Fund (NNRF) as well as our cash balance.
• 21% decrease in liabilities to below $1 million for the first time since 2017 due to decreased hotel costs, Representative trip removals, and a reduced dependency on outside legal counsel.
• 2% increase in total receipts (comprised of dues income, past dues collections, and interest and dividend income).
• 21% decrease in total disbursements and payments paid out (lowest since 2012).
• 6.56% decrease in dues obligated members.

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Cash Position

Our cash balance as of 10/18/2021 was $2,794,897. In the first quarter of the current fiscal year (April 2021-June 2021), our cash increased by 52%.

Since 2016, APFA’s percentage of income spent was on an upward trajectory, culminating with 97% of income spent in the 2019-2020 fiscal year. During the April 2020-March 2021 fiscal year, our percentage of income spent decreased to 64%.

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Metrics

Although we’ve seen a steady decline in membership and an increase in dues arrears due to VEOPs, furloughs, and other attrition, we have successfully decreased our overall spending while still providing the same or more services to the membership.

Some highlights of the Metrics:

• Dues income has decreased by 4%. This is consistent with the 6.5% decrease in membership and 6,972 members in dues arrears totaling $2,443,024.
• Staff & Officer Salaries shows an increase of 10%. This shows an increase due to this fiscal year being a transition year with two sets of Officers on the payroll for the one month of Officer transition and year-end Officer payouts (unused sick time, unused and accrued vacation).
• Trip Removals and Expenses have decreased by 15% due to stricter financial oversight by all APFA Representatives with guidance from the Budget Oversight Committee (BOC).
  • The use of the contractual five-hour-per-day PA/AR removal code (Policy Manual 5.C.1.b) excludes premiums, and serves as a significant cost saving to APFA both pre and post PBS bidding.
  • PA/AR removals for known meetings (such as Board of Director’s Meetings and Executive Committee Meetings) are pre-planned absences placed onto a Union Representative’s schedule before PBS processes, and are counted towards the Representatives PBS award max (Policy Manual 5.C.1.g).
  • We must also recognize the many Representatives who volunteered their time by remaining available to the membership while on the various leaves offered.
• Travel Expenses saw a significant decrease of 80% due to representatives utilizing technology such as Microsoft Teams to meet, collaborate, and serve the membership virtually.
• Headquarters’ Expenses have decreased by 20%. Year over year, the costs of doing business produce an average 2% increase.

 

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Savings

A little over 90% of our dues go to the actual operation of the Union. The other 10%, or $4 of every $41, goes to a mandatory restricted account for negotiations known as the Negotiations and Negotiations Related Fund (NNRF).

The NNRF has grown tremendously, starting at $900,000 in 1995 to its current value of $17,510,345. From September 2020 to September 2021, the NNRF was up 23.1% due to our exemplary partner Lorie Gebbie, Vice President of Investments at O’Neal, Gebbie, and Kratz Financial Group of Wells Fargo Advisors.

Additionally, we have begun to contribute to our non-restricted savings account to rebuild the value to its 2018 high of $1.3 million. In September 2020, $105,000 was transferred to this account, which is currently valued at $120,672.

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The past fiscal year has been an uphill battle to restore the financial status of APFA to what it is today. On the heels of a financial crisis in 2019, we have successfully restored our Union’s finances despite the many challenges we faced over the past 18 months (COVID-related schedule reductions, staffing overages, furloughs, recalls, VEOPs, displacements, base closures, etc.).

This is our Union. All Union financial and administrative records (including full and part time trip removal forms, PA/AR removal forms, invoices, receipts, and check registers) used to pay our Representatives are available for viewing by all members per Section 7.G.1. of the APFA Policy Manual.

 

In Solidarity,

Erik Harris
APFA National Treasurer
[email protected]