Home » Media Center » The Communicator » November 2017 PEF 39TH Annual Convention Secretary-Treasurers Report
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PEF 39th Annual Convention:
Secretary-Treasurer’s Report

kevin

Kevin Hintz, PEF Secretary-Treasurer

PEF membership, finances in good shape, but could face tough going in 2018

By SHERRY HALBROOK

While PEF is in good shape in terms of membership and income now, the union could face severe challenges to both in the next fiscal year. That concern was at the heart of a report from PEF Secretary-Treasurer Kevin Hintz to the 2017 PEF Convention in late October.

Hintz said state hiring has not kept pace with retirements, but PEF has been largely able to offset that gradual drain on its membership through membership engagement efforts to speak with PS&T employees who did not join the union when they were hired. Those employees have been paying fees, equal to dues, but have not been able to vote on their contracts or in the elections of PEF leaders. In the 2016-17 fiscal year, more than 600 of these feepayers, about 25 percent of them, joined the union. The combined total number of members and feepayers, however, dropped by 567 that year.

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The bulk of PEF’s income is from its members’ dues and the fees from non-members in the state PS&T unit and other bargaining units PEF represents. Since recent contracts negotiated by PEF have increased members’ pay and dues are based on a percentage of their pay, those pay hikes have increased PEF’s income, too.

Hintz said the union has focused on cost reductions that still allow it to maintain and improve services to members. PEF ended the 2016-17 fiscal year on March 31, 2017, with audited end-of-year net assets of nearly $1.3 million, which was an improvement of a little more than $1 million. Hintz said that number is significant especially in determining PEF’s creditworthiness, and the interest rates it would pay if it borrowed money.

Among the steps PEF has taken to improve its financial profile, Hintz cited changes to its health insurance for retired staff, saying, “Our post-retirement liability is down about $700,000.” He also mentioned PEF is sending out a second request to a larger area for proposals from auditing firms to conduct the audit for PEF’s 2017-18 fiscal year, since the response to the first request for proposals that just went to firms in the Capital District was disappointing.

Hintz advised delegates to read the financial department’s report in the 2017 Annual Report to Delegates included in their delegate packets, and the PEF Auditor’s Report on the 2016-17 fiscal year that was published in the September 2017 issue of The Communicator on pages 29-35.

The big worry for the next budget year, 2018-19, he said, is the possibility of an unfavorable decision in the Janus v. AFSCME case before the U.S. Supreme Court or that a national “right to work” bill is enacted. Either of these scenarios might force public employee unions to provide free services to the non-members they represent, which could potentially severely erode membership and income. Another potentially serious threat could come if voters this November 7 approve Proposition 1 that would authorize a state constitutional convention in 2019.

Hintz said he and PEF Director of Finance Valerie O’Dell have been meeting to review and analyze how these threats might affect PEF. He presented slides showing that a loss of just 10 percent of its membership would compel PEF to significantly reduce its expenses, perhaps even at the division level. Greater membership losses eventually could require the union to tap into its special funds, which are currently reserved for such things as contract and state budget fights, just to cover operational costs.

“We could temporarily fill the gap,” Hintz said, “but eventually, we would have to cut expenses. We believe in keeping member services, so we would try to keep our staff. That means the cuts would be made in ‘discretionary expenses.’”

Hintz also emphasized the importance of following strict federal labor law, regulations and guidelines in handling PEF finances and expenses at every level from divisions and committees to the statewide officers. He urged delegates to attend the annual convention workshop to train new division treasurers and council leaders on these issues, and he emphasized the absolute need to submit the actual itemized invoices or receipts that list every purchase or expense to document financial reports or vouchers for reimbursement. He said the delegates must submit their vouchers for convention expenses by December 1. PEF divisions that fail to submit the required budgets and financial and fixed assets reports on time, cannot receive their share of members’ dues until those requirements are met. Air travel for conducting PEF business, must be approved in advance by his office, Hintz said.

Hintz said he is working with a new PEF Financial Compliance Committee appointed by PEF President Wayne Spence to review all of the union’s financial policies and make sure they are up to date and comport with requirements of the federal Labor-Management Reporting and Disclosure Act.

Both Hintz and Spence said they will work with other PEF leaders and staff in the next few months to discuss options and develop plans to ensure PEF is prepared for whatever challenges may come next year. Hintz is required to submit a 2018-19 budget proposal to the PEF Executive Board in early 2018 for action before that fiscal year begins April 1. Once adopted, the board may amend it as needed throughout the fiscal year.

SEE MORE CONVENTION PHOTO GALLERY HERE

Table of Contents – November 2017

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