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Establishing foundations for PEF’s future growth, union excellence

By KATE MOSTACCIO

In her third and final year in office, PEF Secretary-Treasurer Kay Alison Wilkie detailed the solid foundations her office has established over the last three years toward growing the union’s future, and the future of the labor movement.

“As we know, in recent history and currently with the backdrop of increasing violence, as well as conflict and partisanship, we’ve had a very challenging context for our work as unionists,” Wilkie said during her report on October 20 to delegates at PEF’s annual convention. “We have faced challenges internally and externally at PEF when we started working together to lay this foundation in 2017 and 2018.”

Improved processes, policies

Wilkie said the Secretary-Treasurer’s Office has focused on three themes throughout her term: Foundations of the union movement and PEF’s core values; focus on strategic planning and implementation, and believing in PEF’s future growth based on our vision of union excellence and justice.

“One of the key foundational pieces was the series of mandates from the 2017 Convention that called on us to dramatically improve financial oversight and ethical practices and policies,” Wilkie said.

Bringing in a new external auditor, the Bonadio Group, selected by competitive bid in 2017, has been key in PEF’s tightened financial oversight and improved operational accuracy. PEF also established cost-savings measures by strategic use of Employee Organizational Leave (EOL), decreasing annual expense levels by more than $100,000 in 2020 compared to 2018. The union created a code of conduct for PEF elected officials and established policies related to ensuring coherent, ethical, transparent and effective financial management and required the Secretary-Treasurer to meet with the Budget Advisory Committee prior to sending the proposed budget to the Executive Board for approval.

“We’ve gone above and beyond the calling of these resolutions,” Wilkie said.

The Budget Advisory Committee was combined with the Financial Compliance Committee, with the joint committee chaired by a member of the Executive Board and including the Secretary-Treasurer, Trustees, the internal auditor, the director of finance, a retiree, and other key staff.

“It’s a very balanced committee,” Wilkie said. “It has been a very powerful tool for the Secretary-Treasurer’s Office and PEF overall to improve our financial accountability, transparency and our work overall.”

During Wilkie’s term, PEF has also  improved purchasing, Requests for Proposals (RFPs) and contract management processes as required by a 2017 Convention resolution.

“When I started as Secretary-Treasurer, we created a purchasing policy based on union best practices and implemented it,” Wilkie said. “It has been very helpful to our RFP and purchasing processes. It’s consolidated and clarified guidance for our leaders and managers.”

Division finance procedures saw improvements as well. New policies and guidance, informed by PEF’s commitment to ethical financial management, and based on union best practices validated by SEIU and AFT, were established for committees, regions, reimbursements, giveaways, scholarships, E-Board member items and virtual meetings.

“Early on, we created rules for Divisions,” Wilkie said. “Some of them new, most of them clarified from the past, to streamline how Divisions would form and manage their finances.”

Among the Secretary-Treasurer’s actions was obtaining Executive Board approval for restoring more generous per capitas for larger Divisions.

“It was very much needed for membership engagement,” Wilkie said.

Wilkie said there has been an increased emphasis on reaching out to members through attendance at Divisional and Regional membership meetings, in order to provide guidance on Division structure, finances, elections and strategies for successfully recruiting, engaging, and retaining members. In addition, PEF’s MIS team implemented major data improvements and automations to assist Divisions, sending out quarterly reports with detailed member and non-member data.

“This data is critical to empower leaders to engage, recruit, orient and retain PEF members,” Wilkie said.

Some improvements are already visible.

“In June 2018, about 60 percent of PEF Divisions were not in good standing,” Wilkie said. “By February 2020, before COVID, a majority, 79 percent, were in good standing, five were improving and only 16 were not in good standing. That’s a dramatic turnaround made possible by great teamwork.”

Customized training for Division purchase cards and checkbooks, as well as staff attendance as staff at regional leadership conferences, has helped the Secretary-Treasurer’s Office and Division Finance improve Division accounting and financial practices.

“We carefully analyzed the causes and issues for Divisions related to them being not in good standing and that allowed us to rectify some of the issues around documentation, elections and processes,” Wilkie said. “That allowed us to help return many Divisions to good standing.”

Improving the budget process

“Budgets are fundamentally strategic documents and they illustrate our priorities and choices,” Wilkie said. “It’s worth recapping how our PEF resources have been dedicated to the six key strategic goals that we have created.”

Those goals are:

• Sustain and expand membership through engagement and communication;
• Secure and enforce a great contract, as members deserve;
• Assist members confronting employment concerns and civil service erosion;
• Fight privatization and make the case for quality public services;
• Create workplaces free of bigotry and discrimination, and
• Empower our political agenda to advance PEF’s values and interests.

“Our work in the Secretary-Treasurer’s Office has also focused on strategic planning and implementation,” Wilkie said. “We are focused on ethical and honest financial management of your dues, to strengthen PEF’s members’ involvement, neutralize external threats and build PEF power to transcend the challenges ahead.

“We’ve used financial planning to fuel our success, improving operations and communications systems; and providing for capital improvements, maintenance, repairs, IT upgrades and contingencies,” Wilkie said.

PEF provided improved financial guidance for committees on lodging, travel, meal expenses and EOL; developed guidance for purchase and giveaway distributions by PEF elected officials; and updated financial guidance and policies for PEF Regional Coordinators.

Behind-the-scenes work at PEF improved effectiveness. The union archived more than 17 years worth of data, improving the operating effectiveness of accounting software, and improved timeliness of the month-end closing process, decreasing turnaround time for members’ travel expense reimbursements.

Membership

The vitality of PEF membership is crucial to PEF’s financial future.

“We all know how much membership matters to PEF and to our financial stability,” Wilkie said.

Where PEF would usually see an increase in the summer months due to seasonal hiring fluctuations, COVID-19, the state hiring freeze and growing attrition have taken a toll on membership numbers.

“We see a steady decline of members over the year,” Wilkie said. “We started 2019 with 51,866 members. At the end of September 2020, we had 51,060 members and 2,781 nonmembers in the PS&T unit. The number of nonmembers went down about 200. Still, we have work to do.”

The decline has been evident over the last decade. In October 2010, there were 54,921 PEF members.

PEF is taking steps to address the decline.

“We’ve been engaging actively and strategically to encourage former feepayers, now nonmembers, to join our union,” Wilkie said. “That work has been impressive and it demonstrates our strength. Nonmembers have dropped from 3,011 to 2,781. That’s impressive in light of the kind of attacks we’ve faced.”

Post-Janus, there have been 9,854 new hires in the PS&T unit. Everyone hired since the decision is brought into state service as a nonmember and must be converted to a union member. The number who opted to join PEF was 8,029, an 81 percent conversion rate, Wilkie said.

In its Janus v. American Federation of State, County, and Municipal Employees (AFSCME) decision in June 2018, the Supreme Court ruled in a 5–4 decision that the application of public sector union fees to non-members is a violation of the First Amendment.

“This rate is impressive,” she said. “However, given the constraints we’re facing on membership engagement in many agencies and the overall anti-union sentiment amongst many in our world these days, we have to do better and we have to get more active.”

Over the past 50 years, union membership has dropped from a third of all workers in the United States to about 10 percent in 2019. Public sector workers, while enduring relentless attacks, remain the mainstay of unionization, Wilkie said. New York has fallen to 23 percent of workers in unions, suffering major losses.

“Some of this is attributable to New York State sharply curtailing its public sector,” Wilkie said. “And as we all experienced, that reduction and short-changing of the public workforce in New York has had a disastrous impact during the COVID crisis.”

There is hope on the horizon as public opinion is slowly changing.

“Thanks to increased and widespread awareness and activism, the tide of public opinion is shifting and union power is increasing,” Wilkie said. “Public polling just before Labor Day 2020 found that 64 percent of Americans approve of unions. This is one of the highest ratings ever recorded by Gallup in 50 years.”

Looking at the numbers

PEF’s overall financial position continues to strengthen compared to previous years, Wilkie reported. Total assets at the end of the fiscal year on March 31, 2020, including cash, investments, receivables and plant, property and equipment, increased to $22.8 million from $22.5 million in 2019.

“The value of PEF property, plant and equipment increased about $1 million, directly attributable to our infrastructure and capital improvements at headquarters and in Information Technology.”

Total liabilities, including accounts payable, EOL, vacation, lease and post-retirement benefits, rose to $16.8 million, up fro $15.1 million last year.

PEF’s net asset position, impacted by one-time actuarial adjustments to post-retirement liabilities related to the successful conclusion of the USW contract with PEF staff, was $5.96 million, compared to $7.39 million last year.

“At the end of the last fiscal year, PEF faced disruptions to membership levels given the imposition of the COVID-related hiring freeze and attrition impacts,” Wilkie said. “This unanticipated threat followed the lingering impacts of the Janus decision, and other anti-union attacks. However, thanks to the commitment of the vast majority of PEF members to remaining Union Strong and actively engaging with our union, we remain in a financially stable place.”

Staffing improvements

The Secretary-Treasurer’s Office made improvements to staffing, creating collaborative teams, better aligning personnel, and bolstering internal auditing. The position of statewide facilities manager was created and filled in 2017, going a long way to improve spending on infrastructure and facilities.

“That position and its work have been critical to not just saving tremendous amounts of money by avoiding exorbitant emergency repairs to aging infrastructure at PEF headquarters, but also the skill of our statewide facilities manager has meant we have been able to conduct major improvements at regional offices and infrastructure improvements at PEF headquarters in Latham, N.Y.”

In May 2019, PEF launched its Special Events team, providing expertise on logistical arrangements for Conventions, quarterly Executive Board meetings, labor/management and health and safety meetings, committee meetings, conferences, the New York State Fair and other events.

During the pandemic, the team worked intensively on virtual meetings and helping administer the PEF Relief Fund to assist frontline health care workers.

“They handled training and oversight of over 700 Zoom calls with over 6,000 participants,” Wilkie said.

Looking ahead

“PEF’s vision for the future is our guiding light,” Wilkie said. “PEF’s intensive membership engagement and organizing outreach, coupled with the wisdom of tens of thousands of PS&T employees choosing to stay on the side of Union Strong, means that PEF has mitigated most potential damage thus far, to survive and thrive.”

The past several years have shown PEF is capable of confronting both anticipated and unprecedented threats, Wilkie said.

“However, we must do more,” Wilkie said. “We must strive to sign up 100 percent of new PS&T employees as active, engaged new members. We have to commit to engaging and retaining our existing members and fostering future union leaders.”

Wilkie ended her presentation by expressing gratitude for the opportunity to serve PEF members as part of President Spence’s leadership team, and with a quote from Margaret Mead: “Never doubt that a small group of thoughtful committed citizens can change the world; indeed, it’s the only thing that ever has.”