PEF Trustees’ Report to the 2006 Convention delegates
OLUBIYI SEHINDEMI, JULIO MUNOZ, ROBERT REYNOLDS
The PEF trustees are charged by the PEF Constitution to periodically review
PEF’s financial records; report to the membership any activities not in their
best interest and to attend Executive Board meetings. We meet periodically and
review, at random, division audits, regional budgets, and expense vouchers. The
trustees also review those divisions and regions not in compliance with
acceptable PEF financial policies and make appropriate recommendations of action
in keeping with PEF policies.
OVERVIEW OF ORGANIZATION
The NYS Public Employees Federation (PEF) is a not-for-profit organization
affiliated with the American Federation of Teachers (AFT) and the Service
Employees International Union (SEIU). We are a self-governing unit representing
the professional, scientific and technical employees of the state of New York
and several other private entities. The majority of revenues are from membership
dues and agency-shop fees.
AUDIT REPORT
On September 8, 2006, the trustees, Secretary-Treasurer Arlea Igoe and Graham
Goffin, PEF’s director of finance, met with representatives of Marvin and
Company. An overview of PEF’s 2005-2006 audit findings were presented.
The audit included examination of PEF documentation that supported the amounts
and disclosures in the PEF consolidated financial statements. The auditors
assessed the accounting principles used and estimates made by PEF management, as
well as evaluating PEF’s overall financial statements. The audit found that no
unusual transactions were made nor were there transactions done without proper
authority or approval. Marvin and Company reported PEF’s financial position for
fiscal year 2005-2006 ended in conformity with generally accepted accounting
procedures. They further stated all PEF financial statements reviewed by them
supported their opinions and fairly represented PEF’s financial position at the
time of the audit.
The financial statements received include the accounts of PEF and its
subsidiary, PEF Land Holding Corporation. The accounts of PEF include a general
fund, a political action fund, a Committee on Political Education (COPE) fund, a
Retiree’s Fund and a plant fund. The PEF Land Holding Corporation is a
not-for-profit corporation formed to hold title to the land and office building
used to house PEF’s main headquarters in Latham, New York.
This past year we had a few major campaigns approved and supported by the
Executive Board that were costly. The brunt of the monies was spent on our Go
Public campaign and the Stop Workplace Violence campaign. Both of which were
successful. The others were our nursing campaign and our Department of Labor
campaign to try to stop the move of its call center from NYC to the Capital
District. As a result, our contingency fund is down to approximately $2.2
million. We need to build this fund back up and to do so, we will have to make
hard choices in the future as to what campaigns we can or cannot support and to
what degree.
The amount of money subject to credit risk is $5.8 million. PEF continues to be
free from any major liabilities that would threaten its solvency.
2. Temporarily Restricted Net Assets.
Those assets as of March 31, 2006 that are to be used for a specific purpose
only:
A. COPE
(Voluntary Political Contributions) $ 259,268.00
TOTAL $ 259,268.00
B. OTHERS (Restricted/Approved by the PEF Executive Board)
1. Contract Fightback Fund (Approx. $3,096,941)
These funds may only be used to support activities related to contract
bargaining. Presently, the contract team is in training and preparing for its
first meetings with the state which should begin in January or February 2007.
2. Go Public Campaign Funding
All Go Public monies were expended. 2005-2006 saw three of our four bills signed
into law. The campaign was a success. But there is still one bill yet to be
signed into law. That is the benefit-analysis piece that would require an
analysis be done prior to hiring a contractor to prove that a vendor would be
cheaper than state employees. At the June 2006 Executive Board meeting, the
board allocated another $50,000 to be used for making this last bill law.
3. Parole Fightback Funding
Our parole brothers and sisters have been increasingly under the thumb of a
less-than-fair administrator. The state Division of Parole continues to enact
policies that not only put our members in jeopardy but, more importantly,
endanger the citizen population they have vowed to serve and protect. Parole
management has shown that it is anti-union and has no one’s best interest at
heart, save its own. Our parole brothers and sisters have been fighting the
institution with some assistance from PEF but they need more. At the June 2006
Executive Board meeting, board members approved a $28,000 allocation for Parole
to be used for fight-back activities planned in conjunction with PEF personnel.
4. Expenses for the Five Statewide Officers and Trustees:
INVESTMENTS
Our investment firm is Stacy Braun Associates, Inc. Investments in equity
securities and debt securities are valued at their fair value based on market
prices. PEF invests in U.S. Treasury Notes and Bills, U.S. Treasury Zero Coupon
Bonds and GNMA Pass-Thru Securities. Cash equivalents consist of certificates of
deposit with original maturities of three months or less. Investment securities
are measured at fair value. As our investments mature they are sold and
reinvested. The risks associated with our current investments are minimal, our
growth rate competitive and our money safer.
INCOME TAXES
PEF as a labor union is exempt from federal income taxes under Section (c) (5)
of the Internal Revenue Code. However, under Section 527 of this same code,
PEF’s investment income from COPE is subject to tax. PEF Land Holding
Corporation is a title-holding corporation and is also exempt from federal
income taxes.
FUNDS
PEF maintains a Political Action Fund and contributes to the SEIU Pension Fund.
PEF’s Legislative Department administers the Political Action Fund. It is used
for political contributions approved by the Executive Board and for the
day-to-day operations of the Legislative Department funded from PEF's
unrestricted net assets. For fiscal year 2005-2006, $1,185,997 was spent to
cover its operations and political contributions costs. For the same period,
expenses were less than the allocation by $286,500.
The SEIU Pension Fund is a defined multi-employer pension plan for PEF
employees. All employees of PEF who earn over $4,000 are eligible to
participate. For fiscal year 2005-2006, the pension expense was $1,179,317. This
amount is based on the contribution rate of 14 percent of total eligible
employee compensation.
MEMBERSHIP
PEF revenue is comprised of dues paid by PEF members and agency-shop feepayers.
Dues income is collected in the pay period for which New York State pays
members’ salaries. As of March 31, 2006, PEF had a membership totaling 54,706,
up 1,733 from April 2005. Of that number, 3,867 were feepayers, up 356 from
April 2005. PEF’s revenue from dues paid by members and feepayers for fiscal
year 2005-2006 was $27,262,095, up $843,650 from the last fiscal year.
UNION AFFILIATIONS
PEF is a dues-paying member of both the American Federation of Teachers (AFT)
and the Services Employees International Union (SEIU). We have a 50/50 split of
our membership into each affiliate.
In 1979, PEF entered into an Affiliation Agreement with the AFT, SEIU and NYS
AFL-CIO that was approved by the PEF Executive Board in 1980. That document,
along with our PEF Constitution, cements PEF’s relationship with those entities.
PEF is still legally required to honor its obligation to pay per-capital dues to
SEIU and AFT. The agreement further provides that PEF cannot seek to
disaffiliate from SEIU or AFT.
For fiscal year 2005-2006, PEF paid a total of $8,272,197 in dues to AFT and
SEIU. Our current SEIU per-caps dues per member is $12.65. Our current AFT
per-caps dues per member is $13.95.
AFT DEBT (Historical Information)
Under an arbitration award rendered in May 1985, PEF was ordered to pay New York
State United Teachers/American Federation of Teachers in excess of $9 million in
back per-capita dues for the period March 1984 through March 1985. In 1988, a
state Supreme Court decision vacated the award in its entirety. AFT appealed the
decision and in May 1989, the Appellate Division reversed the lower court
decision and awarded AFT approximately $9.2 million in back per-capita taxes
(dues).
In 1989, PEF appealed the decision of the Appellate Division and on March 27,
1990, the Court of Appeals denied PEF’s motion and reaffirmed the $9.2 million
judgment to AFT to be paid over 20 years. During the fiscal year ending March
31, 1991, the state Supreme Court granted AFT’s motion to the Supreme Court to
be awarded prejudgment date interest. In June 1991, the state Supreme Court
granted AFT’s motion for prejudgment date interest.
Interest on the outstanding balance accrues at the rate of 9 percent annually.
On March 31, 2005, PEF’s debt amounted to approximately $4,072,439. The AFT
continues to “forgive” a percentage of our debt and the interest for the current
year. The reduction equals one-twentieth of the original amount owed plus
interest accrued for each calendar year. For the calendar year ending December
31, 2005, the total debt forgiven by AFT was $814,488.
DIVISIONS/REGIONS
PEF has about 220 divisions and 12 regions. Divisions are required to submit, on
a timely basis, quarterly expenditure reports and a year-end fiscal audit to
PEF. Failure to do so will result in forfeiture of divisions per-cap allotment(s).
Repeated failure to submit these reports will result in the division’s account
being closed and put into receivership.
Each PEF division was paid $6.20 per member up to the first 200 members and
$4.96 per member for each member in excess of 200 in each quarter for fiscal
year 2004-2005. A total of $887,788 were allocated in divisional distributions.
Training is held at the PEF convention for division treasurers and any other
interested parties. In addition, the PEF Divisions office periodically sends out
a newsletter that is very informative and helpful as relates to best financial
practices for divisions.
EDUCATION DEPARTMENT
PEF’s Education Department provides staff support to PEF’s representatives on
the PS&T Contract Article 15 Professional Development Committee (PDC). Trustee
Olubiyi Sehindemi is a member of the PDC. The PDC is charged in the contract
with the responsibility of reviewing the needs for professional development and
training programs to improve job performance and to assist employees in
developing their full professional potential. In conjunction with the
representatives from the Governor’s Office of Employee Relations (GOER) the PDC
has met and utilized the funding provided in Article 15 to implement several
programs that members and agency labor/management committees can utilize for
continuing education, training and professional development. Some of these
programs are administered or delivered by vendors under state contract while
others are administered and delivered by GOER.
Due to the shortened time period between ratification of our contract and its
end date, the PDC was able to secure double vouchers per semester and also got
approval for summer semester vouchers. The Voucher Alternative Program may be
used to seek reimbursement for the Promotion Test Battery prep classes offered
by various educational institutions.
FINDINGS/RECOMMENDATIONS:
Finding: Documentation procedures previously established regarding reimbursement
to the regions were not properly followed. Some of the reimbursement requests
and associated documentation did not match. Some of the reimbursement requests
had improper or incomplete documentation. Other requests did not contain the
regional coordinators’ signature. Regions were not notified of these
inaccuracies.
Recommendation: Steps be taken by the secretary-treasurer and the director of
finance to ensure this problem is resolved. They should include, but not be
limited to, the following:
1. Information session for the regional coordinators;
2. Reimbursement requests should include the original vendor invoice;
3. The invoice should include vendor name, date, description of service and
total cost;
4. A list of attendees should be included with the reimbursement request;
5. All requests should be signed by the regional coordinator; and
6. Regional coordinators should be notified of problems as they occur.
Recommendation: To cut costs, consideration should be given to holding the
convention biennially.
Recommendation: A new request for proposals (RFP) be done for our yearly audit
to see if we can save money and also bring in another firm, as Marvin and
Company has been doing our audits for several years.
Recommendation: The RFP process to find a bank other than Amalgamated continue.
Amalgamated may be a union bank, but we receive no interest or services for our
business.
2005 CONVENTION FOLLOW-UP REQUESTS FOR INFORMATION
At the 2005 convention, we were asked about the cost to represent our non-state
agency members versus income received from same. There are a total of seven
entities, including Roswell Park Cancer Institute (RPCI). From these seven,
there are a total of 1,205 members and 119 feepayers. We received a combined
total of $638,226 in dues and feepayer monies. Of that total, $500,430 is from
RPCI and $137,796 is from the other six entities. Total per caps paid to AFT and
SEIU are $143,468 from RPCI and $61,885 from the rest, for a combined total of
$205,352. Each receives the same services as any other agency/members.
Additional costs would be postage. mailing and staff time as needed. They have
field rep and contract services, but no one new was hired as a result of them
being in our bargaining unit. As stated last year, it should be noted that NO
outside organizing is done until presented to and voted on by the PEF Executive
Board.
Last year, we were also asked about the 2004 resolution “Freeze the Freeze” on
which we neglected to report. PEF continues to use whatever resources necessary
to fight the hiring freeze every budget cycle. Currently, PEF is up
approximately 1,500 members since March 2004.
2005 CONVENTION RESOLUTIONS
Below are the 2005 Convention resolutions that were adopted and the action that
has been taken on each:
Resolution 1 — Attendance Rules
ACTION: Draft proposal referred to Contract Administration for consideration in
contract negotiations.
Resolution 5 — Keeping Focus on Nurses’ Priority Issues
ACTION: Referred to Contract Administration, the Legislative Office, the Nurses’
Committee and PEF’s Education and Training. Letters, postcards approved by our
Nurses’ Committee have been sent to our legislators urging support of our
nursing issues including safe staffing ratios and mandatory overtime. PEF also
funded the Stop Workplace Violence campaign and the Nurses Campaign in support
of this resolution. Monies were allocated to establish regional nursing
committees. We had our Nurses’ Lobby Day and the PEF Statewide Nurses’ Committee
continues to work and expand on these items.
Resolution 8 — Lump Sum Dues-Exempt
ACTION: Referred to Contract Administration and the secretary-treasurer. If our
next contract contains a lump sum, no dues will be subtracted from it.
Resolution 12 — Put teeth in Contract Language for Nurses
ACTION: Draft proposals referred to Contract Administration for consideration in
contract negotiations.
Resolution 13 — Seeking Equity in Purchasing Power for All PEF Members
ACTION: Referred to Contract Administration to draft proposals for consideration
in contract negotiations.
Resolution 14 — Solidarity Fund-Enhancement of (PS&T Contract) Article 12.23
ACTION: Referred to Contract Administration for consideration in contract
negotiations.
Resolution 18 — Oppose the War in Iraq
ACTION: Referred to the Legislative Department. A letter was sent to all our
legislators in support of this resolution. The Statewide PAC was also informed.
Resolutions 20, 21 — Protect Voting Rights
ACTION: Referred to the Legislative Department. The NYS Congressional delegation
was contacted as well as other unions and all support the Voting Rights Act.
Resolution 23A — Oppose Privatizing Public Elections
ACTION: PEF publicly supported this resolution and reached out to the
legislators, who delegated the decision to the local boards of election. Letters
were sent to the local boards of election.
Resolution 25 — Pension Benefit Equity
ACTION: Referred to the Legislative Department. PEF supports this wholeheartedly
and continues to submit legislation in support of Tier Equity for all tiers.
Resolution 27 — Pension Fund Contributions Resolution
ACTION: PEF discussed these issues with Comptroller Allen Hevesi and continues
to support all measures to preserve the financial integrity of the State Pension
Fund.
Resolution 29 — Political Action Reform II: Binding Arbitration
ACTION: Referred to PEF’s Legislative Department and the Statewide PAC for
action.
Resolution 32 — 70.1 Transfers
ACTION: PEF sent a memo soliciting members to step forward who meet the criteria
needed to proceed with a lawsuit. To date, no one has come forward. PEF has
supported legislation that has been vetoed twice. Legislation will be
resubmitted.
Resolutions 33, 34 — Unused Vacation; Veterans’ Pension Buy-Back Fine Print
Improvement and VA Funding
ACTION: Referred to PEF’s Legislative Department for action. PEF supports
legislation to accomplish the intent of these resolutions.
Resolution 36 — E-mail
ACTION: PEF has solicited names of those individuals who want to receive
mailings via e-mail and is now doing that. This is an ongoing process as more
individuals sign up for e-mail.
Resolution 38 — Diversity in the PEF Workplace
ACTION: PEF continues to develop plans that result in greater outreach and
recruitment of protected classes. We have increased the number and types of
publications we use to list our vacancies hoping to attract a more diverse pool
of candidates.
Respectfully submitted,
JULIO MUNOZ, ROBERT REYNOLDS AND OLUBIYI SEHINDEMI
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Clarification: A photo caption in the November issue of The Communicator should
have said PEF Vice President Pat Baker and Regional Coordinators Dee Dodson,
Vernetta Chesimard and Jemma Marie-Hanson coordinated the PEF Sept. 11 memorial
service in New York City.