MEA Budget

2009-2010

Budget Hearings remaining as of 2/27/09 March 2 – Region 15 – Traverse City March 18 – Region 5 – Lawrence March 19 – Region 2 – Canton March 21 – ESP Conference – Dearborn March 26 – Region 4 – Battle Creek April 15 – Region 14 – Gaylord April 16 – Region 12 – Bay City May 1 – Spring RA - Lansing

Budget-Finance Committee

Three elected by MEA Board Sue Federico, Region 13 (Fruitport EA) Karen Plaisier, Region 17 (Negaunee EA) Gloria Wagener, Region 12 (Saginaw Valley State

University ESP) Three appointed by MEA President, confirmed by

MEA Board Jay Smith, Region 7 (Birmingham EA) Reed Bretz, Region 9 (Kenowa Hills EA) Matt Dunckel, Region 14 (Alpena Community College

EA) Peggy McLellan, MEA Secretary-Treasurer – Chair

Budget Development Process

MEA Board set budget parameters (July 2008) Members give input (Voice, web, SLC, regions) (July

– December 2008) Budget Committee project 2009-10 needs based on

2008-09 program (operations, field staff, etc.) (September 2008- January 2009)

Executive Committee and Board approve budget for hearings (January 2009)

Budget committee conducts hearings around state (January – April 2009)

Executive Committee and Board transmit budget to RA (April 2009)

Spring RA delegates vote on budget and set dues (May 2009)

2009-2010MEA Budget Parameters

The budget must be balanced and ensure the short-and long-term fiscal stability of the organization.

The budget should support MEA’s stated goals and objectives and Long Range Plan.

The budget should support immediate and long-term staffing needs.

The budget should continue to support the Member Engagement and Retention Initiatives (08-09 Budget Priorities)

Budget Priorities – themes that emerged from member input Continue funding for member training and

release time Continue positive public relations program

(radio ads, WJR show, billboards, etc.) Involve newer, younger members in union

and leadership Plan for the future –possible membership

decline, different service needs, pension and retiree health costs for MEA employees

Revenue by Source

Membership dues & agency fees

84%

General (Interest income + service fees from MESSA & MEA Financial

Services)8%

NEA (Funding for UniServ and Legal

Services)7%

Voice advertising & Conference fees

1%

Expense by Department

Executive Office 5%

Human Resources3%

Communications5%

Government Affairs4%

Finance/Membership8%

Information Technology

3%

Uniserv/Field8%

PD/HR3%

Zones54%

Legal Services7%

Changes common to most departments

Salaries – contractual step increases Benefits

health care reductions (MEA staff on lower-cost plan) pension increases (required by Pension Protection Act

of 2006) Telecommunications – increases due to use of hand-

held devices for e-mail, phone -- higher productivity and efficiency – worth the cost

Rent (zones) – inflationary cost projections

Revenue p. 1

Membership Based on 128,227 members (Nov. 30, 2008 count) Includes $250,000 from fee payers

General Lower interest income Reduced service fees

Conferences More participants Increased fees

CAP interest not used due to concern over drawdown by Wayne-Westland strike and decline in financial markets

Executive Office pp. 3-5

Printed Material/Other – Increased in 08-09 to cover moving costs for new officers; not used because all officers were re-elected. Reduced for 09-10; no elections this year.

Contingency – lower due to reduced revenue

Building Full Capacity Locals – Budget line moved from Field Services; increased investment due to addition of President-to-President initiative and Local Treasurer training

Legal Services pp. 6-7

Legal Services –increased costs of law library materials (on-line materials used by HQ and Field staff)

Grievance & Arbitration – increase based on prior year actual expense; more arbitrations

Corporate Legal Expense – anticipate increases to remain competitive in retaining outside legal counsel when needed

Association Liability Insurance – anticipate decreased costs with new carrier

Human Resources pp. 8-9

Printed Material/Other – increased costs of printing and software agreements for testing of job applicants

Training – reductions in management training help offset increases in Diversity Training

Workforce Renewal & Development – reduced because costs of Intern program moved to Field Services

Bargaining – increased because staff contracts expire in 2010; bargaining will begin in 2009-2010 budget year (line covers consultants, actuaries, etc.)

Recruiting Expense – billed back to MESSA and MEA Financial Services

Staff Affairs – fewer events, lower-cost events (holiday party for staff eliminated)

Communications pp. 10-12

Voice – Inflationary increases in production and postage

Local PR Assistance – Increase allows for more matching funds for locals doing PR projects

External Communications – does not include last year’s contingency transfer (08 Spring RA put $1.1 million in this line; it was placed in a separate fund for billboards, radio ads, etc. It was not intended to be an on-going budget expense. Special fund should last several years -- recently received $350,000 matching grant from NEA for more positive PR.)

Government Affairs pp. 13-14

Training – Increased need for staff training Special Millage Assistance – line had been

under-used; funds were reallocated where needed within department

Political Education – reduction based on prior year actual expense

PAC Administrative costs – increased research and consulting in preparation for possible ballot issues (Right-to-Work [for less], Constitutional Convention), gubernatorial election, House and Senate elections

Finance/Membership pp. 15-16

Training – increased need for staff training on membership system upgrades

Consulting – reduced need due to completion of membership system upgrades

Insurance – reduction based on prior year actual expenses

Utilities – reduced due to efficiencies Building & Security Maintenance – reduced

costs of service

Information Technology pp. 17-18

Consulting – Reduced due to postponement of upgrades to MEA web site

IT Shared Services Fee – more IT services done in-house rather than billed to MESSA IT; payroll system fully depreciated (MESSA had purchased system on MEA’s behalf in financial hard times; MEA has now completely repaid MESSA.)

Leader Internet Services – reductions based on prior year actual expenses; few use MEA’s dial-up service anymore

Field Services pp. 19-22 Part-time Professional Staff – increased use of SNAPs

(Supplemental Negotiations Assistance Program) for bargaining and financial analysis

Printed Material/Other – reduced because funds brought into Field Services in 08-09 are allocated back to zones, PD/HR and IT

BFCL – moved to Executive Office Organizing – increased member retention activities (fighting

privatization & decertification, etc.) HE Bargaining Conference - increased costs Bargaining – development of new bargaining materials and prototype

language ESP Conference – does not include one-time move of $26,000 from

contingency in 08-09 budget; line is increased $5,000 from original 08-09 budget of $50,000)

Professional Development/Student Programs – moved from Professional Development/Human Rights dept. into Field Services

HERON pp. 23-24

Department no longer exists. Budget lines, staff, absorbed into Field Services in 08-09 budget year

HERON stands for Higher Ed, ESP, Research, Organizing, Negotiations. All services and staff were retained as department was rolled into Field Service.

Professional Development/Human Rights pp. 25-26

Printed Material/Other – moved to Field Services in 08-09 budget; allocated back to PD/HR for 09-10

PD/Student Programs – moved to Field Services Professional Development Conferences – increased funding

for Summer Leadership Conference, Instruction & Professional Development Conference and new Social Justice Institute (replaces Unity Conference – will be held at end of Summer Leadership Conference beginning Summer 2009)

AYP – new line partially funded by Collaborative Support Projects line, partly new money (08-09 budget was amended mid-year to meet immediate needs of over 300 MEA schools that did not meet AYP; funds were moved from other lines in PD/HR budget)

Prof Dev/HR Local Training Assistance – New funding for Critical Incidents Training (trains school staff members to deal with catastrophic events such as death of a student or staff member, fire, natural disaster, etc.)

Central Zone pp. 27-28

Printed Material/Other – Increased because funds moved to Field Services in 08-09 are allocated back (same for all zones)

Training – reduction in staff training funds due to prior year actual expense freed up some additional funds for member/leader training

Eastern Zone p. 29

Uniserv Office Supplies – Increase due to inflation

Northern Zone pp. 30-31

Zone Projects – Increased funding for the zone’s Knowledge Has Value bargaining project. $15,000 of the increase was moved from Training lines in the Field Services department.

Southern Zone p. 32

Training – Staff training reduction based on prior year actual expense; funds used for increases in member/leader training.

Planning for the Future

Reminder of need to think about future programs and funding The budget must be balanced and ensure the

short-and long-term fiscal stability of the organization. (Budget Parameter)

Plan for the future –possible membership decline, different service needs, pension costs. (Member priority)

You as leaders need to make informed decisions about MEA’s future.

Planning for the Future – some facts

Consumer Price Index has increased 3% a year since 2006 Dues percentage and cap have not increased since 2006 In 2006, 57% of MEA members were at dues cap; in 2009-10

61% (more than 77,000 members) will be at the cap. That means the only new dues revenue will be from those members making less than $41,333, and that’s only if they receive raises in 09-10. There will be no new revenue from those at the top.

“People costs” (contractual salaries, benefits) at MEA will increase 2.6%

Pension funding is required by law and driven by the financial markets. Law requires 100% funding in 5 years; market losses have caused setbacks in our efforts to comply.

Trends indicate possible membership losses as high as 1,100 per year at an average of $492 dues per member (loss of $541,200 in dues revenue).

Wrap-up

For 2009-10, “people costs” (contractual staff salary/benefits) will increase by $1.9 million.

Despite increased “people costs”, department managers and budget committee cut over $1 million – some cuts were painful.

In spite of painful cuts, the 2009-10 revenue still falls short of expenses by $797,000.

Executive Committee considered a number of alternatives to cover shortfall and made recommendation to the MEA Board.

Executive Committee Decision

Possible ways Exec Committee considered to cover $797,000 shortfall Increase dues cap by $10 (from $620 to $630) Combination of raising dues cap by a smaller

amount and supplementing with excess cash from 2007-2008 fiscal year

Use $797,000 from 2007-2008 cash (allocate remainder of 07-08 cash for future pension payments)

Recommendation to MEA Board: Option 3 above

Dues Breakdown as % of Total (reflects numbers on last page of budget document, rounded to nearest whole number)

Uniserv Staffing Program56%

Legal Services6%

Governance5%

Information Technology3%

Instruction & Professional Development

3%

Advocate Research4%

External PR & Internal Communications

5%

Training Elected Leaders & Staff

3% Legislative & Political Action

5%

Membership & Administrative Costs

8%

Contingency0%

Organizational Business Costs

2%

Questions?

For further information, please feel free to contact:

Peggy McLellan, MEA Secretary-Treasurer

(800) 292-1934, ext. 5500

(517) 337-5500

pmclellan@mea.org