2004 DUES INCREASE

In October 2003, in response to a bylaw resolution submitted by the Local 802 Executive Board, members voted in favor of raising dues by a margin of over 2-1. It was the first time since 1996 that annual dues were raised and the first time since 1984 that the work dues percentage was increased.

The bylaw resolution raised annual dues by $12 per year for three years in a row starting in 2004, followed by a single $2 increase in 2007. These increases include a $2 per year increases mandated by the AFM at its 2003 convention.

The resolution also increased work dues to 3.5 percent (from 3 percent). Recording work dues were increased from 3.5 percent to 4 percent, which brought 802’s recording work dues levels to the same as Local 47, Los Angeles.

WHAT WE PROMISED

Public Relations

As mandated by the resolution, the union dedicated half of the increase in work dues for the sole purpose of funding public relations programs. With these funds, the union has been able to build on the public awareness of live music initiated during the 2003 Broadway campaign. In part, the increased revenue has enabled Local 802 to retain its public relations firm, Ken Sunshine Consultants, on an ongoing basis.

These funds have also proved to be essential in Local 802’s fight to keep music live. In 2004, this administration went on the offensive to protect the artistic integrity of live musical performance against the ongoing attempts to eliminate live music with the virtual orchestra machine. Our efforts have resulted in legal decisions on the federal level upholding the bans we have achieved against the virtual orchestra machine. In so doing, we have set a nationwide precedent that has begun to motivate others to reach for their union banners, rather than their surrender flags, in response to the “threat of technology.”

In addition, our public relations funds have enabled Local 802 to sponsor several high-profile live music events and have increased our members’ visibility through print and radio ads.

As we face the many fights ahead, we can rest assured that the commitment of these funds will help us expand on these initiatives, to the benefit of all working musicians.

Increased Services

Following the 9/11 terrorist attacks, the union had no choice but to cut back spending through staff attrition. That translated into decreased services to the members in key areas of the union. In proposing the dues increase, Local 802 outlined a plan to restore key positions, thereby increasing services, in the areas of the union where the severest cutbacks had occurred — primarily in the Concert, Theatre and Organizing departments.

Several key positions have indeed been restored to address the needs of the membership and the interview process for representatives in other important areas of the union has been underway.

A Financial Reserve

The recommendation for the increases was not brought to the membership lightly. 802 had gone from a gain of $246,000 in the year 2000 to a loss of $364,000 just two years later. Much of the loss had to do with spending money on public relations and the union’s Live Music Campaign in the years leading up to the 2003 Broadway negotiations.

The union’s controller had also advised that the union’s expenses were expected to grow at 3 percent annually while revenues would grow by 2 percent, which had been the pattern for the last several years. Without an increase in revenue, Local 802 would continue to show growing losses into the future.

Former 802 President Bill Moriarity told the membership that “the dues increase was not proposed as a short-term stopgap, but was intended to make us whole for at least the midterm foreseeable future.”

THE 2004 BUDGET

In preparing our budget for 2004, fulfilling each of these promises was of paramount importance to the newly elected leadership of Local 802.

First, as mandated by the resolution, the union allocated half of the increase in work dues, over $300,000, to fund public relations initiatives. Second, funds were also allocated to restore key positions and increase services in the areas we had promised. Lastly, the budget provided for a financial reserve of approximately $250,000 to ensure the union’s financial stability into the foreseeable future.

BUDGET VS. ACTUAL

In reviewing the actual income and expenses of the union from January through November 2004, some chilling realities have become apparent.

Although our projections for work dues revenue were based on conservative estimates, the actual numbers prove that, with the exception of Lincoln Center steady engagements and Broadway, work is down in all fields

Looking ahead, Broadway revenue will become increasingly difficult to predict. First, shows that were grandfathered into the new contract at the old minimum are beginning to close and the new minimums are taking effect. Second, there now exists the potential for even more abuse of the Special Situations exception to the minimums given a recent arbitration ruling which overturned the panel’s decision to deny Special Situation status for “All Shook Up,” the first such case under the new contract language. (A report on the arbitration decision will be detailed in next month’s Allegro.)

The potential ramifications of these circumstances could affect all musicians. Broadway provides a primary source of revenue to the union, which directly impacts our ability to represent all members.

IMMEDIATE MEASURES WILL BE TAKEN

It is important that you know that the union did not overspend beyond its budget and we do expect to end the year in the black. However that would not have been the case had we filled all the positions we had intended. Regardless, the financial surplus that we had anticipated was not realized.

In keeping with our fiduciary responsibility to you — the Local 802 member — it is imperative that we take immediate steps to address this situation. The Local 802 Executive Board has therefore implemented an immediate hiring freeze to address its fiscal crisis. Although this means holding off on filling some of the positions we had intended in order to provide increased services to you, for the time being we will have to make due with what we have — and we will make it work. When you supported the dues increase you gave us far more than your money — you gave us your trust. This administration is committed to fulfilling its promises to you.

ADJUSTING THE COURSE AHEAD

We cannot always predict what lies ahead, but it is crucial that we adjust course immediately when we come upon troubled waters. As I stated to you in my report on organizing last September, if we are to begin to reverse the course of declining membership and declining work, we must be willing to take a long, hard look at what needs to be done in order to turn this ship around. We must be willing to make the changes necessary to meet the challenges of a dramatically changed industry. Business as usual simply won’t cut it anymore. I am convinced, now more than ever, of the necessity for the strategic planning process to which the Executive Board has committed.

OUR COMMITMENT TO ORGANIZING

The steps I have outlined to you in this report are in no way contrary to our commitment to organizing. That goal is not realized, however, by simply hiring more organizers. Selecting organizing targets needs to be part of a fully informed strategic organizing plan — one that capitalizes on our strengths, works within our resources, and incorporates tactics to overcome any internal or external barriers to effective organizing. It will require the focus, commitment and cooperation of 802’s entire leadership, staff and membership. If we are to effect meaningful change, we must be willing to change the culture of our organization.