The challenging economic environment has affected all of us – including Local 802. As you know all too well from your personal experience, there has been a serious decline in the amount of work being offered to members. This translates directly into a reduction in work dues revenue for the local and directly impacts our bottom line.

As of June 30, we have collected 12.2 percent less in work dues when compared to work dues collection for the same period last year (Jan. 1, 2008 to June 30, 2008).

While I have seen lean years in our business, I have never witnessed the dramatic contraction of work that we are currently experiencing.

The result is a small but nevertheless disappointing deficit ($17,124) as of June 30.

This is the first time I have had to report such an occurrence since taking office in January 2004.

We were able to reduce expenses from a year ago, which helped to keep the reduction in net assets small. However when compared to the $393,163 surplus we enjoyed on June 30, 2008, one can understand my concern as financial vice president.

On the bright side, we remain financially stable.

The surpluses experienced since 2004 total $2,348,167 and have left us with unrestricted net assets on June 30 of $7,266,933.

I remain optimistic that work will increase for our members – but this may take some time. We must continue to contain expenses, particularly during these challenging economic times.

Investment policy

Recently the Local 802 Executive Board approved an investment policy statement for the General Fund. We will be investing nearly $2 million in a portfolio with an asset allocation mix of 70 percent fixed income (including cash) and 30 percent equities.

As you can observe from the financial statement, we have been sitting on cash. As interest on cash accounts has been very low, the Executive Board has determined – with my concurrence – that the relatively conservative investment portfolio as described in the investment policy statement will, over the long term, help to improve our bottom line.

Among the investment guidelines for the portfolio, the investment policy statement includes a section on socially responsible investing.

At the request of the Executive Board, the investment managers will apply screens for socially responsible investing, which include labor relations and human rights issues, as well as ties to Sudanese businesses.

It is believed that such screens will not have a material negative effect on portfolio performance and any possible negative effect may be balanced by the potentially positive effects of avoiding investments in socially undesirable companies.

I would like to thank the members of our financial committee for their dedicated service. The work of financial oversight and formulating policy to recommend to the board is enormously important. These members have truly distinguished themselves through hard work and dedication to the job at hand.

New software update

We have begun the initial testing phase of several new computer software modules as part of our comprehensive proprietary software project.

New proprietary software for the Health Benefits Department has already been implemented and it won’t be long before all departments at Local 802 are able to enjoy the benefits of new software as well.

It is our expectation that the new software will help improve interdepartmental communications and lead to greater efficiencies in record keeping.

Going wireless

Also, Local 802 is in the process of bringing wireless Internet access to our meeting rooms. This will include the Club Room and Room B on the first floor. Once the wireless access has been installed, we intend to place some union computers in Room B for member use. Specific days and times will be set aside where Room B will be available for this purpose. There will be an announcement in Allegro when this initiative is completed. In the meantime, there is a computer available for member use on the fourth floor. Please contact my secretary, Lisa Mejia if you have any questions, at (212) 245-4802, ext. 106 or Lmejia@Local802afm.org.

And, as always, should you have any questions regarding the financial statement, please call me at (212) 245-4802, ext. 105.