Strike Fund Alert
You've probably never seen this. I know I hadn't. It was in an email forwarded to this blog.
You've probably never seen this. I know I hadn't. It was in an email forwarded to this blog.
Ron Elliot, Region 1 Board member, writes:
"I am determined to know the extent of our $41,750,561 deficit in the General Fund, which basically makes the Strike Fund worth $18,133,023.00, if we do not include the Education Fund surplus."
WHOA -- this is serious stuff. You read it right. Elliot is proposing that the strike fund be reduced to cover operating deficit! Where does he get off making this proposal? Can't be read any other way. He is reducing the strike fund of $60 million to under $20 million to balance the budget. That's nuts!!
Fortunately, the OPSEU Constitution does not allow what Ron Elliot is proposing...at least not right now:
Article 23.1 The Union shall maintain a Strike Fund, whose assets shall be used only for the following purposes:(a) for strike pay and expenses related to strikes, lockouts and other work stoppage situations involving OPSEU members; and(b) upon a two-thirds majority roll-call vote of the Executive Board, to make interest-free loans to other striking unions where the Board deems such loans to be in the interests of OPSEU Members.
Elliot must know that the Consititution prohibits him and his associates from draining the strike fund this way, so what's his game here? Fear mongering? Erode the strike fund? Backdoor a dues increase? Hard to say. Elliot's contention does not pass the smell test. It stinks!!
And why is Elliot saying he is, "determined to know the extent of our $41,750,561 deficit?" The Insider is no accountant, but didn't he just say the extent of the deficit is $41,750,561. Hhhhmmmm...
Solidarity
And why is Elliot saying he is, "determined to know the extent of our $41,750,561 deficit?" The Insider is no accountant, but didn't he just say the extent of the deficit is $41,750,561. Hhhhmmmm...
Solidarity
Yes he said we have a HUGE deficit, which when taken into account as a whole means that our assets (read Strike fund) are only worth 18 million. I would like to point out that it is our current VP that is taking the money from the Strike Fund to cover the deficit.
ReplyDeleteWHOA indeed! Judging by the posts on this subject, the authors don't seem to think it is a big deal if deficit keeps growing, and that it has no impact on the only real collateral the union has -- or strike fund (which already includes the Union's real estate).
ReplyDeleteI guess they weren't listening at the last few conventions when Patty Rout and Maurice Gabay (OPSEU's accountant) explained that the growing debt and its impact on our balance sheet could affect the interest rates charged on further borrowing -- and whether lenders will be willing to lend to us at all if things get much worse.
If the ratio of our debt to our assets keeps rising, we risk insolvency. This can happen if our debt continues to grow -- for example if we continue to rack up annual deficits, or if we need to borrow for a big strike. It can also happen if we spend a big chunk of our only real asset -- the strike fund -- in a major strike.
So it is dreaming in technicolour to think that our growing deficit won't affect our ability to draw on the strike fund. To use the author's homespun metaphor. If your mortgage and line of credit are worth more than your house, good luck trying to borrow to fix the roof. And if you decide to live on your credit card, you better get used to 18% interest rates.
What's more, the plan to divert investment income from the strike fund won't help. It really is like burning the furniture -- and the floor boards -- to heat the house. And what happens if our investments loose money -- like they did in 2008?
So what's the solution? First, we need to keep the strike fund strong, rather than diverting investment income into the general fund. Second, we need to take a close look at the way we spend our $85 million general fund to make sure it goes to key priorities -- like fighting to defend public services and our members jobs, maintaining services to members and locals, and keeping the lights on at OPSEU's offices. Conferences with television stars, politicians we pay to come, and cabinet ministers who then turn around and freeze our wages and cut our jobs? Not so much.
I agree that we need a strong strike fund. The proposal that we take the interest and move it to the general fund is what I meant by moving funds out of the strike fund.
ReplyDeleteI was trying to explain what I believed brother Elliot was trying to say. To use the insider's example of a house that is worth $220 000 and debt that is $20 000, while your assett is still worth the same, your net worth is does decrease to $200 000. So yes OPSEU's net assetts are 18 million.