winning together: fairer dues for a stronger union the 5 cent solution

1. Winning Together: Fairer Dues for a Stronger Union – The 5 cent solution !

3. Dues Committee Participants

4. Why Are We Changing the Dues Structure Now? At the 2006 IU convention in Chicago, delegates passed an amendment requiring each affiliated council to “determine the dues rates for all members through a progressive dues system as determined by each council.” Art IX, Sect. 5, AFSCME International Constitution

5. WHY CAN’T WE KEEP THE CURRENT SYSTEM OF DUES? The International determined our current system is not “Progressive” A financial analysis was conducted going back 3 years using our audited finances (indicating sound financial practices) Projected finances were then run out for the next 6 years utilizing the same dues system (with 3% annual per capita increases) Projected losses of over $1.5 million dollars were determined Within 2 years – two staff positions would have to be cut and either the Council would have to significantly raise its dues per capita, or all reserves would be gone and services would suffer greatly….CHANGE WAS IMMINENT!

6. What Happens If We Don’t Change Our Dues Structure? As per Article IX, Section 5 of the Int’l constitution: “In the case of any council that fails to adopt or implement a progressive dues system by January 1, 2011, or fails to enforce such system, the dues rate for each member of such council’s affiliated local unions shall be two (2%) percent of such member’s gross compensation each pay period…”

7. What Are Progressive Dues? Member dues are determined in relation to salary Those who earn more will pay slightly higher dues, while those who earn less will pay slightly lower dues. As defined in Int’l constitution: “Progressive dues system” means a system that determines the dues rate to be paid by each member on the basis of such member’s rate of compensation, including, but not limited to , a system in which the rate of dues is determined as a percentage of a member’s earnings, a multiple of a member’s hourly rate of pay, or pursuant to a graduated dues structure based on levels of compensation.” (Article IX Section 5)

8. What Are the Benefits of Progressive Dues? Create equity and fairness; dues are set based on ability to pay, not a flat rate; Eliminate the need for future changes in the dues structure; Ensure that dues revenue will increase as wages increase; Provide a long term stable revenue source to fund ongoing operations and increase services to members; and Provide resources to meet the goals of AFSCME’s 21st Century Committee

9. WHAT ARE 21st CENTURY INITIATIVES? As per Int’l mandates, each council undertook the development of long range planning with specific objectives, priorities and time lines established Co 65 established growth in Organizing as the number 1 priority (Organizing Director added) Development of a political/legislative presence (Day on the Hill; lobbyist; Pol Coordinator; PEOPLE program initiatives)

10. WHAT; WHY; HOW – COMMITTEE CHALLENGES The Dues Committee began with a careful analysis of Council 65 finances. Each expenditure was open for discussion and approval.Dues Committee mandated that the plan generate no significant surplus, no new funds, no new programs or windfall The Committee examined other progressive systems in place with AFSCME Int’l & multiple design concepts The committee wanted to ensure that the level of services remained high, no additional staff added, reasonable cost of living increases were factored into necessary expenditures Member growth and higher wage increases are hoped to eliminate the projected 2010/11 loss.Membership losses were built into the forecast (800 members) For 2010 to 2012, total net estimate is a loss of $135,000 + This slide needs some consistency on the bullets – it’s confusing as to when there will be losses and surpluses.This slide needs some consistency on the bullets – it’s confusing as to when there will be losses and surpluses.

11. Committee Recommendations: Include annual caps to alleviate the “shock” of transitioning to a new system Implement a system that truly provides some relief to the lower paid members/part-timers Present a system that can sustain itself over a long period of time Allow local units to modify their local dues to meet their local financial needs

12. What is the actual increase?How high is the cap? At $39.15 (current max) you pay $.2259 p/hr for dues In 2010 we are proposing an additional $.045 or ($.27) p/hr - IS RETAINING “YOUR” UNION WORTH 40 CENTS PER DAY? $.27 p/hour X hours per pay period or 1.615% for 2010 $.29 p/hour X hours per pay period or 1.615% for 2011 $.32 p/hour X hours per pay period or 1.615% for 2012 $.35 p/hour X hours per pay period or 1.615% for 2013 $.375 p/hour X hours per pay period or 1.615% for 2014 In 2015 the maximum will increase via the same index used by the Int’l Union to calculate annual adjustment rounded to nearest whole number

13. What Will the New Council Dues Structure Be? Minimum Assessment Rate =1.615% of base hourly wages worked per pay period or 27 cents - times hours worked - per pay period(excluding overtime) whichever is less This change takes effect January 1, 2010 with a drop dead implementation date of July 1, 2010. Annual caps placed to minimize those making higher wages FAIR SHARE FEE PAYERS – UP TO 85% OF NEW RATES

14. Progressive Dues by the Numbers: 2010

15. Wage Increases vs. Dues Increases 2009 vs 2012 (Assuming 1.22% Annual Wage Increases)

17. Impact on Local Union Rebates All members will be rebated at a fixed rate ($2.80) Locals have a variety of dues rates & structures No good option was available to match each local’s existing rebates, except to let each local have a different percentage formula. Local share tied to AFSCME Minimum Dues annual adjustment Each local can revise the model to provide needed income Options include a local specific percentage, higher maximum, or added fixed amount Local constitutions will have to be revised

18. DUES COMPARISONS: MNA – Registered Nurses - $61.00 p/mo USWA – 1.45% of gross pay UFCW – 1.4% or 2.5 times hourly rate (whichever is less) IBEW – when working 2.25% of gross Teamsters 320 – 2% (we believe) Education MN - $65.00 and up

19. How Much Dues Income Do We Need? Council income and expenses were forecast through 2016 The model used assumes current operations continue No new programs or existing program enhancements added in forecasts Percentage dues model should be able to go at least five years with no revisions New revenues will be needed to continue current level of services

20. Forecast Annual Net Gains and Losses

21. We Need You for Success Your fellow brothers and sisters on the dues committee unanimously recommend support of this change in the system to assure long term viability of the Council, an improved position when organizing; and to achieve the goals of the 21st Century initiative for our Council and our members.  Your Executive Board has unanimously approved this proposed change to our Council constitution and wholeheartedly asks for your sincere consideration and support. THE CONSTITUTIONAL AMENDMENT WILL BE VOTED ON AT THE OCT 9/10 COUNCIL CONVENTION IN MANKATO.