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Component Secretary-Treasurer's Report – April 2013

Dear fellow members,
 
Thank you again for electing me as your Component Secretary-Treasurer.  According to our Component Bylaws, part of my duties is to present a financial report to the Membership. In the past, this has been interpreted to mean that the Component Secretary-Treasurer presents a report to the ACCEX, and the Local presidents will in turn relate the information to their Local members.
 
During my electoral campaign, I promised to exceed the current level of transparency concerning our union finances. In addition to presenting the following report to your ACCEX during our April 2013 meeting, I also attended the April 17, 2013 Local 4092 Membership meeting (alongside Component Executives Michel and Katherine) and distributed copies of my report.  As promised in our campaign to make ourselves accessible and available to the Membership, we attended to connect with members and answer questions that may be on the forefront of members’ concerns. With the permission and invitation of Local Presidents, we hope to attend more meetings across the bases.
 
I hope you find my first Air Canada Component Secretary-Treasurer’s Report interesting, informative and transparent.
 
The Component’s fiscal year is from July 1, 2012 to June 30, 2013. Therefore, as with any new administration, the new Component executives inherit and carry on working within the budget of the previous administration. Thankfully, for continuity and consistency’s sake we have an accountant who is an incredible resource and is the connective thread that ties our financial history together.
 
This report begins by looking at the unaudited interim budget statement of December 31, 2012. The fiscal year is from July 1, 2012 to June 30, 2013.
 
 
REVENUES
 
We have received more revenue than was expected due to the increase of hiring during months that our airline usually shrinks the workforce. New hires joined our ranks in December, with hundreds more expected in April and May, and there are new Service Director training classes scheduled in April/May 2013.
“Plus Other Income” doesn’t reflect the market value of the investments, and will be reflected properly in the next budget.
 
 
ADMINISTRATIVE EXPENSES
 
Telephone Main lines: This is over-budget due to long distance charges. The Bell phone system is now obsolete and can no longer get replacement parts if we need them. We recently received a presentation on a new phone system, and there are significant improvements to technology, including the possibility to have emergency lines within the telephone system that will be twinned with individual cell phones. This would relieve our Component of some emergency cell phone contracts. During this changeover, we will also try to negotiate better terms for the telephone service.
 
 
Internet: Internet service at the Belfield office continues to be a challenge. It is currently provided by a satellite internet service for about $880/month. There is a cap on the internet usage, so the over-budget amounts refer to overages that were primarily due to the server and internet problems associated with sending out the large files of Component election material. We are currently looking into an alternative, more reliable and ultimately cheaper internet provider such as Rogers or Bell. The quotes themselves have taken weeks, and the estimate of installation is $35,000 because the area where the office is located doesn’t have the infrastructure already. We began requesting quotes in February, but have yet to receive the final estimates.
 
Unreliable internet at the Component office and all the affiliated email addresses is ridiculous, and we are working to resolve it as soon as possible.
 
Server issues: have been plaguing the Component since last year. Server outages have been becoming more frequent and problematic in recent months. It is often the reason why there are email access outages and is also the reason why bulletins and vote results were delayed during the 2013 elections. Once a bulletin is sent, there is often a 2 hour delay before members receive it. Of the four servers, only the one that handles email and bulletins needs to be changed. We are currently switching it to an iCloud server which is extremely reasonably priced. However, the transition hasn’t been smooth. We had hoped to have it completely resolved by now, but the Component email system is still suffering.
 
Depreciation of Laptops for Component Executives: The previous Component executives were able to buy their computer equipment for a depreciated value of $2.00 I suggest that this is a poor use of members’ money.
 
When we took office on February 1, 2013, there was no computer equipment available for the new officers. Although we met with the IT company on our first day of office, it still look over two weeks for us to get computers with all the software and VPN requirements so that we could truly get to work. Computer equipment does depreciate quickly, but I would suggest that we need to re-examine this practice to ensure that the members’ money is used wisely and that union work can easily be carried on.
 
Wages and Benefits: Much of this line is due to overtime payments to the administrative staff at the Belfield office.
 
Rental Income: The Local 4095 (Sunwing Flight Attendants) have just agreed to rent an office at the Belfield office for $500/month which is the current rate. They have recently ratified their first collective agreement and now have their first office. Welcome Sunwing! 
 
 
BELFIELD EXPENSES
 
Generally within budget.
 
Hydro and property taxes budget lines were estimates so it may be over budget by the end of the year.
 
The Property Maintenance, Repairs budget line includes a leak in the roof of the Belfield office that needed to be repaired.
 
Kitchen supplies:  As of the end of February 2013, this budget line of $1,500 is already at $2,136.96. This line is severely over-budget due to the fact that in March 2012, an 18 month lease was signed for a sophisticated coffee machine. The machine is free, but the lease commits us to purchasing $260/month in supplies. From July 1, 2012 until the end of February 2013, $243.48 was spent in kitchen supplies, and $1,893.48 was spent in coffee supplies. We spoke with the supplier, and have been able to end our lease, with no penalty, at the end of April 2013.
 
 
COMMITTEE EXPENSES (OVER-BUDGET ITEMS)
 
Component Officers:  In this budget line, the Air Canada Component Secretary-Treasurer’s salary accounts for $43,644.00 and the Air Canada Component Executives top ups account for $18,336.11. The rest are comprised of mileage, meals, telephone, and accommodation expenses.
 
Also, according to our Bylaws, the daily car allowance (mileage) maximum is set as $20.00. A Component officer was charging their 407 toll charges to the Component.  This will have to be addressed by the Component Trustees in their next audit.
 
The salary for the Air Canada Component Secretary-Treasurer has been in dispute since July 2012. In the previous fiscal year he had been Company paid due to negotiations. Since November 2012 the ACCEX has been in LCC negotiations and thus, should be Company paid since then as well. These disputes seem to take sometimes years to resolve. We will be continuing to pursue this matter.
 
Grievance Committee:  Salaries are the bulk of this item. Both grievance committee members received an increase in pay after the budget was adopted.
 
There is an ongoing dispute with the Company concerning the Grievance Chairperson’s salary per the Collective Agreement, and the question of who pays the benefits. The past precedent has been the Company, but they have been refusing to continue to pay it.
 
Legal – Arbitration of Grievances:  Since Megan Reid’s departure from her position as our in-house counsel, our legal fees have skyrocketed. From a total of about $205,000.00 spent on in-house and outside legal fees for the 2011/2012 fiscal year (the final audit is not available yet), we have spent more than that amount in just six months. This does not include the legal fees that we have spent with the Health & Safety committee.
 
There have been significant arbitration and grievance challenges this past year with Rouge/LCC negotiations, PBS, and the increasing number of grievances and terminations. Our members depend on us for representation, and we will need to re-examine the best way to achieve that — possibly by working together with CUPE National and/or considering another in-house lawyer.
 
Please note, however, that $29,704.41 is for a legal opinion concerning the indemnification of Lesley Swann. I speak more of that in the next line.
 
Legal Opinion – ACCEX or Indemnification of Lesley Swann/ Lawsuit between Katherine Thompson vs. Lesley Swann:  During the transition meeting with the previous Component administration on January 27, 2013, we were informed that this item was settled and paid out prior to our taking office February 1, 2013. We were informed that if we wanted to see any documentation concerning this matter, including any and all legal opinions, bills, and communication, we were to sign a confidentiality agreement. This agreement was to be administered by the Executive Assistant and we were denied to read the confidentiality agreement itself. Myself, Michel Cournoyer, and Katherine Kontosthenos as your Component Executive immediately answered with a resounding “NO, we will NOT sign an agreement that will mean keeping information from the ACCEX or the membership”. Consequently, we have not seen or signed the confidentiality agreement.
 
Without signing a confidentiality agreement, I was able to trace the budget line and see how much was allocated to that line. “Legal Opinion – ACCEX” which actually refers to the previous administration taking carriage of Lesley Swann’s legal fees and lawsuit had a budget of $125,000.00 and is over-budget. The final amount that was spent for that line is $154,000.00, however, that does NOT include the legal opinions (approximately $9,800.00, $1,700.00 and a third legal opinion of $29,704.41) that were obtained in order for the previous Component administration to come to their decision. From the ACCEX minutes record, the proposed budget line prior to adoption was called “Indemnification of Lesley Swann”, and then it was changed to the current “Legal Opinion – ACCEX”. Thus, the ACTUAL amount spent on the indemnification of Lesley Swann is closer to $200,000, although, the 2012-2013 budget line would only be $183,704.41 because the other legal opinions were acquired in previous fiscal years.
 
The serious concerns this situation raises include the following:
  1. Can the previous Component administration impose a confidentiality agreement/stipulation on the next Component administration concerning the Component’s finances and members’ money?
  2. Without having seen the confidentiality agreement, should we bound by this?
  3. Is this an appropriate role of the Executive Assistant to administer such a confidentiality agreement which puts her in conflict with either the previous or the current Component executive officers?
  4. Is it ever appropriate for the Secretary-Treasurer to be denied access to information about how the membership’s money was spent?
  5. Renaming a budget line “Legal Opinion – ACCEX” when it does not contain any legal opinions in order to draw attention away from its purpose is NOT transparent, raises suspicion, and creates distrust.
 
As ACCEX, we need to understand that the expenditure on the “Legal Opinion – ACCEX” has put tremendous pressure on the rest of the Component budget and severely impacts the funds we can provide our membership.
 

Negotiations – Contract:  Refers to a new budget line added that paid for the outside consultant to translate the contract into French. In my opinion, for a consultant (Richard Nolan) to only charge us $5,000.00 for translating our entire Collective Agreement is a labour of love and an act of volunteerism. Thank you Richard!
 
Although our Collective Agreement does have language that indicates that the Company would pay for two flight releases to translate the Collective Agreement, Richard Nolan is a previous Component Officer who was present during many negotiations of the last two decades. I can agree that it is in our membership’s best interest that we have control over the translation.
 
However, in the future, if there is language like this in the contract, I would suggest that someone like our Central site members, Dionne Solomon and Caroline Charrier, who are both bilingual and familiar with the Collective Agreement, may have been good choices for this position, with a consultant such as Richard Nolan to act as a proof reader.
 
PBS:  The bulk of this budget line was spent on accommodations, consultants, per diems and automobile expenses. Now that the PBS Joint Committee are based in YUL, this budget line will probably be within budget by fiscal year end.
 
Temporary Relief of Locals:  This should be renamed to “Local Augmentation – YYZ” and “Local Augmentation YVR” for clarity and transparency.
 
WSIB:  I have looked closely at this committee’s expenses, and believe it to be very lean. Too lean. Currently, Doug Hay, the chairperson, is the only paid member (Union paid), the other bases are crewed by retired volunteers. No one is paid a salary, but there are various agreements that range from a charge per case to per diems and some expenses only. In totality, they are volunteers, and the associated costs are much less than what we would pay for a full-time release. This could become a serious problem in the future as there is no succession plan. We need to train more, encourage more members to become involved, and allocate more funds to this budget line. WSIB claims are rising and so are denied claims. This in turn creates more work to appeal the denied claim. The diligence and training costs required for this position requires a long term commitment from the member.
 
 
INITIATIVES TO USE OUR UNION FUNDS MORE EFFECTIVELY
 
Translation Costs:  In 2009, the Component agreed to take on the translation costs to ease the burden on Locals. Since then we have spent the following:
 
In the fiscal year ending June 30, 2011  =               $31,558.05
In the fiscal year ending June 30, 2012  =               $22,696.77
From July 1, 2012 – April 1, 2013 =                         $16,396.16
 
These translations costs are buried in other budget lines such as: bulletins, tabulating committee (translation of election material), grievance committee (when arbitrations or statements are made in the grievor’s language of choice), etc.
 
In the past, we have used three outside translating companies, and the value has been to provide representation and communication in both official languages.
 
We have implemented a plan to do more in-house translation with the help of Dionne Solomon. Among her other duties in the expanded Central Site position, she is taking on some translation work. This represents a better use of our union funds.
 
Re-examination of the Expense Policy for Committees:  It has come to my attention that there is a wide spectrum of ideas among committee members of what is a normal CUPE paid expense. Past precedent seems to vary widely. Although Component and Locals are autonomous, I would suggest that for clarity and consistency’s sake, and to make things easier for everybody in the future, Component and Locals should share their official expense policies with each other and with the members to ensure that we’re consistent.
 
 
Thank you for reading my report, a copy of which is also available on the Component website www.accomponent.ca, under Bulletins > Treasurer’s Report.
 
In solidarity and in service to the Membership,
 
Joyce Nakanishi
Air Canada Component Secretary – Treasurer
 
 
 
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