CCAR News - May 2008 - (Page 3) Financial Report Rick Block, Financial Secretary Presented during the 119th Annual CCAR Convention Preparing for Employment Contract Negotiations By Michael J. Gan abbinic employment contract negotiations are stressful for many rabbis. For some, it is the difficulty of reconciling one’s role as a spiritual leader with the zealous advocacy needed to achieve a successful employment contract outcome. For others, it is the unfamiliar territory and the David v. Goliath dynamic that can exist in some relationships, particularly where the Temple Board is well stocked with savvy negotiators. The antidote to most pre-negotiation anxieties is preparation. The preparation phase ideally should begin many months before negotiations begin and every rabbi’s checklist should include the following: hree years into fashioning solutions to the CCAR’s financial crisis, I can report with confidence that our fiscal house is in order. As one hallmark of that momentous achievement, the CCAR’s 2005 audit was recently completed, something we once thought impossible, and we received an unqualified opinion from our auditors. This is a tremendous tribute to our staff, which had to reconstruct completely that year’s books and records for the audit to go forward. Our 2006 and 2007 audits will be completed within the next few months. Our members, contributors, vendors, and customers, and the leaders and members of the sister institutions of our Movement, can now rely, with ample justification, on the completeness and soundness of our financial records, policies and procedures, and the integrity and competency of our Conference staff. The second major dimension of our recovery involves coming to terms with our “internal debt.” I am thrilled to report that the Board of the Conference, at its pre-convention meeting, adopted, unanimously and in full, the recommendations of the Budget and Finance Committee for a resolution of the internal debt problem. This involves three main elements. First, repayment of the following, with interest: board-approved borrowings, as provided in our bylaws, a total debt, as of 12/31/2007, of $547,885; funds contributed for Hesed, but used without authority for operating purposes: $77,042, including interest; and repayment of $151,950 of principal improperly expended from the Joseph B. Glaser Fund, plus accrued interest of $51,393 through 12/31/2007. The total debt designated for repayment as of that date is $828,260. That sum, plus future interest, will be repaid in a series of escalating annual installments starting this year, with the goal of retiring the debt in full within ten years, or even sooner if funds are found to accelerate repayment. Payments will come from the operating budget unless other means become available. Hopefully, they will. Fundraising to rebuild the Hesed fund to a sufficient level will also be undertaken. Next, the repayment plan is supplemented by stronger internal safeguards and, on advice of counsel, a reorganization of our audit committee, patterned in part on applicable provisions of the Sarbanes-Oxley law. These steps will provide much greater assurance that the problems of the past cannot recur and that our systems of internal controls are and remain effective. The primary ongoing challenge relates to “sustainability,” the capacity of the Conference to generate sufficient resources, on an ongoing basis, to pay its bills and achieve its goals. Although we ended 2007 in good shape, both from a cash and an accrual perspective, our 2008 budget includes approximately $300,000 in net non-recurring revenue. Thus, as we begin to budget for 2009, we will have to fill a $300,000 hole, approximately ten percent of our non-publishing revenue. While Mishkan T’filah sales are strong, as they inevitably begin to decline, perhaps as soon as next year, this will create an even larger structural deficit going forward. Dues are our other main source of revenue. However, in the 2008 budget, dues income is sufficient to defray just 28.5% of total expenses and only 37% of non-book-related expenses. This is highly problematic and requires serious thought by what is, after all, a membership and member services organization. Moreover, too many of our colleagues continue to be very late in declaring and paying their dues. This is unconscionable, and it is also disheartening to those of us working on Conference finances. The options for achieving sustainability are obvious, and limited. We can expand our publications program with new and renewed titles. We can seek grants, sponsorships, and donations. We can work to enlarge our endowment income through fundraising, planned giving, and bequests. We can step up our financial support for the Conference by meaningful increases in dues and generous annual contributions, both from discretionary funds and personal resources. Or we can cut back programs, services, and staff, perhaps dramatically, to match the funds we are willing to provide and able to obtain. We can get by a little longer with an imbalance of income and outlays as we restore functionality, enhance the value of Conference membership, and lay the foundation for future funding, but we cannot do so indefinitely. If we do not act decisively, and soon, the Conference will again be imperiled. If we face the dangers and seize the opportunities that lie before us, the future will be bright. (This column is a condensation of my report to the Convention. The full report can be found on our website: www.ccarnet.org.) T R Know your contract. Before negotiating a successful employment agreement you must be an expert in the terms of your current contract. Know the fine details. This will help you focus on what you like and do not like about your present contract and suggest a path to what you may be looking to achieve in negotiations. For rabbis in transition, knowing your current contract will help prepare you to negotiate on the subjects you may wish to incorporate into a new employment relationship. Know yourself. A critical self-evaluation will help you immensely as you begin negotiations. What are your strengths and weaknesses? What special contributions have you made to the congregation/community? What challenges/setbacks have you faced? Take the time to be introspective. Know your objectives. Begin negotiations with a list of objectives. That list might have five items on it or it may have fifteen. Will you focus on economics (salary and benefits) or non-economic terms (for instance, the role of the rabbi or dispute resolution)? Commit these objectives to writing but do not be afraid to add to or subtract from the list during negotiations preparation. Do your homework. It is one thing to have goals in negotiations. It is another thing to marshal the supporting evidence to convince the Congregation to accept your proposals. Consult with colleagues and review surveys on salaries and benefits. Make a list of your 10 most significant contributions to the community. Arm yourself with as much data and as many arguments as you can to justify your proposals. (Continued on page 11) 3 http://www.ccarnet.org
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