PROFESSIONAL STAFF CONGRESS OF THE
CITY UNIVERSITY OF NEW YORK
FINANCIAL STATEMENTS
WITH SUPPLEMENTAL INFORMATION
AUGUST 31, 2022 AND 2021
CONTENTS
Independent Auditor’s Report
Statements of Financial Position
Statements of Activities
Statements of Functional Expenses
Statements of Cash Flows
Notes to Financial Statements
Supplemental Information
Schedules of Expenses by Category
INDEPENDENT AUDITOR’S REPORT
To the Executive Board of Professional Staff Congress of the City University of New York
Opinion
We have audited the financial statements of the Professional Staff Congress of the City University of New York (PSC/CUNY), which comprise the statements of financial position as of August 31, 2022 and 2021, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of PSC/CUNY as of August 31, 2022 and 2021, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of PSC/CUNY and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about PSC/CUNY’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of PSC/CUNY’s internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about PSC/CUNY’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Report on Supplemental Information
Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The Schedules of Expenses by Category are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
Novak Francella LLC, New York, New York March 10, 2023
Statements of Financial Position |
|||
| August 31, 2022 and 2021 | |||
| 2022 | 2021 | ||
| Assets | |||
| Cash and cash equivalents | $909,136 | $1,325,199 | |
| Investments – at fair value | |||
| Mutual funds | 10,781,323 | 12,620,304 | |
| Investments – other | |||
| Certificates of deposit | 993,000 | 992,000 | |
| Total investments | 11,774,323 | 13,612,304 | |
| Receivables | |||
| Dues | 292,000 | 231,000 | |
| Due from related entities | 176,000 | 218,000 | |
| Total receivables | 468,000 | 449,000 | |
| Property and equipment | |||
| Equipment | 764,210 | 760,283 | |
| Leasehold improvements | 172,262 | 661,808 | |
| Furniture and fixtures | 346,461 | 346,461 | |
| 1,282,933 | 1,768,552 | ||
| Less: accumulated depreciation | (1,068,282) | (1,520,943) | |
| Net property and equipment | 214,651 | 247,609 | |
| Other assets | |||
| Security deposit | 100,056 | – | |
| Prepaid expenses | 35,929 | – | |
| Total other assets | 135,985 | – | |
| Total assets | $13,502,095 | $15,634,112 | |
| Liabilities and Net Assets | |||
| Current liabilities | |||
| Accrued expenses | $636,994 | $338,952 | |
| Accrued compensated balances | 335,861 | 605,840 | |
| Due to related entities | 1,362,429 | 1,561,688 | |
| Deferred revenue | – | 168,438 | |
| Total current liabilities | 2,335,284 | 2,674,918 | |
| Long-term liabilities | |||
| Deferred rent | $- | $218,242 | |
| Unfunded projected pension benefit obligation | 3,386,842 | 5,020,042 | |
| Total long-term liabilities | 3,386,842 | 5,238,284 | |
| Total liabilities | 5,722,126 | 7,913,202 | |
| Net assets without donor restrictions | 7,779,969 | 7,720,910 | |
| Total liabilities and net assets | $13,502,095 | $15,634,112 | |
Statements of Activities |
|||
| Years Ended August 31, 2022 and 2021 | |||
| 2022 | 2021 | ||
| Revenue | |||
| Membership dues | $15,972,850 | $15,752,687 | |
| Organizing assistance | 3,363,836 | 3,482,090 | |
| Investment income (loss), net | (1,521,064) | 772,699 | |
| Rental income | 314,327 | 305,859 | |
| Grant income | 99,850 | – | |
| Loss on disposal of assets | (169,206) | – | |
| Other income | 128,058 | 117,558 | |
| Total revenue | 18,188,651 | 20,430,893 | |
| Expenses | |||
| Affiliation fees | 9,470,816 | 9,760,945 | |
| Salaries, employee benefits, and payroll taxes | 6,800,922 | 6,411,134 | |
| Representational and governance | 120,203 | 149,528 | |
| Public relations | 79,497 | 69,431 | |
| Building expenses | 1,401,111 | 1,391,748 | |
| Administrative, office and general | 407,698 | 343,025 | |
| Professional fees | 926,501 | 1,026,894 | |
| Contract and budget campaigns | 491,789 | 432,108 | |
| Stipends and reassigned time | 518,783 | 455,106 | |
| Depreciation expense | 43,724 | 49,532 | |
| Membership campaign | 15,457 | 11,370 | |
| Total expenses | 20,276,501 | 20,100,821 | |
| Net increase (decrease) in net assets before other changes | (2,087,850) | 330,072 | |
| Other changes in net assets | |||
| Unfunded pension benefits obligation adjustments | |||
| other than net periodic pension service cost | 2,146,909 | (416,082) | |
| Net increase (decrease) in net assets | 59,059 | (86,010) | |
| Net assets without donor restrictions | |||
| Beginning of year | 7,720,910 | 7,806,920 | |
| End of year | $7,779,969 | $7,720,910 | |
Statements of Functional Expenses |
|||||||||||
| Years Ended August 31, 2022 and 2021 | |||||||||||
| 2022 | 2021 | ||||||||||
| Member | Support | Member | Support | ||||||||
| Total | Services | Services | Total | Services | Services | ||||||
| Affiliation fees | $9,470,816 | $9,470,816 | $- | $9,760,945 | $9,760,945 | $- | |||||
| Salaries, employee benefits and payroll taxes | 6,800,922 | 3,013,393 | 3,787,529 | 6,411,134 | 2,846,355 | 3,564,779 | |||||
| Representational and governance | 120,203 | 120,203 | – | 149,528 | 149,528 | – | |||||
| Public relations | 79,497 | 79,497 | – | 69,431 | 69,431 | – | |||||
| Building expenses | 1,401,111 | 620,832 | 780,279 | 1,391,748 | 617,936 | 773,812 | |||||
| Administrative, office and general | 407,698 | 115,103 | 292,595 | 343,025 | 99,630 | 243,395 | |||||
| Professional fees | 926,501 | 926,501 | – | 1,026,894 | 1,026,894 | – | |||||
| Contract and budget campaigns | 491,789 | 491,789 | – | 432,108 | 432,108 | – | |||||
| Stipends and reassigned time | 518,783 | 518,783 | – | 455,106 | 455,106 | – | |||||
| Depreciation expense | 43,724 | – | 43,724 | 49,532 | – | 49,532 | |||||
| Membership campaign | 15,457 | 15,457 | – | 11,370 | 11,370 | – | |||||
| Total expenses | $20,276,501 | $15,372,374 | $4,904,127 | $20,100,821 | $15,469,303 | $4,631,518 | |||||
Statements of Cash Flows |
|||
| Years Ended August 31, 2022 and 2021 | |||
| 2022 | 2021 | ||
| Cash flows from operating activities | |||
| Change in net assets | $(2,087,850) | $330,072 | |
| Adjustments to reconcile change in net assets to net cash | |||
| provided by (used for) operating activities | |||
| Depreciation | 43,724 | 49,532 | |
| Net realized and unrealized gains | 1,860,357 | (515,015) | |
| Unfunded pension benefit obligation adjustments | |||
| other than net periodic pension service cost | 2,146,909 | (416,082) | |
| Loss on disposal of assets | 169,206 | – | |
| Decrease (increase) in assets: | |||
| Dues receivable | (61,000) | (64,000) | |
| Due from related entities | 42,000 | (77,000) | |
| Security deposit | (100,056) | – | |
| Prepaid expenses | (35,929) | – | |
| Increase (decrease) in liabilities: | |||
| Accrued expenses | 298,042 | (64,106) | |
| Accrued compensated absences | (269,979) | 15,859 | |
| Due to related entities | (199,259) | (67,730) | |
| Deferred revenue | (168,438) | 104,319 | |
| Deferred rent | (218,242) | (191,924) | |
| Unfunded projected pension benefit obligation | (1,633,200) | 756,891 | |
| Net cash used for operating activities | (213,715) | (139,184) | |
| Cash flows from investing activities | |||
| Purchase of property and equipment | (179,972) | (35,629) | |
| Purchase of certificates of deposit | (200,000) | (199,000) | |
| Liquidation of certificates of deposit | 199,000 | 199,000 | |
| Sale of investments | 329,740 | 944,173 | |
| Purchase of investments | (351,116) | (681,984) | |
| Net cash provided by (used for) investing activities | (202,348) | 226,560 | |
| Net increase (decrease) in cash | (416,063) | 87,376 | |
| Cash and cash equivalents | |||
| Beginning of year | 1,325,199 | 1,237,823 | |
| End of year | $909,136 | $1,325,199 | |
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2022 AND 2021
NOTE 1. ORGANIZATION AND TAX STATUS
The Professional Staff Congress of the City University of New York (PSC/CUNY) was created by a merger of the Legislative Conference of The City University of New York and the United Federation of College Teachers. It was created to be the collective bargaining representative of the instructional staff of the City University of New York (CUNY). The Professional Staff Congress of the City University of New York is a Local (Local 2334) of the American Federation of Teachers (AFT). Through the AFT, PSC/CUNY is affiliated with New York State United Teachers (NYSUT) and The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).
The purpose of PSC/CUNY is to advance and secure the professional and economic interest of the instructional staff of the CUNY and other members of the bargaining units of PSC/CUNY. The objectives of PSC/CUNY are to negotiate and administer collective bargaining agreements; to improve the quality of education, research and scholarship at the CUNY; to cooperate with other educational, professional, and labor organizations in order to enhance the quality of education in the nation and to promote the professional and economic interests and the welfare of all workers; to serve as the public representative of the instructional staff of the CUNY and other members of the bargaining units of the Professional Staff Congress; and to cooperate with other CUNY employee and academic organizations and student bodies in order to advance the interests of the faculty, staff and students of the CUNY and the community it serves. The benefits members receive are paid for by contributions from the employer, CUNY, which are negotiated during bargaining as part of members’ compensation. PSC/CUNY and its affiliated organizations have arranged for various special economic benefits for its members.
Supplemental health and welfare benefits are paid from a separate trust fund and are not included in these financial statements.
PSC/CUNY is exempt from Federal income taxes under Section 501(c)(5) of the Internal Revenue Code under a blanket exemption of the AFT.
Accounting principles generally accepted in the United States of America require management to evaluate tax positions taken by PSC/CUNY and recognize a tax liability if PSC/CUNY has taken an uncertain position that, more likely than not, would not be sustained upon examination by the
U.S. Federal, state, or local taxing authorities. PSC/CUNY is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. Typically, tax years will remain open for three years; however, this may differ depending upon the circumstances of PSC/CUNY.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Method of Accounting – The accompanying financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for non-profit organizations. Net assets are classified as net assets without donor restrictions and with donor restrictions. Net assets are generally reported as net assets without donor restrictions unless assets are received from donors with explicit stipulations that limit the use of the asset. PSC/CUNY does not have any net assets with donor restrictions. Membership dues and fees are accounted for as exchange transactions.
Net Assets without Donor Restrictions – Net assets that are not subject to donor-imposed restrictions and may be expended for any purpose in performing the primary objectives of PSC/CUNY. These net assets may be used at the discretion of PSC/CUNYs management and the Board of Directors. Net assets without donor restrictions totaled $7,779,969 and $7,720,910 for the years ended August 31, 2022 and 2021, respectively.
Cash and Cash Equivalents – PSC/CUNY considers all cash and highly liquid investments, including certificates of deposit with initial maturities of three months or less, to be cash equivalents.
Investments – Investments are carried at fair value which generally represents quoted market prices, or the net asset value of the mutual funds, as of the last business day of the fiscal year as provided by the custodian or investment manager. Certificates of deposit held for investment that are not debt securities are classified as Investments – other and are carried at cost.
Property and Equipment – Property and equipment are recorded at cost. Major additions are capitalized while replacements, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed currently. Depreciation is computed over the assets’ estimated useful lives, three to thirty years, by the straight-line method. Depreciation expense was $43,724 and $49,532 for the years ended August 31, 2022 and 2021, respectively.
Accrued Compensated Balances – Future employee absences that have been earned but not yet taken are accrued within the contract limits. The accrued compensated balances were $335,861 and $605,840 for the years ended August 31, 2022 and 2021, respectively.
Membership Dues and Dues Receivable – Membership dues are recognized as revenue over the membership period. Dues come from members through payroll deductions and direct payments. Dues receivable are recorded as revenues are recognized. PSC/CUNY has determined that no allowance for doubtful accounts for receivables is necessary as of August 31, 2022 and 2021.
Deferred Rent – Operating leases are recognized on a straight-line basis over the term of the lease. Deferred rent has been recorded for the difference between the fixed payment and the rent expense. Deferred rent was $218,242 for the year ended August 31, 2021.
Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
NOTE 3. CONCENTRATION OF CASH
PSC/CUNY places its cash and certificates of deposit with financial institutions deemed to be creditworthy. The balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. Cash balances and certificates of deposits may at times exceed the insured deposit limits. As of August 31, 2022, PSC/CUNY’s cash and certificates of deposit in excess of FDIC coverage totaled $659,136 and $743,000, respectively.
NOTE 4. AVAILABILITY AND LIQUIDITY
The following represents PSC/CUNY’s financial assets available within one year of the statements of financial position date for general expenditure at August 31, 2022 and 2021:
| 2022 | 2021 | |||||||||
| Financial assets available within one year: | ||||||||||
| Cash and cash equivalents | $909,136 | $1,325,199 | ||||||||
| Investments | 11,774,323 | 13,612,304 | ||||||||
| Receivables | 468,000 | 449,000 | ||||||||
| Prepaid expenses | 35,929 | – | ||||||||
| Total financial assets | 13,187,388 | 15,386,503 | ||||||||
| Less amount held in cash as collateral for letter of credit | (321,178) | – | ||||||||
| Less investments maturing greater than one year | (696,000) | (793,000) | ||||||||
| Financial assets available to meet general expenditures | ||||||||||
| within one year | $12,170,210 | $14,593,503 | ||||||||
As part of PSC/CUNY’s liquidity plan, excess cash is maintained in checking and money market accounts, and certificates of deposit.
NOTE 5. FAIR VALUE MEASUREMENTS
The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described as follows:
Basis of Fair Value Measurement:
Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the PSC/CUNY has the ability to access.
Level 2 – Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; inputs that are derived principally from or corroborated by observable market data by correlation or other means.
If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.
The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model- based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period.
For the years ended August 31, 2022 and 2021, there were no transfers in or out of levels 1, 2, or 3.
The following tables set forth, by level within the fair value hierarchy, the major categories of investments measured at fair value at August 31, 2022 and 2021:
| Fair Value Measurements at August 31, 2022 | ||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||
| Mutual funds | $10,781,323 | $10,781,323 | $- | $- | ||||
| Investments at fair value | $10,781,323 | $10,781,323 | $- | $- | ||||
| Fair Value Measurements at August 31, 2021 | ||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||
| Mutual funds | $12,620,304 | $12,620,304 | $- | $- | ||||
| Investments at fair value | $12,620,304 | $12,620,304 | $- | $- | ||||
NOTE 6. SINGLE-EMPLOYER PENSION PLAN
PSC/CUNY contributes to the Professional Staff Congress/CUNY Pension Plan (the Plan), a single-employer plan covering professional and management employees who meet age and service requirements. Contributions are actuarially determined.
The Professional Staff Congress of the City University of New York Pension Plan is a defined benefit plan paying 2.2% of Final Average Compensation for each year of service, up to 25 years. Final Average Compensation is the average compensation over the last highest 5 consecutive years (or highest 60 months) of service. Plan assets do not include any securities of the employer or related entities. No amount of future annual benefits of plan participants is covered by insurance contracts. There were no significant transactions between the PSC/CUNY or related parties and the Plan during the years ended August 31, 2022 and 2021.
The following are the balances as of or for the years ended August 31, 2022 and 2021 as provided by the Plan’s actuary:
| 2022 | 2021 | ||||||
| Projected benefit obligation | $(7,259,267) | $(10,284,405) | |||||
| Fair value of plan assets | 3,872,425 | 5,264,363 | |||||
| Funded status | $(3,386,842) | $(5,020,042) | |||||
| Accumulated benefit obligation | $(3,134,721) | $(2,657,659) | |||||
| Amounts recognized in the statement of financial position: | |||||||
| Noncurrent liabilities | $(3,386,842) | $(5,020,042) | |||||
| Amounts in net assets not recognized as components | |||||||
| of net periodic benefit cost: | |||||||
| Accumulated net (loss) | (252,121) | (2,362,383) | |||||
| Weighted-average assumptions: | |||||||
| Discount rate (to discount plan benefit obligations) | 4.57% | 2.64% | |||||
| Discount rate (to measure net periodic pension cost) | 2.64% | 2.59% | |||||
| Expected return on plan assets | 7.00% | 7.00% | |||||
| Rate of compensation increase | 4.00% | 4.00% | |||||
| Employer contributions | $425,375 | $420,000 | |||||
| Benefits paid | $836,868 | $2,053,839 | |||||
| Net periodic pension cost – service cost | $939,084 | $760,809 | |||||
| Other components of net periodic pension cost: | |||||||
| Interest cost | $263,186 | $265,588 | |||||
| Expected return on assets | (362,925) | (437,588) | |||||
| Recognized actuarial (gain) loss | 63,092 | 61,533 | |||||
| Recognition of settlement loss | – | 423,153 | |||||
| $(36,647) | $312,686 | ||||||
| The change in unfunded pension benefit obligations consists of the following: | |||||||
| 2022 | 2021 | ||||||
| Changes in net periodic pension cost – service cost: | |||||||
| Net periodic pension cost – service cost | $939,084 | $760,809 | |||||
| Less: Employer contributions | (425,375) | (420,000) | |||||
| $513,709 | $340,809 | ||||||
| Changes recognized in unrestricted net assets other | |||||||
| than net periodic pension cost – service cost: | |||||||
| Other components of net periodic pension cost | $(36,647) | $312,686 | |||||
| Increase (decrease) in unrecognized | |||||||
| accumulated net gain or loss | (2,110,262) | 103,396 | |||||
| $(2,146,909) | $416,082 | ||||||
| $(1,633,200) | $756,891 | ||||||
In 2022 and 2021, PSC/CUNY has recorded a gain of $2,146,909 and loss of $416,082, respectively, to its net assets for the additional change in accrued pension payable beyond the current-year pension expense.
The Plan’s expected long-term rate of return on assets assumption is 7.00%. This assumption represents the rate of return on Plan assets reflecting the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the benefit obligation.
The assumption has been determined by reflecting expectations regarding future rates of return for the investment portfolio, with consideration given to the distribution of investments by asset class and historical rates of return for each individual asset class.
For the years ended August 31, 2022 and 2021, there were no transfers in or out of levels 1, 2 and 3.
The following tables set forth, by level within the fair value hierarchy, the major categories of Plan investments measured at fair value and the allocation of the Plan’s net assets available for benefits at August 31, 2022 and 2021:
| Fair Value Measurements at August 31, 2022 | |||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||
| Cash and cash equivalents | 5.84% | $226,356 | $226,356 | $- | $- | ||||
| Equities | 43.18% | 1,672,059 | 1,672,059 | – | – | ||||
| U.S Government and Government | |||||||||
| Agency obligations | 29.12% | 1,127,509 | 1,127,509 | – | – | ||||
| Mutual funds | 21.86% | 846,501 | 846,501 | – | – | ||||
| 100.00% | $3,872,425 | $3,872,425 | $- | $- | |||||
| Fair Value Measurements at August 31, 2021 | |||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||
| Cash and cash equivalents | 2.72% | $143,213 | $143,213 | $- | $- | ||||
| Equities | 54.92% | 2,891,036 | 2,891,036 | – | – | ||||
| U.S Government and Government | |||||||||
| Agency obligations | 18.18% | 957,006 | 957,006 | – | – | ||||
| Mutual funds | 24.18% | 1,273,108 | 1,273,108 | – | – | ||||
| 100.00% | $5,264,363 | $5,264,363 | $- | $- | |||||
PSC/CUNY’s investment policies are designed to ensure that adequate plan assets are available to provide future payments of pension benefits to eligible participants. Taking into account the expected long-term rate of return on plan assets, PSC/CUNY formulates the investment portfolio composed of the optimal combination of cash and cash equivalents, equities, fixed income and mutual funds.
Future Cash Flows
The projected contribution for next fiscal year is $393,000.
The following benefit payments, which reflect expected future service, are expected to be paid as follows:
| 2023 | $209,583 |
| 2024 | 342,890 |
| 2025 | 201,915 |
| 2026 | 197,721 |
| 2027 | 264,662 |
| 2028-2032 | 1,681,013 |
NOTE 7. MULTIEMPLOYER DEFINED BENEFIT PENSION PLAN
PSC/CUNY participates in the Office and Professional Employees International Union, Local 153 Pension Fund, a multiemployer defined benefit pension plan, under the terms of a collective bargaining agreement that covers its union-represented employees who meet age and service requirements. The risks of participating in multiemployer defined benefit pension plans are different from single-employer plans in the following aspects:
a. Assets contributed to the multiemployer defined benefit pension plan by one employer may be used to provide benefits to employees of other participating employers.
b. If a participating employer stops contributing to the multiemployer defined benefit pension plan, the unfunded obligations of the multiemployer defined benefit pension plan may be borne by the remaining participating employers.
c. If the Plan chooses to stop participating in the multiemployer defined benefit pension plan, the Plan may be required to pay the multiemployer defined benefit pension plan an amount based on the underfunded status of the multiemployer defined benefit pension plan, referred to as a withdrawal liability.
PSC/CUNY’s participation in the multiemployer defined benefit pension plan for the annual periods ended August 31, 2022 and 2021 is outlined in the table below. The zone status is based on information that PSC/CUNY received from the multiemployer defined benefit pension plan and is certified by the multiemployer defined benefit pension plan’s actuary. Among other factors, pension plans in the red zone are generally less than 65 percent funded, pension plans in the yellow zone are less than 80 percent funded, and pension plans in the green zone are at least 80 percent funded.
| Legal Name of Pension Plan | Pension Plan’s Employer Identification Number | Pension Plan’s Plan Number | Pension Protection Act Zone Status | Expiration Date of Collective Bargaining Agreement | |||
| Zone Status | Extended Amortization Provisions Used? | Zone Status | Extended Amortization Provisions Used? | ||||
| Local 153 Pension Fund | 13-2864289 | 001 | Red as of 01/01/22 | No | Red as of 01/01/21 | No | * |
* PSC/CUNY participates in the Local 153 Pension Fund through a collective bargaining agreement between PSC/CUNY and the Office & Professional Employees International Union, Local 153AFL-CIO (Local 153). The collective bargaining agreement has a three-year term of October 1, 2018 through September 30, 2021 and was extended through September 30, 2022.
| Legal Name of Pension Plan | Contributions paid by the Plan directly to the Pension Plan | Contributions to the Pension Plan greater than 5% of total Pension Plan contributions (Plan year ending) | Employer Contribution Rate of the Pension Plan | Number of Employees Covered by the Pension Plan for which the Plan contributes directly to the Pension Plan | ||||
| 8/31/2022 | 8/31/2021 | 8/31/2022 | 8/31/2021 | 8/31/2022 | 8/31/2021 | |||
| Local 153 Pension Fund | $110,209 | $111,767 | No, Plan year ending 8/31/22. | No, Plan year ending 8/31/21. | * | * | 8 | 9 |
* The employer contribution rate of the Pension Plan was $292 per week per employee effective October 1, 2021, and $284 effective June 1, 2021.
| Legal Name of Pension Plan | Funding Improvement Plan or Rehabilitation Plan Implemented or Pending? | Surcharge paid to Pension Plan by the Benefit Funds? | Minimum contributions required in future by CBA, statutory requirements, or other contractual requirements? | |
| No? | If yes, description | |||
| Local 153 Pension Fund | Rehabilitation Plan Implemented | Yes | No | N/A |
NOTE 8. MULTIEMPLOYER PLAN THAT PROVIDES POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
PSC/CUNY contributed to one multiemployer defined benefit health and welfare plan during the years ended August 31, 2022 and 2021 that provides postretirement benefits for its full-time support staff employees. PSC/CUNY’s contributions to the welfare plan on behalf of its full-time support staff employees, contribution rates, and number of employees covered were as follows:
| Legal Name of Plan providing postretirement benefits other than pension | Contributions to Plan | Employer contribution rates | Number of employees covered by Plan | |||
| 8/31/2022 | 8/31/2021 | 8/31/2022 | 8/31/2021 | 8/31/2022 | 8/31/2021 | |
| Local 153 Health Fund | $7,742 | $8,302 | * | * | 15 | 15 |
* Under a collective bargaining agreement between Local 153 and PSC/CUNY, PSC/CUNY established coverage through an insured Preferred Provider Organization Plan to provide medical, dental and prescription benefits. PSC/CUNY contributed $66 per month to Local 153 Health Fund per active employee and $8 per month per retiree under a collective bargaining agreement between Local 153 and PSC/CUNY to provide supplement benefits for life insurance coverage and vision benefits.
NOTE 9. RELATED PARTY TRANSACTIONS
Identification of Related Organizations
PSC/CUNY has the following related entities:
· American Federation of Teachers (AFT)
· Municipal Labor Committee (MLC)
· New York State United Teachers (NYSUT)
· Professional Staff Congress of the City University of New York Welfare Fund
· The American Association of University Professors (AAUP)
The entities listed above share common trustees, officers, or affiliation with PSC/CUNY.
PSC/CUNY is affiliated with New York State United Teachers (NYSUT) and the American Federation of Teachers (AFT) through arrangements whereby PSC/CUNY pays dues to each entity in order for its members to participate in affiliated programs and, in turn, is reimbursed for various expenses, including reimbursements for meetings, organizing, legislative representation, training programs, and arbitration.
Dues paid to NYSUT for the years ended August 31, 2022 and 2021 were $6,026,117 and $6,291,585, respectively. As of August 31, 2022 and 2021, PSC/CUNY owed NYSUT $779,000 and $1,020,000, respectively, for dues. Dues paid to AFT for the years ended August 31, 2022 and 2021 were $3,083,120 and $3,126,502, respectively. As of August 31, 2022 and 2021, PSC/CUNY owed AFT $416,000 and $531,000, respectively, for dues. Dues paid to MLC for the years ended August 31, 2022 and 2021 were $45,469 and $43,688, respectively. As of August 31, 2022, PSC/CUNY owed MLC $22,490 for dues.
Reimbursements from NYSUT for the years ended August 31, 2022 and 2021 were $3,012,854 and $3,145,604, respectively. As of August 31, 2022 and 2021, NYSUT owed PSC/CUNY $92,000 and $186,000, respectively. Reimbursements from AFT for the years ended August 31, 2022 and 2021 were $350,982 and $336,486, respectively. As of August 31, 2022 and 2021, AFT owed PSC/CUNY $39,000 and $32,000, respectively.
PSC/CUNY pays NYSUT a monthly fee for dues processing. Dues processing fees totaled $76,695 and $72,600 for the years ended August 31, 2022 and 2021, respectively. As of August 31, 2021, PSC/CUNY owed NYSUT $1,959 for postage.
PSC/CUNY reimburses the Welfare Fund for shared computer services. PSC/CUNY’s portion of shared computer expenses totaled $54,618 and $49,353 for the years ended August 31, 2022 and 2021, respectively. As of August 31, 2022 and 2021, PSC/CUNY owed the Welfare Fund $38,354 and $6,876, respectively for shared computer services. As of August 31, 2022 and 2021, PSC/CUNY owed the Welfare Fund $6,889 and $1,853 in other consulting fees.
As of August 31, 2022, PSC/CUNY was owed $45,000 from the PSC PAC Fund for a payment made in error from PSC/CUNY’s account.
Office Space Leases
PSC/CUNY leased office space from 61 Broadway Owner, LLC through August 31, 2022. On September 30, 2005, PSC/CUNY entered into a sixteen-year lease with 61 Broadway Owner, LLC for Suites 1500 and 1615 of the 61 Broadway building. The lease was amended on August 4, 2009 and May 17, 2012 to include Suites 1630 and 1610, respectively. The leases, all of which expired on August 31, 2022, were classified as operating leases and provided for minimum annual rentals, plus certain additional expense escalations and utility charges. Per the agreement, PSC/CUNY was also responsible for its portion of real estate taxes.
PSC/CUNY leases office space from 25 Broadway Office Properties, LLC (the Realty Corp). On August 10, 2022, PSC/CUNY entered into a fifteen-year lease with the Realty Corp for a portion of the fifteenth (15th) floor of the 25 Broadway building. Rental payments are abated for twelve (12) months following completion of the landlord’s work. Until construction of the 15th floor is substantially completed, PSC/CUNY is required to pay fixed rent in the amount of $27,500 per month for temporary space located on the 9th floor. The Rent Commencement Date begins at the conclusion of the abatement period. The lease, which expires on the fifteen (15) year anniversary of the Rent Commencement Date, is classified as an operating lease and provides for minimum annual rentals, plus certain additional expense escalations and utility charges. Per the agreement, PSC/CUNY was also responsible for its portion of real estate taxes.
The sum of the minimum annual future rental payments over the 15-year duration of the lease will total $20,088,338 and will commence on the 1st day of the month following the conclusion of the abatement period.
Rent including utilities and maintenance was $1,242,195 and $1,175,148 for the years ended August 31, 2022 and 2021, respectively.
PSC/CUNY subleases office space to the Professional Staff Congress of the City University of New York Welfare Fund, a related party. The Welfare Fund paid PSC/CUNY a sum equal to 23.90% of the lease of Suite 1500 of 61 Broadway through the sublease expiration on August 31, 2022. The Welfare Fund will pay PSC/CUNY a sum equal to 21% of the lease of a portion of the 15th floor of 25 Broadway at the conclusion of the abatement period. Until construction of the 15th floor is substantially completed, the Welfare Fund is required to pay fixed rent in the amount of $1,375 per month for temporary space located on the 9th floor.
The sum of the minimum annual future rental income over the 15-year duration of the sublease with the related party will total $4,218,551 and will commence on the 1st day of the month following the conclusion of the abatement period.
Total rental income for the years ended August 31, 2022 and 2021 was $314,327 and $305,859, respectively. As of August 31, 2022, PSC/CUNY owed the Welfare Fund $15,649 for rent. Under the sublease agreement, the PSC/CUNY owes the Welfare Fund $21,012 for deferred first month’s rent and $63,035 for a security deposit, which is refundable upon expiration of the sublease.
NOTE 10. LITIGATION
Certain claims, suits, and complaints arising in the ordinary course of business have been filed or are pending against PSC/CUNY. In the opinion of PSC/CUNY’s management and legal counsel, the ultimate outcome of these claims will not have a material adverse effect on the financial position of PSC/CUNY.
NOTE 11. SUBSEQUENT EVENTS
PSC/CUNY has evaluated subsequent events through March 10, 2023, the date the financial statements were available to be issued, and they have been evaluated in accordance with relevant accounting standards.
SUPPLEMENTAL INFORMATION
| Schedules of Expenses by Category | |||
| Years Ended August 31, 2022 and 2021 | |||
| 2022 | 2021 | ||
| Affiliation fees | |||
| New York State United Teachers | $6,026,117 | $6,291,585 | |
| American Federation of Teachers | 3,083,120 | 3,126,502 | |
| The American Association of University Professors | 275,960 | 258,140 | |
| Municipal Labor Committee | 45,469 | 43,688 | |
| Other | 40,150 | 41,030 | |
| 9,470,816 | 9,760,945 | ||
| Salaries, employee benefits, and payroll taxes | |||
| Salaries | 3,855,041 | 3,850,029 | |
| Payroll taxes | 320,358 | 310,872 | |
| Health benefit expense | 1,547,186 | 1,341,410 | |
| Pension benefit expense | 1,049,293 | 872,576 | |
| Other | 29,044 | 36,247 | |
| 6,800,922 | 6,411,134 | ||
| Representational and governance | |||
| Conferences and conventions | 105,859 | 64,379 | |
| Elections | 14,045 | 84,802 | |
| Committees | 299 | 347 | |
| 120,203 | 149,528 | ||
| Public relations | |||
| Mobilization and outreach | 45,547 | 45,588 | |
| Community relations | 33,950 | 23,843 | |
| 79,497 | 69,431 | ||
| Building expenses | |||
| Rent and services | 1,242,195 | 1,175,148 | |
| Real estate taxes | 58,734 | 125,010 | |
| Repairs and maintenance | 100,182 | 91,590 | |
| 1,401,111 | 1,391,748 | ||
| Administrative, office and general | |||
| Office | $235,945 | $208,243 | |
| Postage | 12,504 | 11,848 | |
| Insurance | 71,235 | 46,032 | |
| Dues processing | 76,695 | 72,600 | |
| Other | 11,319 | 4,302 | |
| 407,698 | 343,025 | ||
| Professional fees | |||
| Legal | 357,170 | 350,222 | |
| Consulting | 321,952 | 299,432 | |
| Accounting and auditing | 36,650 | 35,200 | |
| Computer | 210,729 | 342,040 | |
| 926,501 | 1,026,894 | ||
| Contract and budget campaigns | 491,789 | 432,108 | |
| Stipends and reassigned time | 518,783 | 455,106 | |
| Depreciation expense | 43,724 | 49,532 | |
| Membership campaign | 15,457 | 11,370 | |
| Total expenses | $20,276,501 | $20,100,821 | |
Published: June 21, 2023
