Activities Included and Excluded from the Agency Fee

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1 CALIFORNIA FACULTY ASSOCIATION NOTICE TO ALL NONMEMBER AGENCY FEE PAYERS FOR THE FEE PERIOD JANUARY 1 THROUGH DECEMBER 31, 2006 The State Controller s office will continue deducting an agency fee from your paycheck. The Controller s office will transmit the deducted amount to the California Faculty Association ( CFA ). CFA serves as your collective bargaining representative and is required by law to protect faculty interests in matters related to your wages, hours and working conditions with the California State University ( CSU ). CFA provides this notice to you, and other nonmembers to inform you of how the fee was calculated, the types of activities that are included and excluded from the fee calculation, financial data in support of the fee calculation, and the procedural steps that you and CFA will follow if you challenge the accuracy of the calculation of the agency fee. The CFA Agency Fee As a nonmember represented by CFA, you are being charged an agency fee that is less than the regular membership dues paid by CFA members. Regular membership dues include fees for political and other activities, which are not chargeable to you. You are, therefore, charged a reduced rate that reflects only your share of expenses that are germane to CFA s status as your exclusive bargaining representative. You have a right to challenge the accuracy of CFA s calculation of the chargeable and non-chargeable expenses and to have your challenge resolved by an impartial arbitrator. If you wish to challenge the accuracy of the fee calculation you must follow the procedures detailed later in this notice. Activities Included and Excluded from the Agency Fee As you review the financial information used to determine the amount of the agency fee, you should know which kinds of expenses are included and which are not. The agency fee is the proportionate share of member dues and agency fees that represents certain operating costs and costs of collective bargaining, contract administration, and pursuing matters affecting wages, hours, and other terms and conditions of employment. Non-chargeable expenses are those involving expenditures to support political and ideological activities and expenses unrelated 1

2 to the cost of collective bargaining, contract administration, or pursuing matters affecting wages, hours, and other terms and conditions of employment. The following lists identify activities as fully chargeable, chargeable to the extent they are germane, and non-chargeable to agency fee payers. Expenses associated with the following activities are totally chargeable: 1. Gathering information in preparation for the negotiation of collective bargaining agreements, including gathering information from employees concerning collective bargaining positions. 2. Negotiating collective bargaining agreements. 3. Administration of ballot procedures on the ratification of negotiated agreements. 4. Public advertising of CFA s positions on the negotiation, ratification, or implementation of collective bargaining agreements. 5. Adjusting grievances pursuant to the provisions of collective bargaining agreements, enforcing collective bargaining agreements, and representing employees in proceedings under civil service laws or regulations. 6. Purchasing publications used in negotiating and administering collective bargaining agreements. 7. Paying technicians in labor law, economics, and other subjects for services used in negotiating and administering collective bargaining agreements and in processing grievances. 8. Membership meetings and conventions held at least in part to determine the positions of the employees on collective bargaining issues, contract administration, and other matters affecting wages, hours, and working conditions, including the cost of sending representatives to such meetings and conventions. 9. Internal communications that concern collective bargaining issues, contract administration, public employment generally, employee development, unemployment, job opportunities, award programs, and other matters affecting wages, hours, and working conditions. 2

3 10. Impasse procedures, including fact-finding, mediation, arbitration, strikes, slowdowns, and work stoppages over provisions of collective bargaining agreements and the administration thereof, so long as they are legal under state law. These costs may include preparation for strikes, slowdowns, and work stoppages regardless of their legality under state law, so long as no illegal conduct actually occurs. 11. Lobbying for the negotiation, ratification, or implementation of a collective bargaining agreement. 12. The prosecution or defense of arbitration, litigation, or charges to obtain ratification, interpretation, implementation, or enforcement of collective bargaining agreements and any other litigation before agencies or in the courts which concerns bargaining unit employees and is normally conducted by an exclusive representative. Expenses associated with the following activities are chargeable to the extent that they are germane to collective bargaining activity: 13. Purchasing books, reports, and advance sheets used in activities or for purposes other than negotiating collective bargaining agreements and processing grievances. 14. Paying technicians in labor law, economics, and other subjects for services used in activities other than negotiating and administering collective bargaining agreements and processing grievances. 15. Membership meetings and conventions held for purposes other than to determine the positions of the employees on collective bargaining issues, contract administration, and other matters affecting wages, hours, and working conditions, including the cost of sending representatives to such meetings and conventions. 16. Supporting and paying affiliation fees to other labor organizations that do not negotiate the collective bargaining agreements covering the agency fee payer s employment. 17. Internal communications that concern subjects other than collective bargaining issues, contract administration, public employment generally, employee development, unemployment, job opportunities, award 3

4 programs, and other matters affecting wages, hours, and working conditions. 18. Prosecution or defense of arbitration, litigation, or charges involving matters other than the ratification, interpretation, implementation, or enforcement of collective bargaining agreements or that relate to the maintenance of CFA s institutional existence. 19. Social and recreational activities. 20. Payments for insurance, medical care, retirement, disability, death, and related benefits for CFA employees, staff, and officers. 21. Administration activities and expenses allocable to CFA s activities and expenses for which agency fee payers are charged. Expenses associated with the following activities are not chargeable: 22. Training in voter registration, get-out-the-vote, and political campaign techniques. 23. Supporting and contributing to charitable organizations, political organizations, candidates for public office and initiative measures, ideological causes, and international affairs. 24. Public advertising of CFA s positions on issues other than negotiation, ratification, or implementation of collective bargaining agreements. 25. Lobbying for purposes other than the negotiation, ratification, or implementation of a collective bargaining agreement. 26. Affiliation fees to the AFL-CIO and its state federations and central bodies. 27. Organizing bargaining units of employees whose wages, hours, and terms and conditions of employment have no impact, direct or indirect, upon the wages, hours, and terms and conditions of employment of employees represented by CFA. 28. Organizing within the bargaining unit in which agency fee payers are employed, other CSU bargaining units, and bargaining units of other 4

5 California public employees whose wages, hours, and terms and conditions of employment have a direct or indirect impact upon the wages, hours, and terms and conditions of employment of employees represented by CFA. Audited Financial Records CFA s calculation of expenses for which objecting nonmember agency fee payers can be charged a pro rata share is based on the following audited financial information. This financial information sets forth the expenditures of CFA and its affiliates, audited by independent accountants, and states the amounts of expenditures, which are chargeable to nonmember agency fee payers pursuant to the criteria set forth above. Enclosed with this notice is a copy of the CFA audit report. Because the reports of CFA s affiliates are voluminous, it would add significantly to the cost of this mailing (chargeable to nonmember agency fees payers) to include them in this packet. Therefore, CFA has chosen to make the affiliate reports available to nonmember agency fee payers as follows: (1) The reports are available on CFA s website, at (2) You may request a copy of the reports by (cfa@calfac.org); telephone ( ), fax ( ), or regular mail (5933 W. Century Blvd, Suite 220, Los Angeles, CA 90045). The reports will be mailed by regular mail. The mailing address must be in the request. (3) Copies of the reports are available at CFA s regional and chapter offices. For the location of the chapter office on your campus, or the nearest regional office, please call CFA at (310)

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14 American Association of University Professors Statement of Expenses and Allocation of Expenses Between Chargeable Expenses and Non-Chargeable Expenses Year Ended December 31, 2004 Chargeable to Objectors Non-Chargeable to Objectors Total General Fund Expenses Service to collective bargaining chapters $ 417,396 $ - $ 417,396 Collective bargaining congress 69,012-69,012 Committee on Representation of Economic and Professional Interests 1,833-1,833 Committee on the Economic Status of the Profession 195, ,104 Academe and other publications 60, , ,590 Grants to collective bargaining chapters 66,001 23,988 89,989 Administration Administrative services 195, , ,448 Membership records 92, , ,798 Office of General Secretary 52, , ,812 Executive functions - 201, ,106 Office of Staff Counsel - 212, ,917 Membership development - 377, ,804 Public information - 162, ,488 Chapter development - 134, ,730 Organizing - 136, ,735 Conference development - 192, ,357 Dues to other organizations - 15,271 15,271 Committee on Governance - 87,038 87,038 Other publications - 56,698 56,698 Committee on Academic Freedom and Tenure - 605, ,342 Committee on Government Relations - 103, ,015 Committee on the Status of Women in the Academic Profession 6,883 21,433 28,316 Fundraising - 125, ,105 Ford Fund Sloan Fund 92,001 92,001 Other Committees - 176, ,924 Sub-total $ 1,156,672 $ 4,338,534 $ 5,495,206 Deduct charges for Academe (60,215) 60,215 - Total $ 1,096,457 $ 4,398,749 $ 5,495,206 Percentage 19.95% 80.05% % 14

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16 National Education Association of the United States Supplemental Summary Schedule of Agency Fee Chargeable and NonChargeable Expenditures Year Ended August 31, 2004 CFA Prepared Summary Chargeable Non-Chargeable Total Expenditure Expenditure Expenditure STRATEGIC PRIORITIES Student Achievement 2,937,465 1,772,390 4,709,855 Teacher Quality 3,209,535 2,294,754 5,504,289 Education Support Professional Quality 2,098,215 1,611,873 3,710,088 Quality School Systems 4,526,985 2,332,312 6,859,297 Public, Parental, and Business Suppor 649,232 40,757,858 41,407,090 Membership and Affiliate Support 92,560,696 39,662, ,223,142 Administrative Services and Program Support 57,958,465 26,686,927 84,645, ,940, ,118, ,059, % 41.25% Modifications made for California (6,164,521) 6,164, ,776, ,283, ,059, % 43.46% Note: NEA's chargeable and nonchargeable expenditure figures are based on its audited financial statements for the fiscal year. Subsequent to the issuance of that statement, NEA made several modifications to the chargeable and nonchargeable schedules as a result of receiving more recent audited chargeable figures from the California Teachers Association for certain expenditures in California. Those modifications are reflected in this schedule which was prepared by CFA. 16

17 CALIFORNIA STATE EMPLOYEES ASSOCIATION Statement of Operating Expenses by Activity and the Allocation of Expenses Between Chargable, Non-Chargeable and Member Only Benefits CFA Prepared Summary CSU Division For the Year Ended December 31, 2003 Member Non- Only Total Chargeable Chargeable Benefits Activity Expenses Expenses Expenses Expenses Contract Negotiation and Enforcement $ 1,585,366 1,585,366 Governmental Representation 136,751 57,150 79,601 Litigation 45,153 29,667 15,486 Conferences 191, ,777 Membership Recruiting 54,705 54,705 Community Service 5,066 5,066 Other Activity 16,184 15, Political Activity 37,054 37,054 Communications 58,995 55,667 3,328 Legislative 105,427 79,650 25,777 Meetings and Governance 929, , ,331 5,899 Administration 740, ,169 52,166 8,129 Member-Only Benefits 49,218-49,218 49,218 $ 3,955,231 3,489, ,982 63, % 88.22% 11.78% 1.60% 17

18 General Fund Personnel costs Service Employees International Union, AFL-CIO, CLC United States Division Consolidated Statement of Expenses and Allocation Between Chargeable Expenses and Non-Chargeable Expenses - Alternative Basis of Allocation Year Ended December 31, 2004 Column A Column B Column C Total Chargeable Non-Chargeable Expenses Expenses Expenses Organizing departments 27,574,883 $ - $ 27,574,883 Field operations and campaign support 12,808,134 9,901,006 2,907,128 Politics, government, and community 3,798,915-3,798,915 Union communications 5,987,344 1,613,604 4,373,740 Leader support 7,344,583 6,524, ,981 Administrative and financial services 6,084,131 4,248,267 1,835,864 Professional fees and expenses 9,532,179 4,893,288 4,638,891 Administrative expenses 17,583,088 6,027,483 11,555,605 Contributions 1,543,761-1,543,761 Payments to locals Subsidies 5,482,580-5,482,580 Per capita tax rebates 10,330,490 10,330,490 - Reimbursements 1,604,468 1,604,468 - Political subsidies 1,922,861-1,922,861 Conferences and meetings 1,951, ,934 1,465,122 Communications and media 673, , ,492 Affiliation fees and assessments 10,206,662-10,206,662 Death gratuities 136, ,250 Building expenses 1,185, , ,209 State Council return 1,558,736 1,558,736 - Total General Fund 127,308,954 47,776,010 79,532,944 Strike and Defense Funds 2,965,217 2,965,217 - Political Education and Action Funds 42,165,228-42,165,228 Committee on Political Education 10,107,640-10,107,640 Unity Fund 58,730,283-58,730,283 Convention Fund 11,245,759 11,245,759 - Legal Defense Fund 57,063-57,063 Conference Fund Expenses 832, ,246 - SEIU Communications Center 739, ,893 Total expenses before modification 254,152,283 63,559, ,593,158 Less Per capita tax rebate payments to locals (10,330,490) (10,330,490) - Political expenses paid from voluntary contributions (10,107,640) - (10,107,640) Conference Fund expenses (832,246) (832,246) - Legal Defense Fund (57,063) (57,063) SEIU Communications Center (739,893) (739,893) Total expenses, as modified $ 232,084,951 $ 51,656,496 $ 180,428, % 22.26% 77.74% 18

19 CFA Chargeable Calculation Membership dues are set at 1.05% of an employee s salary with minimum dues of ten dollars ($10.00) per month. As a non-member agency fee payer, you will instead pay a sum equal to.714% of your salary, or 68% of membership dues. Minimum agency fees are $6.80 or 68% of $ If your monthly salary from Unit 3 earnings is less than $450.00, agency fees are waived. Procedure for Challenging the Chargeable Calculation CFA has established the following procedure for individual nonmembers who pay agency fees and who wish to challenge the calculation of chargeable and non-chargeable expenses. PLEASE READ THIS PROCEDURE CAREFULLY. YOU MUST COMPLY WITH THIS PROCEDURE IN ORDER TO CHALLENGE THE CALCULATION OF CHARGEABLE AND NON-CHARGEABLE EXPENSES. NONMEMBERS WHO CHOOSE NOT TO PURSUE A CHALLENGE UNDER THIS PROCEDURE WILL BE DEEMED TO HAVE ACCEPTED THE ACCURACY AND VALIDITY OF CFA S CALCULATION. 1. Challenges An individual nonmember agency fee payer who wishes to challenge CFA s calculation of chargeable and non-chargeable expenses must inform CFA of his or her challenge in writing. The written challenge must include the challenging agency fee payer s ( challenger s ) name, address, social security number, job title, campus, department, and work location. The written challenge must be sent to CFA at the following address and be postmarked no later than thirty (30) days following your receipt of this notice. California Faculty Association Agency Fee Challenge 5933 W. Century Blvd, Suite 220 Los Angeles, CA Funds collected from you will be placed into an interest bearing escrow account and will remain there through the end of the 30-day period during which you may file a challenge. Absent a challenge, CFA will remove the nonmember s funds from the escrow account. Where a timely written challenge is filed, the challenger s funds will remain in the interest bearing escrow account until an impartial arbitrator has rendered a decision as to which party is entitled to those sums. 19

20 2. Arbitration Upon receipt of challenges, CFA will arrange for an arbitration hearing, by making a request of the American Arbitration Association for the appointment of an arbitrator. CFA will ask that all challenges to its calculation be consolidated into a single proceeding. The impartial arbitrator will hold a hearing in which challengers can participate personally or through a representative. In the hearing, CFA will have the burden of proof regarding the accuracy of the calculation of chargeable and non-chargeable expenses. Challengers will be given the opportunity to present their own evidence and to present written arguments in support of their position. The arbitrator will issue a decision and award on the basis of the evidence and argument presented. Challengers will receive further information regarding this procedure upon CFA s receipt of the challenge. For information on CFA s policy of accommodating religious objectors, please visit our website at Controller s Notice This notice was mailed for CFA by the State Controller s Office at CFA s expense to protect the privacy of the unit members who requested their home address not be given to CFA. 20