It's All Good Until It's Not
We hear it all the time at the end of every meeting "we still have X amount of dollars and are financially sound". I'd like to say that the truth is we are financially stagnant, but actually we have less now than what we had three years ago. Meaning we are spending money faster than its coming in. Is it really that bad? Lets look at a safe example:
Lets say there was this general construction company that three years ago had 4.25 million in the bank. This construction business has ten employees and has average monthly earnings of $150k. That is an additional 5.4 million over a three year span. The business should theoretically have 9.65 million but there are three years of salaries to factor in, plus operating expenses (electricity water maintenance etc.) It would look something like:
9,650,000
-2,400,00 ( 3yrs of 10 salaries avg. 800k per year)
-600,000 ( 3yrs operational cost avg. at 16.6k per month)
-1,000,00 (3yrs of building repairs, additions, equipment purchases)
______________
5,600,000
5.6 million Is what you would expect to be remaining. However the construction company only has 3.5 million in the bank . It started with 4.25 million, what happened? Well there was a lot spent on marketing, business travel and charitable donations. Continuing the trend in another nine years, the business would be down an additional 2.25 million leaving only 1.25 million in the bank. Lets say they don't spend a dime on repairs or additions, then they'd be back to 4.25 million but after nine years of inflation that money buys even less. It would be worth about 3.26 million in today's dollars. This construction business is financially moving backwards, not to say what would happen when business slows down. Unless something changes, they wont survive, let alone thrive.
Although this is a basic example, our local does share many similarities with it. What does nine years in the future look like for us? Would we still be financially sound? Herein lies the point: our local has survived this far but its never thrived.
Below is my proposed plan for the financially stable and thriving future of our local:
Below is my proposed plan for the financially stable and thriving future of our local:
1. OBJECTIVE
To implement a robust financial overhaul of the local union through strategic capital reallocation and asset-backed real estate investments, thereby increasing long-term financial sustainability, liquidity, and member-centered benefit delivery.
2. FINANCIAL ASSESSMENT & STABILIZATION FRAMEWORK
2.1. Forensic Financial Audit
-Deploy third-party CPA for a 36-month forensic audit and obtain a full report on operating deficits, fixed cost inefficiencies, fiduciary misallocations, and net capital at risk
-Benchmark current asset performance against actuarial norms (currently only our CD's)
2.2. Fiscal Reallocation Protocols
-Suspend discretionary non-member-impacting expenditures
-Consolidate underperforming accounts and redirect cash equivalents to higher-yield instruments ( such as weak, no foot traffic advertising)
3. GOVERNANCE: UNION INVESTMENT STRUCTURE
3.1. Investment Oversight Committee
-Form a five member fiduciary board:
Financial strategist (chair)
Licensed legal counsel (compliance)
Union-appointed member (voice of labor)
CPA or actuary (risk modeling)
Construction/real estate advisor
3.2. Establish Investment Policy Statement (IPS) with:
-Asset allocation targets
-ROI thresholds
-Liquidity protocols
-Member reporting intervals (quarterly)
4. REAL ESTATE INVESTMENT STRATEGY (REIS)
4.1. Entry-Phase Portfolio Deployment (Years 1–2)
-Asset Class: Small-scale multifamily, value-add mixed use
-Acquisition Budget: $700K–$1.2M per asset
-Target IRR: 12–16%
-Cash-on-Cash Return: 8–10%
-Debt Ratio: 70/30 (LTV)
-Union Labor Utilization: 100% where feasible
4.2. Mid-Scale Accrual Assets (Years 3–5)
-Asset Class: Workforce housing, flex industrial, union-anchored commercial space
-Development Cost: $1.5M–$4M
-Leverage: 65% with layered financing (municipal bond/tax credits)
-Revenue Strategy: Triple-net leases or internal operational offsets
To implement a robust financial overhaul of the local union through strategic capital reallocation and asset-backed real estate investments, thereby increasing long-term financial sustainability, liquidity, and member-centered benefit delivery.
2. FINANCIAL ASSESSMENT & STABILIZATION FRAMEWORK
2.1. Forensic Financial Audit
-Deploy third-party CPA for a 36-month forensic audit and obtain a full report on operating deficits, fixed cost inefficiencies, fiduciary misallocations, and net capital at risk
-Benchmark current asset performance against actuarial norms (currently only our CD's)
2.2. Fiscal Reallocation Protocols
-Suspend discretionary non-member-impacting expenditures
-Consolidate underperforming accounts and redirect cash equivalents to higher-yield instruments ( such as weak, no foot traffic advertising)
3. GOVERNANCE: UNION INVESTMENT STRUCTURE
3.1. Investment Oversight Committee
-Form a five member fiduciary board:
Financial strategist (chair)
Licensed legal counsel (compliance)
Union-appointed member (voice of labor)
CPA or actuary (risk modeling)
Construction/real estate advisor
3.2. Establish Investment Policy Statement (IPS) with:
-Asset allocation targets
-ROI thresholds
-Liquidity protocols
-Member reporting intervals (quarterly)
4. REAL ESTATE INVESTMENT STRATEGY (REIS)
4.1. Entry-Phase Portfolio Deployment (Years 1–2)
-Asset Class: Small-scale multifamily, value-add mixed use
-Acquisition Budget: $700K–$1.2M per asset
-Target IRR: 12–16%
-Cash-on-Cash Return: 8–10%
-Debt Ratio: 70/30 (LTV)
-Union Labor Utilization: 100% where feasible
4.2. Mid-Scale Accrual Assets (Years 3–5)
-Asset Class: Workforce housing, flex industrial, union-anchored commercial space
-Development Cost: $1.5M–$4M
-Leverage: 65% with layered financing (municipal bond/tax credits)
-Revenue Strategy: Triple-net leases or internal operational offsets
4.3. Long-Term Capital Holdings (Years 5+)
-Asset Class: Ground-up development, land banking, joint ventures
-Holding Period: 10–20 years
-Legal Vehicle: Union-Owned Real Estate Trust (UORET)
-Performance Metrics: Equity yield >15%, Net Asset Value appreciation >6% Compound Annual Growth Rate
(This combo means the investment should both pay off in the short term and build long-term capital for our local.)
5. MEMBER BENEFIT AMPLIFICATION
5.1. Revenue Reinvestment Programs
-Emergency relief fund (self-liquidating revolving structure)
-Pension, assessment or dues supplementation, via Net Operating Income allocation.
-Tuition and apprenticeship stipends (cash flow indexed)
-Committee reviewed First time homebuyer grants available to members in good standing
6. LEGAL & STRUCTURAL IMPLEMENTATION
6.1. Special Purpose Vehicles (SPVs)
-LLCs for asset protection per project
-Parent UORET for long-term capital consolidation
6.2. Regulatory Compliance
-DOL, IRS, ERISA alignment
-Annual external audit
-Asset Class: Ground-up development, land banking, joint ventures
-Holding Period: 10–20 years
-Legal Vehicle: Union-Owned Real Estate Trust (UORET)
-Performance Metrics: Equity yield >15%, Net Asset Value appreciation >6% Compound Annual Growth Rate
(This combo means the investment should both pay off in the short term and build long-term capital for our local.)
5. MEMBER BENEFIT AMPLIFICATION
5.1. Revenue Reinvestment Programs
-Emergency relief fund (self-liquidating revolving structure)
-Pension, assessment or dues supplementation, via Net Operating Income allocation.
-Tuition and apprenticeship stipends (cash flow indexed)
-Committee reviewed First time homebuyer grants available to members in good standing
6. LEGAL & STRUCTURAL IMPLEMENTATION
6.1. Special Purpose Vehicles (SPVs)
-LLCs for asset protection per project
-Parent UORET for long-term capital consolidation
6.2. Regulatory Compliance
-DOL, IRS, ERISA alignment
-Annual external audit
By implementing this Real Estate Investment driven financial turnaround strategy, our local transitions from capital inefficiency to generational wealth; delivering stability, transparency, and legacy infrastructure for our membership body. Granted, investments take time to pay off and this financial plan is aiming high, but at least we're aiming. If we would of started when I was an apprentice, today we could of had our assessments at a lower percentage or be completely covered by income from our REI portfolio. Today we could of had our dues payments covered or distributed REI income into our annuity. We would already be there at #5 MEMBER BENEFIT AMPLIFICATION.
Here's a secret: some business managers have put this type of plan into action for their local years ago and it worked beautifully. Unfortunately today some of those plans are no longer in place and fell apart because those business managers eventually retired or the members elected a business manager that wasn't as financially literate and loved to spend. This is a mistake we don't have to make. Being a union electrician isn't just a good job, its one with a future. That is what we preach. It is time we start building a better one.
Here's a secret: some business managers have put this type of plan into action for their local years ago and it worked beautifully. Unfortunately today some of those plans are no longer in place and fell apart because those business managers eventually retired or the members elected a business manager that wasn't as financially literate and loved to spend. This is a mistake we don't have to make. Being a union electrician isn't just a good job, its one with a future. That is what we preach. It is time we start building a better one.