This is the last year of our five-year, phased-in dues increase. Due to unfilled vacancies and other factors, however, the increase this year is $3,000 less than anticipated.
The banking crisis and the Fed’s lowering of interest rates have definitely had an effect on ICSOM’s finances. We took a huge hit in interest income (down $9,500 compared to last year). Most of this slide came in the first quarter of 2009. Wachovia Securities (formerly A.G. Edwards, now Wells Fargo) abruptly began paying practically no interest on the Mendelson, the general reserve, and the Emergency Relief Fund’s money market accounts. This prompted an investigation into better options at different institutions.
I’m pleased to report that the Emergency Relief Fund (ERF) is now making 3.25% on a $200,000 one-year CD. The remaining $127,000 in the ERF is now earning 2.4% in a money market. (ICSOM’s policy is not to exceed the FDIC limit in any one bank, so the CD and the money market are in separate banks.) The combined Mendelson and general reserve funds are earning 3% in a money market, guaranteed for one year at that rate.
Here is snapshot of our accounts as of 6/20/09:
|General Checking (Wachovia)||$ 21,378.03|
|Chair’s Account (Wachovia)||1,460.85|
|Secretary’s Account (Wachovia)||941.38|
|Senza Account (Wachovia)||1,047.61|
|Wachovia Money Market||2,959.89|
|Mendelson/Reserve MMA (Cornerstone Bank)||46,372.10|
|ERF CD (Cornerstone Bank)||200,006.23|
|ERF Money Market (Brookhaven Bank)||127,134.77|
|ING Direct Working Reserve Account (ING)||178,144.99|
|Total in All Accounts:||$ 579,445.85|
The Wachovia money market is currently earning 0.68% interest, the Mendelson/Reserve MMA 3%, the ERF CD 3.25%, the ERF Money Market 2.4%, and the ING Direct Working Reserve Account 1.25%. In order to maximize our earnings, our lower-interest accounts are depleted first.
The good news is that, through our conservative investment strategy (CDs and money markets), we have not lost a penny of principal. The situation will improve on paper when the year-end interest is credited. Also, the accrued CD interest that won’t be paid during this fiscal year will improve next year’s numbers.
A complete accounting of how your dues money was spent for this entire fiscal year will be given to delegates at the ICSOM Conference in August.