National Nurses United

Audit + Index_FINAL 12/30/09 2:16 PM Page 18 CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 8 - Mortgages & Loans Payable (Continued) Note 9 - Retirement Plan (Continued) The property is subject to a non-recourse loan originally for $3,200,000 that is payable over 15 years with a stated interest rate of six and two-thirds percent fixed over the term of the loan. The Organization can elect annually to pay off twenty percent of the outstanding principal balance without incurring a prepayment penalty. As of June 30, 2008, the principal maturities are as follows: Retirement plan expense under the Steelworkers Pension Trust amounted to $2,321,209 and $1,975,035 for the years ended June 30, 2008 and 2007, respectively. Year Ended Note 10 - Building Rental and Expenses Total June 30, 2009 June 30, 2010 June 30, 2011 June 30, 2012 June 30, 2013 & Thereafter $ CNA occupies all four floors of its Headquarters building located in Oakland, California. The following schedule summarizes the expenses in connection with the building. The interest expense represents mortgage interest and the interest charges on the line of credit and margin loan. Depreciation expenses are for the original purchase of the property plus total improvements since the purchase. Other expenses represent the amortization of loan costs and fees incurred in connection with mortgage. 173,238 185,272 198,143 211,562 226,605 1,545,990 $ CNA also maintains a defined contribution pension plan, California Nurses Association 401(k) Retirement Plan for the benefit of all regular employees. Eligible employees are allowed to make elective pretax deferrals into the 401(k) Retirement Plan. 2,540,810 CNA has a $500,000 line of credit secured by the real property located in Oakland, CA with a local financial institution that expired on April 30, 2007, with an interest rate of .75% above prime. No funds were drawn on the line of credit during the years ended June 30, 2008 and 2007. Note 9 - Retirement Plan Effective May 1, 2001 for all permanent and probationary employees (Covered Participant) employed within the bargaining unit represented by the Staff Professional and Clerical Association (SPCA) the Organization agreed, under its collective bargaining agreement with SPCA, to contribute to the Steelworkers Pension Trust, a multiemployer defined benefit plan. Effective the same date CNA also elected to cover all permanent employees outside of SPCA's bargaining unit and to contribute to the Steelworkers Pension Trust. Starting from the day of employment CNA contributes a percentage of a Covered Participant's gross wages. The percentage increases upon completion of six months employment by the Covered Participant. CNA also contributes a percentage of the gross wages of all permanent employees outside of the bargaining unit starting from the day of employment. Both Covered Participants and permanent employees outside of the bargaining unit may elect as a group to forego, if unanimous, certain other compensation in return for an increase in the percentage CNA contributes to the Steelworkers Pension Trust for the current and future years. The permanent employees outside of the bargaining unit made this election as a group. Expenses Interest Depreciation Utilities Repairs and Maintenance Garbage Security Janitorial and Supplies Property Taxes Insurance Other $ Total 2008 178,444 154,418 108,395 127,540 14,474 146,851 25,520 69,511 45,106 1,928 $ 872,187 $ $ 2007 188,481 147,840 112,009 188,414 19,434 34,456 30,445 62,104 65,942 1,928 851,053 Note 11 - Affinity Program CNA has an Amended and Restated Affinity Agreement (Agreement) with a national financial institution that under a Term Extension Addendum (Addendum) shall automatically extend at the end of the initial term or any renewal term for successive two-year periods, unless either party gives written notice of its intention not to renew at least ninety (90) days, but not more than one hundred eighty (180) days, prior to the last date of such term or renewal term, as applicable. The initial extension of the Agreement expired on December 31, 2007. Under the terms of the Agreement and the Addendum the financial institution provides certain services and benefits to certain persons included in certain lists provided to the institution by or on behalf of CNA. CNA receives royalties based upon various percentages or dollar amounts in relation to the services provided by the financial institution. -15- -16- CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 11 - Affinity Program (Continued) Note 13 - Pennsylvania Association of Staff Nurses and Allied Professionals (PASNAP) Under terms of the Addendum CNA received a $500,000 advance against future royalties to be earned during the extended term of the Agreement. When the royalties computed during the term of the Addendum exceed the $500,000 advance, CNA will begin receiving royalties at the end of each calendar quarter as computed under the terms of the Addendum. CNA recognized $173,224 and $211,221 in royalties under the Addendum during the years ended June 30, 2008 and 2007, respectively. Note 12 - National Nurses Organizing Committee The National Nurses Organizing Committee (NNOC), authorized by the CNA Board in February 2004, serves as CNA's national organizing arm for affording staff nurses outside of the State of California an opportunity to win collective bargaining rights and exclusive representation by CNA and provides nurses and bargaining units of nurses with a direct path to joining the national CNA collective patient advocacy movement. The NNOC does not have a separate identity or organizational status independent of CNA and all CNA organizing activities outside of the State of California are conducted under the name of the national organizing committee CNA/NNOC. Nurses inside and outside of California may become members of the NNOC by paying a $30 annual membership fee. CNA received and recognized as income $27,493 and $29,278 in said fees during the years ended June 30, 2008 and 2007, respectively, and are included in dues and fees in the Statements of Activities. During the year ended June 30, 2006, pursuant to CNA's exclusive representative status and agreement reached with the employer CNA began receiving CNA/NNOC dues and fees from nurses in a bargaining unit outside of California which CNA had won the right to represent the previous year. The terms and conditions of work for represented nurses were maintained under a pre-existing collective bargaining agreement with another union. CNA entered into an agreement with Pennsylvania registered nurses sharing the same goals and objectives as CNA and its members to help to establish the Pennsylvania Association of Staff Nurses and Allied Professionals, an unincorporated Association, modeled after the California Nurses Association structure and intended to qualify as a tax exempt organization under Internal Revenue Code section 501(c)(5). Under the agreement CNA provided PASNAP with administrative, organizational and accounting support from CNA staff and members and agreed to advance funds over a 24 month period starting in May 2000 to cover an expected deficit between PASNAP's budgeted receipts and expenditures. During the year ended June 30, 2004 PASNAP agreed to pay back a minimum of $2,000 per month for funds previously advanced until repaid in full. However, PASNAP has stopped making the payments starting in February of 2008. CNA received $14,000 and $24,000 in such payments during the years ended June 30, 2008 and 2007, respectively. The amount that has not been repaid totals $178,843 and $192,843 at June 30, 2008 and 2007, respectively, and is included in Dues from Other Organizations in the Statement of Financial Position. Management is currently negotiating with PASNAP to collect the outstanding balance. Note 14 - Caregivers and Healthcare Employees Union The Caregivers and Healthcare Employees Union (CHEU) is a separate, independent, autonomous entity affiliated with CNA under the terms of an Affiliation Agreement entered into by both Organizations. CHEU's purpose is to organize and represent employees of healthcare and related employers for purposes of collective bargaining; advocate on behalf of the interests of CHEU members; and join with other healthcare unions and health advocacy organizations to establish enforceable rights and standards for universal, safe and quality healthcare for all people. CNA provides CHEU with such administrative services reasonably necessary to carry out its duties and responsibilities under terms of the Affiliation Agreement, its Constitution and Bylaws, and as allowed by law. Such services include, but are not limited to accounting, legal, staff, equipment, supplies, office space and furniture, IT support and research. In return CHEU is required to reimburse CNA for such services rendered by means of the payment of membership dues to CNA, a portion of which shall be returned to CHEU for political action and miscellaneous representational expenses as needed. CNA received $742,402, and $805,507 in such payments during the years ended June 30, 2008 and 2007, respectively, which are included in dues and fees on the Statement of Activities. -18-17- 18 REGISTERED NURSE W W W. C A L N U R S E S . O R G NOVEMBER | DECEMBER 2009

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