NCUA has proposed cutting its budget next year by about $1.9 million, or 1.3%, to $148 million.
The proposal, which will be voted by the NCUA Board next month, will result in lower operating fees assessed federally chartered credit unions and a reduced overhead transfer rate, the funds transferred from the NCUSIF to finance the agency's annual operating expenses, according to Len Skiles, NCUA executive director.
Skiles reviewed the budget for the public last week. How much operating fees and the transfer rate will be reduced has yet to be decided.
The proposed budget for 2005 includes 4% average pay hikes for NCUA employees, about the same as this year.
But the agency projects as much as $2.1 million in savings in the salaries and benefits portion of the budget, which accounts for 85% of NCUA spending, because of the retirements of some higher-paid staff and their expected replacement with new, lower-paid employees, according to Skiles.
Also, NCUA continues to operate with at a lower-than-authorized level. This year's budget authorized 963 employees but NCUA has been operating with around 910 to 920, with staff levels falling as low as 899 once, said Skiles.
The continued elimination of credit unions at a rate of at least one for every business day of the year will be used in staffing the agency over the next year, Skiles insisted. He projected as many as 300 credit unions will disappear through merger or liquidation this year, and the number of credit unions in the U.S. will fall below 9,000 next year for the first time in 50 years.
The agency has also budgeted for a collective bargaining agreement with its new union, the National Treasury Employees Union, which was approved earlier this year, he said. Negotiations with the new union are currently under way.
Another major saving would be in administrative expenses, with $1.2 million in charges for this year's relocation of west coast Region VI from San Francisco (Concord) to the Phoenix suburb of Tempe, Ariz., not in the budget for next year.
Of the major expense items: travel expenses are projected to fall 5% ($661,000); rent, communications and utilities are expected to decrease by 12% ($516,000); contracted services are projected to rise 2% ($173,000) with planned renovations to the Alexandria headquarters building.
There are no major capital expenditures planned for 2005, but Skiles said he expects to budget for a major replacement of computers for the following year.
