Finance Council Meeting

Church of the Resurrection

April 11, 2007

The meeting was called to order at 7:30 p.m. In attendance were: Fr. Mark Hobson, Dennis Bodziony, Len Castelli, Bill Hawke, Catherine Mazanec, Norm Perney, Daniel Renz, Bob Sorin

Financial Progress Report

Offertory Collections

Although offertory collections are down 6% compared to last year, we received $143,400 ($17,500 per month) in debt reduction payments. Debt reduction contributions were not significant last year. Additionally, operating expenditures are down 5% compared to last year.

This year’s Easter collection totaled $30,539 compared with $34,090. The bad weather this year had a definite impact on attendance and, most likely, on the offertory collection.

Dennis Bodziony shared two spreadsheets showing the range of contributions from parishioners in the years ended December 31, 2005 and 2006. Not surprisingly, these schedules confirm that 80% of our contributions come from a minority, approximately 36%, of our parishioners. The average weekly contribution in 2006 was $21.77. It was pointed out that, when we began planning for the new worship space, the average contribution was closer to $14.

Capital Campaign

We have received two new pledges from former St. Jude’s parishioners. Thus far, we have collected 98% ($3,117,426) of the amount pledged ($3,158,740), although this includes payments in excess of pledged of $91,341. There are currently 23 accounts that had no payments in the last nine months. These accounts total $110,000 and could potentially become write offs.

Debt Reduction Fund

The Debt Reduction Fund currently has $245,600 cash on hand before transfer of half of the Christmas collection ($23,800 before Diocesan assessment). Debt reserve funds were used for some maintenance (driveway repair, etc.), and the funds are being replaced with funds received in the maintenance envelopes. After considering some additional maintenance expenditures and off balance sheet stock holdings, there is approximately $322,600 available for debt service. At $15,634 per month, this represents 20.6 months of debt service. (It was noted that the Maintenance Committee will be meeting soon and will be preparing a three to five year projection of maintenance needs at Resurrection.)

Debt service reserve funds are currently earning 4.9%, and interest on the debt is 5.9%. We have recently been making additional payments of $10,000 a month from the debt service reserve. These additional payments have cut 36 months off the debt term and, over the life of the debt, will reduce total interest paid by $373,000. Also, if we were to continue to pay $10,000 extra each month, the debt would be paid off in eight years—in 2015. A motion was made and passed to increase the excess debt payment from $10,000 to $15,000 per month until the debt service reserve balance is $200,000. This would further accelerate debt repayment and reduce interest expense.

Strategy to Increase Debt Reduction Funding

There was some discussion about the merits of initiating a debt reduction campaign. The consensus was that it was still too early to do so, but that parishioners should receive a communication about current financial status with a request that any increase they might provide in their financial support should go into the debt reduction envelope. Currently, our average collection per week, through the end of February, is $12,514 and average expenditures are $12,857, resulting in close to a break even situation. In 2006, expenses exceeded revenues at 45% of the 231 parishes in our diocese and regular attendance at Mass has declined to approximately 29% of Catholics. Resurrection has an active faith community and operates with a positive bottom line, two very positive messages to communicate.

Dennis Bodziony will draft a letter to parishioners which will be reviewed by Fr. Mark Hobson and Catherine Mazanec and then shared with the Finance Council at its June meeting. This letter will be a positive one, sharing with parishioners the current strong financial situation which has resulted from their generosity. It will also point out the benefits of accelerating our debt payments on total interest and debt term.

Registering New Parishioners

In addition to communicating with current parishioners, Fr. Hobson thought we should also make a concerted effort to increase registration among those who regularly attend services at Resurrection but have not joined our parish. These individuals would then receive envelopes and could contribute to the financial support of the parish. Based on anecdotal evidence, this number could be fairly large. Fr. Hobson would like the Hospitality Committee to consider how best to support a concentrated effort to increase registration – e.g., Sign Up Sundays. Catherine Mazanec will put the issue on the Hospitality Committee’s agenda.

Other Options

It was suggested that we should consider allowing parishioners to use automatic bank transfers in lieu of writing checks to Resurrection each week or month. This raises some questions – for example, would we need two bank accounts to which parishioners would transfer funds, one for debt service and one for offertory. Dennis Bodziony will ask Diane Lionti to look into this question with the bank.

There was a brief discussion about issuing children’s envelopes, but no action was taken.

Review of Off Balance Sheet Accounts

Bill Hawke reviewed the status and performance of Resurrection’s Investment Accounts. These accounts currently fall into three categories, Investments (not recorded on the financial statements but disclosed to the Diocese), Scholarship Fund and Capital Improvement accounts. Bill Hawke indicated that Fifth Third Bankcorp (our largest holding, currently valued at $52,845) was lagging the market and industry and had a relatively high PE ratio relative to its industry group. He suggested that we consider switching those funds to Vanguard Wellesley Income, which is a conservative income fund which has increased in value by 7-8% over the last two to three years.

The suggestion that we sell the Fifth Third Stock and invest in another fund prompted a discussion about whether we should actively invest in the stock market. As an alternative, it was suggested that we use the proceeds from the sale to make additional debt service payments. Several actions resulted from this discussion.

First, the committee moved to sell stock in the Capital Improvement category and apply those funds, totaling $26,418, to debt service. It was pointed out that these stocks were given to Resurrection as part of the capital campaign. (It was subsequently determined that these stocks were contributed prior to the start of the capital campaign.) The Committee did decide to maintain the Keithley Instruments stock (valued currently at $772) in order to keep the Capital Improvement account open and available for future stock donations.

Second, the committee agreed it was never our intention to actively trade in the stock market. It seemed, however, reasonable to take the proceeds from the Fifth Third Account and invest them in a conservative fund which should generate better total returns than using the funds for additional debt service. Further, the committee indicated that this investment was one of several that comprised a “rainy day fund” in case of emergency and were not donated specifically for the capital campaign. A motion was made and passed to sell the Fifth Third Stock and put the proceeds in the Vanguard Wellesely Income Fund.

Third, the Investment Fund has also been holding cash, in the amount of $7,048. A motion was made to transfer those funds over to Resurrection. Dennis Bodziony will communicate with Diane so that she knows what to do with the transferred funds (including those from the Capital Improvement category).

Finally, the committee agreed that we should, at some point, establish a savings and investment policy. The savings policy would outline the amount of funds we should generate and hold for emergencies. Funds in excess of this amount could then be used for other purposes.

Cluster Committee

Fr. Hobson indicated that the Diocese is requesting that all newly-formed Clusters form committees from among their parishioners to determine how best to work together and what the clusters would look like. One of the members from each parish must be from its Finance Council, since we may be discussing some shared employment. Catherine Mazanec will represent Finance Council on this Committee.

Next Meeting

This meeting concluded at 9:00 p.m. The next meeting of Finance Council is scheduled for June 6th. The meeting will, again, be held in the nursery.