Finance Council Minutes

Church of the Resurrection

September 7, 2005

Review of Financials from the last Fiscal Year

Nancy Brown reviewed the Church of the Resurrection Financial Report for the year ended June 30, 2005 and the report to the Catholic Diocese of Cleveland for the same period.  Current assets total $206,236 and fixed assets are at $5,610,130.  Nancy pointed out that we have incorporated new nomenclature to reflect the new phase we are in – the Capital Campaign Fund is now the Debt Retirement Fund with a balance of $177,191.  (One question that was raised was whether we could designate the Fifth Third stock (Putnam) as debt reduction funds so that there would be no assessment on the income.)

Operations were close to breakeven, with an excess of expenditures over receipts of $7,418.

Operating expenses reflect about nine months of experience in the new space.  Utilities, which totaled $61,948, would have been approximately $75,000 for a full year. 

In reviewing the Diocesan report, it was pointed out that it is critical that we separate the offertory collection from debt reduction funds.  Page four of that reports outlines operating receipts, of which only the first item, offertory collections, is taxable.

FY 2005-2006 Operating Budget

Charlie Tremont reviewed the operating budget for the 2005-2006 fiscal year.  This budget identified the weekly offertory target to communicate and track each week.  This target, for 50 weeks (not counting Christmas and Easter) is $13,624, rounded up to $14,000 per week.  This amount would be achieved if we received an average of $17.03 per week from the current 820 supporting families.  The budget assumes that ½ of the Christmas and Easter collections are earmarked for nonroutine operating expenses (e.g., debt reduction). 

The utilities budget is based on eight months of actual experience and, estimating conservatively, is set at $91,000.  The budget, at this point, shows a deficit of $18,604.  Again, it is important to note and to communicate that we need a weekly offertory collection in the $13,000-$14,000 range to make budget.

This year each area, such as music ministry and PSR, developed a specific budget based on the prior year’s experience.  This will allow the parish team to track and monitor expenses against their individual budget.

Charlie indicated that he would close each month’s financials by the 15th of the following month, to include bank reconciliation.  The goal, by mid-September, is to have a pretty conclusive July and August statement.

Financial Progress Report

• Capital Campaign and Debt Financing
  

Dennis Bodziony reviewed current status regarding offertory collections, debt reduction and pledge payments.  He indicated that an additional $16,200 in pledges will potentially be written off.  In total, 94% of pledged amount has been collected, and total write offs are estimated at less than 2.8%.  Of the 737 who pledged, 103 paid in excess of the amount they pledged; 428 paid in full and 217 have made partial payments (65% of total pledged amount).

Permanent financing is in process with the Knights of Columbus for $2.2 million.  The fixed rate will be the 10 year Treasury bill yield plus roughly 155 basis points.  Monthly principal and interest at 6% would be $15,761; at 5.9% it would be $15,634.  Our original estimate was that we would borrow $2.4 million at 6.2%, with a monthly principal and interest payment of $17,472. 

The Debt Retirement Fund totals $247, 700, which includes a cushion of $200,000 in excess borrowing from the Knights of Columbus.  The $200,000 will be invested in CDs to earn interest to offset the associated interest expense.  At a monthly debt service of $15,634, this would provide for 16 months of debt service.  Also, we need some reserves for special projects, such as painting the outside of the building (estimated at approximately $35,000).

• Stewardship
  

Dennis reviewed our offertory collections compared to budget for the fiscal year to date through 8/28/05.  Collections totaled $105,105.  The budget for this same period was $126,000.  The variance after nine weeks is ($20,895). 

Debt reduction collections after nine weeks totaled $45,699 (including payments on pledges), and the amount required to meet debt service requirements during the same time period was $33,768, for a favorable variance of $11,931. 

It is important that this information be communicated to the parish community, and that they be kept informed of our progress against budget during the year.  The progress report will be reproduced in the Bulletin during the weekend of September 17-18.  After each of the masses this weekend, Fr. Mark will talk to the parish about the offertory campaign.  The decision has been made not to undertake a massive phone campaign to get the balance of commitment cards returned (response rate is 42%), but rather to ask parishioners to increase their level of support, as they are able.  The response of those who have returned their cards has been very positive; if the balance of our parish family also increases their contribution, we should meet our operating and debt service requirements.

• Ongoing Reporting
  

The committee felt that regular reporting of progress against budget is very important, but that a more simple approach of presenting the results is needed.  Charlie will come up with an approach to graph results compared to target.  Key numbers will be included on the graph, so that they can be easily understood and progress can be easily tracked.  Essentially, we have two weekly targets -- $14,000 in operating revenue and $3,752 for debt service.

Debt Reduction Funds

Catherine reported briefly on the results of the offertory campaign.  Of the total amount pledged, approximately 20% was earmarked by parishioners for debt reduction.  In many cases, parishioners indicated, however, that they would be putting their contribution in one monthly check, assuming we will do the allocation.  In addition, forty one respondents (approximately 9% of the total responding) indicated that they would like Fr. Mark to use the funds “wherever needed.”  If these were applied to debt service, then the total amount committed to debt service increases to 25% of pledged amount.  Catherine will complete an analysis and develop a draft report that will be reviewed by the committee and possibly, then, presented to the diocese.

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