Finance Council
Church of the Resurrection
Meeting Minutes
June 9, 2004

 

Preliminary Financials – Review

Nancy Brown distributed a set of preliminary financial statements for the nine months ending March 31, 2004.  Comparison with the prior year to date numbers is somewhat difficult given reallocations of a number of expenditures and timing issues.  This should even out by year end.  At this point, year to date results are improved over last year—slightly more than break even, compared with a $29,000 loss last year at nine months.

Donations include money pledged to Epiphany (approximately $3,200).  This would show as a reduction in the Building Fund as it reflects the 1% option selected by some parishioners (by which 1% of their capital campaign pledge would go to Epiphany parish).  Council agreed that we should go into a holding pattern regarding additional contributions.  We may not be able to afford to give $10,000 this year; about $7,000 has been donated thus far.  We will continue to distribute donations received in the “food envelopes.”  It is off the books now but, as in the past, distributions will be disclosed at year end.

 

Salary analysis

A salary analysis was distributed.  The analysis showed current annual salaries and the impact of potential increases from 2 to 10%.  It was noted that Fr. Hobson was shorted $15 per month last year.  To make that up this year, his compensation would go to $1,729 per month.  Fr. Hobson’s compensation is set by the diocese.

Fr. Hobson indicated that staff has been prepared to expect no salary increase for the next year, given our budget situation.  For information purposes, current salaries total $220,400; with a 2% raise, the total would increase by about $4,400 to $224,808.  It was noted that a $50 per person per month increase is being required by the Diocese for health care benefits.  Council thought that a $50 increase per person, to allow them to pay for increased health care costs, could take the place of a salary increase.  This is in the 2% salary increase ballpark.

We do have increased maintenance needs, and we must hire a service or add additional hours.  Some of the custodial needs could be met by a cleaning service for the inside, and Fr. Hobson has requested an estimate from the service that cleans his home.   We also need a part-time bookkeeper to take some of the load from Diane which would add to salary expense. 

 

Budget for the Next Year

  • A first draft of next year’s budget is about 17% higher than this year’s before considering debt service.  Nancy emphasized that this is a first draft, and she made educated guesses about the impact of the new worship space on operations.  For example, she doubled the insurance expenses, increased maintenance and supplies by 33% and added salary for a half-time maintenance worker.  Debt service could add another 30% to the budget.  
  • Both Dennis Bodziony and Mark Carrabine estimated that expenses would increase approximately 30%, significantly more than the 17% currently reflected in the first budget draft.  Dennis will compare original estimates to Nancy’s to identify differences, if any.
  • The personnel budget does not yet incorporate a part-time bookkeeper. Margie Schroeder was suggested as a potential candidate, and Fr. Mark will speak to her.  Current estimates are that we would need approximately one day per week.  (Monday would be a good day, since that is when all of our banking is handled.)  At $15 per hour (just a guess at this point), we would be spending about $120 per week or $6,000 per year.  If we had to double that amount, the impact on the budget would be $12,000.  Because the workload would most likely be unevenly distributed week-by-week, Council thought we should hire the person on an hourly basis, rather than for a set part-time period.   Other compensation-related issues are discussed above, under salary analysis.
  • Dennis Bodziony distributed an analysis of offertory collections and pledge payments, a summary of project expenditures to date compared to budget, estimated cost for art, liturgical furnishings and seating, and a summary of the loan required for the project, assuming a 5.82% rate of interest.  Per these analyses:

Collections this year are up 13% from the beginning of the year to the end of May; $752,000 was collected on pledges at the same time.  76% of campaign pledges have been collected through the beginning of May.  There is a $60,000 reserve for uncollected pledges, and this will be reviewed again at the end of June.  Many parishioners have paid their entire pledge (242 to date), and we have about a $25,000 cushion from those who paid more than they pledged.  Memorials are being accounted for as additional pledges.

A debit program for the offertory could result in a higher collected amount, as long as the program was set up correctly.  Chuck Maimbourg offered to oversee the establishment of a debit program for this purpose.

  • Council discussed the appropriate time to ask parishioners to increase their offertory.  We need to celebrate the 13% increase and ask for consideration of further increases when the new building opens.  We need to establish a goal considering cash flow (e.g., summer is a slow period and we will not collect as much as during other times).
  • All project costs thus far have been paid with available funds, and there is now less than $70,000 in the capital account.  All bills we received have been paid. We are ready to initiate our construction borrowing from Provident Bank. 
  • Current estimates are that approximately $1.64 million in long-term debt would meet our needs, but we would need to borrow $1.9 million to provide a cushion. This translates into a $13,700 monthly payment. If we were to borrow now, we would have to borrow the $750,000 for pledges not yet corrected.
  • In the future, consideration should be given to permanent financing.  Mortgage rates will be going up, and it may be in our best interest to lock in a long term rate now, rather than wait a year or two.  Dennis Bodziony will contact the Knights of Columbus to determine the current mortgage rate as well as the impact of borrowing more now on the monthly debt service payments.  Dennis will report on the status at the September meeting.
  • We are currently under our $5.1 million construction budget.  What we are saving on the building, however, we are spending on art and liturgical furnishings which had an inadequate budget.  The good news is that the pledged amount for art exceeds our current estimated costs.

 

Next Scheduled Meeting

Our meetings are scheduled for the first Wednesday of the last month in the quarter.  This would be September 1, 2004.  Because this is the date of one of the Big Picture presentations, we may need to reschedule.