Plan and Budget ForumMay 13, 2012

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Agenda

Opening, Rev. Michael SchulerWelcome and agenda review, Sandy Eskrich, Board President

Overview of Vision of Ministry, Sandy EskrichBudget overview, Will Salvi, Finance Committee Chair

Susan Koenig, Church Administrator

Discussion, Sandy Eskrich

Closing, Michael Schuler

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2012-13 Vision for Ministry

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2012-13 Vision for Ministry

• Motivate our Members to Live the UU Principles

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2012-13 Vision for Ministry

• Motivate our Members to Live the UU Principles

• Strengthen Ties among Generations

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2012-13 Vision for Ministry

• Motivate our Members to Live the UU Principles

• Strengthen Ties among Generations

• Increase Connections among Members

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Budget Overview

• Capital Fund & Debt Update• Re-Cap of Current Operating Budget Results• 2012-13 Operating Budget – Overview• Summary

Foundation and Special GiftsCapital Pledges

Annual Pledges

Other Annual Revenue Restricted

Funds

CAPITAL EXPENSES-Preservation-Equipment-Furnishings

CAPITALFUND

OPERATINGFUND

OPERATINGEXPENSES

FUS Finances - Overview

MORTGAGE 60%

MORTGAGE 40%

Foundation and Special GiftsCapital Pledges

CAPITALFUND

MORTGAGECAPITAL EXPENSES-Preservation-Equipment-Furnishings

Capital Fund and Debt Update

Foundation and Special Gifts

Capital Pledges

CAPITALFUND

Capital Fund - Revenue

Capital Fund Balance$416,079 as of April 30

Capital Campaign statusTotal pledged: $6.3 millionTotal collected: $6.08 million (97%)Expected in 2012: $45,000

Foundation (Stonehaulers):$25,000/year, depending on market

CAPITAL EXPENSES-Preservation-Equipment-Furnishings

CAPITALFUND

Projected Capital Expenses$105,000 in Fiscal year 2012-13 Roof Planning Equipment purchase/replacement

Future ProjectsRoof replacement (summer 2016)Organ Console replacement Possible Isom House addition

MORTGAGE

• Payments on term loan began March 2012

• Principal balance as of April 30: $4,460,000

• Interest rate, fixed – 6.28%• Total Annual payment FY 2012-13 - $357,000

• Principal - $76,000• Interest - $281,000

Debt Update

OPERATINGFUND

Operating Budget: Debt Repayment

% of Total DebtFiscal Year Debt Repayment Repayment 2011-12 $140,000 40%

CAPITALFUND

MORTGAGE 60%

Mortgage 40%

OPERATINGFUND

Operating Budget: Debt Repayment Plan % of Total Debt

Fiscal Year Debt Repayment Repayment

2011-12 $140,000 40%

2012-13 $190,000 53%

CAPITALFUND

Mortgage 47%

MORTGAGE53%

OPERATINGFUND

Operating Budget: Debt Repayment Plan % of Total Debt

Fiscal Year Debt Repayment Repayment

2011-12 $140,000 40%

2012-13 $190,000 53%

2013-14 $265,000 74%

CAPITALFUND

Mortgage 26%

MORTGAGE 74%

OPERATINGFUND

Operating Budget: Debt Repayment Plan % of Total Debt

Fiscal Year Debt Repayment Repayment

2011-12 $140,000 40%

2012-13 $190,000 53%

2013-14 $265,000 74%

2014-15 + $360,000 100%

CAPITALFUND

MORTGAGE 100%

Revised Debt Plan for Operating Budget

Operating budget contribution to Capital Fund (loan payment)

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17+

New Plan starting 2012-13 $ 140,000 $ 190,000 $ 265,000 $ 360,000 $ 360,000 $ 360,000

Original Plan

$ 140,000 $ 240,000 $ 350,000 $ 360,000 $ 360,000 $ 360,000

We have moderated our internal debt payback plan to bring our need for new revenue closer to our

expectation.

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 $-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

FY End Capital Fund Balance

New Plan 2012-13

original plan

• More moderate increase in Operating Budget portion of loan payment

• Uses more capital funds in the next two years• Leaves some reserve throughout• No change in the schedule for the Operating Budget to take

on full payment of loan

• We continue to face the challenge of maintaining our program while increasing debt payment from the operating budget.

Increase in Expenses Implied Pledge

Related to Debt Growth

2012-13 $50,000 - $100,000 4-9%

2013-14 $75,000 7%

2014-15 $100,000 8%

• Recent Pledge growth history has been below this implied growth, although our long-term track record implies this is possible.

Ongoing Challenge – Growth in Debt Payments

Annual Pledges

-Fees-Rentals-Foundation-Parking-Other Fundraising

RestrictedFunds

OPERATINGFUND

OPERATINGEXPENSES

2011-12 Operating Budget Performance

• Total pledges were up 4% ($45,000) over 2010-11

• Number of pledging households increased 8%

• Expect to end the year with normal (95%-100%) pledge fulfillment, though a pattern of sluggish pledge payments has emerged

• Costs are in line with expectations

• Cabaret set a new record, netting over $32,000.

• Bottom Line – We expect to finish the year in balance.

Current Year Budget

• Support the Vision of Ministry

• Make prudent structural changes to support core programs while managing expenses

• Continue to retain and support high quality ministers and staff.

• Support member involvement and fundraising to stay on our new course of debt repayment

• Balance the Budget

2012-13 Operating Budget Goals

•Total Revenues – Up 2% (+$35,000)– Pledge Revenue is budgeted to remain flat with 2011-12

• We have 100 fewer pledges than at this time last year• The average pledge is about $100 higher than at this time last year

– Will use one dedicated contribution and one generous bequest in support of our staffing plan ($37,000)

– We expect an increase in Adult RE revenue, due to fees for Quest participants

– Decrease in use of Restricted Funds ($29,000) reflects the end of our use in 2011-12 of a dedicated bequest to support Music/RE

2012-13 Operating Budget – Overview

• General Expenses & Debt Repayment - Up 7% (+26,000)

– Primarily due to ramping up our debt repayment ($50,000)

– Other costs are down 24%• move away from frequent printed guides and catalogs • end of our contract with Dan Hotchkiss.

• Program Expenses – Actual Program remains flat

– Changes in our accounting have effect of 19% increase • Now run outreach offering and Eviction Prevention expenses through

programs• Increase in RE expenses reflects pass through costs (Quest and

Coming of Age)

– We are continuing our current rate of contribution to UUA and CMwD

2012-13 Operating Budget –Overview

• Personnel Related Expenses – Down 3% (-$35,000)

– Structural Change• Leave 50% Social justice position unfilled ($20,000 savings first-year)• Plan early departure of Associate Minister (end of 2012-13 fiscal year) and sun-setting that

ministerial position ($46,500 savings in 2013-14)• Eliminate dental insurance benefit for staff ($11,000 savings)• Reduce senior minister professional expenses

– One-time change to bridge to Associate Minister sunset• One-week staff furlough ($17,000 savings)• Use bequest and special gift ($37,000)

– Will not fund 4 raises we had planned to bring staff in line with local and professional compensation standards

2012-13 Operating Budget – Overview

Summary

• Significant staff changes make 2012-13 a challenging transitional year

• Finding the capacity to handle our debt payments is a continuing challenge over the next 3 years, and is exacerbated by the slow pledge growth we’ve been seeing.

• The proposed budget for next year reflects hard choices about the best way to meet our mission given these challenges.

• Pledge growth (driven both by new member growth and increases to average pledges) needs to improve to prevent future painful choices

• The keys to making this process easier going forward are deepening member engagement, growth in new members, and new sources of funding.

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