As we enter the fourth quarter of the church’s fiscal year, the finance committee is busy juggling challenges to ending the current year in balance, achieving a balanced budget for next year, and maintaining our aging facilities.
We currently project a deficit for this year of $17,500 plus or minus $15,000, which amounts to somewhere between 0.5% and 4.75% of our $688,000 budget and does include the alarming possibility of devouring the entirety of our reserve fund. While we have been keeping most of our expenses under budget all year to accommodate some early changes to anticipated income sources, since January we’ve also become increasingly uncertain of our pledge income as payments have fallen behind last year’s pattern. Pledges are our largest source of revenue and fund 84% of the budget, so small deviations in the timing of payments can create substantial anxiety over whether they will all arrive. We typically budget for and achieve a 97% collection rate on received pledges, but last year that fell to 95% and this year we seem to be on pace for 93%. However, we have begun to identify and confirm some large pledges that are late relative to prior year payments, which has relieved some of our anxiety. It would be ideal for our cash flow if everyone paid their pledges by automatic monthly installment, but we realize there may be market and tax planning reasons for doing otherwise. However, if you have not yet paid your 2015-16 pledge and it is later than usual, a note of confirmation that it will be coming before July 1 would be much appreciated.
While collecting payments on the current year pledge is vital to fulfilling our church’s commitments and ministries, equally crucial is the collection of pledge promises for next year ahead of the budget hearing on May 1 and the Congregational vote on June 5. While many did increase their pledge generously during the pledge drive to produce an overall increase to our budgeted pledge of 5% ($26,000), we are really in need of at least 9% ($50,000). Since our church’s necessary expenditures are subject to annual inflationary pressures from multiple sources, everyone’s pledge actually needs to increase every year just to maintain our current level of operations. We are now in the third round of trimming back on our aspirations for next year, which include the following priorities (in alphabetical order):
– Music Program: Bring the Director to full-time
– Personnel: Follow compensation guidelines provided by the Unitarian Universalist Association for all positions.
– Reserve Fund: Maintain and improve its health so that it eventually amounts to 10% of the budget.
If you have not yet turned in your pledge for next year, please do so as soon as possible. If you did not increase your pledge, please reconsider. If you did increase your pledge, please ponder the possibility of making your increase effective immediately rather than waiting until July. Your generous support of our church and its mission is greatly appreciated.
Finally, our facilities require ongoing investment so that they remain an asset rather than turn into a liability. Repairs and improvements to our facilities have long-term consequence but are often cost-prohibitive to accommodate in a single year’s budget. Recognizing this, in 2013 the Congregation approved $50,000 of long-term Notes to be sold to members for use on capital improvements, of which $34,0000 was used in 2014 primarily for parking lot repairs and flooring in the RE building. A number of additional needs have since become apparent, including large cracks in the walkways, additional flooring issues in the RE building, and outdated office infrastructure. The finance committee has thus requested and the board has approved sale of the $16,000 remainder in the capital improvement Note authority to address these needs. The terms of the Notes will conform to the previous issuance, specifically:
Principal value of each new Note: $2,000
Effective date: July 1, 2016
Interest rate: 3% with principle amortized over 20 years
Payment schedule: semi-annual (October and April)
Payoff/refinance: April 1, 2019 (to conform to the cycle of our other debt obligations)
Anyone who would like to purchase one of these new Notes may send an email expressing their interest to email@example.com by April 30. Preference will be given to pledging church members who do not currently hold any other long-term Notes from the church. Funds will be due to the church by June 1 to facilitate planning and administration and to accommodate any reconsiderations.