Schematic overview of FUS financesWe have two main funds, the capital fund and the operating fundCapital FundRevenues from remaing capital pledgesFoundationSpecial gifts Expenses On-going capital expenses, including preservation MortgageOperating FundRevenues Majority from annual pledges Other annual revenue (fees, rentals, parking, foundation) Restricted Funds (Music Fund, Eviction Prevention)Expenses All annual operating expenses Part of mortgageToday, I’ll summarize the status of all of these elements, starting with the capital fund and the mortgage
Transition: we use the capital fund to pay on-going capital expensesIf needed: Stonehaulers is restricted to capital expenses Has a current balance of about $700,000 Pays out 80% of its earnings in a given year $37,500 is pledged this year to new building
HVAC changes were made to improve the noise level in the Courtyard classroomsGift from Mark Shults and Nancy Vedder –ShultsTransition:the major expense from the capital fund is to the building debtDetails: Windows, IH $40,000RE space, $5000 and a lot of member laborRoof planning $30,000Furnace Geothermal fix ($15,000)Water heaterHearing loop (3000)
Transition: the major expense from the capital fund is to the building debtThis all refers to TOTAL MORTGAGE – currently paid from both capital and operating funds60% from capital funds, 40% from operating funds.Transition: Our plan has been to gradually ramp up the amount of the debt payment that is made through annual operating funds.
Current fiscal year
The continuing challenge to us is to keep pace with the increasing demand on operating funds to pay the mortgage.For the current fiscal year, our annual pledges increased by 3%, which led us to fund the gap through restricted funds, most of which had come from one substantial bequest.
Switch gears to look at the operating budget, its revenue sources and expenditures, and our current performance
Increased our base of pledging households, but the average pledge did go down as a resultPledge revenue received is a bit lower than last year at this time (we had 49%)In the past two years, we’ve seen a trend of less early pledge paymentOther revenue is better than on track. (Service collections are up over last year)Turning to Expenses
If needed: Other
Last year, program was 11% of total budget, so that’s down this year.Also on track with expenses, normal for this time of year (except, NO SNOW!)
Deepen member engagementNew governance, ministry teams, clearer rolesFocus on doing, not meetingWe are working to strengthen our pledge baseFocusing on :Younger middle-aged peoplePeople who are currently pledging in the $1000 rangeAlso on new CRE pledgers, encourage them to engage in and support the whole community, not just pay RE feesAsking them more personally to reflect on FUS’s value to them Move close to $1500 fair share rangeDetails Median pledge is $750Modal pledge is $600Mean pledge is $1323
FUS Financial Update
Foundation and Other Special Gifts Annual AnnualCapital Pledges Pledges Revenue Restricted Funds CAPITAL OPERATING FUND FUND CAPITAL OPERATING EXPENSES MORTGAGE MORTGAGE EXPENSES -Preservation -Equipment 60% 40% -Furnishings FUS Finances - Overview
Foundation and Capital Budget and Debt UpdateCapital Pledges Special Gifts CAPITAL FUND CAPITAL EXPENSES MORTGAGE -Preservation -Equipment -Furnishings
Capital Pledges Foundation and Special Gifts Capital Fund - Revenue CAPITAL Capital Fund Balance FUND $348,106 as of December 31 Capital Campaign status Total pledged: $6.3 million Total collected: $6.07 million Expected in 2012: $45,000 Unpaid pledges (2007-2011): $251,000 Foundation (Stonehaulers): $40,000/year, depending on market
CAPITAL FUND Ongoing Capital Expenses $140,000 in FY 2011-12 -Hearthroom window refurbishingCAPITAL (funded by the Friends)EXPENSES -Isom House windows-Preservation-Equipment -Isom House remodeling-Furnishings -Roof Planning -HVAC changes
MORTGAGEDebt Update•Construction loan (interest only) converts to term loan in 2012, firstpayment March 2012•Loan up for renewal in 2017•Total debt entering term loan: $4,472,015•Interest rate, fixed – 6.28%• Total Annual payment FY 2011 – 2012 - $303,000 •Principal - $25,000 •Interest - $278,000 (transition from interest only construction loan to Principal and Interest term loan)•Total Annual payment FY 2012-13 - $357,000 •Principal - $76,000 •Interest - $281,000
CAPITAL OPERATING FUND FUND MORTGAGE Mortgage 60% 40% Operating Budget: Debt Repayment Plan % of Total DebtFiscal Year Debt Repayment Repayment2011-12 $140,000 40%
CAPITAL OPERATING FUND FUND MORTGAGE Mortgage 33% 67% Operating Budget: Debt Repayment Plan % of Total DebtFiscal Year Debt Repayment Repayment2011-12 $140,000 40%2012-13 $240,000 67%
CAPITAL OPERATING FUND FUND MORTGAGE 97% Mortgage 3% Operating Budget: Debt Repayment Plan % of Total DebtFiscal Year Debt Repayment Repayment2011-12 $140,000 40%2012-13 $240,000 67%2013-14 $350,000 97%
CAPITAL OPERATING FUND FUND MORTGAGE 100% Operating Budget: Debt Repayment Plan % of Total DebtFiscal Year Debt Repayment Repayment2011-12 $140,000 40%2012-13 $240,000 67%2013-14 $350,000 97%2014-15 + $360,000 100%
Ongoing Challenge – Growth in Debt Payments• Ramp-up of debt repayment and inflation make maintenance of status quo challenging Increase in Expenses Implied Pledge Related to Debt & Inflation Growth 2011-12 $75,000 - $95,000 6-8% 2012-13 $100,000 - $150,000 9-13% 2013-14 $110,000 - $140,000 9-13% 2014-15 $10,000 - $30,000 1-2%
Capital Fund Projected Year-end Balance $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $- 2011-12 2012-13 2013-14 2014-15 2015-16 Dec-16By 2016, we hope to call on our capital fund for a roof replacement(2014) and organ improvement (2016). These projects are within ourreach if we meet the challenge to pay our mortgage from operatingfunds by 2014-15.
-Fees -Rentals -Foundation -Parking Annual -Other Restricted Pledges Fundraising FundsMid-Year 2011-12Fiscal Status OPERATING FUND OPERATING EXPENSES
Operating Revenues 2011-12 Revenues: $1.61 mil.• Member pledges make up thebulk of our annual revenues – in2011-12 we expect about $1.17million in pledge revenue.• Our other sources of revenuegenerate a combined $440,000.•The use of over $70,000 inrestricted funding (primarily forRE, Music, and Quest) has Pledge Payments (73%)allowed us to avoid cutting back Other (11%)those programs this year. Foundation and Restricted (8%) Rent (8%)
Mid-year Revenue Update– Pledging Households • 893 households have so far pledged $1.18 million • 3% increase in the total amount pledged – slightly under budget (.7%) • 8% increase in number of households pledging– Pledge revenue • 47% of pledged amount has been paid • Thank you to all who are current on your pledges!– Other revenue • YTD other revenue totals $259,000 and is 59% of the budgeted total for the year.
Expenses 2011-12 Expenses: $1.609 mil.• The bulk of our expenses relate to ourstaff and our programs – in 2011-12these two areas account for almost 75%of our total budget.• We have little ability to significantlyreduce general officeexpenses, building maintenance &utilities• Debt service is not a flexible expense.• Shortfalls in revenue will directly Staffing & Program (76%)impact personnel and programspending. Genl (Office and Bldg) (15%) Debt Service (9%)
Mid-Year Expenses UpdatePersonnel 68% of budget YTD 48% of budgeted personnel costsGeneral Expenses (less debt repayment) 15% of budget YTD only 37% of budget expendedProgram Expenses 8% of budget YTD only 44% of budget expendedDebt Repayment 9% of current budget
Operating Budget compromises• Children’s RE, music, and Quest sustained this year by restricted funding• Social justice position is only half-time• Fundraising professional is only half-time• UUA denominational contribution is at 5% of recommended level
Summary• The major challenge we face as a congregation is building the capacity to increase our pledge revenue so that in the coming years we can meet our debt payments while at the same time enriching FUS programs. We need at least 10% growth in pledges to avoid difficult decisions each year that will impact staff and programs.• Programs are sustained this year by the use of earlier directed gifts and dedicated fundraising We recognize it will be difficult to maintain this level of spending next year.• Managing the transition to full debt repayment: Deepening member engagement, Growth in new members, and New sources of funding.