3rd bullet should be 2012-13 operating budget overview?
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 SLIDE redundant if the previous slide is briefly described
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
“potential” future projects? Are these done-deals? I’d suggest they are looming possible expenses (okay the roof is really looming)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
4-9% is what we hoped for, are seeing 0%. 2013-14 % is based on this projection of flat pledges for 12-13. (Also takes shrinkage into account)This doesn’t make sense to me. How can an increase of $75,000 require 9-13% and an increase of $100,000 only require a 1-2% increase?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
894 is 86% of our 1035 member and affiliate households
What is “one dedicated contribution”? I understand the one generous bequest.
Huh? Bank fees? Credit card payments? What’s this?How does program expenses up 19% and programs remain flat? Do the bullets explain this as a wash?
Crappy, but true.
4th bullet, …going forward appear to be deepening… allows discussion and doesn’t imply that is the only answer.
Fus plan and budget forum 05.13.12 rev
Plan and Budget Forum May 13, 2012
AgendaOpening, Rev. Michael SchulerWelcome and agenda review, Sandy Eskrich, BoardPresidentOverview of Vision of Ministry, Sandy EskrichBudget overview, Will Salvi, Finance Committee Chair Susan Koenig, Church AdministratorDiscussion, Sandy EskrichClosing, Michael Schuler 2
2012-13 Vision for Ministry• Motivate our Members to Live the UU Principles 4
2012-13 Vision for Ministry• Motivate our Members to Live the UU Principles• Strengthen Ties among Generations 5
2012-13 Vision for Ministry• Motivate our Members to Live the UU Principles• Strengthen Ties among Generations• Increase Connections among Members 6
Budget Overview• Capital Fund & Debt Update• Re-Cap of Current Operating Budget Results• 2012-13 Operating Budget – Overview• Summary 7
Foundation and Other Special Gifts Annual AnnualCapital Pledges Pledges Revenue Restricted Funds CAPITAL OPERATING FUND FUND CAPITAL EXPENSES OPERATING -Preservation MORTGAGE MORTGAGE EXPENSES -Equipment 60% 40% -Furnishings FUS Finances - Overview
Foundation and Capital Fund 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 $416,079 as of April 30 Capital Campaign status Total pledged: $6.3 million Total collected: $6.08 million (97%) Expected in 2012: $45,000 Foundation (Stonehaulers): $25,000/year, depending on market
CAPITAL FUND Projected Capital Expenses $105,000 in Fiscal year 2012-13 Roof Planning Equipment purchase/replacementCAPITALEXPENSES Future Projects-Preservation Roof replacement (summer 2016)-Equipment Organ Console replacement-Furnishings Possible Isom House addition
MORTGAGE Debt Update• 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
CAPITAL OPERATING FUND FUND MORTGAGE Mortgage 60% 40% Operating Budget: Debt Repayment % of Total DebtFiscal Year Debt Repayment Repayment2011-12 $140,000 40%
CAPITAL OPERATING FUND FUND MORTGAGE Mortgage 47% 53% Operating Budget: Debt Repayment Plan % of Total DebtFiscal Year Debt Repayment Repayment2011-12 $140,000 40%2012-13 $190,000 53%
CAPITAL OPERATING FUND FUND MORTGAGE 74% Mortgage 26% Operating Budget: Debt Repayment Plan % of Total DebtFiscal Year Debt Repayment Repayment2011-12 $140,000 40%2012-13 $190,000 53%2013-14 $265,000 74%
CAPITAL OPERATING FUND FUND MORTGAGE 100% Operating Budget: Debt Repayment Plan % of Total DebtFiscal Year Debt Repayment Repayment2011-12 $140,000 40%2012-13 $190,000 53%2013-14 $265,000 74%2014-15 + $360,000 100%
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 Planstarting2012-13 $ 140,000 $ 190,000 $ 265,000 $ 360,000 $ 360,000 $ 360,000Original $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.
FY End Capital Fund Balance$500,000$450,000$400,000$350,000$300,000$250,000 New Plan 2012-13$200,000 original plan$150,000$100,000 $50,000 $- 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 • 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
Ongoing Challenge – Growth in Debt Payments• 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.
Current Year Budget• 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.
2012-13 Operating Budget Goals• Support the Vision of Ministry• Make prudent structural changes to support core programs whilemanaging expenses• Continue to retain and support high quality ministers and staff.• Support member involvement and fundraising to stay on our newcourse of debt repayment• Balance the Budget
2012-13 Operating Budget – Overview•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
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.