Update on Parish Finances Preliminary 2014-15 Budget

April 14, 2014

Don CharltonCharles Ladner

Agenda

• Meeting Guidelines• Parish Mission• Overview of Parish Finances• Key Factors Impacting Finances• Questions & Answers

Meeting Guidelines

• Goal is to provide transparency and seek input from the parish on our 2015 Budget Process

• Meeting IS an opportunity to seek – Feedback, suggestions and comments

• Meeting is NOT an opportunity to– Revise specific numbers in the budget– Review past decisions regarding the school closing– Lobby for or against specific areas

• Presentation + Q&A = 60 minutes

St. Monica Parish Vision

We are one, enthusiastic disciples of Jesus Christ who bring God’s love to all.

St. Monica Parish Pastoral Priorities

• Sunday Experience – Our community is based on a personal relationship centered around the Eucharist within the context of active and vibrant liturgy.

• Youth – Recognizing Saint Monica's ceaseless prayerful determination, we will demonstrate God's love to our youth.

• Service & Outreach – Recognizing we are the church, we accept the responsibility to enthusiastically promote a vibrant community engaging and welcoming all.

Finance Council Purpose

• Assist the pastor in monitoring and utilizing the temporal resources of the community to support the needs of the parish

• Areas of responsibility– Long-range financial and physical needs planning– Assess adequacy of the resources to meet annual

goals and plans approved by our pastor– Review quarterly financials and assist in the

dissemination of financial information to parish community

Where does the parish stand financially?

Where we think the parish will end up this year (July 13 – June 14)

Church Income $1,084,000

Church Expenses $966,000

Operating Income $118,000

Debt Service -$66,000

Net Cash Flow $52,000

Our Reserves*/Cash in the Bank

• Unrestricted reserves $803,000• Restricted reserves $363,000

*Before liabilities of $288,000

The Good, The Bad, The Ugly

• The Good – We have come a long way from the severe financial distress the

parish faced just two short years ago due in large part to the parish rallying with sustainability reserves and a generous bequest

• The Bad– Unfortunately giving has not increased, net net we are losing

parishioners and our expenses many not within our control are going up

• The Ugly– Our facilities are in need of repair – roofs, boilers, etc. after

years of neglect

2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014

Forecast

Prelim 2015

Budget

$(400,000)

$(300,000)

$(200,000)

$(100,000)

$-

$100,000

$200,000

$(18,576)

$(142,419)

$(51,199)

$(208,200)

$(107,170)

$(221,478)

$(338,095)

$(260,294) $(277,893)

$67,745 $51,404

$(66,542)

PARISH CASH FLOW FROM OPERATIONS AFTER DEBT SERVICE

2004-2012 $1.62 million in cumulative "losses"

How the parish spends your collection $$

Debt6%

Diocesan Assess-ment

9%

Facilities19%

People40%

Programs15%

Tuition Subsidy

11%

Key Factors Impact Revenues

• Collections have remained flat since 2013 despite efforts to increase

• Religious Education Fees benefited in 2013 from summer session one-time revenues, but are now at lower steady level

• The Cambridge School has decided not to renew their lease resulting in significant loss of rental income.

Key Factors Impacting Expenses

• Diocesan assessment will increase in FY 2015 due to new calculation method

• Payroll and benefits will increase with addition of a part-time Youth Minister, part-time Facilities Manager, and mandatory increased retirement and health insurance costs (Diocesan Plan)

• Administration was impacted in FY2014 due to expense for changeover of pastor, but FY2015 should return to prior levels

• Office expense will be impacted by need to replace aging computer equipment

Key Factors Impacting Expenses

• Parish Formation and Outreach spending has risen in order to invest in the mission (Youth High School group, ASK series, …)

• Tuition Subsidy continues to rise as area schools increase their tuition

• Utilities and Maintenance costs have increased this year with extreme weather conditions, aging equipment that requires additional service, and increased cleaning and maintenance services

• Property Insurance and Taxes benefited from lower levels when the school closed, but are now expected to rise due to higher insurance premiums

Key Factors Impacting Capital Expenses

• Significant investments in facility repairs are needed– Parish Center and Church roof needs major repairs– Boilers and control units need to be replaced

What is the Finance Council Doing?

• Outside firms hired:– RGI Group

• Review facilities & make recommendations• Parish Center roof most pressing issue/leakage• Holding parish focus group meetings to give input into budget and

future facilities decisions

– Flynn and Co: • Re-negotiate with Cambridge• Look for a new tenant (which could take over a year)

• If the building lot is sold we will consider paying off our debt to reduce interest costs to the parish

• Promoting electronic giving

Financial Assessment

Reserves remain adequate to pay back the Archdiocese loan and address facility repairs*.

FY 2013 FY 2014 Forecast

FY 2015 Budget

- 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000

AssetsLiabilities

*$75,000 was included both in FY2014 Forecast and in FY2015 Budget for facility repairs.

Financial AssessmentHowever, net assets after the repairs would not leave significant reserves for future facility maintenance or resources to grow new initiatives.

FY 2013 FY 2014 Forecast FY 2015 Budget

$422,498

$515,456

$467,783

Net Assets (Assets – Liabilities)

Financial Assessment

The preliminary FY 2015 identifies the resources needed to operate the parish for the coming year, however, in order to support our mission, initiatives and future facilities maintenance, St. Monica Parish needs to• Increase collections• Secure a tenant for the old school building• Reduce or restructure expenses• Fund new initiatives to grow our parish and support

outreach

Comments

Q&A

St. Monica Parish Operating IncomeFY 2013 - 15

SAINT MONICA PARISH Budget FY2015

ACTUAL FY 2013 FY 2014 BUDGET FY 2014 FORECASTPRELIMINARY FY 2015

BUDGET

CHANGE FY2015 BUDGET TO FY2014

FORECASTChurch Operating Revenues Collections for Parish Use $971,605 $982,611 $979,396 $974,651 ($4,745) Religious Education $60,562 $41,514 $48,779 $47,438 ($1,341) Interest, Dividends, Rents, and Other Income $25,595 $22,700 $20,872 $20,856 ($16) Total $1,057,762 $1,046,825 $1,049,047 $1,042,945 ($6,102) Church Operating Expense Diocesan Assessment $87,800 $92,600 $92,600 $106,086 $13,486 Payroll and Benefits Parish, Rectory and Rel.Ed. $360,781 $402,490 $377,955 $436,029 $58,074

Administration - Pastor $17,055 $21,841 $20,209 $15,051 ($5,158) Office Expense $62,876 $65,767 $67,523 $72,823 $5,300 Parish Formation and Outreach* $5,231 $35,000 $35,000 $25,000 ($10,000) Liturgy $23,421 $23,458 $34,793 $32,397 ($2,396) Religious Education Admin and Instructional Materials $18,204 $19,622 $18,823 $19,199 $376

Tuition Subsidy to Other Schools $115,865 $112,310 $112,721 $121,851 $9,130

Utilities and Maintenance $84,910 $104,309 $105,749 $103,317 ($2,432) Property Insurance and RE Taxes $46,666 $25,810 $29,257 $30,720 $1,463 Other Expense $0 $0 $0 $0 $0 Total $822,809 $903,207 $894,630 $962,473 $67,843 Church Operating Income $234,953 $143,618 $154,417 $80,472 ($73,945) Education/Parish Center Rental Income $2,170 $2,000 $34,930 $13,182 ($21,748) Education/Parish Center Expense Payroll, Taxes and Benefits $34,376 $20,725 $10,336 $15,444 $5,108 Utilities and Maintenance $54,155 $58,903 $71,145 $74,065 $2,920 Rental Utility Offset $0 $0 ($13,541) ($2,708) $10,833 Property Insurance and RE Taxes $9,556 $4,278 $5,149 $5,406 $257 Total $98,087 $83,906 $73,089 $92,207 $19,118 Education/Parish Center Operating Income ($95,917) ($81,906) ($38,159) ($79,025) ($40,866) Cemetery Income $44,200 $18,000 $22,920 $18,050 ($4,870) Cemetery Expense $32,964 $18,723 $21,497 $19,762 ($1,735)Cemetery Surplus/(Deficit) $11,236 ($723) $1,423 ($1,712) ($3,135) PARISH OPERATING INCOME $150,272 $60,989 $117,681 ($265) ($117,946)

St. Monica Parish Net IncomeFY 2013 - 15

SAINT MONICA PARISH Budget FY2015

ACTUAL FY 2013 FY 2014 BUDGETFY 2014

FORECASTPRELIMINARY FY

2015 BUDGET

CHANGE FY2015 BUDGET TO

FY2014 FORECAST

PARISH OPERATING INCOME $150,272 $60,989 $117,681 ($265) ($117,946) Legacies & Bequests $67,946 $0 $0 $0 $0 Sustainability Appeal $87,892 $67,063 $60,299 $38,025 ($22,274) One-Time Income $43,177 $0 $7,927 $0 ($7,927) Total Other Income $199,015 $67,063 $68,226 $38,025 ($30,201) Capital Expenditures $1,340 $75,000 $75,000 $75,000 $0 One-Time Expense $16,326 $1,183 $7,516 $0 ($7,516) Interest Expense $12,724 $11,406 $10,433 $10,433 $0 Total Other Expense $30,390 $87,589 $92,949 $85,433 ($7,516) PARISH NET INCOME $318,897 $40,463 $92,958 ($47,673) ($140,631) Loan Repayment $69,803 $55,844 $55,844 $55,844 $0 PARISH NET INCOME AFTER LOAN REPAYMENT $249,094 ($15,381) $37,114 ($103,517) ($140,631) PARISH OPERATING INCOME $150,272 $60,989 $117,681 ($265) ($117,946)Interest Expense $12,724 $11,406 $10,433 $10,433 $0 Loan Repayment $69,803 $55,844 $55,844 $55,844 $0 Parish Operating Income after Debt Service $67,745 ($6,261) $51,404 ($66,542) ($117,946) YEAR END BALANCE SHEET Unrestricted Assets $757,709 $742,328 $802,948 $691,306 ($111,642)Loans outstanding $321,096 $265,252 $265,252 $209,408 ($55,844)Other Liabilities $14,115 $14,115 $22,240 $14,115 ($8,125)Unrestricted Net Assets (Assets - Liab) $422,498 $462,961 $515,456 $467,783 ($47,673)

St. Monica Parish EOY Proj Balance Sheet 6/30/14