Link to Prism of Possibilities – a proposal to help the congregation think about pledging from Rev Rachael
This year, we are attempting to begin our annual budget conversation earlier than in the past in order to engage as many members of the congregation as possible.
The tentative outline of important dates for the Fiscal Year 2024 (please note: Fiscal Year 2024 – runs from July 1, 2023 to June 30, 2024 – and hereafter shortened to FY24) budget process are as follows:
- March 12 – Conversational conversation on UUSA finances
- April 1 – FY2024 pledge forms due (pls return forms to office or pledge online)
- April 20 – 1st board meeting on the budget
- April 27 – Special board meeting on the budget (if needed)
- April 30 – Present draft budget to congregation (sent via email)
- May 7 – Congregational conversation on the proposed budget
- May 10 – Zoom meeting on the proposed budget at 7:00 pm
- May 18 – Final board meeting on the budget
- May 21 & 28 – Warrant is read to the congregation
- June 4 – Annual congregational meeting to vote on the budget
As we emerge from the worst of the pandemic, it may be time to take a fresh look at our traditions, our hopes and our dreams, tempered with the reality of our finances. It may help to think about our current situation as a moment in time and recognize that if we make good choices we will continue to be a vital and vibrant part of our larger community.
This document is an introduction to a conversation that has been ongoing among members of the Board of Trustees and the Finance Committee. It is time to open this conversation to us all.
Let’s begin with a look at the FY23 budget (the current year). The following table includes our original budget estimate, approved by the congregation last June, with a column added for adjustments (in red) covered by the very successful Winter Appeal (in green). Our FY 23 revenue will cover expenses thanks to the Winter Appeal. Further explanations are below the table.
- PLEDGE INCOME: The pledge income is on track. The number of pledges were down in FY23 but the amount per pledge increased.
- CONTRIBUTIONS (Plate & Gifts): Plate contributions were lower than expected, perhaps due to low donations from participants on zoom. The estimate was adjusted based on actual weekly donations.
- DEDICATED OFFERING: This is included as income but 100% of it goes to other organizations so it is also included as an expense below.
- RENTAL INCOME: The original rental income estimate was based on pre-pandemic experience and was overly ambitious. The estimate was adjusted to a more reasonable number.
- FUNDRAISING: The fundraising estimate has been adjusted based on more realistic expectations. 5b. The very successful winter appeal has made up for the difference between planned and adjusted income in the Plate, Rent, and Fundraising categories.
- ENDOWMENT INCOME: Endowment income is interest-only income and is correct.
- OTHER INCOME: Other income is from SRECs (solar-related)
The FY 23 expense estimate is presented below with explanations.
8. MUSIC PROGRAM: This is mostly the salary (94%) of the Music Director, and some professional expenses, and organ/piano maintenance.
9. RELIGIOUS EDUCATION: This is mostly salary (96%) of the DRE, and Youth and Young Adult Coordinator, Preschool Teacher and Preschool Helper, in addition to a very small amount of supplies.
10. OFFICE OPERATIONS: This includes salary for the Congregational Administrator, bookkeeper expense, office supplies and equipment.
11. MEETINGHOUSE AND GROUNDS: This includes utilities, maintenance and repairs, housekeeping and landscaping
12. HOUSEKEEPING AND MAINTENANCE: This is mostly the salary (84%) for the Sexton and supplies.
13. DONATIONS AND DUES: This is for the UUA. The recommended dues for our congregation was $13,538. We contributed less this year.
14. FINANCIAL EXPENSES: This is for liability insurance.
15. PROGRAM EXPENSES: The largest expense (70%) is for the Dedicated Offering. We have eliminated many of our program expenses.
16. MINISTERS COMPENSATION: This includes salary and some professional expenses.
17. PAYROLL EXPENSES: This includes FICA, employee insurance, workers compensation etc.
FY 23 Summary: Over the years we have cut our expenses to “bare bones” in order to balance our budgets including in FY23. Thanks to the generosity of members who contributed to the Winter Appeal, we are on the road to balancing our FY23 books. This achievement, despite the challenges described above, will put us in a strong position to not tap our cash reserves to meet operating expenses. In addition, a few members have made donations to cover the initial loan payments which began in full in March on our loan with Florence Bank for our new meeting house siding. With it looking like our revenues sufficient to cover our FY 23 operating costs, we feel humbled by and grateful for the continued generosity and commitment our members.
Looking forward, however, we hold concerns about the long-term financial health of our congregation. For many years, our budgets have been funded with a heavy reliance on a small number of committed donors. For FY 23 almost 50% of our budget was funded by 16 of the 92 pledging units (individuals and families making a pledge) in our congregation. Our concerns rest on the apprehension that relying on a small number of very generous donors leaves the UUSA vulnerable should any of these donors be no longer able to sustain their level of financial commitment to the UUSA in FY 24 or beyond.
Additionally, while we are currently blessed with an extraordinary minister and staff, our inability to provide fair compensation may significantly compromise our ability to thrive as a congregation. Unfortunately, due to budgetary constraints, we were unable to support the full UUA recommended salary COLA increase for our staff in FY23. We are concerned that a continued inability to provide our staff with recommended fair compensation salary adjustments will leave our staff and the UUSA in a difficult long term position. Furthermore, the UUA has recently revised its Fair Compensation guidelines which leaves us further out of step with UUA recommendations. Our FY24 budget process has taken these guidelines into consideration which we address below.
The next section presents an estimate of recommended changes for FY 24.
FY 24 Expenses
Since 1995, the UUA has provided Fair Compensation Guidelines to congregations, consistent with Unitarian Universalist Principles. Following an exhaustive study, the UUA released new recommendations for salaries and benefits, based on:
- Geographic Region
- Size of the congregation (based on membership, staff numbers, and budget)
- Position descriptions and qualifications for each staff member
The new approach is described in detail here: Congregational Salary Program. The UUA recommended that each congregation work with the new guidelines and at least provide an 8.3% COLA to all employees in FY 24.
The UUA provided extensive and detailed resources to the congregations to explain the context, background, and values used to develop the new guidelines. The first step taken by the Board in developing recommended salaries for FY 24 was the clarification of the core values which provide the basis for our budget recommendations.
We affirmed that we currently have an excellent staff who bring us powerful sermons, beautiful music, a vibrant Religious Education Program, and efficient and effective management. We believe the larger community needs the UUSA to serve as an active force for radical social justice and personal transformation. We believe we have the potential to grow our UUSA membership as we emerge from the pandemic. And we support a commitment to bring all of our employees up to a fair level of compensation.
Members of the Board of Trustees attended webinars offered by the UUA to try to understand the new compensation plan. Several board members and one member of the personnel committee met with a UUA Compensation Specialist. At the February meeting of the Board, the new plan was thoroughly examined.
The board found that to bring all of our employees up to the minimum recommended salary for their position, salary increases significantly greater than 8% would be required. We decided we could not reasonably ask the congregation to increase pledges enough to bring all employees up to the minimum salary recommended even though this was our intent. The Board voted unanimously to recommend an 8.0% cost-of-living-adjustment (COLA) to the congregation which is included in the tables below.
The following table represents the most recent estimate of proposed FY 24 budget expenditures. This needs to be reviewed by the Finance Committee and the Board of Trustees before it is brought to the congregation for a vote in June. At this point, we are asking for input from the congregation for the preliminary budget proposal.
This projection represents approximately $12,000 increase over expenses in FY 23, primarily to cover the proposed 8% COLA.
At this time, we are projecting a conservative income estimate based on fluctuation in our pledge base and a more realistic estimate of potential fundraising and rental income.
As you can see, we have decisions to make as a congregation. It might help to take a deep breath and return to the opening words above which suggest… “As we emerge from the worst of the pandemic, it may be time to take a fresh look at our traditions, our hopes and our dreams, tempered with the reality of our finances. It may help to think about our current situation as a moment in time and recognize that if we make good choices we will continue to be a vital and vibrant part of our larger community”
And now, maybe take another deep breath….. we do have choices.
If you are able to join us on March 12, immediately after the Sunday service, we will continue this conversation in the sanctuary and on zoom. There are several approaches to balancing the budget in FY 24 and beyond that we might consider, including:
- We might try to cut our current expense budget. This would most likely mean staff reductions.
- We might ask our current donor base to “dig deeper” and increase our pledges.
- We might increase our membership and number of donors willing to pledge over the next few years.
- We might try to rent out the meetinghouse during the week, and only reserve it for UUSA use on Sunday mornings.
- We might do all of the above or we might try something you suggest.
We have choices and we need our entire congregation to engage in this conversation……
You should also know….
We have received voluntary contributions toward paying for the siding loan which will cover loan payments until mid-April. Payments for the loan will be $1188.37 per month. We are accepting contributions toward this capital expense but a ‘formal ask’ is not being made at this time. Anyone willing to help us by contributing all or part of one month’s loan payment should contact Lea Douville.
The UUSA currently has an endowment of approximately $160,000. This money is not used for operating and remains intact, generating some investment income which is part of our annual budget (projected to be about $8,400 in FY 24). It is the recommendation of the Finance Committee and the Board that this money not be used for annual operating expenses.
In addition, we currently have about $114,000 in free cash and money market accounts. These reserves accumulated during the pandemic, much of it from the rental of the social hall to Craig’s Doors and a forgiven Paycheck Protection Loan of $15,600 we received for continuing to employ our staff during the pandemic. In addition, we have applied for Employee Retention Tax Credits with the IRS, which if approved, would refund payroll taxes approximating $36,000. Our total available cash reserves is projected to equal about $150K in FY2024.
These funds which are not currently earmarked for particular expenses provide us with an opportunity to invest in our future. We have discussed several ways of investing these non-obligated funds. For example:
- We might pay part of the principle of the loan and then refinance the loan at a lower payment rate.
- We might earmark part of these funds to cover the cost of proposed staff salary increases for two years, with the expectation that a vibrant and vital congregation will attract new members.
- We might use part of these funds to cover additional program initiatives that would likely attract new members.
- We might…… your ideas?
We will figure this out. Our budget is fundamentally a document that expresses our values. As a congregation we have expressed our values as a demonstration of our commitment to what we hold dear, such as:
- Our extraordinary staff – we are proposing an 8% Cost of Living Adjustment (COLA) to maintain our investment in our staff.
- Our surrounding community – we commit to sharing 50% of the weekly plate contributions with organizations that make the Valley a better place through our Dedicated Offering
- Our historic meetinghouse – we have recently made an investment in the structural integrity of our meetinghouse with a facelift in the form of new and much needed siding.
- Our membership – we are offering this explanation as an attempt to share with all members a complete appraisal of our current financial situation. We are also proposing new guidelines for your pledge based on the recognition that some of us can give more than others but that everyone’s contribution counts and we all care deeply for our congregation.
Finally, we recognize that this update is likely to result in some tension and discomfort. This is natural and should not be denied. At the same time, we have the opportunity to continue to learn together to build the Beloved Community, where we can live with the tension, harness the discomfort, and boldly invent a future that perhaps no one of us alone can imagine.
The following is a prayer for living with tension and discomfort…
If we have any hope of transforming the world and changing ourselves,
we must be
bold enough to step into our discomfort,
brave enough to be clumsy there,
loving enough to forgive ourselves and others.
May we, as a people of faith, be granted the strength to be
so bold,
so brave,
and so loving.
Joseph M. Cherry
UUA Worship Web
Link to Prism of Possibilities – a proposal to help the congregation think about pledging from Rev Rachael