UUSA Financial Projection; FY24 (July 1, 2023 to June 30, 2024)
Revised May 30, 2023
The outline of important dates for the Fiscal Year 2024 (FY 24) budget process are as follows:
- March 12 – Conversational conversation on UUSA finances
- April 1 – FY2024 pledge forms due (additional pledges – pledge online)
- April 20 – 1st board meeting on the budget
- April 27 – Special board meeting on the budget
- 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
The following was prepared by the Board of Trustees and provides the context for a vote of the congregation on June 4, 2023.
FY24 Projected Income
The 2023 pledge drive resulted in a major increase in financial contributions toward the operations of our congregation. We asked for your support and you answered the call, demonstrating your love and generosity for our UUSA community! The Board of Trustees, minister and staff are humbled by your commitment and grateful to be part of this congregation. With our current pledge estimate, we, as a congregation have increased the annual commitment to the UUSA by more than $22,000. This is really exciting and good news.
However, as is often the case, good news is tempered with challenges. And this is true, as we put together our FY 24 budget. In years past, including our current fiscal year (FY 23), we have relied partly on the generosity of one anonymous major donor who offered a matching pledge to our congregation. Our understanding at this time is that this pledge will not be available for the FY 24 year. This means that although we had a remarkable pledge drive, we didn’t raise quite enough money to balance the budget.
The table below provides a snapshot of the income that we are projecting based on current estimates of pledge income as well estimates of other sources of income, including rental income and fundraising. Also included is a line item for Transfer from Unrestricted Funds which will be discussed in more detail below. We will update these amounts, if necessary, as more information becomes available.
FY24 Projected Expenses
Our projected FY 24 non-compensatory (other than wages) expenses are based on a combination of historical precedent as well as adjustments made based on known or projected increases for certain line items. Our projected budget for compensation (salary and benefits) related expenses is based on a recommended 8% COLA (cost of living adjustment) for our staff. In setting staff compensation levels, the Board tried to follow the new guidelines of the UUA for a fair and equitable salary for each paid position, including the minister. In studying these guidelines, we found that to bring all our employees up to the minimum recommended salary recommended by the UUA for their position, increases significantly greater than 8% would be required. After much deliberation, we decided we could not reasonably ask the congregation to increase pledges enough to bring all employees up to the minimum recommended by the UUA, even though this was our original intent. The Board voted unanimously to recommend an 8.0% cost-of-living-adjustment (COLA) to the congregation to be voted on at the Annual Meeting.
In addition, the FY 24 expense estimate includes the cost of paying the principal and interest on the siding loan. Having covered the 20% down payment for the siding loan from unrestricted reserves, the loan balance was $173,057. The loan payment is $1,188.37 per month with a term of 20 years. Monthly payments will be covered by a transfer of funds from our unrestricted reserves for as long as needed this year. A “siding appeal” is being planned for the fall. Our hope is to cover most if not all of the cost for the siding at this time.
The following table represents the Board of Trustees draft recommendation based on committee requests for FY24 expenses. This is being shared with the congregation for feedback and suggestions. It will then be reviewed and adjusted as needed by the Finance Committee and the Board of Trustees before it is brought back to the congregation for a vote in June. At this point, we are asking for your support and approval of the following expense recommendations.
Note: a more detailed budget may be viewed here:
This projection represents a significant increase over expenses in FY23. The largest (non-loan payment) increase is for the recommended 8% COLA. In making this recommendation, the Board recognizes that we currently have exceptional staff who bring us powerful sermons, beautiful music, a vibrant Religious Education Program, and efficient and effective management. We strongly believe that our ability to continue to support and nourish our existing UUSA community as well as to attract new members is directly tied to our willingness to support our staff.
Based on the above and including the loan payment, we are presently projecting a deficit of $36,431.43 which is the amount reflected on the Transfer from Unrestricted Funds line in the income table. We are hopeful that a successful siding appeal in the fall, will lower this estimated deficit. The Board voted unanimously to recommend to the congregation that we meet this deficit with a transfer from our unrestricted funds. With the help of the Finance Committee, before making this recommendation, the Board considered other approaches including the following:
- Cutting our expense budget by either reducing the COLA adjustment or making a significant reduction in our current level of paid staff.
- Asking our current donors to increase their pledges beyond the amount already pledged.
- Cutting our commitment to the music, religious education, and already limited program budgets with further reductions in support.
The Board strongly believes that these alternatives would significantly damage our ability to serve the needs of the congregation and the larger community. Therefore, we are recommending that we transfer an amount of money from our unrestricted funds to the operating budget to balance the FY 24 budget without a reduction in staff hours, their recommended compensation levels, or further reductions in program funding. We are making this recommendation after much deliberation and do not make it lightly. We have considered the circumstances, our resources, our commitment to fair and equitable pay standards, the generosity and commitment of our members and friends, and the effects of the various alternatives on our congregation. We acknowledge the long-term risks involved in funding operating deficits from non-operating resources but we believe in the upward trajectory of our congregation and that there are times when the use of rainy day funds is the appropriate course for meeting the weather on a rainy day. We believe this is such a time.
You should also know….
The UUSA currently has an endowment of approximately $160,000. The principal of this fund may not be used for operating and remains intact, generating some investment income which is part of our annual budget (projected to be about $8,400 in FY24).
In addition, we currently have about $139,000 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 the reduced programming costs while we were “treading water” during the pandemic. In addition, we had a Paycheck Protection Loan of $15,600 forgiven for continuing to employ our staff during the pandemic. Potentially adding to our flexible unrestricted funds, we have applied for Employee Retention Tax Credits with the IRS, which if approved, would refund payroll taxes approximating $36,000. Our total available monetary reserve of unrestricted funds is projected to be about $175K in FY24.
The unrestricted 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 using these non-obligated funds. For example:
- We might pay part of the principle of the siding loan and then refinance the loan.
- We might move some of these funds to our restricted Capital Expense Fund as insurance to cover unexpected repairs to the meetinghouse.
- We might maintain some of these funds in interest bearing accounts as an emergency or rainy day fund.
- We are recommending that these monies be used to fund the projected budget deficit in FY 24.
Fortunately, we have options and we will figure this out.
Our budget is a document that expresses our values. Our recommended budget represents our continued commitment to serve as an active force for radical social justice and personal transformation, and to support those things that 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 vibrant Sunday services and programming – we are proposing a budget which begins to build back our capacity to better serve our current members while attracting visitors and new members.
- Our membership – we are offering this explanation as an attempt to share with all members a complete appraisal of our current financial situation and we are asking for your feedback.
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
and so loving.
Joseph M. Cherry
UUA Worship Web