ANNUAL BUDGET MEETING 2018

Transcription

1 ANNUAL BUDGET MEETING 2018

2 2019 Proposed Ministry Goals & Budget November 11, 2018 Hearts consumed by Christ. As we focus on 2019 and the continuation of our 20/20 Vision priorities, Redeemer s board has considered this profound statement to direct our path forward. As Paul wrote in Philippians 1:27: Just one thing: as citizens of heaven, live your life worthy of the gospel of Christ. Then, whether I come and see you or am absent, I will hear about you that you are standing firm in one spirit, in one accord, contending together for the faith of the gospel. A few verses later, he simply asserted: I want to know Christ (Philippians 3:10) In December 2017, the congregation approved ambitious goals for 2018 and, with God s grace and guidance, we will achieve them by year s end. As we look forward to 2019, the board has prepared this report to highlight several important decisions and place them in recent context, including: 1. A year-to-date update on our 2018 ministry goals, and presentation of 2019 goals, 2. A financial overview of our ministries, 3. A snapshot of our giving history, planned capital expenditures, and 4. Two different 2019 operating budget scenarios (12-month budget and an 8-month). We pray that you will review this information and join us on Sunday, November 11th at 2 p.m. to discuss our achievements, goals and challenges for 2019 as we focus on Redeemer s mission: Reaching people for Jesus Christ, embracing them in a Christ-centered community, and nurturing them in God s Word to be faithful disciples. Respectfully Submitted, Redeemer s Board of Directors Page 2

3 Two years ago, the congregation approved the 20/20 Vision with these five strategic targets: 1. Reaching people for Jesus: Building a Culture of Community Engagement; 2. Embracing them in a Christ-centered community: Building a Culture of Fellowship; 3. Nurturing them in God s Word: Building a Culture of Equipping; 4. Giving to express faith in Christ: Building a Culture of Stewardship; and 5. Growing Redeemer s CDC: Building a Culture of Ministry Partnership. Goals 2018 Update Here s where we stand through November 1st in furthering God s mission: Reaching people for Jesus: Building a Culture of Community Engagement 2018 Goal: 2200 neighbors engaged, with 200 Redeemer members participating 2018 YTD Actual: 1197 neighbors engaged (549 from two-mile radius) with 407 of us involved in community engagement. Nineteen neighborhood families have attending worship this year. Five families from the two-mile radius have joined. Embracing them in a Christ-centered community: Building a Culture of Fellowship 2018 Goal: 440 of us involved in fellowship 2018 YTD Actual: 425 of us are involved in various fellowship activities, including 16 new members. This year we have welcomed 38 new members. Nurturing them in God s word: Building a Culture of Equipping 2018 Goal: 450 of us attending classes and other discipleship activities, with 150 of us equipped for a specific service YTD Actual: 320 of us have attended classes and other discipleship activities, with 200 of us equipped for a specific service. Giving to express faith in Christ: Building a Culture of Stewardship Throughout 2018 we have been working to establish baselines for stewardship You have graciously given your time and talent by volunteering in Redeemer s many ministries and serving opportunities. You ve also given your treasures through Sunday morning offerings and through the LIFT campaign commitments.

4 a) LIFT - we are blessed to report that commitments are 91.6% fulfilled at $1,201,060 (through September). b) Offerings as Pastor Matt noted in his letter of October 10th, our year-to-date 2018 weekly offerings through August were $103,000 behind budget. We project, based on the current offering trend, that at year end we will experience an operating deficit of approximately $200,000. Because salaries, mortgage payments and utilities comprise 89% of our expenses, there are few opportunities to cut spending. We ask that you prayerfully consider increasing your 2018 offerings so we can carry out our mission of reaching people for Christ without consuming additional cash reserves. Growing Redeemer s CDC: Building a Culture of Ministry Partnership 2018 Goal: 154 children enrolled in CDC, with 5 CDC families joining Redeemer. In year two of our expanded facility, our CDC has 179 children enrolled (as of November 1st) ages 6 weeks and up. We ve had 13 CDC families involved in our ministry with three CDC families joining Redeemer. Page 4

5 Ministry Goals Proposed 2019 As we look ahead to 2019, we continue to live out our 20/20 Vision priorities. We recognize that building a culture of discipleship takes time and effort as we work to achieve the Lord s mission (reaching people for Jesus, embracing them in a Christ-centered community, and nurturing them in God s word). In 2019, this mission will mean adapting initiatives to disciple those who are not currently connected in ministry. We pray that each of us will utilize our God given time, talent, and treasure to support these priorities. Therefore, we submit the following 2019 goals. Because discipleship needs to be grounded in God s Word to produce fruit (John 15:1-17), during 2019, 200 Redeemer households will participate in weekly devotions, including: Reading and reflecting on God s word at least several times per week and having faith discussions with family and/or group members at least several times per week. By September 1, 2019, the Children s Ministry Team will present a three-year plan for revitalization of our children s ministry program. The program will be inspirational and educational, equipping and encourage both parents and children to model faith in daily life. By December 31, 2019, RLC members will increase stewardship (time, talent, and treasure by 5% from 2018 levels). Members will be encouraged to participate in current ministry initiatives or any of these new opportunities: a) CDC/Redeemer Bridge Team to develop and implement interactive events between CDC and Redeemer families; b) 3rd Service Research Team to explore and develop a third worship service; c) Discipleship Huddles representing small groups of one to five people gather for spiritual growth; d) LifeLine Team to encourage inactive members to return to worship; and e) Increased financial support of our ministry by a minimum of 5%. Treasure is a topic of pressing concern for the Board. We anticipate that Redeemer will need at least $850,000 in offerings in 2019 to fully fund RLC ministries. This requires an increase of $70,000 (9%) over 2017 and 2018 giving. We fervently pray that all members will increase their giving by at least 5% for 2019 so we can make progress toward closing the deficit. For those not currently making regular contributions, we ask you to prayerfully consider taking this step of faith. Throughout 2019, we will share up-to-date information about our financial position. Consequently, we expect to achieve the following in the eight months (*) ending August 31, 2019: GOAL Building a Culture of Community Engagement Building a Culture of Fellowship Building a Culture of Equipping Increase Average Sunday Worship Attendance From 347 to 370. Adding New Members 60 (*) See page 10 for a discussion of the proposed change to a September through August fiscal year. 8-Month Measure, January 1st - August 31st 2,000 neighbors reached, 300 from the 2-miles radius. 400 members will be active in fellowship. 200 members will be equipped for specific service. Page 5

6 Giving History This table shows Redeemer s giving history for the ten years 2008 through The second column shows tithes and offerings collected for church operations. The third column shows the increase or decrease in each year s tithes and offerings relative to The fourth column shows contributions to the Good Shepherd capital campaign ( ) and the LIFT capital campaign ( ). Year Tithes & Offerings % change from 2008 LIFT/Good Shepherd Gifts Total Contributions , ,842 1,403, , % 276, , , % 185, , , % 757, , % 784, , % 769, , % 759, , % 185, , , % 534,607 1,328, , % 228,793 1,010,488 While Redeemer s expenses have increased significantly during the last ten years (most notably the mortgage, utilities, and health care premiums), tithes and offerings have remained nearly flat since The church s 2017 tithes and offerings were below the previous two years, and were only 2.3 percent higher than 2008 s tithes and offerings. Redeemer is struggling to operate a 2018 ministry on a 2008 budget. The next table and graph compare actual tithes and offerings to what they would have been if giving had increased by only 2 percent per year. If tithes and offerings had increased only 2% per year over the last decade, we would have had an additional $131,579 in 2017 (cumulative $738,000 over the last nine years) that could have been used to pay an assistant pastor, make necessary church repairs, serve our neighbors, and grow God s kingdom Page 6

7 Recent Financial Results & Proposed Budget This table shows actual revenues and expenses from 2017, budgeted and projected amounts for 2018, and a proposed budget for Actual 2018 Budget 2018 Projected 2019 Budget REVENUE Tithes & offerings $ 778,310 $ 873,937 $ 778,079 $ 816,983 (3) CDC facility fee 96, , , ,000 (4) Thrivent Action Team Dollars 12,500 (5) Other income 26,889 13,000 13,000 15,000 Total revenue 901, , ,079 1,012,483 EXPENSES Wages & retirement 367, , , ,578 (6) Taxes & insurance 70,404 83,464 89,254 75,236 Outside giving 67,039 88,800 84,100 64,820 (7) Worship & ministries 28,736 28,400 27,670 32,600 Church operations 53,162 32,250 45,008 32,500 Facilities Debt service 245, , , ,172 (8) Maintenance & utilities 158, , , ,310 Capital improvements ,280 77,525 (9) Total expenses 991, ,937 1,104,864 1,052,741 Surplus (Deficit) $ (89,855) $ - $ (201,785) $ (40,258) (10) (1) (2) (1) The church s mortgage payments, utilities costs, and operating expenses increased significantly in 2017 because of the expansion of the building. As shown, tithes and offerings fell in 2017 relative to the prior two years. The combination of higher expenses and lower revenues caused an operating deficit of about $90,000. This deficit was funded by using the church s cash reserves saved from previous years operating surpluses. (2) The 2018 operating budget assumed that tithes and offerings of $873,937 would be needed to fund the church s operations. While we would love to meet this goal, September year-to-date gifts of $562,523 suggest that total 2018 tithes and offerings will be no greater than last year s amount of $778,310. In addition, a number of unexpected capital improvement needs arose during 2018 that required immediate attention. These projects include replacing air conditioner units, sealing water leaks, and repairing the sewer pipe. At this point, the board anticipates a 2018 deficit of approximately $200,000. Many of these capital expenditures will be funded by a $150,000 loan from LCEF, which was approved by the congregation in August. The remaining expenditures will be funded by using cash reserves from the LIFT strategic reserve. Page 7

8 (3) The 2019 goals outlined on page 5 ask all members to increase giving by at least 5%. The proposed operating budget assumes tithes and offerings will increase by 5% over 2018 ($778,087 x 1.05 = $816,983). (4) $12,000 per month for January through August plus $18,000 per month for September through December. (5) Assumes Thrivent members will obtain $12,500 through Thriven Action Team dollars to support Vacation Bible School, Screen on the Green, and cul-de-sac events. For more information, talk to Wayne Woodcock and Jessie Estrella. (6) No raises for staff or Assistant to the Pastor. No amounts budgeted for Associate Pastor or Call Committee. (7) Historically, Redeemer has devoted 10% of offerings received to community outreach and outside giving. In 2019, we propose reducing outside giving by $20,000. (8) Debt service increases $21,000 because of the $150,000 capital improvement loan that will be repaid over the next ten years. (9) See schedule of capital improvements on the following page. (10) A 5% increase in tithes and offerings will very likely result in a third consecutive year with an operating deficit. The board anticipates Redeemer will need at least $850,000 of tithes and offerings in 2019 to fully fund its ministries. This requires an increase of $70,000 (9 percent) over 2017 and 2018 giving. We believe this is a reasonable goal. As shown on page 6, total contributions to Redeemer met or exceeded $850,000 in six of the previous ten years. Redeemer s members have the economic resources and the spiritual willingness to support the church s ministries. Now that the LIFT capital campaign is completed, the board urges members to prayerfully consider adding a significant portion of their last three years LIFT contributions to their annual tithes and offerings. The LIFT campaign generated $948,000 in years , an average of more than $315,000 per year. If members add one-fourth of that average LIFT contribution ($78,000) into their annual tithes and offerings, the church can make a significant step toward funding its current ministries. Page 8

9 Capital Expenditures This chart outlines the capital expenditures we ve made to date and what we expect and plan to address in the subsequent years of 2019, 2020, 2021 and Name Description Location Complete or Scheduled Repair Cost HVAC Unit #12 Replace HVAC Unit CDC - East Complete, 6/1/2018 $14,988 Aaon Air Handling Unit #1 Replace Hot Gas Valve/Line Dryer Sanctuary Complete, 9/28/2018 $2,964 Roof Membranes Replace Rubber under Units #1 & #2 Sanctuary Complete, 10/5/2018 $8,400 HVAC Unit #1 & Unit #2 Replace HVAC Unit Sanctuary Complete, 10/12/2018 $37,688 HVAC Compressor #3 Replace HVAC Compressor Choir Loft Complete, 10/12/2018 $1,790 Sewer Pipe Cleanout & Repair Church Property Complete, 10/26/2018 $22,450 Subtotal $88,280. Elevator Replace Control Panel Walkway Winter 2019 $45,000 Parking Lot Repair Repair Asphalt Circle Drive Spring 2019 $5,000 Stained Glass Repair Repair Window Glazing Sanctuary Spring 2019 $4,700 Skylight Repair Cracks in Inner & Outer glass Fellowship Hall Spring 2019 $2,325 Paint Interior Patch Repair and Paint Narthex/walkway Spring 2019 $14,500 Paint Exterior Caulk and Paint Entrances Narthex Spring 2019 $6,000 Subtotal $77,525 Stage Stage for Simple Truth Sanctuary Spring 2020 $10,000 Outside Handrail Powder Coated Handrail Choir room Spring 2020 $5,000 HVAC Unit #11 Replace HVAC Unit CDC - East Spring 2020 $16,000 Carpet Replacement Replace all Carpet Sanctuary/Narthex Fall 2020 $22,100 Subtotal $53,100 Sidewalk Steps Outside NW Fellowship Hall Spring 2021 $2,150 Stamped Concrete Spalling in Stamped Surface North Entrance Spring 2021 $30,000 Ceiling Repair Repair/Paint Sanctuary Ceiling Sanctuary Spring 2021 $9,000 Concrete Sidewalk Replace by Circle & Upper level Spring 2021 $8,500 Flood Lights Replace Flood Lights Triple Crosses Fall 2021 $2,500 Wall Protection Install Protection in Corridors CDC Fall 2021 $15,000 Subtotal $67,150 Parking Lot Paving Replace all asphalt paving Spring 2022 $79,800 Subtotal $79,800 Page 9

10 Proposed Change in Fiscal Year The church currently sets its operating goals, prepares its budget, and keeps its accounting records on a calendar year basis. The Child Development Center (CDC) currently budgets and keeps its accounting records using a fiscal year beginning in September 1 and ending August 31, which coincides with the academic calendar. The board proposes switching the church to a September through August fiscal year to coincide with the CDC. This will simplify the overall budgeting and accounting process. The board will be able to prepare a unified budget that the congregation can approve at a single voters meeting each August. If the proposed change in fiscal year is adopted, the church will have an eight-month accounting period for January through August 2019 before beginning its next fiscal year on September 1, Budgeted 2019 Expenses 12 months January - December 8 Months January - August Payroll & Retirement $ 352,578 $ 234,699 Taxes & All Insurance 75,236 47,822 Outside Giving & Community Engagement 64,820 36,200 Ministry Operations 65,100 46,219 Sub-Total 557, ,940 Facility 495, ,405 Total Ministry Budget $ 1,052,741 $ 695,345 Page 10