February, 2011



July 27th, 2020

To: Wardens, Treasurers and Convention Delegates

From: Diocesan Council

CC: Trustees, Standing Committee, Commission on Ministry, HR Committee and Diocesan Staff

RE: 1st DRAFT 2021 Diocesan Budget

Attached please find the first draft of our 2021 Diocesan Budget & Apportionment, along with information regarding the role of Diocesan Council, the Budget Committee and budget process/timeline.

Please plan to join us for an online forum (via Zoom) on Wednesday, August 12th at 6:00 PM for a brief overview of the budget, as well as an opportunity to ask questions and provide feedback. An invitation for this Zoom meeting will be sent via e-mail on August 3rd.

INCOME from Apportionment, Investments (i.e., Endowment), and Other Income:

APPORTIONMENT: In 2019, we moved to a new, simplified formula for Apportionment that is grounded in the Biblical Tithe of 10% (EXHIBITS A1-4). The concept behind the new formula is to expand the 10% apportionment rate-range each year, gradually reducing the average apportionment towards a 10% Tithe.

For 2021, the proposed apportionment formula is:

• 10% on the first $135,000 of Parish Operating Income, and 15.5% on all income over $135,000

• Any increase or decrease in Parish apportionment for 2021 is limited to a maximum of 3% of the Parish’s 2020 apportionment

Expanding the 10% rate range from the first $115,000 (in 2020), to the first $135,000 (in 2021), may reduce apportionment by up to $1,100 (for churches with Operating Income over $135,000). Total Apportionment income for 2021 is expected to be $1,025,032, an increase of 0.9% over 2020 (EXHIBIT #1). A list of all 2021 Parish Apportionments is provided in EXHIBIT #9.

INCOME FROM INVESTMENTS: Diocesan Trustees have approved total draws from investments of $963,500 for 2021, including $906,000 to help fund the Operating Budget, along with another $57,500 from a designated fund, to fund Health Reimbursement Accounts (HRAs) and Lay Post-retirement benefits for eligible retirees. The total draw is equal to 4.7% of the trailing, 5-year average balance and includes the unrestricted interest income from our loan portfolio (EXHIBIT #2). We have worked closely with Trustees to maintain a disciplined draw while also recognizing that current economic uncertainty may require additional resources in the coming year.

OTHER INCOME: Next year, we expect to resume the original intent of the Annual Bishop’s Appeal, to help fund growth of key leadership development programs. To date, we have received over 280 gifts totaling almost $20,000 for this new initiative. For 2021, continued expansion of the Bishop’s Appeal, along with previously awarded grants for Deaf Ministry ($40,000), should provide a total of $70,000.

EXPENSES: Since 2015, our annual operating expenses have stabilized at around $2 million. Given the current economic climate, we are working to keep average expenses for 2020-2022 roughly at the 2019 level of $2.045 M. (EXHIBIT #3). Expenditures in the 1st Draft Budget total $2.062 million (a decrease of 1.8% vs. 2020 budget), as we continue working to close a small Operating Deficit (EXHIBIT #4-5).

Our 2021 Operating Expenses are summarized below and detailed in EXHIBITS # 6-8.

• CONGREGATIONAL DEVELOPMENT PARTNERSHIP (CDP): The CDP Committee is currently reviewing all new and renewal grant requests for 2021. Total requested funding is over $450,000 and we currently estimate a 6% increase in the budget to $300,000.

• MISSION PARTNERSHIP: The Mission Partnership Committee will be reviewing 2020 mission grant requests after August 1st. Total funding for 2021 is currently estimated at $168,000 (5% below 2020 Budget, and about equal to the average of the last two years). $30,000 of Mission Grant funds will be reserved for distribution in Q1 of 2021 for Covid-19 related needs.

• DOMESTIC & FOREIGN MISSONARY SOCIETY (D&FMS): Our contribution to D&FMS will decrease by about 1% (to $283,760) due to lower Diocesan income last year (2019).

• HEALTH BENEFITS: Funding of all Post-retirement Benefits, including Health Reimbursement Accounts (HRA), will come from a new, designated HRA Fund overseen by Trustees. The HRA benefit continues at $900 per eligible retiree.

• LEADERSHIP DEVELOPMENT: Funding is estimated to be 9% below the 2020 budget as a number of programs have moved to online delivery. Of course, there is no way to know when in person meetings and travel may resume, but we estimate that they may return to about 50% of the previous budgeted level.

• GOVERNANCE: Total expenditures will decrease by 24% with the Bishop not attending Lambeth and assuming that The Church moves to an online General Convention. A final decision on General Convention is still to be determined (est. cost savings ~ $40,000).

• STAFF: Based on our current staffing levels, total staffing expense will increase by about 1% (compared to 2020 Budget), as potential increases to salaries were deferred to January 2021, and will be partially offset by reduced travel expenses. EXHIBITS S1-5 provide details on staff structure, salary ranges, and total compensation by position.

• OFFICE EXPENSE: Costs are expected to decrease 1% compared to the 2020 budget, as lower costs for telecom, hospitality, supplies and cleaning are mostly offset by increases in IT, rent and insurance.

The first draft budget is always a “snapshot” of our work in progress and there will certainly be changes, as we clarify assumptions, refine estimates, and incorporate feedback. Our goal remains the same: to provide you with a balanced budget in September that supports congregational growth by enhancing relationships, developing leadership resources, and continued thoughtful stewardship.

Thank you for your continued engagement and faithful support.

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