Monday, September 23, 2013
To: Wardens, Treasurers and Convention Delegates
From: Todd Rubiano
CC: Diocesan Council, Trustees, Standing Committee, C.O.M., HR Committee
RE: Proposed 2014 Budget:
On September 17th, the Diocesan Council approved a proposed budget for 2014 (summarized in EXHIBIT 3). In addition to updating administrative cost estimates (including health insurance costs), the Council approved the following changes to the First Draft budget, communicated on June 7th:
Apportionment: As we implement the resolution adopted at our last Convention (EXHIBIT 2), Council approved lowering apportionment rates by 1% point in each band. We will continue to utilize a “5% cap & floor” to limit the short term impact of changes on individual parishes. This change reduces available income by almost $25,000 in 2014.
Domestic & Foreign Missionary Society (D&FMS) Asking: In the First Draft of our 2014 Budget, the Diocesan contribution to the D&FMS Asking was increased by 10%, in order to make progress towards the full asking. Given the decrease in total Diocesan income, it seems practical to limit the increase in our contribution to 5%, thereby reducing the impact on our expenses by over $10,000 (EXHIBIT 3 & EXHIBIT 6).
Congregational Development: In 2010 we spent about $225,000 in this category. In 2012 we increased this investment to over $416,000, using the savings generated from administrative cost reductions to fund new grants. At the same time, Council began implementing a new grant process predicated on decreasing grants over time, as well as reviewing all existing grants. In 2013 we have committed to funding of almost $364,000 against an original budget of $419,000. While it’s not yet certain how much of the remaining budget may be utilized over the next few months, it seems reasonable to reduce funding levels as long as there are funds available for new grant requests. The proposed budget of $346,000 provides almost $50,000 for new grants, while reducing the impact on expenses by more than $14,000 (EXHIBIT 3 & EXHIBIT 4)
The 5-Year Budget Projections in EXHIBIT 1 are based on Total Parish Operating Income (basis for apportionment) remaining at 2012 levels and average annual returns of 7% on our invested funds. In order to reduce our draw from investments closer to 5%, we will need to reduce spending about 5% annually over the next five years.
In total, the proposed 2014 budget is an effort to balance sound “investments in growth” with good stewardship of our resources for the long term. The Trustees of the Diocese clearly recognize the need to reduce our draw from investments over the next several years - and yet do so in a manner that does not undermine long-term growth. There will always be tension between calls for “austerity” vs. “stimulus”, but neither extreme is likely to further our mission.