Episcopal Diocese of Rochester
Joy in Christ, as a way of life

2017 First Draft Budget Published

To: Wardens, Treasurers and Convention Delegates
From: Budget Committee of Diocesan Council
CC: Diocesan Council, Trustees, Standing Committee, Commission on Ministry, District Deans, HR Committee
RE: First Draft 2017 Diocesan Budget
 
Attached here is the FIRST DRAFT of our 2017 Diocesan Budget for your consideration and feedback.  Diocesan Council distributes a first draft at this point in the annual budget process to encourage feedback before finalizing a proposed budget in September.  Sharing budget plans, priorities, and challenges at this stage allows our collective leadership an opportunity to help us direct our financial resources to “Grow and develop congregations spiritually, numerically and in missional leadership.”  So, please take a few minutes to review this DRAFT budget, discuss with your Convention Delegates, and share your thoughts at District meetings or directly with Council members.
 
INCOME FROM APPORTIONMENT is based on the Operating Income reported by our parishes in the 2015 Parochial Report and provides 47% of the total funding for our Diocesan Budget.  Parish Operating Income increased 3% last year to $7.750 M. With no proposed changes to our apportionment rate structure (EXHIBIT #1), the projected average rate of apportionment remains at 12.6% of total parish operating income.

Council continues to limit individual parish increases and decreases to no more than 5%, from one year to the next.  And, as we’ve done in past years, Council reduced apportionment for a few parishes where recent declines in operating income have far outpaced the reductions in apportionment.  The effect of this “cap on effective rate” is detailed in EXHIBIT #2, along with a complete list of parish apportionments inEXHIBIT #14.
                                               
INCOME FROM INVESTMENTS: Our Diocesan Trustees have approved a draw from investments of $1,100,000 to fund 53% of our 2017 Diocesan Budget.  This draw is equal to 5.5% of the audited, trailing five year average balance and includes interest on our loan portfolio.  We continue to stay on course to gradually reduce our draw to a more sustainable level over the next few years (EXHIBIT #3).
 
OPERATING EXPENSES:  Our first step in developing the 2017 Operating Expense budget was to roll up the requests and inputs from the committees of Council, Bishop, and Staff into a preliminary “baseline budget.”  The total operating expenses of this baseline budget were almost $2.105 M, an increase of around $33,000 from 2016, with a deficit of nearly $84,000 (EXHIBIT #4).
 
The combined impact of “flat” apportionment and gradually reducing our “draw” means that operating expenditures must be reduced by 2.4% in 2017 (around $50,000).  Our first draft budget capped the proposed increases in Mission Partnership Grants and contributions to D&FMS at around 5% and eliminated the Diocesan subsidy for parish dental insurance in order to reduce the operating deficit to less than $38,000 (EXHIBIT #5).
 
The 1st DRAFT Budget contains cost reductions of almost $60,000 that are partially offset by increases in funding for Mission Partnership Grants (up $9,450), contributions to the Domestic & Foreign Missionary Society (up $10,250), Leadership Development (up $3,500) and Staff (up $22,768).  A summary of the First Draft Budget may be found in EXHIBIT #6, along with detail by expense category inEXHIBITS #7 – 11.
 
CONGREGATIONAL DEVELOPMENT PARTNERSHIP:  The committee is reviewing all renewal grant requests for 2017.  These grants are currently noted as “To Be Determined” (TBD).  All funding for both potential renewals and additional new grants is currently assigned to a single line item for 2017.
 
MISSION PARTNERSHIP:  The committee will be reviewing grant requests in the coming weeks.  Since all grants require new applications for 2017, the budget is currently allocated into three categories (Partner & Parish Grants, Sustainable Development Grants and District Grants) with no specific line item allocations, pending review of all applications.  Allocations may change depending on feedback & requests.
 
CONTRIBUTIONS TO D&FMS: A resolution from the 2015 General Convention reduces Diocesan contributions from a 19% “Asking” to a 15% “Commitment” by 2019.  We project that our contributions will actually need to increase by 8% annually for the next three years to meet this requirement.  For many years the Diocese has paid less than the full asking.  In 2012 the Diocese gave approximately 8.5% and agreed to gradually increase our contributions towards the full asking, beginning with our 2013 Budget. For 2017, the proposed contribution has been increased $10,000 to $238,000 (about 12.5% of Asking).
 
HEALTH BENEFITS: Last fall, at the Bishop’s request, the Council and Convention approved a one-time increase in funding for retiree Health Reimbursement Accounts (HRA) from $600 to $900 per eligible participant for 2016.  This action was taken to ease the transition for these participants moving from the higher level of Medicare Supplemental coverage under the Plus Plan, to the Comprehensive Plan.  For 2017, Council has gone back to the $600 amount originally approved for 2016.  As previously noted, the estimated $9,000 subsidy for parish dental insurance was eliminated for 2017. As part of our transition away from a self-insured Diocesan Dental Plan last year, the Diocese reimbursed parishes for the employer subsidy in 2016, as detailed in EXHIBIT #13.
 
LEADERSHIP DEVELOPMENT/GOVERNANCE/STAFF:  A $3,500 increase in funding for Leadership Workshops, Programs & Events reflects recent levels of spending and provides additional opportunities for clergy retreats and development.  A reduction in audit fees and change in accounting for General Convention have reduced Governance expenses by $12,000. Even with no changes to current staffing levels, increases in salaries (2.5%) and benefits (3.0%) will increase staffing costs by almost $23,000.  EXHIBIT #12 provides details on staff structure, salary ranges, and total compensation by position.
 
OFFICE EXPENSE:  Continued efforts to reduce costs for information technology and office supplies will reduce our costs by about $14,000.  Trustees continue to develop plans for the future use of our current Diocesan office space at 935 East Avenue.  As these plans develop, we will work with Trustees to determine the impact on both current and future operating expenditures.
 
COMMUNICATIONS & FEEDBACK:  Please take some time to review the first draft budget and provide your thoughts by attending District meetings or by contacting your elected Council and committee members.  A list of the Diocesan Council and Committee members is included and also available on the Diocesan Website, as are all budget related documents.  Updates will be announced via E-News and posted to our website.
 
All first draft budgets are simply a “snapshot” of work in progress.  As we move forward to include recommendations and feedback, there will be changes.  Our plan is to have a final draft budget by September that maintains our focus on supporting congregational growth, balanced with sound stewardship.

Thank you as always for your faithful commitment and support.

Diocesan Council Contacts & Roster
 
Name Role Details Subcomittees
The Rt. Rev. Prince Singh Chair Bishop  
Gwen Van Laeken Vice-Chair Elected
Northeast
Budget
The Rev. Christopher Streeter   Elected
Monroe
CDPC (Co-Chair)
Deborah VanderBilt   Elected
At-Large
CDPC (Co-Chair)
The Rev. Lucille Alonzo   Elected
Rochester
CDPC
The Rev. Dr. William Daniel Jr.   Elected
At-Large
CDPC
The Rev. Lynne Sharp   Elected
Southeast
CDPC
Dawn Wilkins   Elected
Rochester
CDPC
Margaret Ashley   Elected
At-Large
MPC (Co-Chair)
The Rev. Kelly Ayer   Elected
Southwest District
MPC
Carolyn Mok   Elected
At-Large
MPC
Elizabeth Porter   Elected
Southwest
MPC
Linda Raide   Elected
Southeast
MPC
The Rev. Joshua Walters   Elected
At-Large
MPC
Scott Seabridge   Elected
Monroe
Budget (Chair), MPC (Co-Chair)
The Rev. Dan Burner   Elected
At-Large
Budget
The Rev. Sara D'Angio White   Elected
Northeast
Budget
Philip Fileri   Ex Officio
Chancellor
 
Terrence Butwid   Ex Officio
Treasurer
 
Bliss Owen   Ex Officio
Assistant Treasurer
 
Todd Rubiano   Ex Officio
CFO
 
Susan Woodhouse Secretary Ex Officio
Non-Voting Volunteer