PARISH ADMINISTRATION & FINANCE ENEWS
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Budgeting tips for 2019
by Louis Fuertes
- It has information on clergy compensation benefit costs, and various other financial rules of the road. Many parishes (maybe even yours!) have run into budgeting and compensation problems that could have been avoided by checking things out in the “TN.”
- Mark Twain is said to have said “It ain’t the things you don’t know that gets you. It’s the things you know for sure that just ain’t so!” It wouldn’t hurt to check out even the thing “you know for sure” in the Treasurers’ Newsletter.
Tip #2:
When calculating clergy compensation, be sure you have addressed all components of clergy compensation and are above minimums.
- For the best way to assure yourself that you have done so, see Tip #1 above.
Tip #3:
Budget for a 7% increase in your parish’s property and casualty expenses for 2019.
- The Treasurers’ Newsletter, published in September, provided a 5% increase as budgeting guidance for Property and Insurance expenses for 2019. It turns out that property insurance providers (whose premiums make up about 50% of the overall property and casualty expense) have collectively experienced substantial reductions in their loss reserves over the past several years due to catastrophic events nationwide. Almost all of these carriers had been seeking substantial (~15%) premium increases, but have fortunately wound up with more modest increases. Premium increases for general liability and specialty coverages seem to be in the 3 – 5% range, leading to the 7% guidance for the overall Property and Casualty budget for 2019.
- ECCT expects to receive final pricing information over the next week, which will allow us to develop invoices for individual parishes prior to month end.
Tip #4:
Look to your 2017 Parochial Report to budget your Common Mission Support assessment for 2019.
- Since the 2014 Annual Convention, Common Mission Support obligations have been set at 10% of parishes’ “Trailing year” “Line B” revenues. The “trailing year” for 2019 is 2017, which is also the year of the last Parochial Report we have received from ECCT parishes. The ECCT Finance staff develops parishes’ 2019 Common Mission Support obligation by taking the “Total Operating Revenue” reported on “Line B” on parishes’ 2017 Parochial Reports, and then moves the decimal over one space to calculate 10%. (Okay, we also divide this number by 12 to come up with monthly payment amount and round off the pennies to come up with the number that shows up on your monthly invoice, but why spoil a good story with details like this?)
Tip #5:
Assume 3% inflation for parish operating expenses.
- The cost of living in Connecticut (estimated by averaging the increase in the cost of living in the New York and Boston Metro Areas as reported by the Bureau of Labor Statistics) increased by 2.4% in 2018, but the rolling 12-month average of these reports was clearly increasing rapidly (inflation in the Boston area has been significantly higher in the New York area, as has been the case for several years now). Energy prices have been softening in recent months, which should help, but the upward momentum in inflation has been significant for the last three years. Use 3%!
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Tip #6:
Keep track of your “pledge yield” and bake it into your revenue budget
- Let’s say your parish receives pledges that total $172,000 (which happens to have been the average for all parishes that reported pledge results on their 2017 Parochial Reports). What amount do you budget for pledge fulfillment revenue? The ratio of pledge fulfillment revenue actually received divided by the total amount pledged is your “pledge yield,” which varies considerably across parishes. It is definitely worth the effort to “do the math” for your parish, as pledge yield are neither truly useful or defensible if questioned.
- In addition, it is worth the effort to “do the math” for several years, as results for a single parish can vary significantly over a 5-year period. Once you have done the math, it is wise to use a yield percentage that reflects the average over a multi-year period (or a number one or two percentage points below your average if you want to build in some conservatism for your budget).
Tip #7
:
Get a complete “Preliminary Revenue Estimate” together early, then tweak it over time
- Earlier than you are comfortable in doing so, create a “best guess” for parishioner pledge contributions, loose plate collections, income from investments and other income, summed together, and share the preliminary estimate with other parish leaders with the understanding that the estimate will change with more information.
- With this estimate, the parish leaders can get a sense of the staff expense and ministry support that could be afforded after making allowance for office operating and building operations. As stewardship results become more certain, your original “best guess” can become even better, and funding for staff and program expenses can be refined.
Tip #8:
Yay for the Contingency line!
- Despite best efforts to budget carefully, there will be budget surprises every year. There might be revenue surprises (generous pledgers are unable to fulfill pledges, bad weather negatively affects the income from the annual apple festival, etc.) or expense surprises (a really cold winter drives up heating costs, parish leadership wants to initiate a new ministry for the program year). Tip #8 is to include a chunk of money in a line items called “Contingency.” A suggestion is to make this amount equal to 5% of your non-salary expenses (expenses in staff costs do occur from time to time, but surprises usually come elsewhere). If a reasonably funded Contingency line in the parish budget is introduced, two things may happen:
- First, other parish leaders will initially hate the very existence of the contingency line. They will want to reduce the amount in this line so the budgets of other activity can be increased. You are urged at this point to defend the funds in your contingency line aggressively (suggest that the number should actually be 10%; throw the old “best practices” phrase around liberally; ask the most vocal opponents of the Contingency line to identify cost reductions if/when surprises occur; do whatever you can).
- Second, during the course of the next year, you and other parish leaders will be relieved and grateful that your parish has a contingency line that will allow you to address at least some of the surprises that are very likely to emerge. That is your opportunity to seek their support for maintaining or even increasing the contingency line during the next year’s budget cycle.
Tip #9:
Communicate, communicate, communicate!
- Keep vestry members informed how things are looking as budget results get firmed up. Manage expectations before the budget meetings start. Once the year gets underway, keep budget managers (clergy, organist/choirmaster, head of the altar guild, youth group leader) informed each month on how much they have spent and their remaining budget.
Tip #10:
Once the budget has been approved, there might be times when you’ll need to “re-budget”
- If revenue shortfalls or expense surprises are so big that they blow through the Contingency line and it is apparent by June that your parish is heading for a significant operating deficit shortfall, don’t hesitate to engage parish leaders to initiate a mid-year re-budgeting before commitments for the upcoming program year starting in September are finalized. Work with budget managers to inform them of what has happened and get help in revising their spending plans. You might never have to do this, but be mindful that the option exists and that your leadership is essential in avoiding financial train wrecks for your parish.
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2018 Property Improvement Grant Request Information
If you are ever asked, please know that Isabelle Eaton, Sebastian Lawrence, Luna Terrell, Mary Beach, Celia Castle and J.M. Downes share something in common. Each of them, in their own way and with distinctive restrictions, left part of their estates to the Episcopal Church in Connecticut to provide financial support for parish building projects.
ECCT’s Property Committee is eager to increase the awareness and utilization of these bequests. If your parish has completed a building capital improvement project in 2018, it can apply for a partial reimbursement of its expenses by following the directions on the
Property Improvement Grant Application
.
As noted, each of the donor’s listed above specified their wishes for how their gifts should be used, including factors such as the maximum amount to be awarded for any one project and the parts of our State where awards should be granted. Members of ECCT’s Property Committee will respect these wishes in evaluating grant requests. It is important to note that financial need was cited as a criterion by these donors. Awards will not be made for over 50% of the document project expense. No grants will be made in excess of $8,000 (note that in some circumstances, donor’s restrictions will mandate a substantially lower maximum award amount). Consistent with ECCT canons, parishes must be in good standing to be eligible grant recipients.
Please complete your grant requests and mail them to the address listed at the bottom of the application
no later than December 31, 2018.
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HR Matters: Timesheets for Employees
by Kayla Tubolino
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As 2018 comes to a close we can reflect on what we did great as employers and what we can do better next year. Compliance for keeping accurate recordings of all non- exempt working time is something we should strive to do in 2019. For those of you who need a refresher of the term non-exempt, this applies to all employees who are paid hourly and non- exempt means that these employees are entitled to time and a half pay after 40 hours.
Here is a link
for an easy timesheet that will calculate employee’s overtime for you.
The timesheet also include a column for vacation/ personal, sick, and holiday. These hours if used in addition to normal working hours will not be used in the accrual of overtime pay.
Employees can input their work time and the excel sheet will calculate the time worked and any overtime due to the employee. This sheet can be a bit temperamental so employees must enter the times like so: "8:30 AM" or "9:15 PM"
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The Commons: ECCT offices will be closed December 25 - January 2
This includes the Mission Finance & Operations office. Contributions and donations need to be received in the office no later than
December 14
for credit in 2018. Donations for the "Bishops' Fund for Children" should be mailed to
Camp Washington
or made through the
ECCT website
.
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Mandated Changes for Clergy Compensation in 2019 (by diocesan convention resolution):
- A 2.40% cost of living increase
- Minimum salary increases annually for each year of ordination up to 20 years. This year that multiplier for each year of ordination is $782 for full-time clergy. It is recommended that the increase take effect January 1 rather than be tied to date of ordination to the diaconate.
- Remember to file a “change in compensation” form with CPG so that pensions are billed correctly. These forms are available through cpg.org
Reminders:
- Vestries must pass the “parsonage allowance” resolution for their clergy for 2019 BEFORE January 1, 2019. See page 8 of the 2019 Treasurers’ Newsletter for model resolutions. This is for the part of the clergy’s cash compensation set aside for IRS purposes, separate from any cash housing allowance that is paid. It does not affect the total amount paid by the church to the clergy, and vestries may not dispute the amount in the resolution. Clergy should then retain a copy of the vestry minutes that note the passage of this resolution for their tax records.
- Any DOWNWARD changes made to clergy compensation require a new Letter of Agreement, and thus the approval of the Canon for Mission Leadership and a bishop.
- Please see the 2019 Treasurers’ Newsletter for details and more information.
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Ordination of the Rev. Benjamin Wyatt, December 13
The Rev. Benjamin Wyatt, an S.T.M. candidate at Yale Divinity School and currently serving as Curate at Trinity, Hartford, will be ordained to the priesthood by the Rt. Rev. John Bauerschmidt of the Diocese of Tennessee
on December 13 at 7:30 p.m.
at Trinity Church,
120 Sigourney Street
, Hartford.
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Upcoming Confirmation in the NE Region
January 5
: 10:00 a.m. at St. George's Bolton. Contact
St. George's
for more information.
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Bishops' upcoming visitation schedule
December 16:
Ahrens - Holy Trinity, Enfield; Douglas - Trinity, Collinsville
December 23:
Ahrens - Trinity, Brooklyn
January 6:
Ahrens - St. Paul's, Huntington, Shelton; Douglas - St. Paul's, Bantam
January 13:
Ahrens - Christ Church, Watertown; Douglas - St. Luke's/St. Paul's, Bridgeport
January 20:
Ahrens - St. John's, Washington; Douglas - St. John's, North Haven
January 27:
Ahrens - St. John's East Windsor; Douglas - Epiphany, Durham
February 3:
Ahrens - St. Andrew's, Stamford; Douglas - St. Paul's, Wallingford
February 10:
Ahrens - St. James', Higganum; Douglas - All Saints, Ivortyon
February 17:
Ahrens - All Saints, Meriden; Douglas - St. Andrew's, Northford
February 24:
Ahrens - St. Stephen's, East Haddam
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2018 - 2019 ECCT Cycle of Prayer Now Available
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Parish admins invited to join a listserve
Want to chat with colleagues about ACS vs PowerChurch? Offer tips on more successful mail merges? Get suggestions on names for a new campaign?
Alison Hollo
, Senior Administrator for the Office of the Episcopate, invites parish administrators to forward her their names and email addresses to be added to an ECCT listserve for parish admins.
As a member of Bishops' Executive Secretaries Together (B+E+S+T), Alison has participated in their listserve and wants to make the same opportunity available for parish admins in ECCT.
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2019 Treasurers' Newsletter can be found
here
.
Included: Clergy Compensation, Insurance, Lay Pension, Church Records, Supply Clergy, Tax and other IRS information, and other management operations.
2018 Treasurers' Newsletter can be found
here.
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The next issue of the Parish Admin & Finance eNewsletter will be published mid-February.
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