Finance Committee, June 11, 2014

Minutes of the Finance Committee

First United Methodist Church, Santa Rosa

Wednesday, June 11, 2014--Carriage House


Present:  Pamala Stephens (Chair), Mary Brunet, Ryan Comiskey, Jack Dupre, Marjorie Noble, Greg Roth, Larry Schmidt, Larry Thompson and Trustee representative Brian Gebhart.  

Absent:  Steve Zwick


Pamala Stephens called the meeting to order at 7:03 p.m. and began with a prayer.


Approval of Minutes

Minutes of the Finance Committee meeting of May 14, 2014 were approved as written:  Moved by Greg Roth, seconded by Jack Dupre, motion passed unanimously


Finance Report

Larry Schmidt reviewed the financial statements for May 2014.  During the month the main checking account balance decreased $1,685.17 to $52,287.83 and the operating fund balance fell $2,825.86 to $3,515.57.  The committee has a goal of achieving an operating reserve fund balance of $40,000.  Total assets decreased $5,321.43 while total liabilities increased $1,976.91, so total fund balances fell $7,298.34.  Year to date (YTD) pledges and gifts were $284,838.69, which is 90.48% of the YTD budgeted amount of $314,802.29.  Total YTD income was about 92.66% of the YTD budgeted amount.  YTD total expenses were 98.97% of the YTD budgeted amount.  Overall, total expenses have exceeded total income by $13,996.76 so far in 2014.  The 03 and 04 accounts total $78,746.86 and were fully funded. 


Multiple committee members expressed concern regarding the growing gap between budgeted and actual income.  Committee members generally agreed that this income gap deserved close monitoring but that in light of the historical volatility in the timing of pledges and gifts no action should be taken until at least next month when the committee has data for the full first half of the year. 


Other Business

Pamala Stephens updated the committee on the 2015 Annual FUMC Stewardship Campaign, which will be rolled out in the fall of 2014.  The Campaign this year will include the operating budget and the payment on the FUMC mortgage. 


Multiple committee members expressed the strong belief that progress should be made toward paying off the mortgage principal.  At least one committee member expressed the view that it was not prudent or responsible to assume that the mortgage balance remaining (the “balloon payment”) at the end of the 10-year loan period could be refinanced at that time at a rate FUMC could afford.  A failure to pay off the mortgage balance, or refinance the mortgage balance at a reasonable rate, would have very negative consequences for FUMC’s financial health.   


Pamala updated the committee on the upcoming summer meetings to be held as part of the “Join the Conversation, Discovering our Common Vision” effort.   Multiple committee members indicated that they would be taking part in these meetings. 


Mary Brunet informed the committee that a utility contractor has offered to lease a currently unused portion of the Stony Point property.  The sub-contractor is working with P.G. & E. on the Stony Point road project and is looking for space to store equipment.  The contractor offered cash payment for the rent of the space.  Further, the lease/rental arrangement was discussed with the county assessor and the assessor’s office indicated that the lease/rental would not change FUMC’s property tax status.  Representatives of FUMC are exploring the possibility of having the contractor make payment-in-kind in lieu of, or in combination with, cash.  The payment-in-kind would possibly involve utility infrastructure improvements to the Stony Point property.  Research and discussions are currently underway and are overseen by FUMC Trustees. 


Larry Schmidt suggested that financial transparency at FUMC might be enhanced by collecting additional data on the Montgomery and Stony Point campuses.  He made a motion that “income and expenses of the Montgomery and Stony Point congregations be separated, recorded and reported separately monthly.”  Larry proposed that this effort be made on a trial basis to see whether the data proved useful.  Multiple committee members agreed that the data might prove useful.  However, multiple committee members also expressed concern regarding the assumptions underlying the data collection and how the data would be used.  For example, multiple committee members indicated that they make all their donations at the Montgomery campus, but they want all or part of their donations to support the Stony Point campus.  Multiple committee members expressed the belief that this issue would make it difficult to draw any strong conclusions about the “income” produced by one particular campus.  In light of these committee members’ concerns, Larry withdrew the motion.   


The meeting adjourned at 9:20 p.m. with a prayer by Greg Roth.


Next meeting: 7:00 p.m. July 9, 2014, Carriage House


Respectfully submitted by Greg Roth

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Wed, 06/11/2014 - 19:15