2017 Proposed Budget 2018 Draft Budget

Mission Budget Committee Bruce Cann (St Matthew St Joseph’s, Detroit) The Rev. Lynda Carter (Grace, Southgate) Steven Chisholm (St Clement’s, Inkster) Claudia Hamlin (St Paul’s, Lansing) Brian Johnson (All Saints, Brooklyn) The Rev. Karen Lewis (St Paul’s, Lansing) The Rev. Juan Perez (Sta Teresa y San Juan) Robert Sherry, chair (St Thomas, Trenton) Staff Support Jo Ann Hardy, canon administrator (Cathedral Church of St Paul) Mark Miliotto, diocesan treasurer (St John’s, Royal Oak)

Budget Process: Goals and Priorities Present a balanced budget Gather information from budget hearings and evaluate suggestions for inclusion in budget Maintain transparency in process and reporting COLA for staff Redeploy savings from TEC Assessment rate cut Reduce or eliminate reliance on reserves

2017 Apportionment Pledges 100% Participation Every congregation has made a 2017 pledge of support Full Apportionment Pledges at 71% 53 of the 75 congregations have pledged at full apportionment (same rate as in 2016) Up from 67% in 2015, 65% in 2014, and 63% in 2013 Shortfall from Full Apportionment Keeps Dropping 2017 pledges $142k (8.2%) short of full apportionment 2016 $150k (8.7%) 2015 $177k (10.3%) 2014 $209k (12.5%)

53 Congregations Pledging Full Apportionment Christ Church, Adrian St Luke's, Allen Park St Andrew's, Ann Arbor St Clare's, Ann Arbor Trinity, Belleville St James, Birmingham Christ Church Cranbrook, B Hills Nativity, Bloomfield Twp St Paul's, Brighton St Michael & All Angels, Camb Jcn St Barnabas, Chelsea St John’s, Clinton Christ Church, Dearborn All Saints, Detroit Christ Church, Detroit Church of the Messiah, Detroit Grace, Detroit St John's, Detroit St Peter’s, Detroit St James, Dexter All Saints, East Lansing Resurrection, Ecorse St Luke’s, Ferndale St James, Grosse Ile St Michael's, Grosse Pointe Woods St Stephen’s, Hamburg St Peter’s, Hillsdale St John’s, Howell

Full Apportionment Pledges Cont’d St Paul’s, Jackson St Mary's-in-the-Hills, Lake Orion St Michael's, Lansing St Paul’s, Lansing St Michael’s & All Angels, Linc Park St Andrew’s, Livonia St Patrick's, Madison Heights St Aidan’s, Michigan Center St George's, Milford Grace, Mt Clemens Holy Cross, Novi Incarnation, Pittsfield Christ Church, Pleasant Lake St John’s, Plymouth All Saints, Pontiac St Paul’s, Romeo St John's, Royal Oak Trinity, St Clair Shores Holy Faith, Saline St David’s, Southfield Grace, Southgate Christ the King, Taylor St Andrew’s, Waterford Spirit of Grace, West Bloomfield St Luke's, Ypsilanti

Recap of 2015 Financials Operating Revenues $2.25M (excl. reserves) Grew by 4.6% ($100k) over 2014 Exceeded budget by $22k Operating Expenses $2.24M (excl. use of reserves) Over budget by $16k Ended with Net Operating Surplus of $6k

2017 Highlights Apportionment pledges up $17,000 The Episcopal Church Assessment Rate drop from 18% to 16.5% in 2017 (15% in 2018) Net $7k savings in our TEC Assessment $29k savings from rate drop $22k increased expense from volume (income) increase Delay rollout of bookkeeper position ($7k sav) 1% cost of living adjustments for staff 6.5% increase in healthcare premiums Higher cost for Diocesan Convention

Proposed 2017 Operating Revenues 2016 2017 Apportionment Pledges $1,550,000 $1,567,000 Dividends & Interest 485,608 487,685 Contributions 225,500 223,500 Transfer from Reserves 7,055 12,000 Total Operating Revenues $2,268,163 $2,290,185 Memo: Operating Revenues w/o Reserves $2,261,108 $2,278,185 Apportionment pledges up 1.1% Allowance of 2.0% for shortfall on pledges Dividends & Contributions flat Reserves needed to fund healthcare increase

Operating Revenues - 10 Year Trend

Proposed 2017 Operating Expenses Salaries & Benefits $1,153,651 Professional Fees 88,100 Occupancy 172,800 Office Expenses 61,170 Communications 37,400 Conf, Meetings, Events 107,800 Denominational Support 362,713 Travel & Related 76,100 Grants & Partnerships 209,751 Equipment 20,700 Total Op Expenses $2,290,185 TEC Assess down $7k Bookkeeper position dropped from bud ($7k) 1% COLA for staff ($9k) 6.5% in healthcare premiums ($13k) +$13k for diocesan convention +$3k for general convention $5k other minor increases

Operating Expenses – 10 Year Trend

2017 Operating Expenses by Program

2018 Draft Budget Apportionment pledges forecasted to grow 1.7% over 2017 / Dividends up 2% Expect to eliminate reliance on reserves (0.5% of budget in 2017) Will need to consider new healthcare cost sharing options with staff Bookkeeper position back on table TEC Assessment rate to go down to 15% from 16.5% ($31k savings) Projecting 2% increase in most line items

2017 Budget Resolutions Resolution #1 Resolution #2 RESOLVED, that the formula for calculating the apportionment for congregational support of the diocesan budget will be based on 10% of the most recent three year average of each congregation’s normal operating income as reported in the Parochial Report; this formula will be utilized for calculating budgets for the next three years (2017, 2018, 2019). Resolution #2 RESOLVED, that the 2017 Operating Budget of the Diocese of Michigan be in the amount of $2,290,185 and be it further RESOLVED, that the Diocesan Council shall have the authority to adjust the adopted budget in keeping with income assured from pledges received and other expected income.