Financial Considerations of Potential New Conference

Financial Perspectives MEMPHIS TENNESSEE 2018 Budget $6,058,671 $8,870,698 2016 Membership 78,320 116,740 2016 # of Churches 413 588 2016 Average Size 190 198 2018 # of Districts 4 5 2017 Appointed Clergy 314 502 Budget, appointed clergy & membership 40% 60%

Joint Conversations CFA Executive Committees Memphis and Tennessee Annual Conferences John Pearce, President Terry Hundley, Vice President Paul Purdue, Secretary Jim Allen, Treasurer Memphis: Bill Milliken, President David Hayes, Vice President Ed White, Secretary Larry Davis, Treasurer Understand relevant issues/opportunities and find solutions. Report back to conferences with accuracy and transparency. Ensure a potential unified/combined conference will operate financially successful for many years.

Joint CFA Committee Headline While there is financial due diligence work that needs to be done, we do believe that there are no financial issues would prevent the potential unification/combination.

Topic #1: Memphis Conference must fund their post retirement clergy health plan ✔DONE as of September 2017 History: As of Jan. 2017, $29 million on plan liability. Plan terminated July 2016. Now only clergy over 60 have benefits. Liability reduced to $10.6 million. Then, used Board of Pensions & Health Benefits reserves to fund the liability.

Topic #2: Need to agree on a consistent method to pay for Clergy Health and Pension Costs MEMPHIS TENNESSEE Direct Bills Clergy Health and Pension Costs Direct billing is a recent change. Apportions Clergy Health and Pension Costs CFA agreed to report to 2018 conference with recommendations. Tithing versus apportionment model. What are both models and the benefits of both models? What are other good models in addition to these from other conferences? What are the advantages and disadvantages of models?  With healthcare, Memphis uses direct bill. TN has a different model. What are both models and the benefits of each? Any other best practices from other conferences? What are the advantages and disadvantages of models? 

“Apportions” budget based on local church expenditures. Topic #3: Need to agree on a methodology used to pay for the Conference Budget. TENNESSEE MEMPHIS “Apportions” budget based on local church expenditures. Local churches give a “10% tithe” of local church revenue.

Examples of other topics to discuss 2018-2019: Clergy Health Plan Benefits (Family coverage, deductible, co-pay, part time etc.) Clergy Pension plans: Same plans, all over funded, excess reserves Ongoing use of Conference reserves Consolidation of Conference offices and personnel Equalization of District budgets and DS & Conference staff pay Conference camp and retreat assets and deferred maintenance Best practices learned from other conferences