Roseville Lutheran Church Budget and Task Force Update December, 2014

What is the problem we need to solve? We need a plan to pay back funds we have borrowed from our own designated funds We have significant maintenance issues that need to be addressed for the long term structural health of our facility We do not have enough dedicated dollars in the budget to care adequately for our facility long term We do not have a plan or dollars assigned for regular merit pay review for our staff

What is contributing to this situation? We have an aging facility with a large “foot print” We are seeing a change in giving patterns: Number of givers is going down

What is contributing to this situation? We are not alone ~ changing demographics and styles of giving We have “frequency” problem – weekly attendance is no longer the norm for our culture We are in a transition period with our lead pastor which means giving goes down in most congregations. More on giving patterns Average gift is up by those that give, but less givers

What are we already doing to address? Reduced staff in 2014/2015 budget cycle Renewed focus and commitment on stewardship Formed a task force to review current situation and give considerations Obtained approval from the congregation to sell the “green space” Provided and will continue to provide more transparency in communicating our financial situation Starting work on the call process for a new lead pastor, with tangible steps beginning after the first of the year

Financial Facts - - December 2014 Budget situation year to date: $ positive variance to budget Cost of outstanding maintenance needed estimated at $200,000 Borrowing against our designated funds: $123,000 Stewardship commitment: $ committed from intent cards$777,000 Estimated* $595,000 Projected total offering $1,405,000 *offering from regular givers who did not turn in an intent card Projected Total Receipts (including misc. income) $1,490,000 Sale of green space: net approximately $95,000 to $100,000

Overview – how are we spending our dollars? Compensation & Benefits 64% Facilities costs (Properties & Buildings) 12% Program & ministry costs 14% Mission & Outreach 10%

Staffing PositionFull time equivalents in these areas Pastors2.5 FTEs Music Ministry1.7 FTEs Children/Youth Ministry3.2 FTEs Childcare House3.0 FTEs Pre-School1.75 FTEs Hospitality1.5 FTEs Custodial2.9 FTEs Church/Business Admin (mgmt/professional) 4.0 FTEs Office Admin2.7 FTEs TOTAL FTEs23.25

Staffing $100,000 in compensation and benefits reduced in fiscal year 2014/2015 over the previous years (approximately 2FTEs) The majority of staff have not received a raise in 4 years and pay increases have not been part of the budget. Benefits: Maintaining current coverage for 2015 would have represented a 16.8% increase to RLC. Instead, we opted to give our staff a lower coverage plan for New plan still represents a cost increase of 8.7% Staff deductible cost will increase from $1,000 to $2,000

ITEMsCost Estimate Critical Parking lots$40,000 Preschool door$5,000 Water Abatement ’55 & ’86 Building$20,000 Bus (5 year lease)$7,300 '55 Building windows$10,000 '55 Bldg Roof$20,000 Anticipated North wall outside of the Worship Center$8,700 Overhang for worship center roof$30,000 Carpet replacement-Commons$40,000 Carpet replacement-Great Hall$9,000 Worship center shades$5,000 HVAC enclosure door$5,000 TOTAL for ALL $200,000 Maintenance Needs

Building fund giving has gone steadily down Mortgage and facilities maintenance have been paid from this fund in the past. Now it just covers the mortgage

1955 Building – no easy answer We need a long term solution for what to do with the 1955 Building Built with materials not meant to last 60 years. $45,000 in maintenance needs, minimum Currently houses the Nursery School, Cornerstone and Confirmation

Mission & Outreach Funding Area of giving Benevolence / St Paul Area Synod (SPAS)$48,000 Church/Community Outreach$28,800 Cross Cultural Ministry$ 5,000 Global Mission/Tanzania/Slovakia$40,500 Hunger/Shelter Ministry$19,000 We have consistently given 10% of total general offering giving since 2007, based on a motion at that year’s annual meeting. The motion was for our giving to be set at 10% for that year. We have given at that level ever since and not revisited that decision. In 2007 there was still > $100,000 being given to the building fund to help with facilities maintenance costs In 2007 we were not borrowing and had a slight excess in our giving over expenses Outreach impact at RLC goes beyond our Mission & Outreach 10% giving ~ e.g. food drives, special offering appeals, etc.

Task Force Charter & Members  Dave Booms, RLC Business Administrator  John Davis, Council member 2012 – 2014  Lon Erickson, Council Liaison  Greg Johnson, Stewardship Chair  Vicky Lorenz, Facilities Design team  Pastor Steve Molin  Kathy Pedersen, green space contact  Dave Richter, Finance Committee Chair  Dave Werner, Endowment Chair  Erik Wolhowe, Mission & Outreach Chair Short term committee, commissioned by the RLC council Purpose of studying the state of RLC’s giving, spending, and facilities maintenance needs Asked to provide to RLC Council a holistic review to address current and future maintenance needs. Task force consideration list could include sale of assets, budget changes, and facilities planning recommendations, program changes and any other steps the committee would like to have be considered to address the budget and maintenance issues.

BUDGET Document and refine the annual budget process (currently being worked) Change the annual calendar from July 1 st to June 30 th to a different time frame to better predict giving (under consideration) Move to a system that reflects a cost accounting approach to more easily understand costs of various ministries Obtain 2 nd mortgage (low rate) on the facility to pay for some of the needed maintenance PROPERTY Sell green space (pending) Sell the child care house (value unknown but Ramsey County tax statement assesses at $125,000) Increase fees to outside groups Task Force: Options to Consider

MINISTRIES Reduce Mission & Outreach percentage (each percent = about $14,000) STAFF Shop for less expensive employee benefits Staff assessment – to assure we have the right staffing (will be done as part of the call process). Make adjustment if necessary. Task Force: Options to Consider

Winter Table Discussions Purpose of today was to give you an opportunity to learn more about the options to consider based on the task force findings and provide you an update on our giving, expenses and stewardship outcome. In January we invite you to participate in one of the table discussions with other RLC members to give us your feedback on the task force list of considerations and also hear any other ideas

Thank you for coming!