1. 11/15/2018
A NEW FINANCIAL MODEL - OVERVIEW The United Church of Canada L’Église Unie du Canada
GC43 webinar - May 29, 2018
Cheryl Stadelbauer-Sampa
Miriam Bowlby
Erik Mathiesen
Steve introduces participants and credentials
Rev Miriam Bowlby - Minister, Cochrane Street United, St John's NL
                             General Council Executive
                            Member Permanent Committee on Finance
Rev Cheryl Stadelbauer-Sampa
                            Executive Secretary, London Conference
                            Provisional Region Executive Secretary Regions 7,8,9
Erik Mathiesen - Chief Financial Officer, General Council Office
EHM -Finance

2. 11/15/2018
Remit 4 – as approved
The Question: Does the presbytery/pastoral charge agree to a new funding model for the United Church with the budgeting process guided by the following principles?
(1) use Mission and Service to fund ministry and mission activities;
(2) fund governance and support services of other courts/councils by assessing communities of faith/pastoral charges;
(3) share assessments equitably across the whole church;
(4) permit Conferences/presbyteries/regional councils to use additional resources for regional purposes; and
(5) encourage sharing of all resources across the church.
READ SLIDE
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3. Remit 4 – Background video
11/15/2018
Remit 4 – Background video
Available at
STEVE TO PLAY VIDEO
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4. 11/15/2018
Summary Points
The intent of all this reorganization is to create a sustainable and workable church structure in the face of a declining volunteer and financial resource base.
SHARING the costs
CLEARER ACCOUNTABILITY for the funds received
ASSESSMENT INCREASES PHASE IN
DIFFICULT DECISIONS.
READ SLIDE
ERIK TO EMPHASIZE THE DIFFICULT DECISIONS POINT.
CANNOT DELIVER ALL THE THINGS WE USED TO DO.
NEED TO DO DIFFERENTLY
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5. PASTORAL CHARGE ASSESSMENT FOR 2019
11/15/2018
PASTORAL CHARGE ASSESSMENT FOR 2019
Calculator available on-line for those filing 2017 annual statistics electronically.
TARGET assessment is 4.5% of adjusted total revenue.
SUBTRACT:
All outward revenues including M&S and refugee funds.
Property sale proceeds
Bequests
Capital campaigns for building funds
Government grants
Restorative care and other insurance payouts
HST payouts
Reimbursement of shared ministry expense
READ SLIDE
Stress transparent and consistent
Best for smaller and rural etc
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6. 2019 Budget Assumptions & Principles (1)
11/15/2018
2019 Budget Assumptions & Principles (1)
“balance” 2019 Denomination Core budget
Continued decline in M&S ( at $900,000 per year)
2019 COLA factor is 1.6%
We will strive to maintain 2018 level grant programs subject to balancing the operating budget
We will strive to keep the increasing the amount of M&S allocated to Embracing the Spirit, but will also seek to maximize the amount of M$&S available to regions.
READ SLIDE
QUICK RECAP OF GCE approved budget assumptions
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7. 2019 Budget Assumptions & Principles (2)
11/15/2018
2019 Budget Assumptions & Principles (2)
We will work with the indigenous church in continuing our right relations journey while identifying and implementing cost reduction from current expenditure levels.
one time project costs for remit implementation, will be funded from reserves.
Assurance of assessment income to regions for 2019 and If income higher than expected, 100% of the increase would flow to regions. Reserves will fund any shortfalls.
Assurance of M&S income for 2019 and 2020 to the regions despite anticipated decline.
READ SLIDE
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8. 2019 Budget Assumptions & Principles (3)
11/15/2018
2019 Budget Assumptions & Principles (3)
Denomination portion of assessment funds
50% of the cost of Region Executive Ministers and their one administrative staff.
Indigenous governance allocation ($500,000); regionally deployed stewardship staff ($500,000) and full Office of Vocation cost ($1,250,000) of which 2/3 is regionally deployed.
Region assessment to fund 50% of the cost of Region Executive Ministers and their one administrative staff.
Each region to be allocated 1/16 of discretionary regional assessment allocation ($325,000) and Mission and Service allocation ($289,000)
READ SLIDE
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9. 2019 Early Budget Outlook ($Millions)
11/15/2018
Resulting 2019 Budget Outlook
2019 Early Budget Outlook ($Millions)
Denominational Council
Regions
Indigenous
Total
Governance & Shared Services
4.75
5.95
0.50
11.20
Mission & Ministry
17.44
4.59
4.25
26.28
Embracing the Spirit
1.75 -
Total spend
23.94
10.54
39.23
Core Operating Surplus/Deficit
(1.14)
Note the budget is not yet balanced
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EHM -Finance

10. 2019 Early Budget Outlook ($Millions)
11/15/2018
Resulting 2019 Budget Outlook
2019 Early Budget Outlook ($Millions)
Denominational Council
Regions
Indigenous
Total
Governance & Shared Services
4.75
5.95
0.50
11.20
Mission & Ministry
17.44
4.59
4.25
26.28
Embracing the Spirit
1.75 -
Total spend
23.94
10.54
39.23
Core Operating Surplus/Deficit
(1.14)
Notes
(1) Excludes supplemental regional revenue where available
(2) Embracing the Spirit moving towards 10% of M&S target and potentially available to Regions
(3) Denomination portion of assessment funds Office of Vocation and Stewardship ($1.75)
(4) Denomination budget still to be set to nil deficit excluding one-time restructuring costs
(5) Region core revenues will not be impacted by any shortfalls overall
(6) Denomination assessment funds 50% of 6 Regional Executive Ministers and 6 admin positions
(7) Each Region is allocated $325,000 discretionary assessment funds and $289,000 M&S funds
(8) 16 equal shares of assessment revenue to cover 16 Regions plus $150,000 contingency
(9) Overall Regional assessment to pay for 50% roles above $600,000 off the top.
(10) Shared services to be paid for as utilized
(11) Still work to do to balance core budget!
exhibit with the assumptions
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11. Mission & Service in the Regions
11/15/2018
Mission & Service in the Regions
There will be a block grant of Mission & Service Funds to each region to be used to:
Fund previous Presbytery /Conference grants;
Fund Mission Support grants;
Fund mission and ministry regional staff;
Applications to be submitted by September.
Region Commissions to make decisions this fall.
Indigenous granting will be separate
CHERYL – ANN
CES AND SPEAKER WORKED TOGETHER TO DEVELOP THE SHARING MODEL FOR BOTH ASSESSMENT AND MISSION AND SERVICE
A KEY DESIGN PRINCIPLE WAS TO PROVIDE REGIONS WITH AS MUCH FLEXIBILITY AS POSSIBLE IN ALLOCATING MISSION AND SERVICE MONIES.
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12. ALLOCATION OF REGION MONIES
11/15/2018
ALLOCATION OF REGION MONIES
excludes supplemental regional resources
region discretionary core revenue
$325,000 + $289,000 = $614,000
will not be impacted by shortfalls – upside only
denomination portion of assessment funds regionally deployed staff for office of vocation, stewardship and 50% of REMs and one support staff.
Denomination portion is 42% of total assessment including funding for regionally deployed staff.
CHERY ANN or erik
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13. ALLOCATION OF INDIGENOUS FUNDING
11/15/2018
ALLOCATION OF INDIGENOUS FUNDING
$500,000 from assessment
$4,250,000 Mission & Service funded programming
in keeping with “Calls to the Church” mission support applications will be reviewed by Aboriginal Ministries Council (applications for both 2019 and 2020).
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14. LONGER TERM - ALLOCATION OF CORE RESOURCES
11/15/2018
LONGER TERM - ALLOCATION OF CORE RESOURCES
will need to migrate to a percentage approach over time
% of assessment and % M&S
indigenous
regions
denomination
participate in a fair and transparent manner in managing declining revenue (or sharing in increase)
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15. 11/15/2018
The fortunes of every level of the church are now more directly linked to congregational capacity to fund.
Through the assessment, all congregations participate in funding the national church and the indigenous church
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16. THIS IS ACTUALLY A GOOD NEWS SLIDE.
11/15/2018
MIRIAM
THIS IS ACTUALLY A GOOD NEWS SLIDE.
WE HAVE MORE CAPACITY TO FUND TRANSITION THAN WE THOUGHT WE WOULD HAVE.
TWO MAIN REASONS.
OVER THE LAST 5 YEARS, INVESTMENT RETURNS HAVE AVERAGED 9.5 PERCENT WHICH IS MORE THAN DOUBLE OUR PLANNING ASSUMPTION. OF COURSE MARKETS CAN GO DOWN TOO.
THE DECLINE IN MISSION AND SERVICE REVENUES HAS SLOWED SOMEWHAT IN RECENT YEARS.
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17. Governance recommendations – General Council
11/15/2018
Governance recommendations – General Council
Proposal GCE 19
General Council will confirm assessment rate.
Will set “catch-up” mechanism so that all pastoral charges at 4.5% target by 2025.
Might ratify funding definitions
Has already made provision for review
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18. Governance – Denominational Council Executive
11/15/2018
Governance – Denominational Council Executive
Will set annual operating budgets including triennial allocation of revenues to indigenous church, regions & denomination
Executive to provide updates to Denominational Council through annual electronic meeting of Council.
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19. Discussion READ SLIDE 11/15/2018 EHM, The United Church of Canada 19