The year of the Red Fire Rooster begins with a deluge. I have been watching over and over and over Sister Rosetta Tharpe on YouTube, “Didn’t It Rain,” while waiting for the rain to let up.

It was raining cash late last year with a few wonderful donations to our endowment and building fund. Thanks to all who sent funds & I apologize for not being more proactive about sending out individual thank yous. Know that your donations have been welcome “rain” to our coffers!

With budget season in full gear, I have been wearing several Treasurer’s hats trying to keep up with all the changes. Thanks to all who provided program budgets for the information collection period.

The February Treasurer’s report is now available online with a hard copy available in the kiosk in the atrium. The bad news here is that we are delaying our Community Rentals marketing campaign until we have an end date for major repairs to the rafters’ dry rot.  This increases our expected FY1617 deficit from $10,000 to $68,000. The deficit includes estimated total $50,000 in repairs to the Safir room.

We have known for some time we have a deferred maintenance cost that has been accruing. The good news here is that my monthly reporting of this cost has been greatly inflated. Our facility and grounds committee provided the CT with a report dated January 17, which tallies on the high end $120,000 in imminent repairs needed.

We will need to make some rain to make these repairs.

Namaste,

Mary M Muehlbach

Signs of the Unseen. Most days Jalal Adin Rumi’s book of essays remains unseen on my nightstand, collecting dust.

Signs of the Unseen is my constant meditation. The sands at Ocean Beach are constantly changing. Their southward journey is mostly unseen as they are replaced by new sands, journeying from the Sierra Nevada. Every year, this is a walk along a new beach occupying the same space.

And so it is with financial statements. The fiscal year just ended with a net unrestricted surplus, $6,233.

Today I attended my third Financial Advisory Council (FAC) meeting, my first as Treasurer. The FAC helps increase transparency in financial matters at the church. Here are the results of a recent congregational survey:

Agreed or Strongly Agreed with Survey Questions	All (67) Respondents	Board, CT & other lay leaders	FAC Members
There is increased transparency at the church.	43%	62%	38%
There is an increase in the general level of financial knowledge of the membership.	29%	33%	50%
Church Members’ concerns are identified and addressed.	29%	39%	38%

If you are interested in joining the FAC’s ongoing efforts to increase financial transparency in church matters, I invite you to attend our next meeting October 17. As we continue to walk the path seeking sustainability of our congregational home, we need your participation.

Meanwhile, I am sitting on the edge of my pew, anxiously awaiting the completion of our new roof and terrace!

Namaste,

Mary

I am very pleased that UUCB member Mary Muehlbach will become UUCB treasurer, effective August 1. Mary has a strong financial background (including non–profit senior management), and has been a member of the Financial Advisory Council as well as one of our “money counting” volunteers for plate offerings. You will appreciate her knowledge and matter of fact approach to all things financial!

I continue to expect a small operating surplus at the end of the fiscal year, which occurred June 30. Through May we had a $28,400 surplus of revenues over expenses, albeit with no contribution to the building reserve. 

Tip: If you own any appreciated stock, consider paying your pledge with it. You will get full credit for the market value and not have to pay any capital gains on the appreciation. Any stock transfers will go through our Fidelity brokerage account rather than LPL/Mechanics (which is being closed). Contact Mary or  Mary Ellen Morgan for a form to provide to your broker. 

It has been a pleasure to be your “friendly treasurer” for the past two years. 

In faith,
Linda

A bequest of $10,000 from the estate of Jane Lucken raises our projected surplus to $15,000 for the year.  Though pledges continue to underrun for this year (a projected deficit of $22,000), strong performance continues in community rentals and various program revenues.  A big thanks to our staff members Lissa Marda, Lisa, Don, Yao, and Franklin who made the $20,000 over annual budget possible (with a month to go!), and to Barbara Rockhold and Lonnie Moseley for the nearly $5000 overrun in revenues for Personal Theology and Wisdom Pathways classes and seminars.

The value of the UUCB Operating Endowment is $1,487,190 as of April 30.  The Endowment committee approved three projects as meeting the criteria for funding from up to 1.5% of the endowment that is available when there are three years of strong market performance.  These include $9798 for additional training and consulting for Fellowship One, $1000 for consulting for Membership Outreach, and $4000 for a Youth Ministry. These will be considered by the Board on June 18.

On Sunday, May 17, the congregation approved a budget that shifted $50,000 from the “keep the lights on/administrative” side of the budget (the left side of the chart below) to the programs, ministry, and music that make this church come alive (the right side).  The fact that management could do this at all is because this congregation has generated the largest pledge campaign in its history—over $500,000.

This infrastructure reduction and pledge increase has also done something else:  it has put us firmly on a path to being a sustainable congregation.  A major pledge increase in the next fiscal year gives us the “jolt” that moves us to having revenues greater than expenses over the next few years, and in a few years could start contributing substantially to a building reserve. I also showed several charts at the congregational meeting that suggested we had turned the corner on growth:  the 52 week average attendance is up 12% since fall of 2013, the 12 month average of first time visitors is up nearly 40% since fall of 2013, and we added more new members in the first 4 months of this year than we had since 2008 (coming off the Bay Area Marketing campaign).

A huge and grateful “YES” to this congregation and everyone who is making this happen.

Two items of good news:

1. February was a great month for pledge payments – putting us within range of wiping out the projected deficit for the fiscal year. Thank you!
2. Thanks to the tremendous pledge response from our congregation community, the budget that will be submitted to the congregation will likely have only a small deficit.   Considering where we started (with a deficit of over $140,000), this budget reflects some major changes to the fundamental structure of UUCB, and includes some upside opportunities. Look for your congregational meeting packet for more information for the vote you will be making on May 17.

For those of you interested in more of the “nuts and bolts” of the budget and its changes, there will be two review sessions:   May 14 (in person) and May 16 in the afternoon (online). Each session will be about an hour long. Register here: https://www.surveymonkey.com/s/TVC3Y93

Initial returns for pledges for the coming fiscal year are inspiring. As of March 16, 74 of 89 pledges so far have increased 20% or more, qualifying for the challenge pool that has grown to just over $27,000. We are truly in this together.

Our requests for expense increases for the coming year have grown as well – the “everything in that everyone asked for” results in an expense increase over this fiscal year of $110,000, and a deficit of nearly $140,000. Though it is not unusual to have a large deficit on the first cut, this one is unusually high and we may not want to pull all the same levers (such as eliminating all salary increases), so there is clearly work to be done by the Coordinating Team – and the Board – before the budget is presented to you at the Congregational Meeting on May 17.

Though I am still projecting a deficit for this year, the gap is closing as more of us are paying our pledges, and savings like the new health plan are kicking in. The current projected deficit of just under $14,000 could be made up by “CT designated”, an account that was established several years ago by a generous donor. Whatever we don’t spend in this fund for this year will be available for next.

Item 9 on my 2-year Treasurer’s “To Do” list is “Identify and communicate challenges”.

My first congregational meeting in February, 2014 identified the impacts of our shrinking membership. Since that time, we have dropped another 44 members. Using a model I created last summer that allows me to project our profit and loss to 2020 by varying over 20 different assumptions (membership, salary increases, rent, etc.), I showed two very different versions of UUCB’s financial future at the February 2015 congregational meeting:

The difference is almost entirely the pledge increase this year, plus a path that adds 92 members rather than losing another 33. The difficulty with the chart on the left (“business as usual”) is that there appears to be no recovery other than slashing expenses, which means people. Unless we are prepared to replace employees with significant volunteer hours, it also means reducing programs like Family Ministry, Music, and Ministry, which becomes a long term downward spiral. While short term borrowing from the endowment could help us through a down time, unless there is a path to paying it back, it could lead to an even smaller congregation with very few options.

You can find the full report on the Membership Table.

Revenues are currently underrunning nearly $30,000, as expected due to nearly $35,000 less than forecast in pledging, and the decision by one of our tenants to not take a second classroom in our building. This means that unless something changes, we will not be making the additional salary increases that would have brought our lowest paid workers up to UUA minimums.

Expenses are roughly on target, with personnel costs lower because of an unfilled Facilities position. A recent thread on a listserve for UU financial leaders identified “typical” ranges for major expense categories:

	Typical Range	UUCB
Personnel related (% of total expense)	60-70%	71%
Facilities (% or total expense)	20-30%	9%
All Other	5-10%	21%

There are at least three things contributing to the high side of the personnel costs: 1) our Facilities staff provides custodian services for Shu Ren and our community events, all of which are reimbursed and show up as revenues (at least 3% of total expense), 2) our childcare workers are employees rather than contractors (2% of total expense), and 3) we have a substantial music program (11% of total expense).

There are several reasons for the low facilities percentage (which does not include personnel costs): we have a low maintenance budget this year because of the capital funding, and many tasks often done by hiring an external repair company are done by our Facilities Staff. We also do not have a building reserve line item, but very few congregations who have contributed to the listserve on this topic do. Few of them are looking as requirements as high as the $250,000 per year that our extensive buildings and grounds require.