Finance Committee Annual Report

Members: Karen Bottar: Chair, Alan Cody: Treasurer, Bill Dusett, Carla Erb, Laurel Farnsworth, Brian Gill, Faith Kreider, and Kevin McCormick

The Finance Committee has key areas of responsibility including Liaison to Board and to Operations Council, Financial Policies, Monitoring of FY11 Budget vs. Actual, Utility Cost Monitoring, Balance Sheet, Forecasting, Budget Drive Support and Budgeting. We established a schedule of meetings and agenda topics at the beginning of FY11. We met monthly during the fiscal year reviewing and discussing progress across all these key areas. Key accomplishments in FY11 included the following:

FY11 Budget

• Production and analysis of actual income and spending for the FY11 year (June 2010- May 2011. Each month income and expenses as a percent of the total budget are compared to the prior fiscal year to monitor trends. The Operations Council received a monthly update.

• The FUSN Administrator provides the May 31, 2010 Operations Report which is reconciled with FY10 forecasted income and expenses as submitted to the Annual Report.

• Review of historical and current utility usage and costs for electricity, natural gas and water.

• Provided advice on ability to spend additional funds beyond the budget as requested from time to time by the Board of Trustees and the Operations Council.

• Provided regular updates to the congregation with newsletter inserts and posting on the FUSN website.

FY12 Budget and Multi-Year Financial Planning

• Income and spending forecasts with alternative scenarios are developed for the FY12-FY16 for presentation to the Board of Trustees, the Operations Council and the congregation. In this forecast key trends in income and spending are highlighted.

• The long range forecast and budget update was posted to the FUSN website to inform and solicit discussion.

• Requested input from committee chairs in order to compile the budget forecast for FY12-FY16.

• Presented to the Operations Council and the Board of Trustees in the March- May 2011 time period to prepare budget requests with particular attention to the Building and Grounds budget request, Religious Education and Personnel as these three areas represent the majority of our expenses.

• Budget report and forecasts are reported with prior year surplus after the net income line to more clearly represent our financial state.

FY12 Initiatives

The Committee will continue the regular activities as noted above.

• Provide assistance to the Board of Trustees and the Operations Council in areas of financial planning, budgeting, controls and responsibilities.

• Initiate and solicit ideas for new sources of revenue for FUSN.

FUSN FY12 RECOMMENDED OPERATING BUDGET (TBD)

There is modest growth in the FUSN budget. Staff compensation shows a modest increase, we will take the allowed contribution from the Endowment to FUSN’s Operating Budget consistent with our policy including the draw from FY11 which was not taken due to a deferral of major maintenance projects, and we now have a part-time membership coordinator who came on board in the last quarter of FY11. The major maintenance shows an increase in FY12 as repairs to the organ that were anticipated in FY11 were deferred to FY12.

The budget reflects our efforts to compensate staff with Fair Compensation levels defined by the UUA for a congregation of our size.

Expenses for utilities were lower than expected, the contingency of unanticipated expenses was not spent, and major maintenance was deferred, which results in an expected deficit of $26,206. We carried forward a surplus of $91,433 from FY10. We are targeting one month’s expenses as cash reserve or $56,297. We have made an adjustment for actual unrestricted operating cash of $81,733. This results in an estimated operating surplus reserve of $147,000 to carry into FY12. The actual surplus will be confirmed shortly after the end of the FY11. This surplus will help cushion the structural deficit of $51,973 in FY12.

The Budget Drive pledges for FY12 are very modestly above FY11. Our expenses are increasing at a faster pace than income.

The Board of Trustees deliberated and approved changes to the draft FY12 budget. The major adjustments were:

• Taking the full endowment contribution of $53,453 for FY12 and the $20,000 of the allowed endowment contribution from FY11 that was not taken.

The Finance Committee would like to thank the Board of Trustees, the Operations Council, the Board of Investments, the Budget Drive Committee, other Committee Chairs and the many members who have been helpful in the forecasting and budgeting process. We hope that the efforts by the Finance Committee to regularly communicate and educate about the finances of our society will facilitate and support dialogue about how FUSN can achieve its goals.

The Finance Committee, May 2011