Financial Stewardship: Property, Staffing, & Budgets,

Oh My!

Celebration and Faith Lutheran ChurchesOctober 5th, 6th, and 7th, 2008

1. Stay on topic.2. Speak in a way that reflects Christ.

3. Please keep comments brief and focused.4. Ask one question at a time.

Ground Rules

Facilities

CelebrationPresent Facilities

– 27,000 square feet/ 17 acres– Sancta-gymnasium, 12

classrooms, full kitchen, lunchroom/common area, church, school, and childcare office spaces, parking lot

Condition of Facilities– No outstanding major

problems– Regular maintenance work +

initial catch-up work

FaithPresent Facilities

– 47,000 square feet/ 3.5 acres– 500 seat sanctuary, 37

classrooms, kitchen, office area, youth room, childcare area, parking lot

Condition of Facilities– No outstanding major

problems– Regular maintenance work

Capital Campaign

• Not for first 1-2 years– Post-merger ministry planning needed– Allows time to adjust, study, and be creative

• Expected during 3-5 years post-merger– Ministry needs will drive the content– Usually 2-3 times operating budget or less

• Physical expansion more likely at the Celebration site

Present Staffing

Faith• Pastors (3)• DCE – Children’s Ministry• DCE – Youth• Director of Worship & Music

(calling FT– interim PT)• Music Coordinator (PT)• Business Director• Office Staff (2 FT, 1 PT)• Custodial Staff (2 FT, 1 PT)• Other

Celebration• Pastor (PT- 20 hrs, interim)• Executive Ministry Director

(Extended FT- 30 hrs)• Director of Music (PT)• Office Staff (3 PT)• Accountant (1 PT)• Custodial Staff (2 or 3 PT)

Proposed Merger Staffing

2009• All current staff retained• Duties merged – reassigned• Very important for

pastoral/secretarial presence and support to remain at both sites

• Post-merger ministry planning will include staffing

2010 and beyond• More staff will be needed,

budget will be impacted• Type of staff will be

determined by merged ministry needs and growth patterns

Due Diligence Procedure

• Faith• Celebration–Church–School (CLS)–Childcare (CCC)

• What about Faith Childcare?

Faith Church

• One entity – One budget• Receives funds through offerings and

designated gifts.• Operating expenses historically under yearly

budget • Experienced 11% offering growth two years

ago • Traditionally expects a 2-4% yearly growth rate

Celebration Church

• Board of Directors approves budgets for church, school & childcare

• Receives funds through offerings, designated gifts, and school/childcare facility fee

• Celebration’s giving has varied with transitions – Sabbatical– Staffing: Pastor 1¾ FT -> 1 PT DCE FT to-> 0

• Mortgage payments

Celebration School

• Board of Directors approves budgets for school

• Funding from (largest to smallest source): – Tuition– Gifts and their corporate matches– Grants– Fundraising

Celebration Childcare

• Board of Directors approves budget for childcare

• Funding from: – Tuition– Gifts and their corporate matches– Grants– Fundraising

• Self-supporting

Separate Incorporation

MergedMinistry

Lutheran Day School

CelebrationChildcare

FaithChildcare

Mortgage Going Forward

• All ministry debt rolled into one mortgage for approximately $2.5 million

• Offered to refinance– Forgiveness of $60,000– Annual subsidy of $37,500 for 1st 5 years– $247,500 in total subsidies– Interest rate fixed at 6.25% for 5 years– Payments over 25 to 30 years

Merged Budget

Church – School(s) Finances

• The Church owns the facilities • Childcares and School use Church

facilities• Childcares and School pay Church for

facility usage• Facility usage charge determined by

Church Administrative Board.• Ministry flows both ways

Due Diligence Conclusion

• Based on assumptions, financial conditions – full financial support of both congregation members, it is financially feasible

• 1.25% overall financial growth needed for the first year

Risks and Rewards- Financials

Risks• If members don’t support

the merger or economics change we could have a larger deficit

• Matching program rules may change decreasing revenue

• Changes in the economy negatively impact tuition

Rewards• Reaching more people

means growth and the potential for increased giving

• More people could take advantage of matching increasing revenue

• More families know about school potentially increasing revenues

Risks and Rewards- Property

Risks• The facilities will be too

small to support the ministry

Rewards• Facility use will be

maximized to make the best use of resources

• If we grow and have the need for space would have a larger pool of people to support changes

Risks and Rewards- Staffing

Risks• Current staff is

overwhelmed by ministry needs post merger

• Future staffing needs outpace revenues

Rewards• Current staff energized by

the process- team assesses needs and restructures responsibilities to make better use of time and talents

• Church growth necessitates and allows for increased staffing

Considering property, staffing, and financials is merger feasible?

Working together, yes!

Questions?

Next Week…

Being a Blessing:Inreach and Outreach