Financial Stewardship: Property, Staffing, & Budgets, Oh My!

1. Financial Stewardship: Property, Staffing, & Budgets,Oh My! Celebration and Faith Lutheran Churches October 5th, 6th, and 7th, 2008

2. Ground Rules Stay on topic. Speak in a way that reflects Christ. Please keep comments brief and focused. Ask one question at a time.

3. Facilities Celebration Faith Present 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 Present 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

4. 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

5. Present Staffing Faith 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) • 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

6. Proposed Merger Staffing 2009 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 • 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

7. Due Diligence Procedure • Faith • Celebration • Church • School (CLS) • Childcare (CCC) • What about Faith Childcare?

8. 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

9. 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

10. Celebration School • Board of Directors approves budgets for school • Funding from (largest to smallest source): • Tuition • Gifts and their corporate matches • Grants • Fundraising

11. Celebration Childcare • Board of Directors approves budget for childcare • Funding from: • Tuition • Gifts and their corporate matches • Grants • Fundraising • Self-supporting

12. Separate Incorporation Lutheran Day School Merged Ministry Celebration Childcare Faith Childcare

13. 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

14. Merged Budget

15. 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

16. 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

17. Risks and Rewards- Financials Risks 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 • 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

18. Risks and Rewards- Property Risks 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 • The facilities will be too small to support the ministry

19. Risks and Rewards- Staffing Risks 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 • Current staff is overwhelmed by ministry needs post merger • Future staffing needs outpace revenues

20. Considering property, staffing, and financials is merger feasible? Working together, yes!

21. Questions?

22. Next Week… Being a Blessing: Inreach and Outreach