April 30, 2014 St. James Parish Council Meeting Finance Committee Report For the Nine Months Ended 31 March 2014 Confidential – For Discussion Purposes.

April 30, 2014

St. James Parish Council MeetingFinance Committee Report

For the Nine Months Ended 31 March 2014

Confidential – For Discussion Purposes Only

2

Finance Committee Report – Table of Contents

Pages 3-4 Financial Report for Nine Months Ended 31 March 2014 –

Executive Summary

Page 5 Statement of Operations for the Nine Months Ended 31 March

2014

Page 6 Statement of Financial Position at 31 March 2014

Page 7 Comparison of Actual Results to Forecast for Nine Months Ended

31 March

Page 8 Full Year 2014 Forecast 2 and Full Year 2014 Forecast 3

Page 9 Forecast 3 – Full Year 2014 Forecast 3 by Quarter

Supplemental Information

Pages 11-12 Capital Improvement Plan for Fiscal Year 2014 and 2015

Pages 13-14 Investment Actions for the Investment Fund in Fiscal Year 2015

Page 15 Policy and Charter for the St. James Investment Fund

Page 16 St. James Parish “7-Point Financial Plan” for Fiscal Year 2014

Page 17 Statement of Operations for Fiscal Year 2012 and 2013

Page 18 Statement of Financial Position at 30 June 2012 and 2013

3

Financial Report for the Nine Months Ended 31 March 2014 –

Executive Summary

1. For the nine months ended 31 March 2014, St. James incurred ($7,976)

deficit, excluding the Capital Fund. The ($7,976) deficit is ($28,805) worse

than the forecast $20,829 surplus as explained below. The Capital Fund

received $48,857 and spent $7,891 to date on the Church Floor Project. The

Parish has adopted fund accounting as indicated on slide nos. 5-6.

2. The primary causals for the actual results being ($28,805) worse than

forecast is as follows:

• Sunday and Holy Day collections were down ($11,832) as compared to

forecast;

• Heating fuel costs were up $16,374 as compared to forecast;

• Maintenance and building repairs were up $7,966 as compared to

forecast; and,

• Health insurance expenses were up $7,060 as compared to forecast.

4

Financial Report for the Nine Months Ended 31 March 2014 –

Executive Summary

1. The frigidly cold winter and significant snowfall caused a dramatic increase in heating fuel

costs, snow removal, and salt expenses. The heating fuel costs of $31,374 were up 209%

as compared to the $15,000 forecast amount. Moreover, the maintenance and building

repairs of $25,612 principally relating to ground services (e.g., snow removal, salt, etc.)

were up 145% as compared to the $17,646 forecast amounts.

5

Financial Report for the Nine Months Ended 31 March 2014 –

Executive Summary (continued)4. For “Forecast 3,” St. James anticipates that it will incur a ($49,307) deficit for FY 2014. The

primary causals for the forecast ($49,307) deficit for FY 2014 is due to

increased health insurance, excessive heating fuel costs, and ground services

expenses that were up significantly principally due to the cold winter and significant

snowfall. For the remainder of FY 2014, St. James should focus on controlling

expenses and increasing contributions.

5. For the nine months ended 31 March 2014, St. James transferred $25,000

from the Investment Fund to the General Fund to fund operations and the

Investment Fund earned $14,346 (2.8% annualized yield) for the fiscal year

to date. The Investment Fund balance at 30 June 2013 was $703,120 and

the balance at 31 March 2014 is $692,466 ($703,120 + $14,346 investment

income – $25,000 drawdown = $692,466).

6. The 2014 Annual Catholic Appeal target is $14,750 ($245,828 offertory for FY 2013 x 6%).

As of 31 March 2014, St. James has received $9,973 toward the $14,750 goal. Any shortfall

will have to be paid by St. James directly to the Archdiocese and St. James will receive a

100% rebate for contributions exceeding the $14,750 goal for the 2014 Annual Catholic

Appeal.

6

Statement of Operations for the Nine Months Ended 31 March 2014

(segmented by the Four Funds pursuant to Fund Accounting)General Capital Investment Restricted Parish

Revenue Fund Fund Fund Funds TotalSunday and Holy Day collections 146,367$ -$ -$ -$ 146,367$ Capital Fund contributions - 48,857 - - 48,857 Christmas collections 24,927 - - - 24,927 Maintenance and other collections 13,654 - - - 13,654 Archdiocese Appeal rebate 16,800 - - - 16,800 Archdiocese & Zacchaeus contributions - - - 31,443 31,443 Investment income from Investment Fund - - 14,346 - 14,346 Other sources of revenue 21,011 - - 13,977 34,988 Total Revenues 222,759$ 48,857$ 14,346$ 45,420$ 331,382$ ExpensesSalaries 117,198$ -$ -$ -$ 117,198$ Health insurance 28,472 - - - 28,472 Capital improvements to the Church - 7,891 - - 7,891 Archdiocese & Zacchaeus remittances - - - 17,377 17,377 Heating fuel 31,374 - - - 31,374 Maintenance and building repairs 25,612 - - - 25,612 Other various expenses 60,282 - - 10,186 70,468 Total Expenses $ 262,938 $ 7,891 $ - $ 27,563 $ 298,392 Fund Surplus (Deficit) $ (40,179) $ 40,966 $ 14,346 $ 17,857 $ 32,990

7

Statement of Financial Position at 31 March 2014

(segmented by the Four Funds pursuant to Fund Accounting)General Capital Investment Restricted Parish

Fund Fund Fund Funds TotalCash - Capital Fund -$ 40,966$ -$ -$ 40,966$ Cash - Archdiocese, Zacchaeus, etc. - - - 14,066 14,066 Cash - Auxiliary groups - - - 3,791 3,791 Cash - Deferred interfund transfer (4,780) - - - (4,780) Certificate of Deposit No. 1 due 9/29/14 - - 190,625 - 190,625 Balanced Mutual Fund - - 220,505 - 220,505 Growth Mutual Fund - - 102,564 - 102,564 Fixed Income Bond Fund - - 178,772 - 178,772

Total Assets (4,780)$ 40,966$ 692,466$ 17,857$ 746,509$

Fund equity at beginning of year 10,399$ -$ 703,120$ -$ 713,519$ Interfund transfers to date 25,000 - (25,000) - - Surplus (deficit) for FY 2014 to date (40,179) 40,966 14,346 17,857 32,990 Total Equity $ (4,780) $ 40,966 $ 692,466 $ 17,857 $ 746,509 Yield on Investment Fund year to date 2.1%

8

Comparison of Actual Results to Forecast for the Nine Months

Ended

31 March 2014 (excluding the Capital Fund)Actual Forecast 2 Deficit

Revenue 3/31/2014 3/31/2014 3/31/2014Sunday and Holy Day collections 146,367$ 158,199$ (11,832)$ Christmas collections 24,927 23,587 1,340 Maintenance and other collections 13,654 17,962 (4,308) Archdiocese Appeal rebate 16,800 16,800 - Archdiocese & Zacchaeus contributions 31,443 22,899 8,544 Investment income from Investment Fund 15,331 12,587 2,744 Other sources of revenue 34,988 21,722 13,266 Total Revenues 283,510$ 273,756$ 9,754$ ExpensesSalaries 117,198$ 111,237$ 5,961$ Health insurance 28,472 21,412 7,060 Archdiocese & Zacchaeus remittances 17,377 22,899 (5,522) Heating fuel 31,374 15,000 16,374 Maintenance and building repairs 25,612 17,646 7,966 Other various expenses 71,453 64,733 6,720 Total Expenses $ 291,486 $ 252,927 $ 38,559 Fund Surplus (Deficit) excluding Capital Fund $ (7,976) $ 20,829 $ (28,805)

9

Full Year 2014 Forecast 2 and Full Year 2014 Forecast 3

(excluding the Capital Fund)FY 2014 Proposed FY 2014

Revenue Forecast 2 Changes Forecast 3Sunday and Holy Day collections 215,000$ (19,844)$ 195,156$ Christmas and Easter collections 38,587 1,340 39,927 Maintenance and other collections 24,000 (1,857) 22,143 Archdiocese Appeal rebate 22,806 (6,006) 16,800 Archdiocese collections & Zacchaeus contributions 32,875 5,623 38,498 Investment income from Investment Fund 20,000 3,467 23,467 Other sources of revenue 25,022 7,536 32,558 Total Revenues 378,290$ (9,741)$ 368,549$ ExpensesSalaries 145,700$ 10,564$ 156,264$ Health insurance 28,270 9,693 37,963 Archdiocese collections & Zacchaeus remittances 32,875 5,623 38,498 Heating fuel 15,000 18,348 33,348 Maintenance and building repairs 25,200 5,055 30,255 Archdiocesan and PRMAA assessments 40,000 - 40,000 Other various expenses 91,245 (9,717) 81,528 Total Expenses $ 378,290 $ 39,566 $ 417,856 Fund Surplus (Deficit) excluding Capital Fund $ - $ (49,307) $ (49,307)

10

Forecast 3 – Full Year 2014 Forecast 3 by Quarter

(excluding the Capital Fund)1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. FY 2014

Revenue Actual Actual Actual Forecast 3 Forecast 3Sunday and Holy Day collections 49,400$ 51,998$ 44,969$ 48,789$ 195,156$ Christmas and Easter collections - 23,587 1,340 15,000 39,927 Maintenance and other collections 4,996 6,928 4,683 5,536 22,143 Archdiocese Appeal rebate - 16,800 - - 16,800 Archdiocese collections & Zacchaeus contributions 5,801 7,122 15,094 10,481 38,498 Investment income from Endowment Fund 3,909 1,267 10,155 8,136 23,467 Other sources of revenue 12,207 6,214 6,854 7,283 32,558 Total Revenues 76,313$ 113,916$ 83,095$ 95,225$ 368,549$ ExpensesSalaries 42,168$ 34,606$ 40,424$ 39,066$ 156,264$ Health insurance 8,876 5,678 13,918 9,491 37,963 Archdiocese collections & Zacchaeus remittances 5,801 80 8,070 24,547 38,498 Heating fuel 1,974 2,871 26,529 1,974 33,348 Maintenance and building repairs 4,643 5,449 15,520 4,643 30,255 Archdiocesan and PRMAA assessments - - - 40,000 40,000 Other various expenses 23,353 14,868 25,491 17,816 81,528 Total Expenses $ 86,815 $ 63,552 $ 129,952 $ 137,537 $ 417,856 Fund Surplus (Deficit) $ (10,502) $ 50,364 $ (46,857) $ (42,312) $ (49,307)

April 30, 2014

St. James Parish Council MeetingFinance Committee Report

For the Nine Months Ended 31 March 2014

Supplemental Information

12

Capital Improvement Plan for Fiscal Year 2014 and 2015

Below is the tentative prioritized Capital improvements plan and the estimated cost of the

special projects, subject to approval by Father Koys in consultation with the Parish Council.

The Finance Committee recommends that St. James proceed with destroying the two diseased

trees for an estimated cost of circa $2,000 to ameliorate this safety issue.

Capital Improvement Projects Est. Cost Project Timing

1. Church Floor project (180th anniversary) $30,000 Jan.–March 2014

2. Destroying two diseased trees (with lights) $ 2,000 April–June 2014

3. Fenced in yard behind rectory for a dog $ 3,000 July–Sep. 2014

4. Renovation of Sag Hall project $ TDB Calendar Year 2015

5. New outdoor mausoleum with bathroom $ TBD Calendar Year 2016

6. Paving the parking lot $ TBD Calendar Year

2016

Total estimated cost of Capital improvements $35,000

13

Capital Improvement Plan for Fiscal Year 2014 and 2015

(continued)

2. St. James has received $48,857 for the Church Capital Improvement Fund.

The estimated cost for the “Church Floor Project” repairs and improvements is $30,000

and the parish has incurred $7,891 through 31 March 2014 as indicated below:

Est. Actual Over

Church Floor Project Cost Cost (Under)

Install hardwood oak flooring for the sanctuary $ 5,000 $3,161 ($1,839)

Replace the carpet in the entire church 6,000 $ 0 ( 6,000)

Install communion rail in the sanctuary 9,000 $ 0 ( 9,000)

Restoration for the church 3,000 $ 0 ( 3,000)

Parish Hall furniture and fixtures 5,000 $4,730 ( 270)

Refurbish the entrance doors to the church 2,000 $ 0 ( 2,000)

Total cost for Church Floor project $30,000 $7,891 ($22,109)

14

Investment Actions for the Investment Fund in Fiscal Year 2015

1. The Investment Fund’s return on investment for YTD 2014 was 2.1% based upon the

revised asset allocation of approximately 15% to the Growth Fund, 32% to

the Balance Fund, 26% to the Fixed Income Bond Fund, and 27% to a “one

year” CD that is forecast to result in an annualized 4.7% yield, assuming

this allocation for a full year.

2. Upon the maturity of Certificate of Deposit No. 1 on 29 September 2014, the

Finance Committee preliminarily recommends that $123,338 be allocated to

the Balanced Fund and the remaining $67,287 be allocated to the Growth

Fund. This will result in a 50% allocation to the Balanced Fund, 25%

allocation to the Growth Fund, and 25% allocation to the Fixed Income Bond

Fund.

3. The asset allocation of the Balance Fund is approximately 50% equities and

50% fixed income and the asset allocation of the Growth Fund is

approximately 75% equities and 25% fixed income. The asset allocation of

the underlying securities in these mutual funds is approximately 43%

equities and 57% fixed income that is forecast to have a 6.5% annual return

on investment.

15

Investment Actions for the Investment Fund in Fiscal Year 2015

(continued)

16

Policy and Charter for the St. James Investment Fund

1. For its investment policy, St. James has adopted a conservative balanced

portfolio, which seeks a 4% to 6% annual return on investment. Pursuant to

the Archdiocese’s investment rules and regulations, parishes are not allowed to invest

outside of the Archdiocesan Bank.

2. The purpose of the St. James Investment Fund is to hand-down the principal

of this fund to future generations and to have available funds for

extraordinary repairs and maintenance necessary to maintain the safety

and beauty of St. James old church building.

3. St. James Investment Fund will be subject to an annual withdrawal limit

equal to 5% of the fund balance or circa $35,000 for FY 2014 to fund general

expenses, except in the case of an emergency as determined by the Pastor

in consultation with the St. James Parish Council.

4. For FY 2014, St. James anticipates transferring $45,000 from the Investment

Fund to fund general expenses. St. James does not intend to further

drawdown the principal of the Investment Fund, unless necessary to fund

emergency expenses or extraordinary repairs as determined by the Pastor

in consultation with the St. James Parish Council.

17

St. James Parish “7-Point Financial Plan” for Fiscal Year 2014

1. Improve the return on investment from the Investment Fund by adopting a prudent

investment policy that seeks a reasonable return on investment and preserves corpus.

2. The parish is “tightening its belt” by reducing expenses to the extent reasonably possible.

The parish is also seeking ways to be more efficient and taking certain activities in-house.

3. Actively monitor and control expenses to ensure St. James substantially meets budget.

4. The Parish Council will review actual results to budget on a quarterly basis and

recommend appropriate actions to Father Koys to ensure the parish substantially meets

budget.

5. Capital expenditures will be paid for via special fundraising efforts and not paid from the

Investment Fund or debt financed, unless necessary for safety reasons.

6. We encourage you to invite new families to St. James to increase the number of

parishioners.

7. We ask you to prayerfully consider increasing your Sunday contributions to St. James to

the extent your personal situation allows.

18

Statement of Operations for Fiscal Year 2012 and 2013

Actual ActualRevenue FY 2012 FY 2013Sunday and Holy Day collections 195,532$ 197,929$ Capital Fund contributions - - Christmas and Easter collections 39,559 47,898 Maintenance and other collections 32,073 25,151 Archdiocese Appeal rebate 35,315 25,559 Archdiocese collections & Zacchaeus contributions 27,760 29,214 Investment income from Endowment Fund 9,134 16,183 Other sources of revenue 36,019 43,340 Total Revenues 375,392$ 385,274$ ExpensesSalaries 154,440$ 161,288$ Health insurance 16,871 27,779 Transfer to restricted Capital Fund - - Archdiocese collections & Zacchaeus remittances 27,956 27,541 Heating fuel 18,870 25,470 Maintenance and building repairs 30,056 35,380 Archdiocesan assessment 28,260 29,808 Other various expenses 113,432 113,864 Total Expenses $ 389,885 $ 421,130 General Fund Surplus (Deficit) $ (14,493) $ (35,856)

19

Statement of Financial Position at 30 June 2012 and 2013

Actual ActualGeneral Fund 6/30/2012 6/30/2013Cash 2,427$ 10,399$ Due to the Archdiocese & Zacchaeus House - - Capital Improvements FundCash - - Investment FundCash - - Certificate of Deposit No. 1 due 9/29/14 184,977 188,184 Certificate of Deposit No. 2 and No. 3 335,622 314,141 Fixed Income Bond Fund at Archdiocese 226,349 200,795

Total Assets 749,375$ 713,519$

Fund equity at beginning of year 763,868$ 749,375$ Capital Fund surplus for the Period - - General Fund surplus (deficit) for the Period (14,493) (35,856)

Total Equity $ 749,375 $ 713,519