We tried an experiment this year with our budgeting process, and I think wehave created some new conversations around our mission and how we fund it.

Usually, the Finance Committee would deliver a draft budget to the board forconsideration at our April meeting. The Finance Committee does a pretty goodjob of crystal balling our next year's budget. The board then makes some refinements,and the budget gets submitted to the congregation for approval at the annualmeeting in May. There tends to be little discussion about the budget at ourannual meeting, and the congregation approves a financial path for another year.

What we have realized, however, is that the financial path is heading straightfor a cliff. This information will be covered in more detail with you in May,but it is fair to say that our expense line has an upward trajectory of about5% a year, while our income line (mostly pledge income), has been rising about3% a year. It is not hard to imagine what happens when your expenses outstripyour income . . . you go broke.

Action was needed! In a break from tradition, a joint Board, Finance and Stewardshipretreat was held on March 5 to develop some revenue and expense strategies thatcould reverse this misalignment. We held a congregational workshop on March19 to continue the work started at the retreat. Both the retreat and the workshopwere facilitated - and it encouraged dialogue and new voices. The congregationalworkshop was attended by about 40 people - a very gratifying turnout for a Saturday.

We do have some ideas about how to bring our income back into line with ourexpenses - but those ideas will require imagination, volunteer energy and enhancedawareness about the financial realities of the church we all cherish.

-- Carol Kerr

One of the important tasks that the Board of Directors undertakes each springis preparing the operating budget for the church for the next fiscal year. (Iuse the word “preparing” in a very broad sense, as it is reallythe Finance Committee that does the yeoman’s job of compiling budget requestsfrom the various departments and salary recommendations from the Personnel Committeebefore proposing a draft budget.) However, it is ultimately up to the boardto submit a budget to the congregation for approval at the annual meeting inMay.

In working through this budget process, the board is focused on the fact thatwe are a church, and not a business. We don’t have an obligation to showa profitable bottom line to the shareholders every year; we have an obligationto keep the doors of this place open and the programs humming. So, for us, abudget is really just an attempt to balance the revenue of the church with itsexpenses. If the expenses exceed the revenue, we either have to dip into savings,or figure out a way to increase our revenue. We cannot really cut costs becausethat means losing the people and programs that make this church meaningful forall of us.

But this balancing of revenue and expenses is tricky, because our revenue isnever a certainty. Our expenses are pretty concrete. We know how much we payour minister and our staff; and we know how much it costs to keep the lightson, to provide curriculum and art supplies to RE, and to have fine musiciansperform on Sundays. But our revenue can be fickle, because it depends on ourexpectations about what members will pledge, and depends even more on whetherthose pledges are fulfilled. I don’t want you to think that the church’sother sources of revenue are not important—we benefit greatly from theDining for Dollars event, for example—and that fundraiser revenue hasbeen happily predictable. But pledge revenue represents a little more than 70%of our total revenue, and accurately predicting that revenue is obviously criticalwhen the board is putting a budget together.

Perhaps it is the economy, but we have not been very successful in the lastfew years in managing our expectations about pledge revenue. You may rememberthat, at the annual meeting in May 2003, the congregation approved a budgetthat depended on $351,000 in pledge revenue. After the pledge drive in October,it became apparent to the Finance Committee and the board that we had been overlyoptimistic about likely pledge revenue, and so we revised our expectations aboutthat revenue down to $325,000. That is obviously a drop of $26,000. This morerealistic assessment of our pledge income did not have a disastrous impact onour budget for this year because the church did not fill certain staff positionsthat had been included in the budget (or had a delayed start on some positions,such as our new RE Director). In addition, the church has not spent much ofits facility budget in expectation of moving ahead with the building program.

Balancing a budget by not doing something you planned is certainly one wayof managing finances, but it shouldn’t be the preferred method of runningthis church. As president, I could ask the board to spend the next month orso stripping expenses out of the budget so that we can present a balanced budgetto the congregation in May. I would prefer, however, to continue the dialoguestarted by the Stewardship Committee this last year and find a way to pay forthe programs that we cherish. I would appreciate your thoughts.

-- Carol Kerr

I was delighted to attend a dinner with Bill Sinkford, the UUA President, thispast month. I thoroughlyenjoyed hearing his perspective on the UUA generally and where it is headingin the near future. I also appreciated being able to spend the evening talkingwith him in a small group setting.

The evening highlighted the value of small group dialogues and building relationshipsthrough individual conversations. Our Stewardship Committee has been fosteringthat kind of specific dialogue around the subject of generosity and stewardship,and the stewardship meetings I attended certainly had the same spirit of candiddiscussion and passion for our church community as the dinner for Bill Sinkford.We have an opportunity this year, with the assistance of our intern minister,to develop small covenant groups under the umbrella of the Adult Religious Growthand Learning program (ARGL). I encourage you to look for these groups and participate.

I would also like us to spend some time and energy on enhancing the way we,as members, perceive and pursue "fellowship” with each other. Thereare going to be some stressful passages for this congregation over the nextfew years — the exciting but undeniably stressful process of buildinga new building on 17th Street and renovating the sanctuary; the invigoratingbut stressful challenge of continuing to grow our membership and meeting theneeds of our larger community; and the sobering but rewarding challenge of addressingthe reality of our current financial situation.

We will be able to successfully navigate each of these passages only if ourfellowship with each other is durable. I invite you to join me in this process,and of course, I am always available to discuss these ideas with you personally.

-- Caroll Kerr

The board had an excellent retreat on August 9, 2003. I am so delighted tobe serving with board members who bring energy, thoughtfulness and no smallmeasure of passion to the process. We also manage to share our ideas (even whenthey differ) in a respectful manner. Thank you to all the board members forattending.

We began the retreat with a group exercise that I am going to recommend toall of you. (See instructions below.) We broke into three groups of four andtook 15 minutes to identify three strengths of our church and three weaknesses.When we gathered back together as a big group, we shared our thinking. Perhapsnot surprisingly, the strengths and the weaknesses identified by the small groupswere very similar.

I wanted to share the identified strengths with you. We agreed that our churchbenefits from a terrific minister. We also agreed that our church enjoys tremendoushuman capital in the sense that we have a large number of committed and energeticvolunteers. Finally, we agreed that the seven UU principles provide a foundationof strength for the growth and development of our community.

We did, of course, identify three weaknesses. Some of them may seem obvious(like finances), and the board will be focusing on these concerns this year.We will talk more about these weakness in the future.

In the meantime, here is the exercise I want to recommend to each of you.(Yes, homework. It is September after all.) Please take a few minutes this monthto think about the strengths and weaknesses of our church. The group dynamicreally helps, so talk to your spouse, your child, your partner, your friend.Put these strengths and weaknesses on a piece of paper and leave it for me inthe president’s mailbox at church or send it in by mail. We, as a board,may have agreed on our vision of our strengths, but we need to hear your visionstoo to round out our perspective.

As the board begins a process this fall of identifying goals for the year,we would benefit from having your list of issues (good and bad). I think youwill also find that writing down the pros and cons, as it were, will remindyou of why you make this church your spiritual home.

-- Carol Kerr