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3RD QUARTER FINANCIAL REPORT

JUL-AUG-SEP 2019

Official Report from Shalimar United Methodist Church


IN THE LIFE OF OUR CHURCH I want to personally thank all who have given faithfully to God’s Church during 2019. As of September 30, this inaugural quarterly report contains information that describes the financial health of Shalimar UMC. Church staff and lay volunteers prayerfully strive to be good stewards of your tithes and offerings, and this report is the first step of a continuing process to communicate our financial health more effectively. There will be a regular report by the Finance Chair each quarter. In 2018, the Master Plan was initiated to increase functionality, attractiveness, and to enrich the worship experience. In January, Church Council approved the Master Plan, and a majority church vote approved it on June 2. However, the margin of support desired to move forward was not received. As a result, the Master Plan is on hold. Our 2018 and 2019 operating budget reserves paid for $190,000 Master Plan development and architectural services. These expenses were not included in the yearly budgets. Weekly cash management has been challenging this year, and that will continue through the fall months with the Master Plan on hold. The combined impact of Master Plan expenditures and lower than forecast 3rd quarter giving has resulted in a projected negative year-end operating budget balance. We had record giving 1st and 2nd quarters this year following the Will You Grow campaign. A strong 4th quarter will be necessary to end the year well. In challenging times such as these, God offers us the choice to either rely solely on our human abilities or put faith in Him and seek His guidance. Pastor Philip presented a more focused vision for our ministries during worship services. Going forward, we will be able to determine how well church activities support our four focal ministries: Children, Youth, Young Adult, and Adult. A focused ministry vision will simplify our decisions concerning where we place our time, talents, and treasure to further God’s work here on earth. Finance Committee Chairman


OPERATING BUDGET 75% YEAR JANUARY-SEPTEMBER 2019

CONTRIBUTIONS APPORTIONMENTS MINISTERIAL SUPPORT LAY STAFF OFFICE ADMINISTRATION MINISTRIES TRUSTEES MASTER PLAN TOTAL EXPENSES

ANNUAL BUDGET $1,916,251

SEPT YTD ACTUAL $1,335,449

$190,868 $495,686 $601,332 $48,233 $242,850 $337,282 $0 $1,916,251

$104,100 $375,209 $432,102 $36,139 $167,944 $242,833 $45,162 $1,403,489

SEPTEMBER 2 019 YTD CONTRIBUTIONS -VS- EXPENDITURES

($68,040.00)

Preschool and Camp Ministry are not included in the church Operating Budget. These ministries are funded entirely from fees charged to parents versus congregational contributions.

CAMP AND PRESCHOOL BUDGET CAMP

2019 YTD

INCOME EXPENSES NET INCOME

$166,407 125,839 $40,568

PRESCHOOL

2019 YTD

INCOME EXPENSES NET INCOME

$145,774 143,760 $2,014

Net income (profit) is re-invested in the church to further children’s ministries.


2019 BUDGET ALLOCATIONS

Over the last 5 years, the budget allocations have remained constant.

10 YEAR BUDGET TRACKING

During 2018 and 2019, contributions fell below the planned budget and actual expenditures.


FOUNDATION ACCOUNTS Shalimar UMC has 10 funds invested with the Alabama West Florida United Methodist Foundation located in Dothan Al. This organization acts as a financial institution serving the churches in the Alabama-West Florida Conference.

DESIGNATED FUNDS SUMC currently has 77 active designated funds with the following activity through September 2019:

In April 2012 the Finance Committee and the Church Council approved a policy governing the accounting for designated funds. This policy provides guidelines for establishing new funds, definitions, the duration of the funds, and disbursements from the funds. It also details how the funds can be used and how invested.


HAVERTY’S PROPERTY The original loan for the Haverty property was $3,740,000. The balance as of September 30, 2019, is $1,183,261. The funds applied to the loan balance came from the Branch Out campaign, current giving to the note, and the rental income from Haverty’s. The current monthly income from Haverty’s is $20,258.00, with a monthly mortgage payment of $11,297.07, leaving an excess of $8,961.00 per month. In November 2018, the Finance Committee voted to reallocate the surplus rental income from the principle of the loan to the operating budget to partially offset the cash erosion from the Master Plan. Steps are being taken to pay the Haverty’s loan without using church funds. Notes: • Haverty’s Corporation has requested two five year lease options. The first lease extension would begin in June 2023. • The Haverty’s loan has a balloon payment due in 2023. Work is underway to extend the duration of this loan and move the balloon payment schedule to 2028. • Our church will have the option to use the Haverty’s property for church ministries before each of the two five-year lease periods. • The Haverty’s building has been a good investment for our church.

CROSS CORNER PROPERTY In 2018 the Finance Committee approved two internal loans from church accounts for the purchase of Cross Corner. The first was from the designated cash for $147,427, and the second was from the Haverty’s Branch Out account for $225,000. There are several options under consideration for the repayment of these loans. One of these options would be the sale of #10 2nd Street. Note: Internal loans to purchase property for the church have been used in the past. The most recent example is the #10 2nd Street property.


ALL SERVICES ATTENDANCE BREAKDOWN WITH LIVESTREAM

Attendance levels for the 11:07 service peaked in 2011 and began to decline in 2012, with the biggest change starting in 2015. Attendance levels for the 11:00 service peaked in 2011 and then began to decline in 2012. Review of weekly attendance data for 2019 reveals the Easter, July 4th, and Christmas attendance levels are significantly higher (400+ increase, as expected) compared to the average attendance for 2019. Interestingly, these top Sunday attendance events have similar attendance levels compared to years past. An outreach program to our non-active church members will be initiated in November.


We’ve had a wide variety of actives on the campus of Shalimar United Methodist Church this year: • Our children’s ministry has changed hearts in Sunday School, children’s church, the Kid’s Choir Musical, Easter Fest, Vacation Bible School, and Meet you at the Pole. • Our youth have been growing on Sunday and Wednesday nights, had a successful confirmation retreat and class, and Oakwood camp. Children and youth worked alongside Missions for a successful Back to School bash. • Missions had a beautiful day of service with Faith in Action Sunday, and our 2nd Annual Blessing of the First Responders blessed many lives in the community. • Our military ministry is reaching out with two sessions of Reboot, and our women have renewed souls with a day retreat. • Our new JOY ministry is filling the gym with Pickleball games. • Our music ministry has blessed us with the 21 Days of Worship, our Easter Musical, the Youth Dinner Theater, and the Youth Mission Choir Tour. • We have brought all ages and groups together for events like Sunday Night Live, Family Game Night, and the Church Picnic. The generation and ongoing giving of our church family throughout 2019 have been filed with Godly activities to help us draw closer to God and reach those outside our walls.

With so many activities happening, the ongoing challenge for our church is to remain focused on our primary mission of Discipleship. This is a concern that many churches today face. To ensure we remain true to our primary mission, we will concentrate on four focal areas of ministry: Children, Youth, Young Adults and Adults. Some of these focal areas are growing. Others need to grow. Going forward, all ministries of our church will support one, or all, of these key focal ministries. Shalimar United Methodist Church is a Multi Generational congregation of Disciples!

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