Southern California Nevada Conference of the United Church of Christ
TO:  The Congregations and Clergy of the Southern California Nevada Conference
 
From: The SCNC Board of Directors and Staff
 
Re:  Major financial decisions for the Conference

We have important information regarding 2009 Conference budget decisions to share with you.  Following is: 
 A. a brief summary for those who may not feel the need for the full
 details and
 
B. the full letter detailing the current situation, including links to still
 more information and 'what you can do to help'.  We hope you
 will take time to read the entire presentation and that you will
share this information with your local church leadership,
including those who will be delegates to the 2009 Annual
Gathering June 5-6.

SUMMARY OF SCNC FINANCIAL SITUATION AND BOARD DECISIONS:

  • For 4 years, income from local churches, individual donors and other sources has not met budgeted expenditures for basic conference functions.  That deficit has been compensated for from funds derived from property sales.
  • In 2004, SCNC adopted a policy for allocation of funds received from closed churches, with 10% of funds to wider church, and most of the balance to 3 SCNC Mission Priorities:
    • Church Development & Renewal
    • Building Community in Diversity
    • Youth and Young Adult Programs
  • In reality, the majority of these funds to date have been spent on Board-approved church development projects and creation of the Romero Center, with most of the balance used to balance the SCNC basic functions budget.
  • Due to current market conditions for sale of land in Southern California, both church development and conference operations are currently funded by a loan from Cornerstone Fund, with the loan to be repaid out of property sales in 2009-10.
  • During 2008, the Conference Board has first learned these realities [(a) & (b) above] with the aid of new accounting and financial reports, and then taken steps to reduce dependence on property sales to fund SCNC operations and to manage cash flow.  So far, this has involved:
    • o Giving notice to six part-time staffers
    • A hiring freeze, freezing of current salaries, and other steps to reduce the cost of Conference operations to within 15% of revenue (2009 budget)
    • Giving notice to all staff that further reductions may be necessary sometime mid-2009.
    • Reducing the church development budget by 39%
    • Giving notice to all church-development projects that it may be necessary to temporarily alter current rates of funding for their projects sometime mid-2009.
DETAILED LETTER FROM YOUR BOARD:
 

Dear Friends in Christ,

In a recent e-news, you all received a "Good News, Bad News" message from Interim Conference Minister Jane Fisler Hoffman. It provides important background information and you can still access it, if you did not see it(click here.)

In that letter we expressed sincere appreciation from the Conference to all who have given financial support to the ministries of this Conference.  We want to begin this difficult letter by reiterating that appreciation.  The churches and members of this Conference are generous and caring.  We know that there is strong support for the ministry of this Conference and the United Church of Christ.  Many of you not only support the Conference financially but participate in it through elected, appointed and volunteer positions. Thank you.

In that letter, we also promised that we would write to you promptly after our January 24 meeting to share some decisions about our Conference's financial life.  This letter is long but we hope you will read it through and share it with the leaders in your congregation.

First, some introductory statements to help provide the context for this letter:
 
  • We-your board and staff--- are all local church people and we know that many local churches are nearly always struggling with financial challenges and more so in these economic times.  We are keenly aware that layoffs, the stock and real estate market and other forces may impact many individuals and congregations in 2009.  Please know that your Conference leadership understands and respects that.  Nevertheless the expectations for Conference ministry continue, even in challenging financial times.  We want you to be informed and to be part of discerning how to move into the future based on these realities.
  • It is important that you know that the dilemma of the Conference's finances is not primarily because of the current national economic crisis.  The realities and implications we are sharing with you would all have taken place eventually---the real estate crisis has only hastened the arrival of what was at first a more distant reality on the horizon. The Conference fiscal situation has a multi-year history, will have long range impact and will require a long range plan for resolution.
  • Finally, we want you to know that it has taken the full year of the interim for your current staff and Board of Directors to reach full clarity about the financial situation.   The Conference has had a very intricate, complex financial management history.  Many decisions have been made in the assumption of endless abundance.  There has been great and blessed abundance in resources for this Conference. Much has been achieved with that abundance, most notably in new church development. It has taken time and deep examination of the complex systems here to reveal that the abundance of 'extra' resources is far from 'endless' and, in fact, is nearly at an end.
Below, is a summary of the situation and the changes in the 2009 budget that your Board has approved. We also offer some suggestions of how you can help and identify several crucial issues remaining for decisions by the Conference at Annual Gathering.

 Your Conference approves and works from essentially two budgets:
 
1. The budget for basic Conference functions. 

You can find the actual budget online here. This budget includes expenditures for:

a. Compensation and professional expenses for your basic Conference staff, currently Interim Conference Minister and Interim Associate Conference Minister, Administrative Assistant, Business Manager, and part of the Youth and Young Adult Ministries Coordinator)

 b. Facilities (our Conference office building) and materials for operations (office supplies, technology, etc.);

c.  Insurance, legal fees, etc.

d. Meeting costs, including General Synod delegates

e. Mission Partners support.

f.   SCNC support of national UCC (40% of OCWM income)

g.  Conference edition of United Church News
The total of this budget for 2009 approved at the June 08 Annual gathering was $702,451 with income anticipated at $548,100-thus a deficit of $154,351.  This deficit was justified on the basis of the anticipated property sales.

These are the difficult decisions that were made by the Board at our January 24th Board of Director's meeting regarding the Conference Basic Functions budget:

The Conference Basic Functions budget must discontinue dependence on the Five Funds (see below) to cover deficit spending and must operate out of a budget fully funded by Our Church's Wider Mission, per capita, individual contributions and other income (interest, etc).  To accomplish this will involve three actions:
 
a. The 2009 Basic Conference Functions budget will be reduced by $41,625.00 from the budget approved at the June 08 Annual Gathering including these actions:
 
  • No salary increases for staff
  • Elimination of some and reduction of other amounts to Mission Partners (see detail budget here)
  • Discontinuation of the SCNC United Church News section and elimination of the editor position.
  • Reduction of Youth Young Adult staff funding from half-time compensation package to one-quarter package.
  • Elimination of the Ministry Team retreat and meeting costs.
  • Deferment of Search expenses until 2010 (interview, moving costs). This reflects a better estimation of when these funds will be spent. The search will continue to move forward.

b. The Conference Board has established a new Financial Development team to address development of giving to Our Church's Wider Mission, per capita and individual contributions.  The minimal goal for this growth in 2009 will be a total of $15,000.  Below you will see that you are being invited to share in this effort.

c. A 2010 budget will be developed by the May Board meeting and brought to the 2009 Annual Gathering that will further decrease or fully eliminate the deficit dependence on funds received from sale of properties.  As the primary expenses of the Basic Conference Functions Budget are primarily staff related, further staff reductions may be required.

2. The budget for other ministries supported by what are known as the "Five Funds". 
 
These funds include donor specified funds (these are fully protected and honored) as well as board designated funds, primarily from sale of properties.  Budgeted expenditures from these funds as planned by the 2009 budget approved at the June 08 Annual Gathering included:
 
a. Support of Basic Conference Functions: covering the Conference Basic Functions budget deficit (originally in 09 budgeted for the $154,351 mentioned above). 

b. 'Core Programs' of the Conference, which included
  1. Compensation for the half time Administrator for Search and Call and Special Projects; compensation for the 4 part time Conference Ministry Assistants
  2. Modest funds for stewardship programming, etc.
c. Church Development, including:
  1. New church projects-salaries for pastors, facilities and program support, etc.
  2. Salary of the Associate for Church Development and Renewal
d. Youth Young Adult.  Includes portion of salary for Youth Young Adult Ministry coordinator and funds for some youth/young adult programming

e. The Romero Center.  A joint project of the Conference and national UCC Justice Witness Ministries project in San Ysidro for which the Conference supports the facilities costs.

f. Community in Diversity.  This has largely been for compensation of a staff person to focus on this priority.
The above are the key areas of budget which have been supported from the proceeds of the sale of property.  This portion of the Conference financial picture is quite complicated as it includes multiple lines for restricted funds for very specific purposes (such as a $400 fund for victims of misconduct) etc.  

As you see, the Five Funds Budget has been supporting special ministries in areas of the priorities (set by the 2000 Conference Strategic Plan) PLUS Basic Conference Functions. And the Five Fund support of Basic Conference Functions has been happening in two ways: by covering the Basic Conference Functions budget deficit that has been approved by the Conference for at least the last four years and by providing additional staff for basic Conference ministries of Search and Call, Association Church and Ministry support, and partial funding of Youth and Young Adult Ministry staff. 

The property sale funds have been almost completely used and anticipated sales will be lower than anticipated. And we have already borrowed against the anticipated income from the property sales. Your Board of Directors has prayerfully and painfully made the following decision regarding the Five Funds budget:

1. The Five Funds budget approved at the June 08 Annual Gathering will be reduced by a total of $442,105.84 with a breakdown as follows:
a. Reduction of the Church Development budget (to 8 projects; no salary increases for Church Development Associate, etc) from $922,602 to $574,702.

b. Hiring freeze (freeze of budget lines, may be some adjustment within budget amounts) saves $63,000.00.

c. Elimination of the following positions paid from the Five Funds (these individuals will conclude their ministry with us on April 30):
  • Administrator for Search and Call and Special Projects (half time position)
  • Four Conference Ministry Assistant positions (part time)
  • Reduces Core Program budget from $83,518 to $36,518.
2. Reduction of deficit draw to support Basic Conference Functions, from  the approved amount of $154,351 to $112,726.
 

 
So WHAT DOES IT ALL MEAN to you, in our local churches?  There may be yet unknown implications of these necessary but difficult decisions but definitely there are these consequences:
 

 Elected, appointed and volunteer leaders will need to step up and help identify the essential ministries of the Conference, assisting your remaining staff in prioritizing their work
 

Your remaining staff will be unable to 'do more with less,' thus expectations from local churches will have to adapt.
 
SealElected, appointed and volunteer leaders will need to take greater  responsibility in carrying out the essential ministries of the Conference

 
SealYou, the members of the Conference, will need to join us in finding creative solutions to the challenges for the future.

And finally:  WHAT CAN YOU DO TO HELP?  There may be many things that we cannot yet name, but here are some we have identified:

SealPRAY for your Conference Board of Directors and the Conference staff, and both the continuing and no-longer-continuing staff.

 
SUPPORT the identity of this multicultural-multiracial, open and affirming, just peace Conference and its powerful vision for Church Development, Building Community in Diversity, supporting Youth and Young Adult Ministry and ecumenical and global mission.
 

VOLUNTEER to serve on the Financial Development Team.  To do so, contact the Conference office at Arroyo@scncucc.org and she will send your contact information to the co-chairs, Scott Landis and Ann Feaver.

 
INFORM YOUR CONGREGATION about the ministries of the Conference and educate them about the goal of congregational giving at the level of 10% of the local church operating budget to Our Church's Wider Mission.  (For a basic primer about Our Church's Wider Mission and per capita giving go here
 
BE A 'FRIEND OF THE CONFERENCE' by going online at scncucc.org or sending your contribution to the Conference office.
 

 
VOLUNTEER to help in the Conference office (answering phones, assembling materials, etc)

 
ATTEND THE JUNE 5-6 ANNUAL GATHERING in Claremont to be part of the decision making for the life of the Conference and to join in celebrating the ministries of the staff who will no longer be serving with us.

Thank you, friends and colleagues in Christ, for reading this long and difficult letter.  Again we remind you that 'the Conference' is nothing more and nothing less than the congregations and pastors of this Conference. There is no 'them'---there is only US. We are a gifted, blessed and powerful people for God's mission.  No financial crisis can or will change that.

We welcome and look forward to your suggestions, ideas, comments and suggestions.  You may send them to the board via Keith Clark.
 

The Southern California Nevada Conference Board of Directors

David Cavanaugh, Chairperson