UPDATE - Friday, June 3, 2022Here are the questions that were received this week:
Question: My question is how the budget is reported. 42 percent of the budget is salaries yet we are not told how much the superintendents are making, how much the Bishop is being paid, how much or how many staff are being paid. As part of the school system my salary (are a range) is published. I think churches have a right to know more information than the gross number.
Answer: Salaries are reported by department, Communications, Finance and Administration, Connectional Ministries, Conference Secretary and Clergy Concerns, Congregational Development. District Superintendents salaries are reported under cabinet, and require approval by annual conference in addition to budget approval.
Because salaries are a significant piece of budget, I will be sharing the CCFA undertaking of a comprehensive study during my report at annual conference.
Our Bishop's salary is paid by General Church as well as an amount for expenses.
I hope this answer is helpful and I appreciate your question.
Question: Audit Report Assets - please explain a little about "Pooled mutual Funds." Where do these monies come from and how are they invested?
Answer: Pooled Mutual Fund Assets are monies that have been designated and held by the Annual Conference at the Holston Foundation or Wespath. In most cases these funds have been given by donors for specific causes. For reference, they are equivalent to local church designated funds. Quarterly statements are received from both the Foundation and Wespath and earnings are reported. An example would be Holston Conference Endowment Loan Fund, Camping Endowment Fund, and Trustee Endowment Fund to name a few.
Question: Audit Report Liabilities - (a.) is the "Post-retirement benefit obligation" the same thing as the "unfunded pension liability" mentioned in the disaffiliation from the UMC discussions? (b.) is a portion of this amount what local churches would be responsible for if they choose to leave the UMC?
Answer: The “post-retirement benefit obligation” is referring to the retiree health insurance stipend, and that this is not the same thing as the “unfunded pension liability” mentioned in the disaffiliation process. This “post retirement benefit obligation” is not included in the amount that the local churches would be responsible for if they choose to leave the UMC. Note that this health insurance stipend ends on December 31, 2022. Funding for this stipend is from health insurance piece of Board of Pensions budget, and is not related to "unfunded pension liability".
As stated in the FAQ related to disaffiliation for Holston:
Pensions liabilities occur because of promises made to pay pension benefits in the future. These benefits are known as “defined benefits” because the amount to be paid is largely defined by service years, elections made by a retiree and a past service rate.
While the Holston Conference pension plan liabilities are currently fully funded on a minimum contribution basis, the Conference’s pension plan liabilities are not fully funded on a market basis. Pension plan liabilities valued on a funding basis are based on a discount rate that reflects the long-term, average expected earnings of the plan assets, with no change anticipated in the party responsible for paying benefits. Pension plan liabilities valued on a market basis are based on a discount rate that reflects the value of plan liabilities priced on the open market with the possibility an outside party will assume responsibility for the payment of benefits.
Question: 2023 Budget - (a) Is an increase of $750K over 2020 Actual Receipts really reasonable given impacts inflation is having on fixed incomes as well as potential church disaffiliations? (b) how do 2022 receipts to date compare with same period in 2021?
Answer: Covid pandemic created problems and issues related to our churches and, subsequently, our receipts from churches. In working to develop a 2023 budget to submit to the annual conference, CCFA invited leaders from all teams who receive funding from the budget to meet and walk us through budget requests. This meeting helped shape the approach to the proposed 2023 budget.
For the past few years the approach has been to ask ministry teams to cut budget requests in order to submit a budget of no more than receipts of previous year and to pay General Church Apportionments at the percentage of collection in that budget year. CCFA decided we had come to the place that asking ministry areas to continue to try to cut the shared ministries of Holston with reduced funding was placing too much of a burden on them.
The proposed budget for 2023 reflects either funding at current level or increase in funding for each ministry area. Should adjustments be necessary in 2023 we stand ready to do that. However, ministry work areas will be given priority and there will be a possible shortfall in payments to General Church. CCFA does not have authority to reduce amount apportioned in our budget, however, CCFA makes decision on amount of payment of apportionment based on funds available.
I will be sharing plans for a comprehensive study during my report at annual conference.
Revenues for first quarter of 2022 are about 4% behind last year's first quarter report. So, given the plans I will share at annual conference, yes, I believe the 2023 budget submitted is reasonable.
If questions remain, please let me know.
ORIGINAL POST - Sunday, May 28, 2022
We are quickly approaching Annual Conference, and one important item of business is the proposed 2023 budget. Because our time is limited during annual conference session, CCFA would like to address questions or concerns prior to our time for vote on Tuesday. Of course, we certainly will address questions and concerns properly before the body during allotted time on Tuesday as well.
If you have questions or concerns about the proposed budget, please email me at email@example.com. We will post questions and answers received in a blog next week.
It is the commitment of CCFA to be good stewards of tithe monies received from churches. The budget is located in the Book of Reports beginning on page 69. Please take a moment to review the 2023 proposed budget, and let us know any questions you may have.
Grace and peace,
Carolyn L Kidd, President Holston CCFA
Chair of the Holston Conference Council on Finance and Administration