Recap: 2025 Annual Parish Meeting

Please welcome Trey Austin, Carrie Carter, Ashley Dunham and Dick Rose to the Vestry! They were elected by acclamation at Sunday’s Annual Parish Meeting to replace Greg Arthaud, Joanne Charles, Anita Sherman and George Walker, whose terms expired this year. They join current Vestry members Chris Giglio, Gita Grady, Lucian Niemeyer, Lori Working, Ashley Rose, Wesley Duvall, Patrick Heijmen and Suzy Watkins. 

The Vestry also elected new wardens on Sunday. Patrick Heijmen is the new senior warden and Chris Giglio is the new junior warden. We are grateful to Patrick and Chris for stepping up to these important roles for the coming year, and to Joanne Charles and Gita Grady for serving in those roles for the past year.

Patrick can be reached at seniorwarden@saintjameswarrenton.org, and Chris can be reached at juniorwarden@saintjameswarrenton.org.

Sunday's meeting was well-attended and informative. Thank you to all who attended and who gave presentations!

You can download the annual report here. The report includes overviews from 24 ministry, group and program leaders, along with financial charts and data from the treasurer.

Treasurer's report

Below is a transcript of Colin Borgstrom's remarks at the Feb. 2 Annual Parish Meeting. The charts referenced in his remarks can be found here.

When we met at the annual meeting last year, we ended on a cliffhanger with a 2024 operating budget showing a deficit of $67,000.  The Vestry struggled with this number when passing this budget.  Having seen the good works that God was doing in our parish, they felt that God would find a way to provide us with new sources of income, new ways to more efficiently provide the services needed for the work of the church, and reduce the cost of our overall expenses.  Spoiler alert – all three of those things happened for us in 2024!  We ended 2024 without that deficit – let’s take a look at the numbers:

Starting on the 2024 Year End Operating Income and Expense charts, we’ll cover the expenses first.  2024 total operating expenses finished the year at $750,000 which is $42,000 under budget.  Major drivers of these savings are a reduction in overall utilities costs, savings in planned maintenance expenses in both the church and rectory, and even some savings in overall payroll costs due to less than planned number of hours worked by staff.  As shown on the 2024 Operating Expenses chart, the largest portion of the church’s expenses is Clergy and Staff Payroll at $426,000 (67%), followed by Maintenance at $88,000 (12%), Utilities at $55,000 (7%), and our Diocesan Pledge also at $55,000 (7%).  Other major expense categories include Insurance, Capital Improvement Reserves, and Office and Worship Expenses.

The bigger story though is 2024 Operating Income: we ended 2024 at $863,000 which is $138,000 over budget!  Pledge Income ended at $570,000 (67% of income) but the biggest jump was in Open Plate Offerings at $156,000 (18% of income) – this was a $91,000 increase over budget and a testament to the generous giving within our parish for 2024.  The St. James’ School Tithe also contributed $93,000 (11%) to our budget while All Other Income rounded out with about $35,000 (4%).

Revenues over budget with expenses under budget leads to a net income from operations - $113,000 in fact.  That’s not the whole story, though.  It takes a little bit more to run the church, so we also have to factor in capital expenses – those major break/fix or improvements that come up from time to time that are not included in the day-to-day operations.  These would include major HVAC repair or replacement, major roof repairs, or even sometimes having to dig up a 40-year old drain pipe in the church backlot to find a leak.  These expenses have been trending to $100,000 or more annually in recent years but in 2024 we only had $52,000 in these expenses.  If we subtract this figure from the net income above, we ended 2024 with a surplus from operations of $62,000.  This is a much better position than our original budget, and we are very thankful for the generous contributions from our parish during the year along with the wonderful work of the leadership within our ministries to control expenses.

As we shift to the next set of charts, 2024 Year End Cash and Investments, we’ll look at liquid and near-liquid assets held by the parish.  As of December 31, our Endowment Holdings totaled over $2.5 million.  The Vestry reviews whether to take a conservative draw from the earnings each year (generally 4% which would be around $100,000) which is mostly used to fund capital expenses (as previously outlined) or debt service on our church loans.  We were fortunate in 2024 to have other sources of liquid funds to manage the 2024 costs and did not need to take a draw in 2024, allowing those funds to continue to grow.  The more those funds can grow from wise investments by our Endowment Committee along with gifts from within our parish, the larger that draw can be in future years, allowing the Vestry options to expand service offerings, staffing, building enhancements, or other callings.  

The next category is a total of our Non-Operating Accounts showing $302,000 at year end– a collection of funds from about 20 sub-accounts that fund the ‘work’ of the church.  Examples of funds are Outreach, Refugee Ministry, Youth Groups, Flower Guild, Parish Discretionary Fund (used to spot-help families in our community), and others.  These funds include a one-time estate gift to the Refugee Ministry of $156,000 that came in late 2024; the Vestry and ministry leadership are working through the best uses of these funds both now and in the future.

Next is the church’s Operating Account at $220,000 which represents about 2.5-3.0 times expected monthly expenses.  This provides for sufficient cash flow coverage in slow summer months as well as sustains the church during a downturn in the economy or sudden spike in costs.  Any excess funds are reviewed and managed by the Vestry by maintaining our Strategic Reserves which shows $206,000 on December 31.  These set-aside funds (mostly from previous years surpluses and one-time larger gifts) are used to fund a new staff position mid-budget year, handle a major repair when capital funds are low, or retire debt as was completed in 2024 (more on that below).

Rounding out the cash position are the Capital Funds ($88,000) and Connected Account ($28,000).  Capital funds are right around the $100,000 mark (with the inclusion of the $13,000 2024 profit from the management of the Kirby office building next door to the church) which would match historical annual costs.  The Connected Account hosts funds used by the church to repay its portion of the commercial real estate loan monthly – these funds will stretch into mid-2025 and the Vestry is reviewing other cash flow options to meet this need later in the year.

There is also a summary of the church’s loan on the bottom of Cash and Investments page.  The church and school combined to pay off $435,000 in outstanding debt in March 2024, reducing the overall outstanding debt to $760,000 as of year end.  This remaining loan is a 20-year fully-amortizing commercial real estate loan with a recently adjusted interest rate of 6.64%. The church and school are evenly splitting the monthly loan payments.  If anyone has a really big checkbook and likes to write the number “760”, I’m sure that Father Ben would be willing to have a conversation!

Finally, we’ll look at the 2025 Operating Budget charts.  Thank you to everyone who responded to the annual pledge campaign in late 2024 by returning pledge cards before year end.  This allowed the Vestry to manage the numbers and pass an operating budget at its December meeting.  The charts look similar to 2024 year end actual figures – there are no new sources of revenue or expense lines between the two years.

2025 Income is expected to rise to $852,607, a 17.6% increase over 2024 budget and 1.2% decrease from 2024 actual figures.  Pledges are $654,000 (77%), St. James’ School Tithe is $98,000 (11%), and Open Plate returns to a normalized $75,000 (9%).  All Other Income rounds this out at $25,000 (3%).

2025 Expenses also show an increase to $852,305 which is 7.6% increase over 2024 budget and 12.1% increase over 2024 year end actuals.  Major components of these expenses are Clergy and Staff Payroll at $491,000 (58%), Maintenance at $100,000 (12%), Diocesan Pledge of $61,000 (7%), and Utilities of $55,000 (6%).  Insurance, Office Expenses, Capital Reserve, Worship Expenses, and All Other Expenses wrap up the last 17% or $145,000.

This budget shows a slight surplus of just $302 – effectively a balanced budget for 2025.  

If anyone has questions on the comments above or charts included, I’m happy to discuss over a cup of coffee.  Please reach out to me via my contact information below.

Respectfully submitted,

Colin Borgstrom

Treasurer, Saint James’ Episcopal Church‍

theborginva@gmail.com

540-270-3285 (cell)