March 2009
LJCC Members and Friends,
We are now well into 2009 and continue to see God’s hand of favor on our church!
As we look toward the balance of this year, we appreciate our many blessings but are aware of the financial challenges in so many lives, especially now. Our goal is to faithfully implement our vision, mission and values with every resource available to us. Essentially this means we may have to do more with less and continue to be resourceful and innovative. We are continuously blessed by the generosity, creativity, industry and initiative of our members and friends. Here is an update of where we are:
Operating Expenses and Revenues
We have now completed our 2009 forecast for operating expenses and revenues. Your staff and Board of Trustees have worked hard to hold costs below last year’s levels. Our expenses, independent of debt service, were flat from 2007 to 2008 and are budgeted to decrease by approximately $50,000, or about 5% in 2009. We project our 2009 operating expenses (excluding preschool) to be $1.53M. The following chart shows a breakdown of our church operating expense budget:
On the operating revenue side, we have compiled all of your giving commitments for this year. We have received commitment cards totaling just 75% of what was committed in 2008. Individual comparisons show an overall trend of a 5% decrease in dollars. While many faithful members and visitors contribute without making commitments, the commitments are a useful way for the Trustees to gauge the year.
A fundamental truth of church finance is that giving fluctuates dramatically throughout the year. December giving, for instance, is usually four times that of August giving. However, expenses are essentially uniform because they are largely related to salaries and debt service. For these reasons, churches need to start the calendar year with a healthy reserve. For LJCC, we wanted our starting balance to be $400,000, as it was in 2008. Despite very strong year-end giving, we started 2009 with operating cash of only $250,000.
Our contributions to the general operating fund need to total $1.53M to support our operating expenses (including current programs) and begin 2010 with a minimum $250,000 cash balance. This requires an increase in giving by the congregation of 10% over individual commitments received to date and a net contribution from our preschool operation equivalent to our largest church donors. This increase must come from new members, new preschool students, visitors, other new sources, special gifts, and greater sacrifice from members and friends who are able. We have started programs to achieve these results.
As we monitor 2009, if we foresee that we cannot achieve income at this level, we will begin to cut back services, programs, and staff. As you can see in the pie chart, our mortgage expense represents 32% of our total projected 2009 expenditures. We will be renegotiating our mortgages to combine them and try to decrease those expenses. Our refinance position has been strengthened now that we have three years of audited financials. We also have a refinance team in place. However, key to these negotiations will be proof of steady and sustainable contributions.
Capital Campaign
We acquired a wonderful property “as is” and below market value in 2007, which gives us abundant opportunities to carry out God’s plans in the future. However, as a young church we are presented with many expense challenges as we begin to transform the property for our use in accordance with God’s plan. At present, we are completing a number of needed capital improvements to our church and a fully licensed preschool that will enable us to increase preschool enrollment, positive cash flow, and the functionality of our church.
Our 2008 Capital Campaign results totaled $950,000 from 84 families to be contributed by September 2010. Contributions in 2008 toward this were $295,000, and we anticipate $380,000 in 2009. So far this year, however, we are significantly behind the required pace. It is very important to remain current on this critical giving, as we have committed these funds to contracted projects.
Our weekly Sunday bulletin will keep you updated on both our operating budget contributions and capital campaign payments throughout the year. If you want to know where your giving is in relation to your commitment at any time, please feel free to contact Jason Gabsch, jason@ljcommunitychurch.org, (858) 558-9020, ext, 210.
We are so very blessed to be given the opportunity to join together to meet the challenges of building a church family that will bring many into a personal, living relationship with our Lord, and to support them as they fulfill God’s will for their lives. We, as a board, honor the trust you have placed upon us and continue our utmost efforts to be good stewards with all you entrust to us.
We thank you for your faithful giving and welcome your prayers.
In Him,
Board of Trustees
La Jolla Community Church