May 2010
Capin Crouse, one of the nation’s most respected church audit firms, has completed the audit of our 2009 financial statements. We are very pleased to announce that the auditor’s report was clean and the management letter included helpful recommendations to improve our financial procedures. We had a blessed 2009 in which we ended the year receiving 99% our budgeted general fund contributions. We had budgeted to receive $1.52 million in contributions and received just under $1.50 million. Given the changes in the economy, we feel very blessed to have experienced this level of support from our congregation. During 2009, we completed the renovations and expansion of the preschool and have been able to run it at near full capacity throughout the year. During 2009 it contributed over $100,000 to our operating cash, and it is anticipated that number will increase for 2010.
We are well into 2010 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 completed our 2010 forecast for operating expenses and revenues. Your staff and Board of Trustees have worked hard to hold costs down while at the same time trying to increase our range of services.
Our contributions to the General Operating Fund need to total $1.52 million to support our operating expenses (including current programs) and begin 2011 with sufficient cash reserves. This is the same level of giving that we had established for 2009. We also project that our preschool will generate approximately $140,000 in operating income. We are prayerful that the increase in our membership will be able to help offset the downturn in the economy that has affected so many of you.
For the four months ending April 30, 2010 we budgeted to receive $442,000 in General Fund contributions. We have received approximately $430,000 in contributions for these four months leaving us with a budget shortfall of $12,000 so far for the year. Our budgeted contributions is based on the past 3 years of historical giving data and is our best tool for trying to monitor giving levels.
As we monitor 2010, if we foresee that we cannot achieve income at this level, we will begin to cut back services, programs, and staff. Our mortgage expense represents 32% of our total projected 2010 expenditures. We will attempt to renegotiate our mortgages to combine them and try to decrease those expenses. Our refinance position has been strengthened now that we have four years of audited financials. We also have a refinance team in place when the time is appropriate to pursue this. 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 February of 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. Financed by a $350,000 bridge loan in September 2008, guaranteed by one of our members, we have completed a number of needed capital improvements to our church and fully-licensed preschool that enable us to increase preschool enrollment, positive cash flow, and the functionality of our church.
Our 2008 Capital Campaign pledges/gifts totaled $950,000 from 84 families to be contributed by September 2010. Contributions in 2008 toward this were $295,000 and $343,000 in 2009. To date we are significantly behind the required pace and need to collect $312,000 in order to pay for the renovations that we have made. We understand that many people have experienced financial reversals, but for those who have the ability to fulfill their faith commitment we ask that it be completed by September of this year as originally planned in the campaign.
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. The Board of Trustees continues its utmost efforts to be good stewards with all you have entrusted to them. We thank you for your faithful giving and welcome your prayers.
Jason Gabsch,
CFO, La Jolla Community Church