Tuesday, June 23 2020
St. John’s Episcopal Church
The regular monthly meeting of the Finance Committee was held on June 11. Joining me were members R.C., Gerry Apple, Mark Hampton, Ric Weatherman, Cynthia Knapp and Christian MacMillan. The Committee reviewed our current financial condition and offers two recommendations detailed below regarding acceptance of a loan from the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) program and the treatment of interest on the restricted gifts from the Estate of Elinor Vadman.
Our Current Financial Condition
Bank Balances as of 6/9/2020:
The most recent Statements of Activity and Financial Position accompany have been posted to the parish website. Click on this link and scroll to the bottom of the page. As of May 31, our year-to-date operating deficit was -$25,523.09, but with the application of the remaining PPP funds in June, we will be very close to being on target for the year-to-date.
Following a significant increase in April, pledge payments were above budget again in May, reducing our year-to-date shortfall to budget to -$10,727.99 (9%).
A payment to bring us current on our Diocesan Assessment for 2020 was made last week.
We will exhaust the remaining PPP funds ($20,364.33) this month. In keeping with guidelines for the program, we have used the funds to pay salaries, benefits, and utilities.
We have been approved for a $150,000.00 loan from SBA through the EIDL program. The loan can run for a maximum of 30 years at 2.75% interest. Payments do not begin until 12 months after the loan is funded, and there are no prepayment penalties. The loan is not secured by real property, but the SBA does require a security interest in “tangible and intangible personal property (e.g. equipment, deposit accounts). We’ve asked the Diocese to review and approve our acceptance of the loan and hope to have their guidance within a few days. With Diocesan approval, the Finance Committee recommends we accept the loan. The proceeds can be applied to a wide range of operating—but not capital—expenses and would provide us with a valuable reserve as we move through a continuing and likely protracted period of economic uncertainty.
With Diocesan approval, the Vestry approved acceptance of the $150,000.00 loan from the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) program.
Estate of Elinor Vadman
To-date, $120,000 has been disbursed from the Estate of Elinor Vadman. These funds are restricted and directed to the Diocese for deposit into a new separate account in the names of Elinor and Warren Vadman included in our Master Account with the Diocese of Olympia Master Trust (DIF). We are not entitled to the principal in the account, but we do have discretion over the use of the interest. It can be withdrawn periodically or reinvested. After reviewing the matter, the Finance Committee recommends reinvesting the interest until such time as we may need it for approved expenses.
The Vestry approved reinvestment of the interest from the Elinor and Warren Vadman Account with the Diocese of Olympia Master Trust until such time as we may need it for approved expenses.
We have received the draft of a contract from Jerry Campbell, our consultant. The Episcopal Church Foundation (ECF), for whom Jerry formerly worked, no longer offers consultative services for congregational campaigns. We would be hiring Jerry as an independent contractor. Since Jerry doesn’t have the overhead of ECF, the fee for his services is reduced considerably. Jerry believes we can also save by using a local vendor (rather than ECF’s preferred source) for design, printing, and mailing of our campaign collateral material. He estimates that the total cost for the solicitation phase of the campaign, including his fees and expenses and those of the vendor would be in the range of $15,000.00 to $20,000.00 (Note: Our original estimate for “campaign support” through ECF was $44,950).
The Vestry approved contracting with Jerry Campbell to provide consultant services for the solicitation phase of the upcoming Capital Campaign.
…Bob Le Roy, Treasurer