As I’ve said many times, Grace Episcopal’s existing cost structure is unsustainable. Thanks to the debt incurred for the recently completed HVAC project, as well as the parish’s continuing willingness to live above its means and its refusal to save, things are looking grim for the 2020 budget. This is the result that, in 2014, I warned Bob Malm was looming, possibly as early as 2016 if expenses were not curtailed. I did so in writing and, predictably enough, did not even get the courtesy of a response from Dysfunctional Bob.
Specifically, as of right now, the parish appears poised for 2020 annual income of $975,000, expenses of $1,206,000, and a net deficit (get ready!) of $231,000.
Variables used to reach these results:
$70,000 diocesan pledge
$9,000 reduction in pledges over 2019 figures. In light of the length of Bob Malm’s tenure, the decline could prove much greater
$80,000 reduction in salaries, primarily attributable to alignment of interim’s salary with local norms, or $130,000 annually
$70,000 in debt service
$50,000 income from trust
$50,000 in maintenance (note that this covers janitorial supplies (paper products, etc) for both the church and school, which then reimburses half the cost to the church. These funds are returned to the operating budget, not line items associated with facilities expenses. Thus, according to the church’s customary financial reporting, nowhere near the full $50,000 actually is available for repairs or maintenance.)
$20,000 in search expenses
$10,000 invested in management reserve
Inclusion of the Alexandria sewer tax
A 2% increase in most operating expenses to adjust for inflation
Continued zero funding for the school beyond cost sharing, which already benefits the school
Limited programmatic, worship, and local outreach funding. Note that these are areas already cut very thin, and typically frozen at end of year. As a result, sooner or later several categories will require additional funding in order to continue.
Not factored in is the increasingly likely possibility of a recession, which would erode both Q4 2019 giving and 2020 pledges, and potentially reduce the allowable draw on the trust fund.
Of course, these figures don’t leave room for contingencies, such as extensive snow removal in the event of a severe winter, or burst pipes. (As I have pointed out ad nauseum, copper pipes do not have an indefinite life span. All the original plumbing in the building is at actuarial end of life. Same for the 20-ton HVAC unit serving the nave, which is well beyond end of life expectancy and already has had one fan motor replaced in an effort to buy time.)
Clearly, church staff recognizes the challenges ahead, and director of music Richard Newman (a delightful person and wonderful musician) has been wise in maintaining visibility by performing concerts in venues around the country. Similarly, it may no longer be possible for the parish to maintain full-time staff for the parish administrator and family ministries positions, or the associate rector position, for that matter.
It may also be time for the church to assess whether the school should continue and, if so, whether it might be spun off as a completely separate entity. The 50/50 cost sharing arrangement, often portrayed by Dysfunctional Bob as a benefit to the church, actually is to the school’s benefit, not the church’s, as the former is responsible for the vast majority of utilities, etc. Another possibility is to require the school to pay its full cost of operation. Such an arrangement could reduce the financial burden on the church and free up money to address issues like hunger in the community, versus devoting such a large portion of the budget to educating children who in most cases come from privileged, affluent backgrounds. It’s also worth noting that very few of the families with children at the school ever become involved in the church, especially since the school eliminated the tuition break for church members.
In a situation such as this, there are no easy solutions, and it is vital that the parish begin to learn to save for the future. But no matter how things unfold there are some tough decisions and difficult times ahead.
And yes, before folks ask, I will continue to protest the church’s conduct, even after Bob Malm’s departure.
Bob Malm has stated in writing that the vestry and other parish leadership joined with him in its decision to take legal action against me, with the tacit approval of the diocese. So Bob Malm’s perjury, his decision to try to drag a dying woman into court, his decision to include Mike in his vendetta, and the various fabrications and inflammatory rhetoric in Jeff Chiow’s legal pleadings — none of these have been repudiated by the parish or vestry. Thus, it is appropriate that I continue to make public my experiences.