I recently had the chance to review some early budget forecasts and other financial information for Grace Episcopal, the clergy perjury parish. The news is entirely bad.
Bottom line is this: Even with cuts, current cost structures are way too high. Maintenance again is being deferred, which inevitably results in a much costlier game of catch-up, and money is not being set aside from operating income from to cover facilities expenses.
Specifically, a physical plant like Grace church normally should set aside 6-10% of annual income for maintenance and repair. In the case of a high-use location, which Grace is due to the school, the AA groups and others, the amount should be at the upper end of that range.
Nor has the church done a replacement reserve study, as has been urged repeatedly over since 2014. And the rather weak efforts of the property committee to prioritize expenses are utterly ignored by the vestry. (I hired a consultant to do a replacement reserve study at my own expense, but threw it in the trash after experiencing childish behavior from Lisa Medley and Alison Campbell. At the time, it reflected cash requirements of more than $1,000,000 in the next five years to keep the physical plant operational.)
To make matters worse, the paltry amount set aside for maintenance is largely consumed by the fact that all property bathroom supplies flow through the budget are and reimbursed at 50 percent by the school. But that money doesn’t revert to maintenance—it returns to the general budget, where it gets squandered on the usual tomfoolery. Great deal for the school. Not so great for anyone else.
Meanwhile, the list of deferred maintenance is daunting; the church’s portion is listed below in cases in which cost sharing applies, as indicated by an asterisk:
- Replacing parking lot and other HIDs, including wood poles — $7,500*
- Refurbish original elevator — $20,000* (and don’t be stupid folks, Stop talking about replacing it entirely. A metal car is a metal car.)
- Replace exterior rotting wood trim — $20,000
- Repave parking lot — $25,000*
- Replace new nave roof — $35,000
- Replace end-of-life insulated glass windows from 1994 renovation — $50,000*
In other words, at least $157,000 in cash is needed within the next few years, at a time when the church already cannot make ends meet. To do that, while setting aside money for management reserve and other needed funds, will require cutting at least $100,000 a year from the budget.
At this point, the only controllable costs are payroll, so I believe elimination of the associate rector position will be needed, while the director of music position, which not that many years ago was part-time, will need to revert to part-time.
And forget about the endowment any time soon. Income from that is already committed.
As it stands, between the vestry’s dismal financial planning, its unwillingness to look reality in the eye, and the reputational issues coming from Bob Malm’s tenure, I do not see that the church as we know it can — or should — survive.
After that, the only thing that can be done will be to cut some of the part-time positions and transition the parish admin position to part-time. Then