Parish financial report published – with commentary

The financial results for St. Francis Borgia Parish in fiscal year 2018 – and the outlook for 2019 – have been published. The report includes the following information for the parish:

  • Commentary (shown below) on fiscal year 2018 and the outlook for 2019
  • Comparative balance sheets
  • Comparative operating statements
  • Comparative revenue summary
  • Operating expense composition
  • Parish cemetery financial summary
  • Education & Activity Center (E&AC) fund – financial summary

See the entire report.

COMMENTARY

Fiscal Year 2018 in Review

The parish completed fiscal 2018 at essentially a break-even operating result, with revenues exceeding expenses by just $887. This is a notable improvement from the $35,805 deficit (loss) in the prior fiscal year.

Consolidated revenues for the year of $3,327,292 increased approximately 2% over the prior year, primarily the result of a 3% increase in Stewardship & Offertory collections. School revenues were approximately flat on a year-over-year basis, reflecting a 3% increase in fees on a per-student basis, partially offset by a slight reduction in school enrollment. School enrollment in the most recently completed year was approximately 325 students, while the Christian Formation program covered 472 parish children. Christian Formation revenues declined 7% from 2017 to 2018.

Investment gains and losses on the Cemetery Perpetual Care Fund, School & Parish Endowment Funds and School Athletic Endowment Fund are not included in operating revenues, in accordance with Archdiocesan guidelines. These funds all had net investment gains for the fiscal year as a result of a robust stock market, resulting in corresponding increases in the underlying fund balances (as reported in the accompanying parish balance sheet). Realized gains and losses from other investments are included in revenues.

Consolidated expenses increased approximately 3.6% from $2,161,536 for fiscal 2017 to $2,240,274 in fiscal 2018. The increase took place at the school, as a result of higher maintenance, health insurance, textbook and technology expenses. Parish expenses declined as a result of one full-time pastor (instead of two), and partial year vacancies in the Music Ministry and Christian Formation departments. Partially offsetting these employee related reductions were increases in maintenance expense and expanding the Parish Accountant to full time.

St. Francis Borgia improved its financial position (balance sheet) in fiscal 2018, primarily the result of solid investment gains in restricted funds (primarily endowment funds) and unrestricted investments, as well as a reduction in debt. The debt reduction resulted from applying $1 million of the net proceeds from the sale of the former school facility on Hamilton Avenue against the E&AC construction debt. During the course of the fiscal year, parish debt declined from $1.6 million to $0.6 million.

Looking ahead to fiscal year 2019

Nearly three quarters (74%) of our expenses are for employee compensation, benefits and employment taxes. While inflation has been relatively tame over the last several years, wages and health insurance costs have increased and will continue to do so.

The financial benefit of partial-year vacancies in two parish staff positions in fiscal 2018 is not expected to repeat in fiscal 2019 as recruiting is underway to fill them. Therefore, the underlying expense will increase in fiscal 2019.

One of our biggest challenges as a parish is increasing Stewardship & Offertory revenue, which has essentially been flat over the last three years. Parish revenues moved from $1.76 million in 2015 to $1.77 million in 2018 – not enough to cover the actual increases in employee, facility and other operating costs. This shortfall was partially offset by investment gains because of the “bull market.” This isn’t expected to continue indefinitely. Without increased stewardship revenue, we will struggle to balance the budget.

Only one out of three parishioners increased their stewardship giving in calendar 2018, but their average year-over-year increase was above 10%. Over the past five years, 50% of parishioners increased giving, while the remainder either maintained or decreased their giving level. We need your help and prayerfully request you to consider an increase of 3-5% in this fall’s stewardship appeal. We will need a 3% overall 2019 stewardship increase to fund our current expense run-rate. Parish expenses, similar to those of a household, increase over time.

The parish will incur a major maintenance expenditure in fiscal 2019 – replacing the roof on the South Church. Due to strong investment returns on prior year bequests, this repair (estimated over $100,000) will be funded from the parish’s unrestricted investment account.

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We are blessed to be part of an outstanding parish and strong faith community led by Fr. Patrick, a dedicated and faith-filled priest.

Please prayerfully discern your blessings and continue to support our parish mission of providing strong Catholic formation to all members and a commitment to educate our young people in the Catholic faith by considering a 3-5% increase in your stewardship.

Thank you for sharing with our parish what God has blessed you and your family with financially.

God Bless!