Financial Statements: We have posted the 2010 audited financial statements for all of the entities under the Eastern Pennsylvania Conference umbrella. The organizations are:
EPA Conference of the United Methodist Church
EPA Board of Pensions and Health Benefits
Conference Education Society
EPA Conference Loan Fund
EPA Conference United Methodist Metro Ministries
The Thomas Bradley Home
Wesley Foundation of the City of Philadelphia
Mid Atlantic United Methodist Foundation
Philadelphia Area Episcopal Office
The EPA Conference audit report is for the year ending December 2009. Our auditors are working on the report for the year ending December 2010. We will post this report upon its completion. We did post a copy of the December 2010 unaudited Balance Sheet for the Conference.
One of the financial challenges is to grow unrestricted assets for the EPA Board of Trustees and for the Annual Conference. As of July 31, 2011, assets on the conference books total $5.3 million. The EPA Board of Trustees reserves are $110 thousand and the EPA Conference unrestricted assets are $153 thousand. This leaves the balance of $5.1 million in restricted assets. The majority of these assets are for; Dewees Fund, $1.6 million, Camping, $1.2 million, Bookstore Fund, $750 thousand, Retiree Health Insurance, $570 thousand.
Conference Budget and Church Giving
Please reference Schedule A and Schedule B for a summary of the conference budget as of September 30, 2011. The total annual budget for 2011 is $3.5 million. The local churches support the conference budget through the CMF bill. Through nine months, giving for CMF from local churches is $2.4 million, 7% less than budget and 11% less than the amount received as of September 30, 2010. We believe part of this variance is the result of the change in 2011, to a 12 month payment plan, versus a 10 month payment plan in past years. When we implemented the new remittance system in January, the annual amounts were spread over 12 months. This is only part of the variance and we have initiated steps to closely monitor expenses during the balance of the year.
For CMF, as of September 30, 2011, a deficit of $68,985 has been recorded. This is due, in large part, to the drop in church giving for this fund. The good news is that expenses of $2.5 million, through nine months, are 6% lower than budget and 4% less than expenses reported as of September 30, 2010.
The total scope of the budget dollars for all funds is $20.6 million. The CMF budget is the only fund on the local church remittance form supporting expenses for the annual conference. The other two apportioned funds, World Service and General Church amounts are to support various ministries domestically and around the world. All conferences in the United States receive a budget from the General Church for these two funds.
All of the other funds churches pay into are for benefits for clergy and lay; pensions, health insurance, property and liability, vehicle insurance, workers compensation. There were a few changes in 2011, namely; the Connectional Health Care Fund (CHC) and a Mandatory Health Care Fund (MHC). The CHC is an amount billed to every local church to support missional churches as designated by the cabinet, the cost to support clergy on incapacity and an amount to return the conference health care reserve to policy limits. The MHC is an amount charged to the local church for each eligible member. This replaced the Waiver fee, and includes, enrolment in the Employee Assistance Plan and coverage for a $10 thousand insurance policy.
In 2010, a total of $18.6 million was paid by local churches for all funds. There were 280 churches or 62% of the total that paid 100% of all funds. A special thanks to all of these churches for paying all funds 100%. We need to increase the number of churches paying 100%. The conference has supported churches that do not pay by continuing to pay the providers of health insurance, property insurance, etc. without any change in coverage to the participant.
Please reference Schedule C and Schedule D for a summary update of church giving, as of September 30, 2011. Giving is behind last year by 3% for most of the funds. The clergy group insurance is down 10%and this is the result of the reduction in the composite rate to $16,300. The clergy insurance contribution rate decreased, from 5% to 3%, and this is the reason for the 49% decline for this fund.
Please review the “Financial Overview” document included with the material at Annual Conference in May 2011, and posted on the conference web site. The conference assembled a task force, “Five Year Planning Committee”, to review the financial situation of the conference and prepare a five year plan. The group has met twice with a meeting upcoming in November. A plan will be presented at the 2012 Annual Conference.
One very important challenge for the group relates to pensions, specifically an unfunded liability of $14 million for the Pre-82 Pension. This liability is billed to local churches as part of the Direct Bill. For the past thirty years, the Conference Board of Pensions and Health Benefits paid half of the annual amount. The other half was billed to the local church. Investments held by the EPA Board of Pensions have been depleted to a point where they can no longer pay 50%. For 2012, the Board approved funding this obligation at 25%. This means that the local church, in 2012, will be billed 75%. We mailed a letter of explanation to each church on October 26, 2011.
The total direct bill, in 2012, is $2.5 million. The Pre-82 piece is $1.4 million. The other components are for; Retirees Medical Insurance, $600 thousand, Administration Costs of the Board of Pensions, $300 thousand and an amount for “uncollectible” of $265 thousand.
If you have questions, please contact Peter DiNofia, Conference Treasurer, at the conference office: firstname.lastname@example.org or 610-666-9090, ext. 209.