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Budget and Staffing Update

By Congregational Council, 01/07/16, 7:45PM CST

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Dear Trinity Congregation:

This is to provide an update on Council actions this week regarding the FY 2016 budget. At the annual meeting on November 15, the congregation passed a motion requiring the Council to adjust the FY 2016 budget so that expenses would not exceed revenues. As explained in detail below, the Congregational Council met on January 4, 2016, to take final action on the FY 2016 budget. Importantly, we believe the budget adopted for FY 2016 will allow Trinity to continue all aspects of our current ministries and end the year with a balanced budget. However, in order to reach a balanced budget and avoid creating additional debt, some spending and personnel cuts have been made, as described below.

We are gratified by the deeply held support of Trinity’s ministry and the shared hopefulness for our future ministry reflected in the pledges made for 2016 and the continuing engagement of the Trinity community. The Stewardship Committee led a terrific pledge drive, contacting hundreds of Trinity households, and re-grounding Trinity in a stewardship-based focus. We want to thank all those who expressed their concerns, hopes, and ideas regarding the 2016 budget. The council gave careful consideration to all the input received.

The originally proposed budget for FY 2016 assumed pledges of $1.425 million in 2016, the amount needed to avoid budget or personnel cuts. Based on actual pledges received by December 31 ($1.09 million), we did not reach that level. To achieve a balanced budget as required by the congregation’s action at the annual meeting, the Council used both staffing reductions and proceeds from a proposed sale of unused Trinity real property (the 3rd Street lot).

The Council’s overriding goal has been to provide support to Trinity’s most critical ministries to the greatest extent possible, while ensuring that Trinity is in a fiscally viable position going forward. Still, decisions that affect staffing are always painful--not only for those directly affected, but also for the congregation. We have been blessed with excellent staff and any reduction is difficult.

The following are the staffing changes made:

POSITIONS ELIMINATED

Effective in the next month, two positions will be eliminated:

  • Kim Pleticha, Director of Communications
    Kim has brought a high degree of knowledge and excellence to Trinity communications, including Trinity Today, weekly email blasts, bulletin notices, the annual report, and much more; her contributions will be sorely missed. Communications remain an integral part of Trinity’s ministry, but this staffing change will mean that some modifications in frequency or scope of publications will be necessary. Our current Publications Specialist, Marilee Tangen, will assume the role of Publications Manager and hold the primary responsibility for the communications function.
  • Rick Minichillo, Custodial Staff
    Rick has tended to Trinity’s physical plant needs for a decade, and we expe
    ct that his departure will result in tangible changes to Trinity operations. These may include building access, closing responsibilities, and contracting for snow removal. We are grateful to Rick for his care and tending over the past decade. Trinity will continue to be served by our other custodial staff, Tom Hosek and Anne Mikesh.

Please extend your thanks and best wishes to Kim and Rick for their contributions to Trinity’s ministry.

OTHER STAFFING AND BUDGET CHANGES

  • Jody Thone, Director of Organization Development & On Purpose Ministries. As recently announced, Jody Thone has tendered her resignation, effective in the next month. Jody has led Trinity’s StrengthFinders program and educated hundreds in the Trinity community and beyond. Additionally, she has been actively engaged in developing and providing adult education opportunities. Most recently, Jody has provided stability and guidance to our staff through challenging times. This vacancy will not be filled. Jody will be available for special projects in the future as needed. Her ongoing adult education responsibilities will be absorbed by Pastor Stefanie.
  • Tom Thiets, Director of Missions. The Director of Missions position will be reduced to half-time. As our Missions Director, Tom has developed and coordinated numerous outreach ministries with the Trinity Community, across the country, and globally, including most notably our Mexico Mission Program and our work in Iringa, Tanzania. Although Tom’s responsibilities to direct Trinity ministries will be reduced, steps will be taken to ensure that all of Trinity’s outreach ministries continue, including the Mexico Mission trip and in Iringa, by joining Tom’s efforts with greater reliance on Trinity’s Missions Board, additional congregational leaders and participants, and services from the Saint Paul Area Synod of the ELCA. We anticipate that other aspects of Tom’s work will continue through the nonprofit organization started by Tom and others, Mano Amiga, which has been actively engaged in offering food-packing and other efforts. Please prayerfully consider how you might participate in Trinity’s outreach ministries.
  • Delay in Staff Salary Increases. Staff salary increases initially included mid-year in the FY2016 budget will be delayed until later in the fiscal year. These raises are especially needed because staff increases were eliminated in FY 2015 budget actions.
  • Property Sale. As noted above, in order to keep staff reductions to a minimum while meeting our financial obligations, the council agreed to move forward with a sale of Trinity’s property on 3rd Street and Myrtle, with the expected sale proceeds used to make up the remainder of the shortfall in our annual budget.
  • Kairos Consulting Contract. In 2015, the council authorized a consulting contract with Kairos to provide assistance to Trinity with a debt reduction appeal; the amount held aside for that contract has been eliminated from the 2016 budget. The debt reduction appeal has been deferred for now and any future contract costs will be made part of the appeal.

By taking the above actions, we expect that Trinity will not only be able to meet its budget in 2016, but also in 2017, which will reflect the full year impact of the actions taken in 2016.

OTHER ACTION

The council will create a real property task force to evaluate the strategic value of Trinity’s auxiliary real estate holdings (including the adjoining lot facing Myrtle, on which the old Post Office building was located; the Croix Center; the 4th Street parking lot; and the drive-in). These Trinity properties are held as security for our mortgages or secured line of credit. A sale of any of these properties may reduce Trinity’s indebtedness and financing expenses, but proceeds would not be available to meet operating budget needs. The task force’s work will be done in conjunction with the work of the Transition Team, based on congregational feedback to the Team about the shape of our future ministries.

Q AND A
WERE CUTS MADE TO CHILDREN, YOUTH AND FAMILY MINISTRIES?

No. In the congregation’s response to the HolyCow! survey in early 2015, all demographic groups identified Children, Youth and Family as the most critical Trinity ministry area, and a variety of steps have been taken since that survey to strengthen our CYF programming and staffing. No cuts have been made to that area in the FY 2016 budget, and we anticipate that this budget will allow us to restore more of our prior summer programming.

WHY SELL THE PROPERTY AT 3RD STREET AND MYRTLE?

We believe the sale of the lot at 3rd Street and Myrtle will allow Trinity to finish 2016 in the black and allow us to move forward in 2017 with a balanced budget. This property is an unused vacant lot and is not used as security on either Trinity’s mortgages or secured loans. Earlier in the 2000’s, Trinity demolished the existing house on the lot, and entered into a joint venture with the idea of developing the property and building a new building on the lot for the Post Office and other businesses. However, it was not possible to secure financing for the deal and the project was abandoned. The Post Office was then relocated to the Croix Center through a renegotiated lease. A sale of the 3rd Street property will require a special congregational meeting and approval before it can be finalized.

As a general matter, the council believes it is unwise to rely on the sale of real property to meet ongoing budget needs since it is a one-time solution and delays addressing structural budget issues. In this instance, however, a sale will not affect our ongoing ministries and will allow Trinity to use a “soft landing” on the budget changes needed for a sustainable budget going forward. We expect the sale proceeds from this property will allow us to finish FY 2016 in the black and go into FY 2017 with a balanced budget. The proceeds will supplement the budget cuts made in FY 2016 (affecting 6-8 months of the fiscal year). Those cuts will be annualized in FY2017, when we will realize a full year of savings from the cuts being made now.

WHAT CAUSED OUR BUDGET ISSUES?

Our operating budget issues were caused by having higher expenses than income over an extended period. The Long Term Finance Planning Team in 2015 identified a number of factors that contributed to this situation:

  • The Great Recession of the last decade and the slow economic recovery
  • Flattening of pledged amounts (mirroring the national decline in congregational giving)  
  • Significant income reduction after the departure of St. Croix Prep from the Croix Center
  • Re-absorbing mortgage expenses into the annual operating budget in 2015 (paid for a time with Opening Doors appeal proceeds)
  • Delay or avoidance in budget cuts through alternative financing, including mortgage refinancing, increased line of credit, and using Opening Doors appeal proceeds to pay mortgage interest.

We believe that earlier budget decisions were born of optimism for where the future would take our congregation: that if we continued our robust programming rather than making budget cuts, additional revenues would eventually develop. That did not occur.

In 2015, the congregation made important strides in addressing the budget shortfall and Trinity’s indebtedness through operating and personnel cuts early in the year, a highly successful summer appeal-Respond to God’s Love, infusion of funds from the ending of the Opening Doors appeal, and the ongoing, faithful giving of the Trinity congregation. Even with the changes we have experienced, the commitment of the Trinity to our congregation’s ministries has been significant. We have more pledging units for 2016 than in 2015. Our projected revenues have remained fairly steady even though we have seen significant changes in pastoral leadership and other staffing during the past year. We want to build on that commitment and stability, while adopting a budget that acknowledges our fiscal reality and the direction given to council by the congregation at the annual meeting. This is an important part of making sure that Trinity is in the best possible position to call a new lead pastor and continue its vibrant ministry and mission in the strongest way possible.

Thank you for your ongoing support of Trinity’s ministries and mission and blessings and best wishes for the New Year.

Sincerely,
Congregational Council
Gail M. Olson, President

Doug Johnson, Vice President
Tom Olsen, Treasurer
Pastor Paul Svingen
Eric Olsen, Secretary
Mel Sullivan, Council Member
Mary Claire Olson Potter, Council Member