A letter from the Dean: Budget

Dear people of St. Paul’s,

If you heard the sermons the last two Sundays, you’ve heard both Jeff and me talk about the significant gap between income and expenses in our operating budget, to the tune of about $200,000 in 2018. A number of people have said that they don’t understand where this came from: we seemed to be doing fine, so this must be a recent and sudden development. In this letter and in several more to come I want to share with you how we got here and some of the factors in play as we think and pray about where God is calling us to in the future.

First, let me state clearly that the budget deficit is not a new phenomenon. During the interim between deans, in 2013, Chapter became aware that for some time the cathedral accounts had been less than accurate. Gifts went into the wrong funds, people weren’t thanked appropriately, the distinction between operating and special funds wasn’t clear, and the policies governing the use of gifts were unclear or no longer adhered to, because of turnover in staff and leadership.

When I arrived in early 2014 the effort was already underway to reform our accounts and clean up the books. Erin Sacco-Pineda resigned her Chapter position to take the leadership on this project, along with our volunteer treasurer. It was a long process of discovery, and it took until 2017 to get to a point where we could have a clean audit of the 2016 books and have a clear sense of our resources. Before that, in 2015, we had developed the Vision for Mission strategic plan and Chapter embarked on a three-year plan to invest significant amounts from our reserves in the operating budget in order to launch some of the V4M initiatives. However, as the financial picture cleared, we realized that the investment was actually needed to support existing ministries and balance the budget. We are now in the third year of that plan.

We based the plan in part on two expectations: we hoped to grow the number of people pledging and the total amount pledged by 6% each of the three years; and we expected to close on the sale of the Olive building site by the middle of 2017, releasing funds for investment which would start yielding interest in 2018. While we have lost some pledging members, for a variety of reasons (which I will discuss in a later letter), when it comes to the total amount pledged, we have actually stayed almost level, thanks to the generosity of faithful parishioners, with a total loss of only about $40,000. The real estate deal timeline has slipped, as these things do, and we now expect to close in early 2019. So you can see that both expectations have not come to pass within the three-year timeframe. The details of the development deal are another topic which I will address in a future letter, but for now, please know that the net income from the sale proceeds will not fill the deficit but only postpone the inevitable.

The bottom line is that the deficit has been a longstanding problem and that we cannot continue indefinitely to fill the gap from our reserves, which are finite. We have worked on cutting non-staff expenses over the last three years, reducing bulletin volume, doing without additional instruments on special occasions, trimming hospitality costs, and trying to manage with outdated computer equipment (which ultimately failed catastrophically in the summer of 2017).

Since this deficit is of such long standing, why should we address it now? Why not continue supplementing our income from our reserves? From a practical standpoint, the more we invade the capital of our reserves, the less income we will draw from them, putting us in a downward spiral. From the spiritual standpoint, we have been entrusted with this treasure by those who came before us and we are called to exercise good stewardship in order to honor their generosity and carry out their desire to see St. Paul’s continue its ministry indefinitely. We could wait until we have used up all our funds and we are facing imminent closure, but in view of what we now know and what we see in the world around us, that would be unconscionably irresponsible. So we must find a way to repair the structural deficit even as we pivot to meet the challenges posed by a post-Christian world where church is seen largely as an institution that excludes and judges and where spiritual growth is regarded as a private and individual pursuit.

We are well positioned to make that pivot, with our strong liturgy and wonderful music, our ministries of service and outreach, and a facility and location without parallel; and most of all, the congregation of faithful, thoughtful, and loving people who have made the commitment to Love Christ, Serve Others, and Welcome All, come what may. Thanks be to God!  

The Very Rev. Penny Bridges