5-10 Year Financial Plan

“Family taking care of Family…”
Sts. Joachim & Ann Parish Five-to-ten year Financial Plan
Operating Budget
 

 
● Total Income: Based on recent trends of revenue and expenses, as a starting point we project the continuation of our historical pattern of an average 3% annual increase in revenue.  According to our history, this would be the case if there is no purposeful change in our patterns of giving.
● Total Expenses: Based on recent trends and standard financial forecasts about the current climate, as a starting point we project a 3% increase in expenses between this present fiscal year and the next, which begins July 1, 2010.  This is because we don’t know how this year’s salary freeze may or may not be compensated for in next year’s faculty salaries according to the archdiocesan pay scale.  Thereafter, we project an average annual increase in expenses of 2%.
● Net Cash Increase/Decrease: Our income would be fine if it were not for the debt payments each month.  Debt interest is included in “Total Expenses.”  Ordinary debt principal payments are listed.  This results in a series of net cash deficits in the operating budget of $100,000 or more for the next five years.  Without a change in giving, this would deplete the parish’s unrestricted savings in 3.5 years.
● Ideally we should be designing this plan not only to get to a break even point, but also to increase our savings safety net along the way.  We currently only have two months’ worth of operating expenses in unrestricted savings.  This is not a sufficient financial safety net.  However, given the demands involved in just breaking even we did not deem it doable in the short term.  You will notice on the above chart that we will be able to begin increasing the strength of our savings safety net in FY2016.
● Added $$ Needed to break even:  The amount of additional cash needed to break even, as shown above, will require the weekly Sunday Offering to be increased substantially. Beginning immediately, for the remaining nine months of FY2010 the Sunday Offering needs to increase by an average of $2900 per week.  Needed increases in subsequent years can be seen on the charts accessible via the link below.
● All of this is only true if we also collectively embrace what follows regarding the Christmas Club for Major Needs.
 
Christmas Club for Major Needs

 
● Recommendation is to expand the scope of the Christmas Club to include not only debt reduction, but short-term infrastructure repair and eventual completion of the Church.
● If we sacrifice enough according to the charted amounts above we can eliminate our debt by 2016 and save $250,000 in interest payments!
● If we sacrifice enough according to the charted amounts above we can pay for our roofs and fire alarm panel and amass $450,000 toward the completion of the Church along with whatever Fish Fry revenue comes in during that time.