Minutes of the Meeting of the Board of Trustees

Minutes of the Meeting of the Board of Trustees

Unitarian Universalist Church of Arlington

May 18, 2010

Trustees present: Bennett Minton, Natty Averett, Desda Moss, David McTaggart, Alex Roth, David Shilton, Lee Bory, Diane Ullius

Church staff present: Michael McGee, Linda Olsen Peebles

Others present: Gene Mulligan (treasurer), Daniel Karnes (acting secretary), Allen Keiswetter

Call to order and quorum call: 7:05 p.m.

Introductory reading and chalice lighting: Alex Roth

Chair’s Report/Announcements

April Minutes

The minutes were approved, 9-0, by email on May 10.

Events

• May 25: Board hearing on the budget and vote to recommend to the congregation
• June 13: Annual Meeting
• June 18-19: Board retreat for continuing and new trustees

Audit Committee

The Board Audit Committee met March 28. Minutes are attached.

Nominating Committee

The report of the Nominating Committee will include the following slates.

Trustees:

• Expiring in 2010: Minton, Moss, Ullius
• Nominated in 2010: Frank Corsoro, Phyllis Woodring (two-year terms), Linda Martin (one year)
• Expiring in 2011: Shilton, Bory, Schmelzer, Martin
• Expiring in 2012: Averett, McTaggart, Roth, third trustee elected in 2010

Secretary: Carol Litchfield

Treasurer: TBD

Nominating Committee (terms TBD):

Minton (chair), Jean Orr, David Talmage, Sarah Munson andPhyllis Dogan (carry over from this year).

PT Report

Rev. Michael reported one follow-up meeting of the April Social Justice workshop has been held of the breakout group on process and structure. A similar meeting, of the group on criteria for social justice projects, is planned to occur shortly.

Rev. Carlton Elliot Smith will be our Consulting Minister for a two-year term.

Rev. Michael asked the Board to appoint a task forceof three to five members to apply for the UUA diversity ministry (JUUST) program.

Rev. Linda noted that she is working with Justin Martin as he transitions out asREcoordinator.

Treasurer’s Report

Gene presented his report. In comparison to last year, revenues are down, but expenses are also down. The endowment fund is smaller because of market fluctuations. We are going to end up the year pretty close to even.

Action Items

a. Global End #3 (from Ends 4 and 5): Serve the World

The board accepted Global End #3.

Discussion Items

a. Annual Meeting Agenda

The trustees reviewed a draft agenda. The PT said it had settled on volunteer award recipients. Bennett is working with counsel on incorporation, but the changes to bylaws will not be completed in time for consideration by the membership. The Board should be able to vote on the changes at the June meeting, leaving ratification to the next membership meeting.

Allen Keiswetter requested time at the Annual Meeting to discuss the prospective capital campaign. Trustees discussed a possible membership endorsement of continued planning for a campaign to be executed next winter. Bennett agreed to work with Allen on the wording of a resolution of endorsement.

b. Constitutional changes

Bennett discussed his conversations with the lawyer engaged to file for incorporation of the church. The papers will be given their final language and be filed within a week or so.

c. Draft budget

Rev. Michael presented the staff’s draft budget. The Board returned the draft to the staff with instructions:

• The Board urges the staff tofocus on the vision and less on the politics. We recognize that certain cuts will produce criticism from individuals and constituencies in the congregation. Our job as trustees is to mind the purpose, the core mission, which is worship, fellowship, RE, and pastoral care. As we have discussed in recent days, the branches of the church are enjoying greater support than is the core.
• The Board's first priority is to provide COLAs for all staff at the 2% recommendation.
• The Board wishes to protect the option of a full audit, pending the recommendation of the Board audit committee. This year's budget is beyond tight, but we take seriously our obligation to mind the store. It is our understanding that the long-term savings of delaying the audit are limited because of the forensics that would be required to construct a full audit next year or the year after.
• The Board reduces its own budget from $5,000 to $1,000.
• The next priority is to preserve as much of our UUA obligation as possible. Just as we place the staff as the top of our priorities, we recognize that most of our UUA (and JPD) contribution goes to staff. You have presented us with a choice of cutting UU staff in our building, or UU staff in the larger movement. We recognize that UUA full share is not possible under current constraints, but we wish to limit the damage.
• As an alternative, we look at the Social Action budget and imagine zeroing outa variety of noted line items, such as Transylvania, VOICE, PAG, VARUUM, JTW, Social Action and UUSJ. We see you have already budgeted a “general reduction” of $2,900.
• We have no idea how the Creative Arts budget works. Because the budget shows only expenses but not revenues, we are in no position to say, for example, “zero out performers fees” because we suspect that the fees are offset by concert collections.
• We share the frustration of the senior staff over the disappointing stewardship campaign results. We do not direct a reduction in staff positions contrary to the recommendations of the ET. We are prepared to defend such a reduction as the staff may recommend. Indeed, if our stewardship results do not improve next year, we anticipate it.

Process Review

Alex Roth reviewed the meeting process.

Executive Session

The Board resolved into executive session. It returned from executive session and adopted unanimously the following executive actions:

• A bonus of $2,000 for Rev. Linda as a token of the Board’s appreciation for her leadership during Rev. Michael's sabbatical, particularly for her role on the ET. It also wishes to recognize her long-term guidance of the Board in the transition to Policy Governance. The bonus is to be paid in fiscal 2010.
• Salary increases of $1,500 each for Bill Peters and Bob Griffith. The Board wishes the raises could be larger – indeed we would like to have approved greater compensation for all of our hard-working staff. In the current climate, we recognize that’s not an appropriate choice. The Board extends these increases to Bill and Bob as tokens for their respective roles: for Bill, his long dedication to managing a sprawling churchwith a very careful approach to expenditures; for Bob, his years overseeing the expansion of the music program.

Meeting adjourned at 10:30.

Addendum

Minutes of the Meeting and Budget Hearing

May 25, 2010

Trustees present: Bennett Minton, Natty Averett, Desda Moss, David McTaggart, Alex Roth, David Shilton, Lee Bory, Diane Ullius

Others present: Chris Sutton, Gene Mulligan, Sue Browning, John Gunning, Linda Lutes

Call to order and quorum call: 7:35 p.m.

Chair’s Report

Bennett had forwarded to the trustees a memorandum from the Audit Committee, dated May 23:

As indicated, the members of the Audit Committee had all independently decided, previous to your initial request for a recommendation, that a full audit should be conducted on the church’s financial statements for the fiscal year ending June 30, 2010, and confirmed this determination in a simple e-mail exchange.The last financial statements to be subject to a full audit were the statements for the fiscal year ending June 30, 2007. Therefore, postponing a full audit this year would mean that three years of financial statements would remain unaudited (2008, 2009 and 2010). We felt, furthermore, that the financial review of last year’s statements was not substantive enough to warrant performing again this year in lieu of a full audit. Last year’s review, however, will facilitate an audit of this year’s statements because it has made it easier for the auditors to confirm last year’s ending balances and hence this year’s opening balances.

We are mindful of the cost considerations and so gave Bill a heads up about our forthcoming recommendation, to invite his feedback on the budget ramifications. His response was simply to indicate that he would put $15,000 in the proposed budget for an audit. We remain mindful that there is substantial competition for the church’s budgetary resources, and thus make the recommendation for a full audit of this year’s statements first and foremost in light of our responsibilities under the Audit Committee charter, rather than as a group advocating for budgetary expenditures in its program or interest area.

The Audit Committee has not discussed nor made any determination on the issue of how frequently it will recommend that a full audit be conducted. This is an issue for a future meeting. Our current priority, however, is to move forward with the portion of the extended agenda we laid out earlier this year that involves a detailed examination of certain of the church’s oversight and control systems. We may be in a better position after this to deal with the issue of audit frequency.

Discussion Item

The Board met to hear from congregants concerning the 2011 budget. It considered the staff’s latest draft, dated May 23. The Board submitted additional questions and instructions to staff and scheduled an additional meeting to adopt the budget on June 1. The instructions were included in an email to the BOT group:

5/27

From: Bennett

To: BOT

cc: Neal Sigmon

Re: FY11 Budget

First of all, the Board appreciates the tough decisions you made in the 5/23 revised budget. It is vastly superior to the preceding draft in its setting of priorities (though obviously not in the reduced expenditures that frustrate all of us).

We are relieved that the congregation has increased its pledges by more than $41,000 in the four days since Mary and I made our call. We understand that you do not budget that entire amount as fulfillment. We are also hopeful that additional pledges will be received in the coming days. We’re dealing with fluid numbers.

We have a deadline of June 3 to get the Board’s budget in the mail/on-line. The Board submits the following directives and suggestions as we move to complete the proposal we will lay before the membership. We would like to have a FINAL draft for our consideration on June 1. I will be away till Monday evening. Please forward your new draft to the entire Board.

We have two directives:

1.We call for a budget deficit no greater than $47,000. It is our observation that the church struggles through the year to hold the line on expenses necessary to maintain the church because of deficit budgeting. For years, we have adopted budgets with deficits of about $50,000, and then we find we do pretty much okay by the end of the year. We commend your management, but we believe that practice has a cost, one that is hard to detect: a reluctance of the staff to execute needed expenditures that, as you noted in a related context, “won't have much impact on congregants.” Perhaps the effects are deferred maintenance or a shortage of pencils – the trustees don’t know. We believe it would be healthier to move to zero-deficit budgeting over time, so that everyone has a greater understanding of what it takes to keep the church functioning in all respects.

2.We direct that VOICE dues be allocated within the budget. The ministers and the Board regard VOICE as a core commitment, a promise made and endorsed by the membership. Funding our dues in part from give-the-plate is a sleight of hand. It also is inconsistent with the purpose of give-the-plate, which is to provide the congregation an opportunity to support particularly worthy community causes chosen by SAC and the ministers. (And we encourage the ministers to emphasize that purpose.) We can imagine that consistently demonstrated support for these chosen causes may result in moving them into the budget, where they become core items. VOICE is past that point. It belongs in the budget, fully funded.

We have four areas that we suggest deserve consideration for additional funding, consistent with our Policy Governance practice:

1.As noted above, we are concerned about deferred maintenance, both of the building and in the creative arts. We also suggest that it may be appropriate to apply some of the Connie Thruston fund to the building, particularly where there is a connection to easing access – for being a Welcoming Congregation.

2.We urge you to consider additional funding for RE, particularly for the Youth position. We are concerned that the 11-month payroll for Sana is inconsistent with our principles of treating staff fairly. We are also concerned that no support staff in July (Justin being gone and Sana on unpaid leave) affects preparedness for the fall. RE is a core function – the reason why many members first come through our doors. We don’t know the particulars of the church’s needs, so we ask you to examine whether this should be a priority for additional funding.

3.In my Sunday plea for more pledges, I said that the cuts the Board was considering included Social Action generally and VOICE and PAG in particular. Having been rescued by the congregation, the church should consider restoration of Social Action funding, directed to those projects that energize the ministers and the congregation.

4.We commend for your consideration a plea from the JPD for support for the Chesapeake UU Growth Committee and its Google ad campaign. Richard Speck has asked for support of $1 per member. Perhaps the request should be considered in the context of our advertising budget.

We look forward to presenting to the congregation a budget that the trustees own and that respects a relationship in which we – the Board and the ET – continue to refine our Ends and their interpretation.

Action Item

Upon the recommendation of John Gunning, the Board appointed additional members as alternates to the UUCA delegation to the UUA Convention (in addition to those appointed March 30):

Parker Bracken

Melody Feather

Bea Ann Phillips

Wendy Jessup

Dorothy Mulligan

Meeting adjourned at 10:30 p.m.

Addendum

Minutes of the Meeting on the Budget

June 1, 2010

Trustees present: Bennett Minton, Natty Averett, Desda Moss, David McTaggert, Alex Roth, David Shilton, Lee Bory, Diane Ullius, MJ Schmelzer Hoekstra

Staff present: Bill Peters

Others present: Sue Browning

Call to order and quorum call: 7:34 p.m.

Bill responded by email to the Board’s 5/27 memorandum. Bill explained that the draft budget was built on the assumption that pledges this year would match last year's total. Historically the church has received $50,000 in pledges post-campaign. But to reach last year’s pledge income (taking into account a 94% fulfillment rate), we need $1.266m in pledges. We have only $1.174m to date, including the $42,000 raised since Rev. Mary and Bennett addressed the budget during services on May 23. Bill explained that the judgment was to be optimistic concerning the congregation’s generosity.

Trustees asked staff to communicate important caveats and assumptions that underlie draft budgets. The trustees do not want to make it a practice to question assumptions, but they would like to be aware of major factors.

Bill addressed the Board’s general interest in reducing the deficit and its concern that the church is maintained in the face of budgetary constraints. Bill said the church has a variety of existing funds and members upon which it can draw for needed purposes and expenditures. He assured the Board that in light of its cash balances outside of the operating budget, deficit budgeting is appropriate and not a hindrance to proper stewardship of assets.

Action Item

Bennett announced that the motion under consideration was to adopt the staff’s May 23 draft budget.

David McT. proposed an amendment, seconded by David S., to increase funding for VOICE from $5,000 to $7,500. He accepted a friendly second-degree amendment by David S. to fund the VOICE increase by subtracting $2,500 from UUA dues. The Board discussed the amendment and resolved to maintain fair share with the UUA, as Unitarian Universalism is our identity. As a tangible matter, fair-share status gives us access to a variety of UUA grants. The trustees defeated the amendment, 0-9. The Board asked the staff to seek early opportunities to ensure we meet our VOICE commitment outside the budget.

Chair’s Report

Bennett reported that Desda and Lee will serve with Rev. Michael in applying for the UUA’s JUUST Change consultancy.

Meeting adjourned at 9:05 p.m.

Date:April 17, 2010

To:Bennett Minton

Chairman, Board of Trustees

From:UUCA Audit Committee

Subject:Minutes of the March 28, 2010, meeting of the UUCA Audit Committee

The UUCA Audit Committee met on March 28, 2010, at 12:45 p.m. In attendance were Audit Committee members Mary Ann Lawler, Alice Maroni, and Peter Vitaliano, Church Administrator Bill Peters, and Bookkeeper Beth Enriquez.

The initial discussions involved the timing for purposes of the upcoming FY2011 budget of a decision on whether to have a formal audit for fiscal year 2010, a financial review, or an internal controls review. The Audit Committee expects to make a recommendation for the board’s decision in May. In the meantime, the Church Administrator will put a placeholder of $10,000 in the budget.