March 15, 2016
Mission Shaped Future 3 – Are the Two Conferences Financially Healthy?
As Rocky Mountain and Yellowstone Conferences consider coming together to create a new Mountain Sky Conference, I hear questions about the health of the two conferences.
QUESTION: How is the Financial Health of the Two Conferences? What liabilities do the two conferences carry?
Recently I heard a scary rumor that if Rocky Mountain “took on” Yellowstone, it would have dire consequences for Rocky Mountain Conference. I went straight to Rocky Mountain Treasurer, Noreen Keleshian, and asked her if there is some danger that we’ve missed? Noreen and Yellowstone Treasurer, Anita Saas, got together to compare the financial health of the two conferences, as of the end of 2015.
ANSWER 1: While one Conference is larger, they are both financially healthy.
Yellowstone’s annual general fund income is slightly less than 1/4 the size of Rocky Mountain’s. For shared area-wide expenses the rule of thumb is Rocky Mountain pays 3/4 of the expense and Yellowstone 1/4.
In 2016 Yellowstone’s budget is $1,369,767. “Mission Share” apportionments to local churches are likely to generate about 90% of the total budget, or $1,232,790. Total income has remained remarkably flat at about $1.2 million for many years. Since 2013 the budget has been built on a realistic projection of anticipated income, rather than on the requests and needs submitted. This has reduced the amount apportioned to the churches, but increased the percentage paid, resulting in a budget that is closer to actual income and expenses than previously. Rocky Mountain’s budget for 2016 is $5,600,000. It has grown slowly from $5.35 million in 2011. Rather than an apportionment formula, Rocky Mountain Conference asks local churches to contribute 13% of their adjusted income each month to connectional giving, called “Tithe Plus Mission” giving. Over the past 5 years the budget has been funded each year between 98 and 102%.
| Yellowstone Annual Conference | Rocky Mountain Conference | ||||||
| Year | Budget | % | Income | Budget | % | Income | |
| 2011 | 1,439,635 | 82 | 1,177,928 | 5,350,000 | 100 | 5,373,287 | |
| 2012 | 1,459,988 | 80 | 1,170,351 | 5,500,000 | 98 | 5,392,784 | |
| 2013 | 1,497,984 | 87 | 1,303,246 | 5,500,000 | 98 | 5,389,175 | |
| 2014 | 1,360,716 | 90 | 1,224,644 | 5,600,000 | 102 | 5,722,087 | |
| 2015 | 1,356,660 | 89 | 1,210,107 | 5,600,000 | 99 | 5,572,286 | |
| 2016 | 1,369,767 | 5,600,000 | |||||
Rocky Mountain Conference has improved its general fund contribution rate from 90% in 2010 to 100% for both 2014 and 2015, with a firm commitment to maintain 100% in the future.
When I arrived in 2008 Yellowstone Annual Conference was well on its way to paying 100% of its general church asking. At my recommendation, to help bring stability to the whole financial program of the Conference, it has settled at 90% since 2012, keeping slightly ahead of the denominational average. Commitment is high, however, to improving in the future.
ANSWER 3: Neither Conference carries significant debt or liability.
Pre-1982 Pension
A place some annual conferences have a large unfunded liability is in pre-1982 Pension obligations. A target funding level for this commitment is 130%. Both conferences are prudently well above 130%: Yellowstone at 154% and Rocky Mountain at 145%. Just as salaries are lower in Yellowstone than in Rocky Mountain, the 2016 past service rate for pre-1982 pension is $455 in Yellowstone, lower than the $558 in Rocky Mountain. When a merger of two conferences occurs, the General Board of Pension and Health Benefits does not insist that the past service rates for clergy coming from the two previous conferences be reconciled. Clergy who served in Yellowstone before 1982 could continue to receive pension based upon the Yellowstone past service rate. Clergy who served in Rocky Mountain could continue to receive the Rocky Mountain past service rate. Over time there will be fewer and fewer clergy affected by this portion of pension for service before 1982.
Other Pension and Benefits funds
The two conferences subsidize for retiree healthcare in different ways and at different levels. Yellowstone is funded at 73% with an unfunded liability of $597,271, or 27%. Rocky Mountain is funded at 30% with an unfunded liability of $6,578,287, or 70%. Both conferences have adopted Comprehensive Benefit Funding Plans and fund other pension and benefits at the rate required of all conferences.
| RETIRED CLERGY HEALTH | Yellowstone | Rocky Mountain |
| Assets | 1,648,021 | 2,826,757 |
| Actuarial Liability | 2,245,292 | 9,405,044 |
| Unfunded liability | -597,271 | -6,578,287 |
| Funded liability | 73% | 30% |
Arrearages for Insurance, Pension and Health
In Yellowstone Conference each local church is responsible for its own property and liability insurance, at levels established by the Conference Trustees. There is, therefore, no conference arrearage for property and liability insurance. However, there may be churches that are under-insured or un-insured for property and liability. Each local church is billed for its pastor’s pension and health insurance. There are no arrearages for these billings.
A few churches in the Rocky Mountain Conference fail to pay all their total costs for insurance, pension and health insurance. At the end of 2015 the total arrearages owed by local churches to the Conference totaled $296,870.
SUMMARY
Both conferences have robust and responsible volunteer and staff systems of financial management and accountability and are continuing to make concrete improvement in areas that are not functioning as well as they should.
As the two conferences get to know one another and consider a shared future, financial soundness is not an impediment. Both conferences have benefited from generous giving, prudent planning and sound management, standing them on solid financial ground.
So, when you hear me say that Yellowstone is facing viability concerns, it is not due to mismanagement, or poverty. It is about scale. Its size and numbers are not large enough to easily support the complex structure of an Annual Conference. But more about that later ...
Share your feedback about this and other Mission Shaped Future blogs online on the Mountain Sky Area Episcopal website.
In Yellowstone Conference each local church is responsible for its own property and liability insurance, at levels established by the Conference Trustees. There is, therefore, no conference arrearage for property and liability insurance. However, there may be churches that are under-insured or un-insured for property and liability. Each local church is billed for its pastor’s pension and health insurance. There are no arrearages for these billings.
A few churches in the Rocky Mountain Conference fail to pay all their total costs for insurance, pension and health insurance. At the end of 2015 the total arrearages owed by local churches to the Conference totaled $296,870.
SUMMARY
Both conferences have robust and responsible volunteer and staff systems of financial management and accountability and are continuing to make concrete improvement in areas that are not functioning as well as they should.
As the two conferences get to know one another and consider a shared future, financial soundness is not an impediment. Both conferences have benefited from generous giving, prudent planning and sound management, standing them on solid financial ground.
So, when you hear me say that Yellowstone is facing viability concerns, it is not due to mismanagement, or poverty. It is about scale. Its size and numbers are not large enough to easily support the complex structure of an Annual Conference. But more about that later ...
Share your feedback about this and other Mission Shaped Future blogs online on the Mountain Sky Area Episcopal website.
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