Prepared by Tom Rosen, Board Treasurer
The purpose of the treasurer’s report is to provide transparency about our current financial position. This report includes considerable detail –you will have access to most of the information that the Finance Committee and the Board use to make informed finance-related decisions.
Note, we often refer to FY19 and FY20. FY is short for ‘fiscal year’ or financial year, which is different from a standard calendar year. Bet Ha’am starts the fiscal year on July 1 each year and ends the year on June 30 of the following year. The most recent fiscal year began on July 1, 2019 and will end June 30, 2020.
There are sets of documents:
- Monthly Summary for FY20: In the expanding boxes below, you will find a standard monthly financial package, which is the documentation reviewed by the finance committee and board. There is a short, written summary about the health of our financial operations following the links to the financial reports. We do not prepare a monthly report for the first two months of the fiscal year (July and August) as there is minimal meaningful detail during the summer.
- Financial Health Report for 2019-2020. This document will help you understand how retiring our mortgage does not change our operating budget; why we all need to contribute to onegs; why we are creating a legacy committee.
- LED Initiative. Read why (and how) we are converting to LED bulbs.
- October Financials, Balance Sheet
- October Financials, P&L
- Notes for P&L
- October Financials, abbreviated P&L
We have completed four months of the fiscal year.
P&L: The P&L is on a modified cash/accrual basis. On the income portion, for the most part, amounts shown are the cash received for the current fiscal year. Billed but not paid amounts are not recorded. Primarily, the items that have outstanding billed amounts are school fees and dinners, machazit hashekel (count me for membership) and nediv lev (gifts from the heart) and rental income. On the expense portion, most recurring monthly items, including payroll, are posted when paid. We pay all of our bills as soon as they are received and have no long-term contracts (except for employment). Program expense, most maintenance expenses, and any other significant expenses are adjusted to the proper fiscal year.
Income: The Total Unrestricted Donations income (line 19) is slightly ahead of last year, with the Annual Fund (16) doing quite well, and General Donations (13) a bit behind. Machazit and nediv lev (lines 38 & 39) are ahead of last year, primarily because we sent out the donation letter earlier and because we have about 20 new families this year. Rental Income (43) is also doing well. Reimbursed Purchases (51), which was abnormally high last year, was offset by Professional Development (157) last year. Otherwise, nothing else significant to report at this early time.
Expenses: Oneg (Shabbat reception) expense (line 79), a perennial problem, has improved this year as Steve and Lynda Hubbell have been successfully recruiting sponsors—please help them. This can be done in honor of someone’s birthday, an anniversary, a yahrzeit (remembrance of a death), etc. You can either bring in food for the oneg or make a donation and the office can do the shopping and setup. Garden & Outdoor Maintenance (90) is a bit over due to plant replacement. Inspections (97) is over because of the need for an occupancy review to satisfy the fire marshal. Medical expense (142) is much more than last year, but within this year’s budget. Pension (150) is much lower because we are paying monthly instead of prepaying for the year as we had in the past. For the same reason, Total Salaries & Benefits (152) is lower than last year. Nothing else is really noteworthy at this time.
The year-end net budget number is a deficit of $44,590. It is way too early to make any guess as to how we compare to the budget. The Net Ordinary Income number (line 180) is much better than last year, mostly due to the earlier mentioned machazit and nediv lev income and paying the pension monthly. The numbers in column “M” denote additional clarification on the Notes page.
Balance Sheet: All checking/savings amounts are accurate. Of most interest, the top portion (lines 8 to 69) present the bank, individual fund, and investment account balances. The mortgage balance (ZERO) is on line 109 and outstanding pledge balance is on line 73.
The operating cash position of $253,262 is $36,149 more than last year at this time. (Operating means funds for our day-to-day operating expenses. It doesn’t include capital campaign or restricted funds.) Again, I attribute this positive event to the earlier mentioned machazit and nediv lev income and to paying the pension monthly. This is the second highest month-end cash position since I have been keeping records (July 2006)! In general, since most of the income arrives at the beginning of the fiscal year and the expenses are spread throughout the year, I would expect the cash position to decrease a bit as the year progresses.
Capital Account: We retired the mortgage last spring. There is about $185,000 in pledges due from capital campaigns, and there is about $91,000 cash in the capital account. All of the cash in the capital account is earmarked for specific purposes (owed to operations, owed to the school program, and earmarked for the upgrade of the Wi-Fi). We also have been using the capital money for some programming, such as Tikkun Olam (social justice) and school retreats, and for major maintenance items (boiler replacement, security items). What is remaining in pledges is not nearly enough for near-term needs. The following is worth repeating from an earlier report of mine. It is my greatest concern.
As the building, now eleven years old, ages, there will be a much greater need for repairs. Pointing the brick on the old school building, to the tune of around $50,000, has been one item we have postponed for a few years. There will be the need to replace the air handlers in a few years for around $20,000. In the next ten years, the divider wall, exterior cladding, concrete floor, elevator, school glazing and windows, and electrical systems will need to be repaired or replaced. Estimates are around $150,000. In the next twenty years, the skylight glazing, roof, and boilers will need work or replacement. Estimates are around $200,000. And that is just what we know. Healthy organizations our size should have an endowment of at least three million dollars. An endowment this size would spin off about $120,000 a year—to help fund a maintenance replenishment fund and to help reduce our reliance on increased annual contributions to balance the budget. An endowment also makes it easier to survive a few lean years. Bet Ha’am has $41,000 in an endowment fund.