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Following a bag supper, the Vestry met in focus session with Chris Moran, Executive Director of the Interfaith Council. Vestry members present were Ted Vaden (Sr. Warden), Paul Carew (Jr. Warden), Bert Liverance, Suzanne Sauter, Robert Wright, Dick Taylor, Kevin Trapani, Bunnie Collura, George Evans, Joe Khoury, and Jack Scarborough. Also present were Stephen Elkins-Williams (Rector), Martha Hart (Deacon), Bill Joyner (Deacon), Barbara Hastings (Parish Administrator), John McGee (Treasurer), Barney Varner (Sr. Associate Treasurer), and Nancy Kelly (Clerk).

The Rector opened the discussion at 6:30 p.m. by introducing and welcoming to the meeting Mr. Moran, who has been with the IFC since 1984 and has served as its Executive Director since 1995.

Mr. Moran began by stating that to date ten congregations and the town of Carrboro have volunteered to host IFC guests during the renovations of the homeless shelter. Four additional congregations are deliberating the issue. He commented that the Chapel of the Cross is the most organized congregation in preparing for this outreach. He added that the Chapel of the Cross is scheduled to host overnight guests from July 18 to July 31.

Mr. Moran said that the IFC hopes to learn much that will be of long-term benefit to the organization, such as training of staff and security and safety issues. He hopes that the result of this shared plan for housing IFC guests will be that the IFC will gain more regular volunteers.

Mr. Vaden asked if the IFC has purchased the Main Street facility, to which Mr. Moran replied that it has done so. Mr. Vaden followed up by asking if this facility is where the kitchen will be relocated, and Mr. Moran replied that this is the plan. The IFC wants the kitchen facility to be accessible to clients and it wants the men's facility to be independently located at another site. Mrs. Hart asked what will happen to the shelter if the kitchen moves to Carrboro. Mr. Moran said that the IFC plans to move back into the shelter once the renovations are complete. Mr. Liverance asked if the food preparation area will be separate from the current IFC shelter, to which Mr. Moran replied that there is a general misconception that the kitchen is for the homeless, when in fact it is for anyone who is hungry. Mrs. Hart added that many of those who come for the evening meal come directly from work.

Mr. Scarborough asked if there is medical staff available for those clients with chemical dependency. Mr. Moran replied that the IFC does not have medical staff, but it is in contact with agencies that can help in this area.

Mr. Elkins-Williams asked if it is difficult to find employment for the clients, and Mr. Moran acknowledged that it is indeed very difficult in the current economic climate, that there is more competition for the work available, and that wages are not adequate. Mr. Scarborough asked if there might not be many opportunities for less-skilled labor in the construction of UNC North. Mr. Moran suggested that this might depend on the contractor hired by UNC.

Mr. Moran was asked to comment on the insurance coverage for the interim during IFC renovations. He said that the company, Best Western, has an A+ rating. There is a $1,000,000 liability package that can be transferred from congregation to congregation. This liability package includes property liability. Mr. Trapani expressed concern about the relationship with the church's own insurance company. If there is damage or loss of life, who would be responsible for the damages? Mrs. Hastings said that the church also has its own $1,000,000 liability coverage. Mr. McGee, stating that $1,000,000 is not much coverage, suggested that the church might consider term coverage for this time period.

Mr. Taylor asked about staffing issues. Mr. Moran said that the IFC will have a paid staff person on site at all times but that the church will need to provide three volunteers, two of whom would go home at 11:00 p.m. and one who would stay all night. All of the clients must leave the church at 7:00 a.m. and take with them all personal items. Showers and other services will be available elsewhere. The church is expected to supply a morning snack only.

Mr. Elkins-Williams expressed his appreciation for Mr. Moran's willingness to come to discuss this issue with the Vestry, and Mr. Moran replied that he appreciated the opportunity to do so.

The focus session concluded at 7:00 p.m., and the Vestry moved to the more formal part of the agenda.

The February meeting of the Vestry was held in the parish library on Thursday, February 19, 2004. Vestry members present were Ted Vaden (Sr. Warden), Paul Carew (Jr. Warden), Bert Liverance, Suzanne Sauter, Robert Wright, Dick Taylor, Kevin Trapani, Bunnie Collura, George Evans, Joe Khoury, and Jack Scarborough. Also present were Stephen Elkins-Williams (Rector), Martha Hart (Deacon), Bill Joyner (Deacon), Barbara Hastings (Parish Administrator), John McGee (Treasurer), Barney Varner (Sr. Associate Treasurer), and Nancy Kelly (Clerk).

Executive Session Summary
The Vestry met in executive session at 6:30 p.m. to consider salary increases for clergy and staff. By unanimous vote, the Vestry approved the recommendation of the Personnel Committee to provide increases of 2.1 percent to clergy and staff for the year 2004.

Also in executive session, the Vestry agreed by consensus to:

1. Continue the stipend through June 30 for the Publications Assistant to provide support and staff assistance to the campus ministry program. This will provide the Associate for Campus Ministry the opportunity to review the role of the Publications Assistant in campus ministry and the need, if any, for further assistance after June 30. The Personnel Committee will make a recommendation on that matter by no later than the May 2003 Vestry meeting.

2. Direct the Finance Committee to examine the costs of the publications program of the parish, comparing those expenses to parishes of similar size, with the goal of making savings or improved efficiency. The review would consider personnel expense, cost of equipment and materials, and the feasibility of outsourcing some or all of the publications function.

Opening
Following an executive session of the Vestry, the Rector opened the meeting at 7:00 p.m..

Devotions
Mr. Carew led the devotions In the Early Evening from the Book of Common Prayer, including a reading from John 10: 22-31.

Selection of Timekeeper
Dr. Khoury agreed to serve as timekeeper for the meeting.

PARISH CONCERNS

Ms Sauter said that several parishioners have asked her about the source for the $25,000 gift approved by the Vestry in November 2003 to the Diocese of North Carolina for the communications function of the diocese. Mr. Vaden confirmed for her that the source of the funds was not the operating budget, but rather donations from contributors.

The following corrections were made to the minutes of the Vestry meeting of January 15:

p. 6, fourth paragraph, third line, change "only through December" to "only through September 2004."

p. 6, last line, change "currently being held in the fund for building and land" to "currently being held in the fund for capital needs."

There were no corrections to the minutes of the executive session of January 15.

It was moved by Ms Sauter, seconded by Mr. Carew, and passed unanimously, that the Vestry approve the minutes of the Vestry meeting of January 15 as amended and that it approve the minutes of the January 15 executive session of the Vestry.

The single item of the addendum has been completed.

There were no items on the Consent Agenda.

Rector
The report of the Rector is attached.

Referring to item 7 of his report, the March Vestry meeting, Mr. Elkins-Williams said that he has arranged for the Vestry to meet in the Morehead lounge. Directions to this facility will be included in the March Vestry packet.

Mr. Elkins-Williams reported that the changes in clergy responsibilities are going well. Tammy Lee is still doing some supervision and planning with youth, although she is now officially the Associate for Campus Ministry.

Sr. Warden
The report of the Sr. Warden is attached.

The Annual Meeting will be held on Sunday, February 22, at 10:00 a.m. in the church. Vestry members will be introduced to the parish, as will candidates for Vestry.

The Vestry election will be held on Sunday, March 21, with the outgoing Vestry members serving as tellers for the election.

Mr. Vaden thanked Mr. Carew and Tedd Pratt for their careful and complete analysis of the information gathered in the recent parish survey.

Jr. Warden
The report of the Jr. Warden is attached.

Mr. Carew encouraged Vestry members to register (on line at endowedparishes.org) for the CEEP Regional Meeting to be held at the Chapel of the Cross on Saturday, February 28, from 8:30 a.m. until 2:30 p.m..

The pledge total for 2004 now stands at about $958,900. Mr. Carew said that he still has a few more calls to make to parishioners who have pledged in the past but have not yet done so for 2004. Mr. Elkins-Williams praised Mr. Carew's dedication to this important work on stewardship.

Parish Administrator
The report of the Parish Administrator is attached. Attached also are the 2003 Parochial Report to the Diocese of North Carolina and a memo outlining the plan for housing IFC guests for a two-week period during IFC shelter renovations.

Mrs. Hastings called attention to the 2003 Parochial Report, stating that the diocese now requires this document to be formally adopted by the Vestry and that Vestry members need to sign a form indicating their approval.

It was moved by Mr. Vaden, seconded by Mr. Scarborough, and passed unanimously, that the Vestry approve the 2003 Parochial Report to the Diocese of North Carolina.

Mrs. Hastings then circulated the form for Vestry members, Treasurer, and Clerk to sign.

Referring to the section of the report on focus sessions, Mrs. Hastings indicated that some changes have been made. The Vestry will meet in focus session with administrative volunteers in March, with leadership and financial stewardship being a single focus session in April.

Mrs. Hastings reported that there has been concern expressed about the cost of the leases on equipment. She will study the matter, but meanwhile, the church is locked into these leases until June 2006.

The May meeting of the Vestry has been moved up a week to May 13.

Referring to the attachment about housing IFC clients, Mrs. Hastings said that the church is in good shape for this outreach program, with plans already in place. Mr. Taylor said that we should determine whether our insurance in general is adequate to cover this program. Mrs. Hastings said that church insurance coverage was recently renewed and that she will send Vestry members a summary of coverage. Mr. Wright reminded the Vestry that a recent Vestry study resulted in increased coverage.

Treasurer
Attached is the Treasurer's Report narrative and the Combined Balance Sheet as of January 31, 2004.

Mr. McGee reported that the 2003 budget came in almost on target. $35,219 in transfers of funds was used to balance the budget.

Mr. McGee, in comparing 2003 and 2004, stated that both revenue and expenses for January are lower this year than last year.

Pledges to date are above target. The budget was adopted based on $950,000 in pledges, and the pledge total now stands at $958,908.

Mr. McGee advised the Vestry that the organ fund will start to become an issue mid-year.

The church will continue to keep the books for the Episcopal Church of the Advocate until fall. ACS policy states that we can do this only for one year.

Mr. McGee reiterated the need for written procedures on the way we invest and how these investments are accounted for. Mr. Vaden asked how soon the investments approved by the Vestry earlier in the meeting will be made. Mr. McGee replied that he hopes to have this completed within three weeks.

Finance Committee
The report of the Finance Committee is attached. Also attached is a resolution on the recommendations of the Investment Committee.

Mr. Wright indicated that there have been some changes in clergy discretionary funds along with the changes in clergy responsibilities and titles. Mr. Varner noted that the figures for discretionary funds for the Associate for Campus Ministry and for the Association for Parish Ministry are reversed and will be corrected in the February balance sheet.

Buildings and Grounds Committee
The report of the Buildings and Grounds Committee is attached. Also attached is the proposed Charge to the Chapel Committee.

Mr. Liverance reported that improvements to the sound system in the church (re-programming of the system) will begin on March 4.

Mrs. Hastings, referring to item 2 of the report, parlor renovations, said that the committee is looking at the furniture pieces we now have and at fabric samples for re-upholstering some furniture, as well as considering what additional furniture might need to be purchased.

Discussion turned to item 3 of the report, the proposed charge to the Chapel Committee. It was moved by Mr. Trapani, but failed for lack of a second, that the Vestry approve the proposed Charge to the Chapel Committee. Mr. Taylor suggested the charge be amended to read the Chapel Organ Committee. Mr. Elkins-Williams observed that it is crucial to determine what is the relationship between the Chapel Organ Committee and the Chapel Committee. Mr. Taylor observed that any dispute that would arise between these two committees would come to the Vestry for resolution. Mr. Vaden and Mr. Liverance will work with the chairs of these two committees to determine areas of responsibility and to draft a charge that is more concise and specific.

Personnel Committee
The report of the Personnel Committee is attached.

Ms Sauter began by presenting to the Vestry a proposal for a sabbatical policy for professional program staff. At present, this includes the Organist-Choirmaster and the Director of Christian Education. In the proposed policy as stated in the report, all references to "Professional Lay Staff" should instead read "Professional Program Staff."

Mr. Liverance asked why such a sabbatical policy is seen as necessary. Ms Sauter replied that a sabbatical policy would provide program staff with the time to improve their skills. Mr. Elkins-Williams added that there are both preventative reasons and restorative reasons for providing sabbatical time: Burn-out is prevented, and improvement of skills influences the future work of the individual.

Mr. Evans asked how we account for the additional costs incurred during sabbaticals. Mr. Elkins-Williams replied that in the past there have been no additional costs associated with clergy sabbaticals, because other priests and non-stipendiary clergy have provided coverage for the responsibilities of the clergy member on sabbatical. He acknowledged that there would be some additional cost for supply organists during a sabbatical for the Organist-Choirmaster. Ms Sauter added that the timing of a sabbatical might also lessen the impact on staffing and additional costs.

Mr. Taylor suggested that we need to take care of our staff all of the time, not just every five years, to which Mr. Elkins-Williams replied that a sabbatical is just one way in which we do so. The Director of Christian Education, for example, has time annually for continuing education.

Mr. Vaden asked when the five-year qualifying period would begin, to which Ms Sauter replied that it would begin from the date of full-time employment.

It was moved by the Personnel Committee and passed unanimously, that the Vestry approve Personnel Policy 7.14, the provision for sabbatical time for professional program staff, as proposed and discussed.

Ms Sauter called attention to the issue of hiring parishioners for staff positions. The Personnel Committee recommends that there be no formal policy to prohibit hiring parishioners. Mr. Wright commented that it is useful to have this clarification, and Mr. Elkins-Williams stated that he is in agreement with this recommendation..

Referring to the section of the report on informing clergy and staff about the cost of benefits, Mr. McGee said that this information is essentially available in the budget. He added that these notifications have already been sent out.

Investment Committee Report
Attached is the report of the Investment Committee.

Bill Farley, Chair of the Investment Committee, joined the meeting to report on the committee's review of how best to invest parish funds not deposited in the Diocesan Common Trust Fund.

Mr. Farley stated that the committee had been asked to review the management of all parish funds. This report addresses the "surplus" funds, those not invested in the diocesan fund. The committee will evaluate the performance of the diocesan fund at a later date.

Mr. Farley explained that under unitrust guidelines, an organization takes out a set percentage of the fund each year. This is especially beneficial to non-profits.

The committee suggests adoption of an investment pattern for some portion of the surplus funds of the parish. The committee recommends that enough cash be held available to cover six months of no investment income. With this in mind, the committee recommends that $300,000 be retained for such purposes and that $700,000 be invested in two Vanguard life style funds. The advantage of these funds is that they are indexed, the parish is relieved of the burden of monitoring the funds, and the funds are readily available. These funds are close to the risk profile of the Diocesan Common Trust Fund. The committee further recommends the unitrust model of taking out only 5% per year. In addition, strong audit procedures must be set up.

Mr. Elkins-Williams asked that since the $700,000 in invested funds would be readily available, is it necessary to retain $300,000? Mr. McGee replied that it would probably not be necessary but that cash flow issues make it advisable. Mr. Vaden added that cash flow problems will likely increase when payments on the new chapel organ begin in 2005.

Mr. Farley continued by stating that the Finance Committee has received all of the recommendations of the committee. He added that the Finance Committee needs to develop carefully detailed investment policy statements.

Ms Sauter suggested that some parishioners might express concern that the indexed funds should include only socially responsible companies. Mr. Farley replied that if certain companies are to be avoided, the fees would increase. Mr. Trapani added that this is part of why we need an investment policy. Mr. Evans asked if the Diocesan Common Trust Fund invests only in socially responsible companies. Mr. Wright replied that there is a committee concerned with this issue, but it has been inactive for some time. Mr. Farley stated that the recommendations of the Investment Committee are a very passive investment style.

Mr. Elkins-Williams concluded the discussion by saying that he is encouraged by the fact that the parish is moving ahead on this matter.

It was moved by the Finance Committee and passed unanimously, that the Vestry approve the recommendation of the Investment and Finance Committees that $700,000 of assets not currently invested in the Diocesan Common Trust Fund be invested in equal parts ($350,000) in two Vanguard Funds, Life Style Moderate Growth (VSMGX) and Life Style Conservative Growth (VSCGX), and that an annual disbursement of 5 per cent of the fund value be made available on a quarterly basis, and that it instruct the Treasurer to invest the funds in accordance with this motion.

Mr. Vaden expressed thanks to the committee for its work in developing these recommendations.

Johnson Intern Program
Attached are the proposed Articles of Incorporation of The Johnson Intern Program, Inc.

Mr. Vaden stated that the proposed articles of incorporation are the first step in allowing the Johnson Intern Program to attain 501(c)(3) status. Such status should make the program more attractive to some funding sources. The proposed articles allow the program to remain associated with the church.

Mr. McGee asked if the church would continue to keep the books for the Johnson Intern Program. Mr. Varner added that the church can't keep the books in the same manner as it currently does if the Johnson Intern Program has its own tax ID. Mr. Taylor responded by saying that the program will not become a separate entity until its board meets and establishes by-laws. The program would also need to apply for a separate tax ID. Mrs. Hastings expressed concern about staffing issues if the church continues to be responsible for maintaining the books of the Johnson Intern Program.

It was moved by Mr. Vaden, seconded by Mr. Taylor, and passed unanimously, that the Vestry approve the proposed Articles of Incorporation of The Johnson Intern Program, Inc.

Respectfully submitted,
Nancy F. Kelly
Clerk of the Vestry

LIST OF ATTACHMENTS

(Attachments are available for review in the library.)