At its January meeting, the Vestry

1) accepted the proposal of the Finance Committee for the Chapel Renovation Fund and the Chapel Organ Fund;

2) learned that there is a $90,000 shortfall in the budget, that many line items are being frozen at 2007 levels, and discussed ways to address this concern;

3) reduced the cost-of-living raises from 2.5% to 0% for clergy and staff, with the exception of any increase necessitated by the requirements of the diocesan minimum for clergy and the exception of the nursery assistants, and further resolved to meet again in executive session in April to review the status of the budget;

4) passed the proposed budget, with pledge revenue adjusted and the pay plan as modified by Vestry motion;

5) adopted the 2008 clergy housing allowance resolutions; and

6)authorized the Sr. Warden to sign for the Chapel of the Cross as guarantor for the proposed rental lease of the Episcopal Church of the Advocate, after addressing concerns of the Parish Administrator.

Following a bag supper, the Vestry met in executive session in the parish library to discuss the pay plan for the 2008 budget. Vestry members present were Melody Savage (Sr. Warden), Ann Henley (Jr. Warden), Terry Eason, Chip Hill, Clare Baum, Gail Cloud, Sandra McClaskey, David Dill, Tony Hawkins, Ele Ross, and Jimmy Satterwhite. Also present were Barney Varner (Sr. Associate Treasurer) and Nancy Kelly (Clerk).

Ms Savage opened the executive session at 6:30 p.m. and then turned the floor over to Mr. Hill, Chair of the Finance Committee.

Mr. Hill began by stating that the Finance Committee met recently to discuss the budget as a whole. As a result of the $90,000 shortfall in the request budget, the Finance Committee decided to hold all lines where possible to 2007 levels. The originally recommended 3% pay increase was cut to 2.5%. Both of these measures are in line with how the diocesan budget is being treated this year.

Mr. Varner then explained that further measures to deal with the shortfall include the transfer of $45,000 from the Program Fund to the operating budget. Of this amount, $20,000 is justified as support for the Episcopal Church of the Advocate. (The additional support for ECOTA will come from the memorials fund.)

Mr. Varner went on to say that $1,341,994 in pledges is needed to support the budget. Pledges totaling $1,254,060 have been received to date.

Mr. Hill said that, based on 2007 budget results, the Finance Committee is optimistic about revenue projections. He then invited discussion of the pay plan.

Ms Baum commented that personnel raises shouldn’t be automatic, but rather based on the economy. This would indicate that there should be no pay raise this year.

Mr. Hawkins commented that in the current economy there is no certainty that pledges will be honored.

Mr. Varner said that a 0% pay increase would save about $16,000, to which Ms Baum added that cuts must be made wherever possible.

Mr. Dill reported that he had spoken with Annual Giving Chair Charlie McClaskey, who had indicated that comments during the Annual Giving Campaign indicated that the economy was a major factor in parishioners’ decisions on pledging this year. He then asked what the strategy is for dealing with the shortfall. He indicated that freezing line items is only a one-year solution and said that the Vestry needs to have a strategy in place for dealing with future years.

Mr. Hill stated that there are three major obligations that dominate the budget: support of the Episcopal Church of the Advocate, support of the Johnson Intern Program, and the Diocesan Share. Support has been pledged to ECOTA and JIP, and the parish has never failed to meet the Diocesan Share in full.

Mr. Hawkins said that how the Vestry approaches the financials is important. The Vestry must underscore the value of the parish and its programs to parishioners. Ms Henley added that the parish has not dealt effectively with stewardship as both a fiscal and a faith discipline.

Mr. Dill again stated that he would feel more comfortable discussing the pay plan if the Vestry had a strategy, plan, and context in mind.

Ms Henley asked if the Vestry ever does a mid-year budget review. Mr. Eason recalled having done so in the case of adding a staff member mid-year. Mr. Hill responded by saying that the Finance Committee plans to review the budget quarterly.

Mr. Eason, commenting on the personnel areas of the budget, said that there has been much increase and shifting in staff positions that has contributed to the sizeable staff budget. He added that the position of Director of Stewardship and Development will begin to have a major budget impact in two years. Ms Savage said that, in any case, no staff member is overpaid, and she reminded the Vestry that the Finance Committee has recommended a 2.5% across-the-board salary increase for clergy and staff, with the exception of hourly assistants. Mr. Satterwhite said that he would feel uncomfortable offering a raise less than the increase in the cost-of-living.

Ms Savage, returning to the proposal to freeze salary levels, said that this would not apply to David Frazelle, whose salary must meet the diocesan minimum.

Mr. Eason asked about the position of Christian Formation Assistant. The plan to have Boykin Bell increase her hours during the sabbatical of Gretchen Jordan would put her hours over 1000 per year, which would require that she be enrolled in the pension plan. Mr. Eason reminded the Vestry that when the assistant position was created, it was specifically limited so as not to require a pension.

Mr. Varner summarized the issue as being not an expense problem, but rather a revenue problem.

Mr. Eason asked what increase would be needed to keep Mr. Frazelle at the diocesan minimum, to which Mr. Varner replied that it would be in the range of 1%. Mr. Eason then raised the possibility that a 1% salary increase be applied to all clergy and staff.

It was moved by Ms Baum and seconded by Mrs. McClaskey that the Vestry reduce the cost-of-living raises from 2.5% to 0% for clergy and staff, with the exception of any increase necessitated by the requirements of the diocesan minimum for clergy and the exception of the nursery assistants, and that this Vestry meet again in executive session in April to review the status of the budget.

Following discussion, the Vestry agreed to defer a vote on the motion until the budget as whole is discussed in the business meeting to follow.

The focus session concluded at 7:15 p.m., and the Vestry moved to the more formal part of the agenda.

The January meeting of the Vestry was held in the parish library on Thursday, January 17, 2008. Vestry members present were Melody Savage (Sr. Warden), Ann Henley (Jr. Warden), Terry Eason, Chip Hill, Clare Baum, Gail Cloud, Sandra McClaskey, David Dill, Tony Hawkins, Ele Ross, and Jimmy Satterwhite.. Also present were Stephen Elkins-Williams (Rector), Bill Joyner (Deacon), John Koch (Director of Stewardship and Development), Barney Varner (Sr. Associate Treasurer), and Nancy Kelly (Clerk).

The Rector presided and opened the business meeting at 7:15 p.m.

Bible Study

Mr. Hawkins led the Bible study for the evening. The Gospel reading appointed for the day was John 4: 1-15. Mr. Hawkins concluded the Bible study with a prayer.

Timekeeper

Mr. Joyner was asked to serve as timekeeper.

PARISH CONCERNS

There were no parish concerns expressed.

There were no corrections made to the minutes of the focus session of December 13 nor to the minutes of the Vestry meeting of December 13.

It was moved by Mrs. McClaskey, seconded by Mr. Dill, and passed unanimously, that the Vestry approve the minutes of the focus session of December 13 and the minutes of the Vestry meeting of December 13.

The sole task on the list is to remain on the addendum, pending completion.

The single item on the Consent Agenda (attached), the proposal (attached) for the chapel renovation and organ funds, was removed from the agenda so that it could be discussed more fully.

Mr. Elkins-Williams reviewed the background for these projects. The chapel renovation, in addition to wall work, included rewiring of the chapel to bring it up to code, both of which needed to be completed before the new chapel organ was installed.

Mr. Varner said that a major contribution to the organ was a gift from a parishioner in the form of an annuity of which the Chapel of the Cross is the irrevocable beneficiary upon the donor’s death. The current value of the gift is $173,197, and it has a guaranteed value of $270,000.

Ms Savage said that the proposal before the Vestry is the result of the best thinking of Mr. Varner, Treasurer Gary Monroe, Co-Chair of the Capital Campaign Committee Reid Conrad, and Diocesan Treasurer John McGee. The Capital Campaign Committee also supports the proposal.

It was moved by Mr. Hill, seconded by Mr. Eason, and passed unanimously, that the Vestry accept the proposal for the Chapel Renovation Fund and the Chapel Organ Fund.

Referring to item 1 of the report, Mr. Elkins-Williams said that the monthly payment for ECOTA’s proposed rental space averages about $2500 per month. Mr. Hawkins said that the financial responsibility of the Chapel of the Cross needs to be more closely defined with a time frame. He suggested that the Chapel of the Cross should be responsible only after ECOTA has been in default for 90 days. Mr. Elkins-Williams reported that Parish Chancellor Bill Daniell expressed concern about responsibility for any damages.

Mr. Hill asked if the Chapel of the Cross is ECOTA’s only option as guarantor. He feels uncomfortable because it would put yet another obligation on the parish. Mrs. McClaskey asked if ECOTA has approached the other sponsoring parishes, to which Mr. Elkins-Williams said that shared responsibility would complicate the matter.

Mr. Hawkins suggested that ECOTA be asked to set aside $100 per month in the event they default on the lease.

It was moved by Mr. Satterwhite, seconded by Mr. Dill, and passed with ten (10) in favor and one (1) opposed, that the Vestry authorize the Sr. Warden to sign for Chapel of the Cross as guarantor for the proposed rental lease of Episcopal Church of the Advocate, doing so after addressing concerns of the Parish Chancellor.

Deacon

Mr. Joyner said that he will attend Diocesan Convention on Friday and Saturday, January 18-19.

Senior Warden
The Sr. Warden’s report is attached.

Junior Warden
The Jr. Warden’s report is attached.

Ms Henley expressed pleasure that Mrs. Ross has agreed to be nominated for Jr. Warden.

Parish Administrator

Treasurer
Attached is the Treasurer’s Narrative Report for January 2008.

Mr. Elkins-Williams asked what is the projected date for the year-end report, to which Mr. Varner replied that the Treasurer is waiting for information from the diocese and for information from the Parish Administrator on accrued vacation time.

Finance Committee
The report of the Finance Committee is attached. Also attached is the 2008 Budget Worksheet.

Mr. Varner stated that in the areas of Work Outside the Parish, Parish Program, and Program Support nearly all items were held at 2007 levels. In the area of Staff, salary increases were lowered from 3% to 2.5%.

Many lines decreased in the area of Physical Plant. Ms Baum explained that the significant decrease in the Property and Liability Insurance line item is the result of moving coverage to Church Insurance Corporation and raising the deductible to $10,000.

Mr. Hill reminded the Vestry that the pledged support for Episcopal Church of the Advocate is in its final year and that the sum committed to this support will come from the Program Fund and the Memorials Fund.

Mr. Elkins-Williams observed that the 2007 budget was a stretch, but the parish accomplished the funding goals. He re-emphasized that parish expenses are sound but that revenue is the problem, even if the budget is frozen at 2007 levels. He expressed the hope that the creation of the position of Director of Stewardship and Development and the ongoing Annual Giving Committee work will result in an improved pledge base.

Mr. Hill expressed concern that the general economy is a big issue that will continue to challenge the parish finances.

Ms Savage reviewed the motion from the executive session, that as a result of the budget shortfall, salaries for clergy and staff be frozen at 2007 levels, with the exception of the requirement to meet the clergy diocesan minimum, and the plan to convene in executive session again in April to review the pay plan. She expressed concern also about the increases recommended for nursery workers and about the requirement of enrollment of the Christian Formation Assistant in the pension plan due to additional hours during the sabbatical of the Christian Formation Director.

Mr. Elkins-Williams commented that there would be no requirement to keep the Christian Formation Assistant on the pension plan in 2009, because her hours would then fall again below the 1000 hours level, but he wondered if she would ever be able to collect on the pension contribution from 2008.

Mr. Hawkins suggested that, in order to avoid the pension enrollment requirement, the hours for the Christian Formation Assistant be limited and that she accomplish what she can within that limit. He suggested that perhaps she could be stipendiary, to which Ms Cloud replied that it would not be professionally acceptable to make her stipendiary. Mr. Elkins-Williams expressed concern that limiting the hours of the position would result in a decrease in program. Mr. Hawkins expressed concern that a precedent would be set by entering the position, even temporarily, in the pension category.

Mr. Elkins-Williams raised the issue of the proposal for the position of Assistant Organist-Choirmaster, which the Vestry last month approved in theory. Mr. Satterwhite asked about the possibility of a volunteer for this position, to which Mr. Elkins-Williams replied that Van Quinn doesn’t think this would be a likely solution. It was suggested that individual parishioners might be asked for special support for this position, to which Mr. Elkins-Williams suggested that it isn’t advisable to ask for special financial support for staff positions.

Ms Savage proposed that the salary for the music intern line item, the savings realized by reducing the supply organist line item to 2007 levels, limiting the salary for the position to $6000 (the lower end of the suggested range), and delaying hiring for the position until August 1 would make it possible to fund this position. Following discussion, it was decided to delay consideration of funding this position until the Vestry budget review in April.

Mr. Eason asked why some parishioners discontinued pledge support for 2008, to which Ms Henley said that there were a variety of reasons but no discernible trend.

Mr. Hawkins said that he would like more time to examine the budget proposal. Ms Savage said that the Finance Committee has already thoroughly examined the possibilities and has made its recommendations to the Vestry.

Ms Savage emphasized that the Vestry has already resolved to examine and reconsider this budget in April. She acknowledged that at that time the Vestry may need to make additional cuts or, more optimistically, may find a way to increase line items.

Mr. Dill suggested that the Finance Committee should set priorities for where cuts can or should be made, to which Mr. Hill replied that the Vestry should come up with suggestions for priorities to forward to the Finance Committee.

Mr. Elkins-Williams said that he would leave his housing allowance at the 2007 level, and he contacted Mrs. Jamieson-Drake, who said that she would reduce her housing allowance to $36,500.

Mr. Dill asked if anticipated income from endowments and investments has been adjusted for market conditions. Mr. Varner responded that adjustments have not been made, acknowledging that this could be an additional area of concern.

Mr. Hill said that all of the minor savings suggested don’t address the $90,000 shortfall. He then stated that an impact can only be made by going after the big-ticket items (ECOTA, JIP, and Diocesan Share) or by cutting program and staff.

Mr. Dill returned to the concept of having a strategy in mind. He suggested that such a strategy might include working for more revenue, making line item cuts, and tapping the Program Fund.

Mr. Hawkins asked about the possibility of charging a nominal fee to those community groups that are provided meeting space in the parish buildings. Mr. Elkins-Williams likened this to a decrease in outreach giving.

Mr. Eason asked why certain line items were kept at the 2007 level when, in fact, they did not spend the budgeted total in 2007. Mr. Elkins-Williams explained that it would be unwise to penalize those groups that were vigilant about their spending. Mr. Eason then suggested that the Vestry needs to thank those who underspent their 2007 budget, explain that they are being funded at the same level in 2008, and that the Vestry would appreciate continued vigilance over spending.

Mr. Elkins-Williams, returning to the proposal for a 0% salary increase, reminded the Vestry that the diocese has kept all line items at 2007 levels with the notable exception of salaries, which it has increased by 2.5%, and he cited for consideration as well the 2.3% increase in the cost-of-living.

Mr. Eason said that a 1-1.5% salary increase somewhat addresses the cost-of-living increase and, at the same time, would indicate an attempt to be fiscally responsible.

Ms Henley suggested that the Annual Meeting would be a good time to address the budget issues.

Mr. Hill asked about the possibility of a second asking, to which Mr. Elkins-Williams replied that the burden for covering the shortfall should be on those who haven’t yet pledged.

The motion from the executive session was presented for a vote.

It was moved by Ms Baum, seconded by Mrs. McClaskey, and passed with seven (7) in favor and four (4) opposed, that the Vestry reduce the cost-of-living raises from 2.5% to 0% for clergy and staff, with the exception of any increase necessitated by the requirements of the diocesan minimum for clergy and the exception of the nursery assistants, and that this Vestry meet again in executive session in April to review the status of the budget.

It was moved by Mr. Hill, seconded by Ms Savage, and passed unanimously, that the Vestry pass the proposed budget, with pledge revenue adjusted and the pay plan as modified by Vestry motion.

The Sr. Warden and the Chair of the Finance Committee will determine how to notify employees about the 0% salary increases. The Vestry will also share with the parish that it hopes to be able to reinstate the recommended salary increases after its April review of the budget and will thank those who carefully monitored line item expenses in 2007.

Buildings and Grounds Committee
The report of the Buildings and Grounds Committee is attached.

Personnel Committee
The report of the Personnel Committee is attached.

Clergy Housing Allowances

Attached are the resolutions for housing allowances submitted by the clergy for 2008. The IRS allows ordained clergy to claim a certain percentage of salary as a housing allowance, which is not taxed. The clergy must be able to document by year-end that these are actual expenses. The housing allowance includes utilities, but it can’t exceed the fair rental value of the property. The matter is between the clergy member and the IRS, and the parish assumes no liability, although the parish must be informed of the amounts of the elections.

It was moved by Mr. Eason, seconded by Mrs. McClaskey, and passed unanimously, that the Vestry adopt the 2008 clergy housing allowance resolutions as presented.

Global Mission Committee

The report of the Global Mission Committee is attached.

Ms Henley reported that former parishioner Cameron Graham is now a missionary in Ecuador, and Mr. Elkins-Williams shared a story about an impressionable experience reported by Ms Graham that took place when she was growing up in this parish.

Mr. Elkins-Williams also reported that he and Martha Dill recently attended a dinner with the Bishop of Botswana.

Hospitality Ministry

The report of the Hospitality Ministry is attached.

Social Ministry Committee

The report of the Social Ministry Committee is attached.

Announcements

Mr. Elkins-Williams passed out the current issue (attached) of Vestry Papers, which focuses on Vestry meetings.

There are six candidates for Vestry and, therefore, no preferential ballot will be needed. Candidates are Valerie Bateman, Sankey Blanton, Ann Craver, Harriet Gaillard, Doug Kelly, and Bill Stockard.

Mr. Elkins-Williams offered a prayer and the meeting adjourned at 9:30 p.m.

LIST OF ATTACHMENTS

(Attachments are available in the library for review.)

Ms Savage and Mr. Hill - Notify employees of 0% salary increase, communicate to parish the hope for reinstatement of recommended salary increases following April review, and thank those responsible for monitoring expenses in 2007.

Ms Savage - Sign for Chapel of the Cross as guarantor for proposed ECOTA rental lease, after addressing concerns of Parish Chancellor.