Conference adopts $17.7 million 2021 budget
By Erik Alsgaard
By a vote of 763 to 17, members to the 2020 Baltimore-Washington Annual Conference Session approved a $17.7 million spending and income budget for 2021. Of that $17.7 million, just over $13 million will come from local churches in Mission Shares (formerly called apportionments), a reduction of $1 million from 2020.
Finance and stewardship leaders on the Conference Council of Finance and Administration (CFA) went back to the drawing board several times in preparing the 2021 budget. This was due to the financial impact of the coronavirus pandemic on local churches, seen acutely in March, April, and May of this year.
In March, Mission Shares came in with a 21% shortfall from what was budgeted. In April, that dipped even lower, to a 31% shortfall. May rebounded slightly, but still showed a 23% shortfall.
The good news: for June, Mission Shares came in on budget.
CFA also authorized several adjustments to the 2020 spending plan earlier this year to help local churches make it through these unprecedented times.
Local church assistance was provided in March when the Board of Pensions announced a 3-month waiver of benefit payments that was complemented by Small Church Grants for local churches with no benefit obligations, said the Rev. Daryl Williams, CFA vice president and pastor at St. Paul UMC of Oxon Hill.
“The Trustees also offered 3-month deferrals for the churches that had Conference loans,” Williams said. “These immediate relief items for local churches were also supplemented by initiatives to set aside $615,000 from the 2020 budget to support emergency grants for any church that found themselves unable to pay a pastor’s salary during the crisis. Several resources were also made available to local churches to assist them with setting up on-line giving and stream online services.”
Many churches, Williams said, benefited from the receipt of funds from the Paycheck Protection Program (PPP). “For many churches, the 2.5 months of payroll support became an important funding stream as they faced the uncertainty of no longer worshiping in-person and closing their buildings to pre-schools and other tenants,” he said.
Also in March, CFA approved an 8% budget reduction that reduced the authorized expenses by $1.1 million, Williams said. Added together, CFA’s actions increased the 2020 expense reductions to $1.6 million, or 11.7% of the total budget.
The 2021 budget assumes a collection rate of 87.5%, according to Phil Potter, president of CFA. In other words, for every $100 of Mission Shares asked of the local churches, the conference expects to receive $87.50 in return.
Potter noted several items directly impacted by the new budget.
“First,” he said, “we believe it is appropriate to institute a staff salary freeze in 2021 in light of the high levels of uncertainty that factor into the pandemic. The original budget proposed a staff increase of 1.5% and the savings will be $77,000.”
Another expense reduction includes slowing down the debt payments on the Mission Center – which had been accelerated for years -- which will reduce those payments from $400,000 to $86,000 annually.
There are also some spending shifts for 2021, Potter said. The Board of Ordained Ministry funding is increased by $19,000, he said, to support the 5-year clergy- care intensive for 80 clergy in 2021. The total cost of this program per year is $112,000. Initial funding of $6,000 has been allocated to launch a new Clergy Care Initiative, and New Faith Expressions will increase funding from closed church sales reserves from $200,000 to $250,000.
After all this reduction, Potter said, it was good to note that “Ministry Teams continues to be 50% of the overall budget expenses” at the annual conference level.
This hard work of CFA was especially noted by Bishop LaTrelle Easterling. Speaking after the budget was approved, the bishop said how appreciative she was of their work.
“I just want to say that, instead of questions flooding our moderators (through the online platform), they were flooded with commendations for CFA,” she said. “Thanksgiving for Paul (Eichelberger, BWC treasurer) and his team, and all those persons who leaned-in to this very difficult moment and led us through very, very trying times.”
It’s a testament to the trust, the bishop said, that BWC members have placed in “those of us who were called to be caretakers of the resources that you diligently provide for the mission and ministry. Thank you very much.”
The Rev. Cary James, chair of the BWC’s Board of Pension and Health Benefits and pastor at Jones Memorial UMC in Washington, D.C., told the conference that they, too, had to adjust because of the pandemic.
The Board launched two relief initiatives in March to assist local churches, he said. The first was waiving pension and health insurance payments for local churches for three months. The total savings to 368 local churches with either full time or part-time clergy amounted to about $2.6 million, he said.
The second initiative was for small membership churches – those served by pastors serving one-quarter time – to receive grants. These grants total about $300,000 and went to 252 churches.
“The actions by the boards,” James said, “provided a common understanding that we were all together in this pandemic.”
James noted in his report that health insurance premiums for participants in the HealthFlex program were expected to go up in 2021. However, in early August, Wespath approved a refund of one month’s premiums – the first one in their history – which was significant enough that the BWC’s board rescinded the proposed rate increase. Thus, local churches will continue to pay, for the fourth straight year, $860 per month for health insurance. Participants, depending on family size, pay the rest.
The report was approved by conference members by a vote of 722 to 6.
Kim Ayres, the chairperson of the Commission on Equitable Compensation, said that their report included a 1.75% rise in the minimum salary for BWC clergy. In 2020, the base salary for full-time clergy is $44,892. In 2021, that amount will be $45,678. Incremental increases of $250 per year of service is added to the base for up to 15 years of service.
Conference members approved the report, 724 to 29.
After all the reports had been presented and approved, Bishop Easterling added a comment about the stewardship and financial leadership in the BWC.
"You know how they say, 'When you see something, say something'?" the bishop asked. "You don't often see diversity (in the leadership of these areas). You don't see diversity in terms of race, ethnicity, age, gender. And so, I want to just celebrate for a moment that we see all of that represented across the spectrum of those that are leading us in this way. Again, it is a testament to who we are as this conference. I'm very proud to make note of that. Thank you to the entire team for bringing us that report."
In other news related to finances, conference members approved the closure of seven churches. The seven are:
- Bells Chapel UMC in Dickerson, Md., Frederick District
- Boring UMC in Upperco, Baltimore Suburban District
- Deer Park UMC in Reisterstown, Baltimore Suburban District
- Forest Memorial UMC in Forestville, Greater Washington District
- Mount Carmel UMC in Brookeville, Central Maryland District
- Saint James UMC in Westminster, Frederick District
- Saint Luke UMC, Monkton, Baltimore Suburban District
Read the resolutions approved by the Annual Conference Session. Whenever a church is closed and then sold, any proceeds from the sale are distributed to foster new mission and ministry.
CFA Report AC 2020 (PowerPoint PDF)