Sunday, December 15, 2019 at 11:48 AM
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The Bottom Line

The Importance of Parish Financial Balance

At St. Hugo’s, we recognize that every strong, successful organization requires financial transparency and accountability in all aspects of resource management. Our parish is no different. We want our parishioners to be confident that we recognize our accountability for how we use the generous resources provided to us and that we are transparent in our disclosure of the same. Furthermore, we recognize we are accountable both for managing the costs and challenges faced by a parish of our size, and for disclosing to our parishioners the steps we are taking to act with fiscal responsibility.

During the preparation of our budget for fiscal year 2019-2020 (which begins on July 1), we have struggled to “balance our budget” because our Sunday offertory collections are flat compared to the prior year, while our expenses have continued to increase.  The parish budget is complex because we have a thirty-acre campus with six aging buildings, numerous ministries, a growing school, and (like all other Catholic parishes) are experiencing declining Mass attendance and participation.

In the coming weeks, we will be sharing information in The Herald about the diverse financial aspects of St. Hugo’s. We will try to shed some light on the costs we encounter, day-to-day processes, and other
behind-the-scenes financial information.


Week 1: The Herald (our weekly bulletin)

The cost of printing The Herald is covered entirely by the advertisers. Additionally, Liturgical Publications, Inc. (LPi), who prints our bulletin, typically returns a rebate to us on an annual basis based on the number of bulletin advertisers we have.  This rebate is used to offset a portion of the internal costs (staff time) to produce the bulletin.  

Therefore, it’s essential that you, our parishioners, patronize those who advertise in our bulletin and let them know that you saw their ad in The Herald.  Please thank them for advertising in the St. Hugo bulletin!

If you would like to advertise in the St. Hugo Herald please call 1-800-477-4574 or visit www.4lpi.com


Week 2: Parish Utilities

The St. Hugo campus is comprised of over 30 acres of land and six buildings:

· Church and parish office building

· Chapel

· Rectory

· School

· Convent

· Maintenance/Ladies of Charity building

Current Utility Costs

The average monthly utility cost for the entire campus is $19,000 (annual cost of $228,000). This includes the cost of electricity, natural gas, water, internet/phone service (the parish phone system is internet based), and trash collection.  Roughly 40% of this cost is for the school and convent; 60% of this cost is for the remaining buildings.

Costs such as these continue whether parishioners are here or not, and whether we have standing-room-only at Masses or a half-filled church. Because our utility bills do not take a vacation, it is essential that parishioners help ensure the financial health of our parish by continuing weekly offertory contributions even when they may be away. In this spirit, we ask that you might consider setting up automatic online giving via your credit card or bank account.  Please visit sthugo.org to register for online giving.

Reducing Utility Expenses


New LEDs installed in the Church

We are working hard to keep our utility costs in line. Here are some actions St. Hugo has taken over the past two years to reduce utility costs and consumption:

· Installed LED lights throughout the school building

· Installed LED lights in the parking lots

· Installed LED lights in the chapel

Here are some actions which are in process or planned for the near future:

· Updating existing LED lights in the church building and installing additional LEDs in fixtures which currently do not have LEDs

· Adjusting the temperature in the church sanctuary during weekdays when the church is not in use (higher in the summer; cooler in the winter)

· Reviewing all utility bills to ensure we have maximum non-profit discounts

· Placing timers on all school water fountains (so that water will not cool during times when no one is present in the building) and reviewing other areas where timers can be installed to reduce electricity consumption

· Asking people to remember to turn off lights when rooms are not in use

With your help, we are continuing to try to reduce our utility costs in order to ensure a healthy financial balance for our parish.


Week 3:  The Parish Budget

Our parish fiscal year runs from July 1 to June 30, and a significant effort is put into assembling the annual budget.  “Balancing the budget” for our new fiscal year (which started July 1, 2019) was especially challenging because our weekly offertory and other collections (i.e., Christmas) have decreased, while our expenses have continued to rise.

Why are costs rising?

· Normal inflation

· The cost of providing increased security for our campus

· The increasing cost to maintain and repair our aging buildings

· Salary increases to ensure retention of church and school staff

What have we done to “balance the budget”?

· A detailed review of all expenses occurred, and tough decisions were made regarding areas where we had to maintain existing budgets (no increases), and other areas where we had to cut the budget in order to accommodate rising costs in other areas.

· Meetings were held with the Worship, Christian Education, and Christian Service Commissions to review all expenses, and an approximately 10% reduction occurred in those areas.

· The decision was made not to replace the youth minister position in the near term.

· Minimal capital expense investments (building improvements, furniture, technology, etc.) have been budgeted for this year; a majority of the capital expenses budgeted are for the investment in our growing school.

· We have restructured some school staff positions.

· We have budgeted for a 2% increase in the Sunday offertory. Hopefully, parishioners who currently donate will heed the call to increase their contributions as they are able, and an increasing number of parishioners who do not currently donate to the parish will begin providing their support.
Fr. Tony will be addressing this issue with all parishioners in upcoming months.

Looking to the Future.

Maintaining financial balance at St. Hugo is challenging because, while we want to continue to offer many worship and evangelization programs, maintain our beautiful campus, provide a secure environment and outreach services, etc., we must face the reality of decreasing Mass attendance and a corresponding decrease in contributions. This reality is one we as a parish are working to address with renewed energy, passion, and creativity as we look with Christian hope to the bright future of our parish and of the Catholic Church.


Week 4: Campus Repairs

What campus repairs were performed in the past year?

With a thirty-acre campus and six aging buildings, St. Hugo’s routinely faces repair and maintenance projects around the campus throughout the year. While some of the numerous projects we have encountered this past year were planned, many were necessary due to unforeseen circumstances. Here are some of the repair and maintenance projects we had to tackle this past year, both planned and of the “emergency” variety:

· Replacement of the north and south entrances to the Church 

·Repair of the storm sewer catch-basin near the north entrance to the Church (pictured)

· Installation of landscape lighting along the rear Church stairway to provide a safer environment

· New boiler for the Rectory

· New dishwasher for the Convent

· Replacement of two windows in the School building

· Sewer line back-up in our School which resulted in the school being closed for two days. The cost of clean-up for this back-up is being covered by insurance, but St. Hugo’s must pay for the repair of an aging sewer line, which is currently in-process.

· Repair of the front steps of the School

· Replacement of carpet in the Rectory

· Roof repairs to all buildings (we have inspections made of the roofs on a routine basis and repairs are made to prevent leaks and to extend the life of the roofing material)


Emergency sewage repair work at the school


School hallway repairs after sewage line break

 

· Repair of Rectory basement wall due to leaks

· Various repairs to School building HVAC units

· Various plumbing repairs throughout the campus

· Repairs of the school kitchen freezer and the Church kitchen freezer

· Repair of the Church kitchen dishwasher

· Replacement of the Church baptismal font pump and heater

· Repairs to various stone and brick finishes around the campus

· Repair of Chapel sump pump

· Repair of Rectory garage door

· Replacement of Chapel bathroom toilet

· Replacement of the fan in the School gymnasium

How does the cost of campus repairs and maintenance affect our savings?

In our budget, we include an estimate for miscellaneous repairs. This past year, however, the cost of repairs exceeded our budget and we had to dip into savings to cover these costs.

Just as individuals and families need to have savings for emergencies, so it is with our St. Hugo family. This year, due to the large expense incurred in replacing the north and south stairs to the Church, our savings have been reduced substantially. We are in the process of actively attempting to restore our savings. Given the various emergency repairs and the tight budget we are facing for the coming year, this will be challenging. Still, as always, we are confident that our St. Hugo family will provide the support needed to keep our parish home in good repair as we face the future ahead.


Week 5: Church and School Endowments

What are the Church and School endowments?

The St. Hugo Church and School endowments were originally established in 1997.  An endowment refers to a non-profit institution’s investments (originally resulting from donations) of which only the resulting investment earnings may be used for a specific purpose, while the principal amounts must be kept intact.  Endowments are intended to grow the underlying principal over time, while using a portion of the earnings (interest, dividends and capital appreciation) for a specific purpose.

St. Hugo has two separate endowments, one for the Church and one for the School, which are invested in the Archdiocese of Detroit (AOD) Endowment Foundation. The AOD Endowment Foundation (Foundation) is a separate entity from the Archdiocese of Detroit and is segregated from all other accounts of the Archdiocese. All amounts in the Foundation are invested in a diverse portfolio of assets which are professionally managed and overseen by a board of trustees comprised of lay leaders and clergy.  For more information about the Foundation see:  https://www.aod.org/our-archdiocese/archbishop-allen-vigneron/sharing-the-light-communications/stewards-for-tomorrow/

When the endowment funds were established, the goal was to allow the Church fund to grow to five million dollars and the School fund to grow to two million dollars before any earnings were distributed from the respective endowments. These goals have been reached and endowment distributions have occurred for several years.

The Archdiocese calculates the allowable annual distributions which can be taken from the endowments. The current maximum withdrawal rate is 5.25% of the fund’s three-year average principal balance.  In other words, the Foundation averages each endowment’s principal balance for the three preceding fiscal years. It then makes available to the parish and school 5.25% of that balance for distribution.  The St. Hugo Finance Council reviews the amount of annual distributions and recommends a withdrawal amount.

How are endowment distributions used?

Distributions from the endowments are typically used for capital projects at the Church and School. For the fiscal year ended June 30, 2019, half of the Church endowment distribution was allocated toward the new north and south stairways; the other half of the distribution was used to replenish emergency cash savings. The School endowment distribution is being used toward the renovation of the School to address expanding enrollment.

Do the endowments mean that St. Hugo’s is “flush with cash” and does not need additional support?

Certainly not. The endowments are meant to grow over time and provide income to assist the parish in financial sustainability.  The endowments’ principal amount cannot be distributed, and the annual distributions are only a small fraction of what is needed to operate our St. Hugo Parish Community.  Think of an endowment like a retirement fund, where the principal is meant to last a very long time.  However, with endowments, the principal must last in perpetuity (unlike a retirement fund which is intended to last for the duration of retirement).

Can donations be made to the endowments?

Absolutely.  Donations made to either of the endowments will help to grow the principal and continue the legacy of St. Hugo’s.

What are the current values of the endowments?

At the fiscal year ended June 30, 2019, the value of the Church endowment was $5,838,681, and the value of the School endowment was $3,186,562.


Week 6: Online Giving & Text-to-Give

What is online giving?

St. Hugo’s has an online giving program so that parishioners and others may provide donations via their credit card or bank account.  This is a very convenient and secure method for supporting our parish. We currently have 378 parishioners who routinely utilize online giving to provide their financial contributions to the parish.  Because of the many advantages of online giving, it would be extremely beneficial if we could increase the number of those who participate. 

 

What are some of the benefits of online giving?

· Convenient:  You may schedule one-time payments or recurring payments via an easy-to-use website using your PC, tablet, or smartphone. You can then select the gift frequency which best meets your needs. Once your online giving account is established, you do not have to write weekly checks or have cash on hand for your donations!

· Safe and secure for donors:  The online giving tool is managed by Our Sunday Visitor. This online tool meets the highest industry security standards, has a high level of data encryption (for data at-rest and in-transit), and is routinely tested and certified.

· Safer for the parish:  Online donations eliminate the need for St. Hugo’s to handle cash and checks. This reduces the risk of fraud and eliminates safety concerns related to making cash deposits.

· Reduces overhead costs:  Online giving reduces the time and cost for our parish to administer Sunday offertory and other donations. Because the funds are directly deposited to St. Hugo’s bank, it greatly reduces the time spent processing checks and cash donations.

· Provides consistent support: As mentioned in previous articles, the parish bills do not take a vacation. By scheduling online donations, financial support continues even when parishioners are away. Online donations also allow St. Hugo’s to manage and predict our cash flow more accurately and efficiently.

· Credit card rewards and cash-back:  When donating via credit card, you can earn rewards and cash-back on your donations. This means, as you help St. Hugo’s, you can also help yourself.

What are some other features?

· Through online giving, you’re able to donate to other funds beyond the Sunday offertory. Examples include Tuition Angels, the Christmas collection, holiday flower funds, etc.

· Those who wish to enjoy the benefits of online giving while continuing to drop an envelope in the collection basket may still do so. Simply check the “electronic giving” box on your envelope.

 

Am I able to use “text-to-give”?

Once registered for online giving, you’re also able to use the text-to-give option. If you find this mode most convenient, you can text to donate to both regular offertory as well as to special funds. Simply text an amount to 248-331-8816 in order to donate to our regular offertory. For special funds, you can specify an amount followed by the fund designation (i.e., “30 angels” will provide a $30 donation to the Tuition Angels fund).

 


Week 7: Safety and Security

In response to the challenging security threats in our society today, St. Hugo has adopted a multi-faceted approach to campus safety, which includes the following:

· Awareness:  The most important part of any security plan is ensuring that people say something when they see something that “doesn’t seem right.” This includes seeing someone who appears out of place and suspicious, seeing someone doing something that is inconsistent (i.e. wearing a long coat on a warm summer day), seeing a suspicious vehicle, etc. Of course, this must be balanced with ensuring we are warm and welcoming to strangers and visitors, which is part of our core mission!

· Video surveillance:  We have video cameras throughout our campus and buildings which are recording all activity, and which are monitored.  The Bloomfield Hills Public Safety Department has real-time access to our cameras.

 

· Access control system:  We have an access control system which limits building entry so that only those who need to enter specific buildings or rooms have that access. This system also records information about all entries into buildings and rooms.

· Visitor traffic flow for the school:  This summer, we are moving the school office to the south side of the building and creating a check-in window in order to ensure that all visitors to our school come through a single entrance which is monitored and controlled.

· Lighting:  In recent years we have installed LED lighting in our parking lots and upgraded landscape lighting in order to increase visibility in the night time.

· On-site police presence:  St. Hugo has a close relationship with the Bloomfield Hills Public Safety Department. Given the proximity of St. Hugo’s to the Department, estimated response time in the case of an emergency is 2-4 minutes. In addition to normal patrols by the officers on duty, St. Hugo pays for on-site presence at the church, school, and religious education program.  This is an area of ongoing cost.

What are the major challenges we face
 with Campus Safety?

· Finding balance:  The desire to keep our campus safe must be tempered by our core mission, which is to be welcoming and open to those in need. The church building itself should be a “safe haven” from the stresses of the world. Additionally, as Christians we are called to make wise decisions, recognize the limitations of what we can truly control, and ultimately place our trust in God.

· How to pay for on-site police protection: The on-site police presence we now have is costly. Security is an area which was never a significant part of the St. Hugo budget. However, since 2018, the on-site presence of police has been consuming a large portion of our budget.

In the security survey taken in the fall of 2018, parishioners’ views were as follows:

· 60% of respondents valued police presence during Mass.

· Of those valuing police presence, 78% were willing to help fund the police presence via an increase in their Sunday offering.

Unfortunately, we have not seen that increase in the Sunday offertory.  In fact, we have experienced a decline in the Sunday offertory compared to the prior year. If you like what St. Hugo’s is doing related to security, and would like it to continue, your financial donations are the best way to show your support.

For those who would like to support the security efforts of the parish, we do have a separate online giving fund specifically for this purpose. Parishioners may access this through our online giving site:  https://www.sthugo.org/onlinegiving 

How secure are we?

We cannot be naïve about the threats of evil which are present in our world. On the other hand, we cannot live in fear. We must be wise and decisive in our actions; we must also trust the Lord and walk by faith. 

In the Gospel of John, Jesus leaves his disciples with these words of comfort:

“Peace I leave with you; my peace I give to you. Not as the world gives do I give it to you. Do not let your hearts be troubled or afraid.” (John 14:27)


Week 7: Campus Repairs & Maintenance – The Reality

When we talk about the St. Hugo budget, the area of Repairs & Maintenance is one of the largest expenses we have (14% of the total operating budget) due to our campus size and the six buildings we care for. Our campus and buildings require a great deal of attention and upkeep, largely due to the age of the structures. The original build dates and total size of each building are as follows:

· Chapel:  1936 (6,000 sf)

· School: 1940 (60,000 sf)

· Rectory:  1941 (7,400 sf)

· Convent:  1967 (11,400 sf)

· Maintenance Garage / Ladies of Charity Building:  1988 (3,800 sf)

· Church:  1989 (48,000 sf)

Our Maintenance Team –

Who They Are and What They Do

Our maintenance team is comprised of five full-time individuals who are responsible for the care and maintenance of all six buildings on the St. Hugo campus. Their responsibilities include:

· Opening of all facilities in the morning and locking of all facilities in the evening

· Assisting with School drop-off traffic control during the school year

· Setting up and taking down the Church Hall and Rectory before and after all events, including meetings, funeral luncheons, coffee and donuts, parish picnic, healing Mass, graduations, etc.

· Kitchen clean-up after all events

· Assisting with decorating of the Church, Chapel, and Rectory for holidays and various liturgical seasons

· Setting up and taking down of equipment related to special events and meetings at the School

· Setting up the Church patio furniture in the spring, storing the patio furniture in the fall

· Sidewalk snow removal and salting

· Making repairs to all facilities and coordinating more complex repairs with third-party trades (plumbers, electricians, painters, carpenters, HVAC technicians, etc.)

· Daily janitorial services and cleaning

· Assisting with columbarium inurnments

· Routine maintenance items in all our buildings, including changing HVAC filters, carpet cleaning, window cleaning, wall washing, etc.

· Caring for the Parish’s Chief Relationship Officer (Sunshine)

 

In 2018, our parish moved to an outsourced model for maintenance.  While the maintenance team is dedicated to St. Hugo’s, they are employed by True North Facility Services, a company that serves more than 10 other parishes across the Archdiocese of Detroit.  The benefits of our arrangement with True North include:

· Availability of supplemental maintenance personnel when needed for special events

· Professional training of our maintenance team

· Professional management and oversight of the team

· Increased opportunities for professional growth and advancement for the maintenance team

· Networking and idea-sharing opportunities for the team with peers from other parishes

 

In addition, a True North janitorial crew is responsible for the nightly cleaning of the School. This crew works closely with our maintenance team related to the care and upkeep of the School. There is also a housekeeper for the Rectory who handles cleaning and laundry, and a housecleaner who services the Convent.

Finally, we have a contract in place with a company which maintains the St. Hugo grounds and landscaping year-round and handles the plowing and salting of the parking lots during the winter.

A Final Word

Our parish is fortunate to have so many hard-working, dedicated individuals who daily (and nightly!) go above-and-beyond to help keep our campus in great shape and keep everything running smoothly. Next time you see a member of our exceptional maintenance team, be sure to smile and say, “Thank you!”

 

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