Unitarian Universalist Church of Arlington Board of ...api.ning.com/files/db4JtL*UowEJujKfkeFKnhD9A8rRdczqB7dkJKrOYx8... · Unitarian Universalist Church of Arlington ... Shelly Thompson

Unitarian Universalist Church of Arlington

Board of Trustees Meeting Minutes

January 20, 2015

Attendees: Board of Trustees (Stephen Brannon, Chair; Paula Bendl Smith; John Bohman; Wendy Jessup via remote participation; Ken Marshall; Gretchen Menn; Janice Morris; Mary Pike; Juliet Purll); Joan Perry (Secretary); Rev. Aaron McEmrys (Senior Minister); Rev. Dr. Linda Olson Peebles (Minister of Faith in Action); Brian Smith (Church Administrator); Rev. David Pyle (District Executive, Joseph Priestly District)

1. Call to Order, Chalice Lighting, and Check-in (7:32pm) The board read aloud the UUCA Congregational Covenant.

2. Consent Agenda APPROVED A) Minutes of 16 December 2014 Board Meeting

3. Previous Action Items’ Status

# Person Responsible

Action Status

1 Board Members up for reelection

Inform the Nominating Committee if they will be running for a position on the Board of Trustees

DONE

2 Paula Bendl Smith

Get final approval from board via email on poster design and send to printer

Approved, print for February 17

3 Steve Brannon Send Brief Update on Board Projects and Committees to board via email

DONE

4 Rev. Aaron Provide rewritten parts of Interpretations of Executive Limitations 4.5 Protection of Assets

DONE

4. Generative Conversation: Board Evolution (Steve Brannon)

Board members discussed how they are growing and changing as leaders, and the board discussed how it is growing and changing as a group. Trustees talked about relational practices, understanding of church governance, growth, and progress.

5. Interpretation of Executive Limitation 4.2 Membership (ATTACHMENT 1)

After discussion of Interpretations of Executive Limitations 4.2 Membership, Mary Pike made a motion (seconded by John Bohman) to find the Executive's interpretations of 4.2 reasonable. PASSED

6. Interpretation of Executive Limitation 4.5 Protection of Assets (ATTACHMENT 2) After discussion of Interpretation of Executive Limitations 4.5 Protection of Assets, Ken Marshall made a motion (seconded by Mary Pike) to find the Executive's interpretation of 4.5 reasonable. PASSED

7. Monitoring Executive Limitations 4.3 Church Groups and 4.8 Endowment Rev. Aaron stated we are not in compliance with 4.3 since this limitation has never been monitored. His monitoring report described how and when he plans to come into compliance. After discussion of the Monitoring Report for Executive Limitation 4.3 Church Groups (ATTACHMENT 3), Mary Pike made a motion (seconded by John Bohman) to accept the report and request a follow-up report from Rev. Aaron in March. PASSED

After discussion of Rev. Aaron’s Monitoring Report for Executive Limitation 4.8 Endowment (ATTACHMENT 4) showing compliance, John Bohman made a motion (seconded by Paula Bendl Smith) to accept the report. PASSED

8. Congregational Sponsorship Statement for Shelly Thompson

Shelly Thompson began her internship in Berkley, CA with Rev. Aaron. She will be with UUCA another 2 years. After discussion Mary Pike made a motion (seconded by Wendy Jessup) that the UUCA congregation agree to sponsor Shelly Thompson. PASSED

9. Audit Committee Update (Paula, Ken, Gretchen) (ATTACHMENT 5)

The Audit Committee provided a report to the board providing background about the audit, information about actions taken, conclusions, and implications. It was decided that the board would submit further questions to the Audit Committee by January 27th.

10. Linkage Update (Wendy, Janice, Juliet)

The linkage planning group has found an Organizational Development Consultant who will help the board create a linkage project with the congregation. He is familiar with Policy Governance and is dedicated to making a difference at UUCA. The group will arrange a planning meeting with him and invite the other members of the BOT.

11. Financial Report (Brian Smith) (ATTACHMENT 6)

UUCA is still projecting a significant deficit. The Board and Rev. Aaron discussed the possibility of having to reduce the scope of our overall ministry if the vision the church holds for itself is not met equally in financial contributions.

12. Upcoming Linkage Opportunities

A. Steve reminded the board about upcoming linkage opportunities related to

dreaming, leadership, and stewardship.

13. The meeting adjourned at 10:12pm

ACTION ITEMS # Person

Responsible Action Deadline

1 Board Formulate questions about the audit, and email them to the board.

January 27

2 Wendy, Janice, Juliet

Arrange a meeting with the Organizational Development Consultant and invite other Trustees

February 17

3 Paula Print poster of policy 2.1.2 to be posted in the Board Room as a reminder of governance focus and emphasis.

February 17

4 Rev. Aaron Follow up Monitoring Report for Executive Limitation 4.3 Church Groups

March 17

ATTACHMENT 1

4.2 Membership

Policy. The Executive shall not allow members’ relationship to the Church to become unclear or unarticulated. Accordingly, the Executive shall not: Policy 1. Fail to articulate to the membership the Church’s religious identity and mission as to who we are, what we believe, and what we do. Executive Interpretation:

We will effectively communicate the religious identity of the church, especially as it relates to values and mission to the congregation across age and other identity/developmental spectrums. We will also strive to communicate these things beyond our church walls in ways that help our moral owners, community “stakeholders” and others know us better.

Indicators:

UUCA’s religious identity, mission and values will be clearly and regularly articulated in:

x Worship x On our web site x In other church communications, like Connections and on

Facebook. x Children’s RE programming

Metrics:

Communicated in one or more ways to the congregation at least monthly. Executive will report annually, and direct inspection by the Board of some of these areas may prove effective – like in the area of worship, for example.

Policy 2. Fail to articulate and promote the meaning and expectations of membership in serving “the purpose of the Church” (Bylaws Article III.);; Executive Interpretation:

We will clearly and regularly articulate the meaning and expectations of membership, especially as it relates to serving the mission of the church.

Indicators:

Executive will report annually that expectations and meaning of membership explicitly articulated and affirmed/reaffirmed by congregation.

Executive will report annually that expectations and meaning of membership explicitly articulated in “New UU” and other “welcoming” type events and activities.

Metrics:

This occurs at least twice annually.

This occurs at least monthly.

Policy 3. Consider a person a member unless they have stated a commitment to support the mission of the Church, agreed to abide by the Congregation’s covenant, made a pledge of financial support, and signed the membership book; Executive Interpretation:

Prospective members will state their commitments, affirm the Covenant and commit to a practice financial support before signing the membership book.

Indicators:

Executive will report annually that such a process is being effectively used.

Metrics:

100% of members follow this process.

Policy 4. Allow persons to retain membership status if they fail to make a financial contribution to the Church for two consecutive years; or Executive Interpretation:

We will have a process to identify and inform members who are not following this policy that their membership status is in jeopardy. We will remove such people from membership as necessary at least annually.

Indicators:

Executive will report annually on this process.

Metrics:

We will use this process and “clean our rolls” accordingly at least annually.

Policy 5. Fail to provide pathways to motivate Friends to become Members. Executive Interpretation:

We will develop and maintain clear, accessible and motivating pathways for people to move from seekers and visitors to members of the congregation.

Indicators:

Existence of programs like “New UU” and “Visitor Orientation.”

Metrics:

Programs and communications designed to serve as pathways will be offered at least monthly and will be reported on annually by the Executive.

ATTACHMENT 2

4.5 Protection of Assets

Policy. The Executive shall not allow the assets of the Church to be unprotected, inadequately maintained, inappropriately used, or unnecessarily risked. Executive Interpretation:

The Executive is responsible for the overall well-being of the organization and its assets in regards to its ability to legally and safely carry out its mission.

Metrics and Indicators:

UUCA remains a recognized business without any encumbrances.

Accordingly, the Executive shall not:

Policy 1. Fail to insure reasonably against theft and casualty losses, corporate liability, and personal liability of Board members, Officers, and staff; Executive Interpretation:

Maintain adequate insurance, fire protection and lock systems


Summary of adequate levels of insurance coverage, as defined and advised by a licensed insurance agent, and complete insurance package available per Board’s monitoring schedule. Existence of functioning fire and lock systems within the building.

Policy 2. Expose the Church, Board of Trustees, Officers, staff or volunteers unnecessarily to claims of liability; Executive Interpretation:

Operate business of church within the laws of the state and federal governments; maintain safe building conditions.


Continuation of incorporated status and legal right to do business. Nonexistent lawsuits or injuries from building negligence.

Policy 3. Risk the nonprofit status of the Church; Executive Interpretation:

Maintain non-profit status by guarding against church staff or programming making political statements and by carefully vetting ventures resulting in unrelated business income.


Continued existence with non-profit status

Policy 4. Risk the reputation of the Church as an ethical organization of high moral standards within the community and the wider denomination; Executive Interpretation:

The Executive will ensure the staff and leaders are aware the Church has a positive reputation that needs protection. The Executive ensures his/her own role protecting the Church’s reputation through interpretations established in 4.1, 4.4., and 4.5.9.


Observation of staff and leaders. Compliance with 4.1, 4.4., and 4.5.9.

Policy 5. Allow historic assets, intellectual property, and Church records to be exposed to potential loss or significant damage; Executive Interpretation:

Protect current and archived records (hard copy and electronic) from permanent damage/unrecoverable loss.


Written policy detailing consistent and reliable backup of all electronic records/files. Physical archives maintained under lock and key.

Policy 6. Allow Church facilities to be used by groups and individuals in ways not sanctioned by written policies; Executive Interpretation:

Maintain and follow written policies regarding proper facility usage.


Existence of said policy, date of last update, and complete policy available per Board’s monitoring schedule

Policy 7. Allow groups and individuals to use the name of the Church, its banner, logo, or its website in ways not sanctioned by written policies; Executive Interpretation:

Approve use of Church brand materials by individuals and groups and monitor materials for non-sanctioned use.


Report to Board instances of non-sanctioned use and actions taken.

Policy 8. Receive, process, or disperse funds under controls insufficient to meet the Board appointed auditor’s standards, other governmental standards, or regular business standards and practices; or Executive Interpretation:

All financial transactions will follow generally accepted accounting practices.


Auditor’s management letter will not show any deficiencies in internal control that would be considered “material weaknesses.”

Policy 9. Purchase goods or services without reasonable protections against conflict of interest, without appropriately soliciting comparative prices, bids, or proposals, or without balancing reasonable factors such as cost, benefit, and quality.

Executive Interpretation:

The Executive will use his/her professional judgment and research to vet purchased goods or services in order to prevent risking the reputation and financial well-being of the Church


Monthly financial statements. The Executive will disclose findings of conflict of interest.

ATTACHMENT 3

4.3 Church Groups – Monitoring Report, January, 2015

As this is a new interpretation under Rev. Aaron, Ministry Teams and Church Groups will soon begin the process of reporting per the language contained in this interpretation. We are aware of no instances of church groups operating in ways that are not consistent with our legal and contractual obligations.


Church groups will understand and be able to articulate how the purpose and activities of their group are aligned with UUCA’s Mission and Ends. Such groups will also understand and be able to articulate

the scope of their charge and its limits, such as our values, Covenant and legal and contractual obligations.

Metrics & Indicators:

1. Pertinent grounding documents, such as UUCA’s Values, Mission, Ends will be readily accessible to congregants, groups and lay leaders. A metric for compliance is for at least 90% of UUCA groups to receive this information annually.

a. January, 2015 – these documents are available to congregants, but have not yet been specifically and directly distributed to leaders of groups. Starting on January 31, leaders will receive this information in person and via email.

2. Ministry Teams will report annually on how their activities and purposes align with UUCA’s Mission and Ends as part of self-evaluation process. Metric: 75% group compliance with this process.

a. January, 2015 – beginning of January 31, leaders will receive instruction and information about this process. They will be invited to complete the first half by the end of February and then complete the follow up self-evaluation in June.

3. Indicator is number of groups complying with this limitation. Metric: There will be zero instances of church groups engaging in activities that are not consistent with UUCA’s legal and contractual obligation.

a. We are aware of no violations of this policy. 4. Indicator: Number of non-members holding positions of undue influence. Metric: There

will be zero instances of non-members holding positions with undue implicit or explicit influence on congregational life or decision making or non-members holding formal leadership positions within UUCA Ministry Teams.

a. We do not currently have data on this. This is one of the data points we expect to collect from the self-reporting process groups will begin at the end of January.

ATTACHMENT 4

4.8 Endowment

Policy. The Executive shall not fail to reserve the corpus of the endowment fund for the long-term financial security of the Church.


The Executive interprets “corpus” to mean the balance of the endowment fund is at least equal to the annual budget.

The Executive interprets “long-term financial security” to mean the endowment continues to contribute to and support the long-term fiscal plan established in 4.8.5:

The Executive shall not operate without a long-term fiscal plan;

Executive Interpretation: The Executive will maintain a long-term fiscal plan that will show an accurate projection of the church’s finances given history, patterns, and other analytics.

Metrics and Indicators: Long-term fiscal plan will incorporate annual operating budgets with contributions to designated reserve and replacement funds, and outlays of funds to pay for facilities maintenance/replacement plan.


The endowment fund balance is found in the monthly financial statements and the annual audit, both of which are accessible to the Board.

Attached is the December Balance Sheet showing the current EF balance. Audit to be presented to Board in January 2015.

Accordingly, the Executive shall not:

Policy 1. Use endowment funds for purposes other than for religious development, education, and training, special projects, community outreach, social action, ethical concerns, major denominational projects, and other religious and societal matters that align with the Board’s Ends (Policy 1), or for large unanticipated emergency financial needs;


The Executive interprets this to mean that the endowment fund can be used for anything the Church supports or needs.


The Executive will inform Board of intent to use funds.

According to the Board minutes, the Executive has not made any formal requests to use EF funds.

Policy 2. Spend or borrow endowment funds without Board approval;


The Executive interprets this to mean that the Board approves transfer of funds to the Executive but does not approve/disapprove of specific expenditures.


The Executive certifies compliance with the Board twice annually.

The Executive has not made any transfer of EF funds.

Policy 3. Plan for annual endowment outlays of more than 4% of the endowment fund balance. As an exception, the Executive may exceed this amount to refinance the mortgage in the year 2017.


The Executive interprets this to mean that he/she will not budget more than 4% of the endowment fund balance for annual requests.

The Executive has the authority to transfer more than 4% of the endowment fund in order to meet the refinancing requirements in 2017, under consultation of financial advisors.


Annual operating budget will not contain a transfer of more than 4% of the endowment fund.

Current, approved Annual Operating budget does not contain an EF transfer.

Policy 4. Allow the endowment balance to be less than 100% of the annual budget. As an exception, the Executive may plan a balance of not less than 50% to refinance the mortgage in the year 2017.


The Executive interprets this to mean that the endowment fund balance cannot end a fiscal year with a balance less than 100% of said fiscal year’s approved operating budget.

The Executive has the authority to transfer more than 4% of the endowment fund in order to meet the refinancing requirements in 2017, under consultation of financial advisors.


The Board will have access to both the current annual operating budget and the year-end financial statements showing the balance of the endowment fund.

Attached is the December Balance Sheet showing the current EF balance. The balance is $1,614,202. This fiscal year’s approved operating budget is $1,537,221.

ATTACHMENT 5

Audit Committee Report to the UUCA Board Jan. 11, 2015

Members: Ken Marshall, Gretchen Menn, Paula Bendl Smith, Steve Brannon, (ex officio)

Background

Committees of the Board ordinarily prepare policy alternatives and implications for Board deliberation and are usually convened for the short term. The June 2014 Board minutes reflect that David McTaggart reviewed a proposal by the Audit Committee to revise the Executive Limitation about an audit every year by an outside accounting firm. The Board approved the proposed change to Executive Limitation 4.6.8 to have an outside audit every other year and an internal audit during the off years. In doing so, the Board noted how very helpful the internal audit had been to the Board in its work.

Actions Taken

An audit of UUCA’s finances for the year ending June 30, 2014 was conducted by the UHY firm in the fall of 2014.

The audit committee reviewed the 2014 UUCA Audit financial statement and management letters submitted by UHY/ CPA dated December 22, 2014. On January 11 Chad Ohlandt, Brian Smith and Beth Enriquez met with the committee and discussed the committee’s questions.

Conclusions and Implications

No entries were observed by the auditors which were considered significant or unusual. Several very material adjustments were required to justify balances for the years ending in June 2013 and 2014. After review of management letter and in consideration of the explanations given by UUCA financial staff, the audit committee came to the following conclusions and recommendations:

x Material adjustments made to correct balances at the end of 2013 and 2014 were necessary to bring bookkeeping in line with auditor recommendations for depreciation and internal fund transfers related to construction . The auditor noted that the transfers had a zero net effect but could unintentionally overstate revenue. The adjustments will make future financial statements easier to understand.

x All material adjustments recommended by the auditor have been made.

x The auditor recommended a yearly audit or a financial review in years between audits. Given the value of the 2013 internal audit by a committee of the Board, a review of practices of other churches, and the cost of a yearly audit the committee concluded a full external audit every year was unnecessary.

x The committee requested that staff ask UHY for a description of an off year financial review and a cost estimate for: 1) a multi-year contract for audits every other year and 2)a financial review in the years in between. This should be compared to UUCA’s existing contract with UHY.

Prepared by Paula Bendl Smith

ATTACHMENT 6

December 2014 Revenues

· Attached is “Dec 2014 Summary…”

· Pledges and Contributions had a strong month totaling $232,569. P&C are roughly $70,000 short of the same point last year due to a week October and November.

· Services Auction fell short of its goal of $37,000 by $4,870.

· Mistletoe Mall fell short of its goal of $4,500 by $1,500

GTP

· YTD: $81,776

December 2014 Expenses

· Attached is “Dec 2014 Summary…”

· Expenses projected to be on budget.

· Aaron and Brian are exploring ways to reduce expenses throughout the fiscal year by cutting staff hours by closing the building on certain days.

Audit

· Brian and Beth met with Steve, Chad, and the Audit Committee to discuss the final financial statement and letters from UHY.

Run Date 1/15/2015 001 Unitarian Universalist Church of Arlington, VA Page 1Time 16:29:26 Fiscal Year Beginning 7/1/2014

Budgeted Financial Statement for Period 06 December 50.00%Revenues and Expenses Summary Report

Description Actual for Period Actual YTD Budget Annual Budget % Bud Balance Act PY Period Act PY to DateREVENUE -- GENERAL OPERATING FUND4099 Pledges & Contributions 232,391.81 733,041.67 1,258,700.00 58.24 525,658.33 251,616.15 806,123.004129 Fundraising Revenue -1,074.25 36,902.67 46,500.00 79.36 9,597.33 3,498.64 41,164.954139 Rental Revenue 6,438.37 41,021.61 113,500.00 36.14 72,478.39 10,315.53 37,593.774159 Program Revenue 1,395.21 1,602.21 7,000.00 22.89 5,397.79 .00 50.004199 Other Revenue -3,930.49 91,303.49 24,000.00 380.43 -67,303.49 18,654.03 61,040.81

-------------------- -------------------- -------------------- ------------ -------------------- -------------------- --------------------TOTAL REVENUES 235,220.65 903,871.65 1,449,700.00 62.35 545,828.35 284,084.35 945,972.53

Staff 96,430.74 545,189.35 1,066,523.00 51.12 521,333.65 76,202.42 482,462.68Church Office 23,425.88 38,850.25 64,250.00 60.47 25,399.75 10,980.70 33,436.17Ministry & Worship 4,233.31 19,288.77 20,800.00 92.73 1,511.23 5,893.37 19,422.78Children & Youth Ministry 378.26 7,203.45 17,360.00 41.49 10,156.55 .00 1,133.42Member Support 261.77 5,281.52 21,600.00 24.45 16,318.48 2,241.15 9,547.29Communications 155.90 2,131.43 13,120.00 16.25 10,988.57 140.57 1,685.30Faith in Action & Outreach 39.40 8,288.31 12,500.00 66.31 4,211.69 17,886.37 61,286.90Our Wider Movement .00 15,214.50 37,768.00 40.28 22,553.50 12,675.00 36,757.50Buildings & Grounds 17,907.45 81,562.53 153,300.00 53.20 71,737.47 10,822.08 66,101.44Mortgage 10,485.00 62,910.00 130,000.00 48.39 67,090.00 10,485.00 62,910.00

-------------------- -------------------- -------------------- ------------ -------------------- -------------------- --------------------TOTAL EXPENDITURES 153,317.71 785,920.11 1,537,221.00 51.13 751,300.89 147,326.66 774,743.48

******SUMMARY******TOTAL REVENUE 235,220.65 903,871.65 1,449,700.00 62.35 545,828.35 284,084.35 945,972.53TOTAL EXPENDITURES -153,317.71 -785,920.11 -1,537,221.00 51.13 -751,300.89 -147,326.66 -774,743.48

-------------------- -------------------- -------------------- ------------ -------------------- -------------------- --------------------NET 81,902.94 117,951.54 -87,521.00 -134.77 -205,472.54 136,757.69 171,229.05

Documents

Unitarian Universalist Church of Arlington Board of ...api.ning.com/files/db4JtL*UowEJujKfkeFKnhD9A8rRdczqB7dkJKrOYx8... · Unitarian Universalist Church of Arlington ... Shelly Thompson