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Report of the California-Pacific Strategic Financial Planning Task Force

newsBrothers and Sisters of the California-Pacific Conference,

Blessed New Year to all of you!  May 2014 be the year when we fully experience the reign of God among us!

At the 2013 Session of our Annual Conference, Bishop Minerva G. Carcaño delivered a state of the conference report in which she shared with you that she had invited our United Methodist General Council on Finance and Administration to assist us in addressing our own financial administration.  While the findings of the GCFA were difficult to receive, she reported to you that she would be gathering a group of our conference leaders to help us address the concerns raised by the work of the GCFA.  She further pledged to you that she and these conference leaders would develop a strategic plan and report back to you about our work at the beginning of this year.  This is our report.

Our Strategic Financial Planning Team has been meeting and working since last September.  We have addressed each of the GCFA findings.  The major strategic steps we have taken include the following by area of concern:

Financial Administration – Our Executive Director of Finance and Facilities has worked with her staff and our Council on Financial Resources in the development of clear fiscal policies and procedures.  She has also led us in reorganizing our conference financial accounts in a manner that better assists us in providing transparent accounting of the conference’s funds.  With others from our task force she is helping us address the management of stagnant funds.  In addition, she and her staff have worked diligently to assure that all designated dollars are forwarded to the appropriate accounts and offices in an efficient and timely way.   In collaboration with our Executive Director of Connectional Ministries, she has helped us develop a reporting process as well as a new format for our conference budget that we hope will also contribute to transparency and efficiency as we strive to be about our mission and ministry through our Conference Essential Ministry Teams.

Pension and Health Benefits – Currently, there is a $30.2 million unfunded liability for retiree healthcare.  GCFA noted in their audit findings that there are no assets to fund the liability. They stated, “Although the conference has been able to keep up with yearly requirements to date, since this liability exists, future annual payments will start growing significantly as the retirement age of the pastors the fund represents gets closer. This amount will create a substantial financial stress upon the conference.”

In response to this concern, our Conference Board of Pensions has directed a series of meetings and is doing considerable research in order to make recommendations about future retiree healthcare that will provide care to retirees and spouses with long term sustainability and the current financial state of the annual conference in mind.  Recommendations will be made to our 2014 Annual Conference Session, including recommendations pertaining to the Lynch Funds.

GCFA also noted concern about an apparent Pension Fund Obligation to the annual conference due to the gap between the pension that local churches are to pay and what they actually pay.  While all obligations to the General Board of Pensions and Health Benefits, including all clergy pension accounts, are up to date, our Conference Board of Pensions is researching our pension local church payout history in order to determine ways to address this gap and its impact on our conference’s missional budget.

Camping, Outdoor and Retreat Ministries – Our Board of Camping, Outdoor and Retreat Ministries prepared a Strategic Plan that is already being implemented.  The plan includes the sale of Cisquito and Sturtevant camps, and the possibility of recommending the sale of a third camp in order to better focus our resources on a more vital camping and retreat ministry.  A new marketing plan is being prepared, and Hawaii leaders are being engaged in developing a plan for summer camp programs on Oahu utilizing an ecumenical model and for camping and retreat events that grow disciples of Jesus Christ at Mekokiko and Koke’e.  All conference camps are under review with clearly established yearly goals focused on fiscal sustainability, ministry-oriented staffing, and summer camp oversight and growth.

Apportionments and Local Church Payables – Cabinet is working diligently to assist local churches with their apportionment commitments and in addressing any delinquencies they may be facing in their local church payables (pension, health and property insurance).  The Cabinet is also assessing churches that chronically struggle with their apportionments and local church payables to determine the level of appointment they are able to financially assume as well as reviewing the clergy record as it pertains to local churches fulfilling their connectional fiscal responsibilities.   District Superintendents with their District Lay Leaders are working together to acknowledge, actively support  and celebrate the good work of congregations who fulfill their connectional responsibilities as well as those who are demonstrating improvement.  They have also worked diligently with the leaders of District Unions to clear all district debts owed to Camping, Outdoor and Retreat Ministries.

Benchmarking – Vital benchmarking for our annual conference to inform us as to how we are doing in comparison to other annual conferences is underway.   The areas under study are those whose strength has been shown to be key to growing vital congregations:  professions of faith, worship attendance, small group participation, total offering and offering per worship attendance, and the number of persons in mission.    The results of this work will be shared with all of you and used to plan for our future.

In Conclusion – We are privileged to serve you through this holy work.  We will continue to work through the balance of this annual conference year with meetings scheduled for February 12th and April 4th and will render a full report at our upcoming 2014 Annual Conference Session.   We are encouraged by what God’s grace has enabled us to do and by your prayers and support as we have represented you at this table.

Strategic Financial Task Force

Chuck Tokuhama, Chair, Congregational Loan Committee; David McGlocklin, Chair, Navigation EMT; Dan Griffin, Chair, Council on Financial Resources; Riley McRae, Chair, Camping, Outdoor and Retreat Ministries Council; Karen Tannheimer, Chair, Board of Trustees; Ken McMillan, Chair, Conference Board of Pensions; Bishop Minerva G. Carcaño; Cedrick Bridgeforth, Dean of the Cabinet; Archana Carey, Executive Director of Finance and Facilities; Steve Hundley, Executive Director of Connectional Ministries; Kris Hodson, Director of Congregational Loans; Jan Hanson, Director of Human Resources/Benefits Officer; David Berkey, Director of Camping Ministry and Operations; Greg Batson, CEO, California-Pacific UM Foundation