My real issue ....

The previous chart on the last blog showed all cash and investments and their value over time.

This chart shows the primary contributor to that increase in the value of our cash and investments:  Health Plan Funding.

We have gone over the last sixteen years from a little under $42,000 in this account to over $4,300,000.  That is a change of 10,000+ percent.  

The vast majority of this money is targeted against our unfunded liability in the area of retiree health.  According to the report by the Conference Council of Pensions and Health Benefits (CP&HB) our obligation in this area given our current policy and population is a little under $10,000,000 (report here, page 3).  Given our current policy, last discussed extensively in 2008, we have an unfunded liability here of at least $4.4M and probably more like $5.6M (my conclusions from reading the provided report.)  

Those are very real numbers, and the type of numbers that cause accountants to flinch.  Justifiably.  

But my issue is not the realness of the unfunded liability, which I will discuss at a different time, my issue is the growth in this account.  How did it happen?  

Real money invested right now is making some real returns on that investment.  As I type this, the Dow Jones Index is over 20,000.  

Where did the real money come from that was invested?  

Two primary means, and both of them start at the local church.  

• First, the collections in 2012-2013 for active health insurance in the conference yielded $400,000+ income above expenses, and that overage was invested in retiree health.  
• Second, rebates were sent back to the conference by the national church in 2012, 2014, and 2016.  All of these rebates, with money that started off at the local church, was, consistent with the Book of Discipline authority.  I do not know the precise number of these rebates but I suspect they are over $2M.  

A third possible point that is in theory an option, is not forecast ed to happen in 2018 but our Comprehensive Protection Plan (CPP) obligation to the national church is zero.  This is sometimes called a "holiday."  But CPP will be billed and that billing will be used for other (and right now, non-retiree) unfunded liabilities.  (Read the report linked above). 

My advocacy for several years on this has included the concept of "sharing" of this bounty with the source, i.e. the local church, and if not, at least explicitly share the information with the local churches why this strategy of lowering unfunded liabilities is beneficial in the long term.

The information is available that this is going on if we look at and read the reports.  The information has not been shared in any kind of targeted, intentional, explicit, manner so that congregational buy-in is acquired.

Selah, Dennis Shaw

The next blog is HERE.  

The Chart That Causes Me Concern ....

If you were to take out the last fifteen journals of the Rocky Mountain Conference and the unpublished auditors report for 2016, which will be in the next Journal, you too could create the following chart.

This is the cash and investment position of the conference over the last sixteen years.  

It shows in this non-budget area of accumulated cash and our other investments, we have increased our value by over 700%.  I show how much in 2001 ($1,559,396) and two of the last three years.  

I will attempt to unpack these numbers in future blogs.  

For those who have a lot of history with the conference, please know that this does not include how we are doing in terms of obligations for those retirees who had service before 1982.  That is a separate pile of money.   

For the next several entries on this blog, I intend to try and take a little of this apart.  I will endeavor to be as fair as I possibly can in why this money exists.  I really do understand the why, and I hope to share that with you as we move through this, but my concern is that during a period of significant performance decline in key missional metrics, we have accumulated significant capital.  

At least one person on Saturday at Annual Conference asked me "and that is bad?"  Let's see in five or six blogs how I do on this, but no, it isn't bad in and of itself.  What is bad is the lack of transparency in how this occurred.  

What is our mission again?  

If our role were the accumulation of capital through wise financial planning I would say we are doing quite well, quite well indeed.  

Read on please.  

Selah, Dennis Shaw  

The next blog is HERE.  

Our Mission Again is .... ?

Before I get to money, I want to focus briefly on what our mission is after all ...

I am mindful that there are many ways to measure how we are doing on our prime directive of making disciples.  If we truly believe that making disciples is best done at the local church, and we do indeed offer that right after we speak to the idea of transformation in our Book of Discipline, I posit that Average Worship Attendance is a very good metric to determine how we are doing in terms of our prime directive.  I am open to other metrics, but this is a good one, if not the best (or only) one.  

I call this chart A Complex Look at Attendance because of Ralph Waldo Emerson, Senior comments about simplicity being of value ONLY after it has been filtered through the lens of complexity.  I see this chart as simultaneously complex but also simple.  

Our attendance from 1976 to 2001 was a relatively flat.  We were in 36,000 range for those twenty-five years.  

But that was a function in part of decline in the churches founded before 1974 offset by increases in those who moved, merged, or were chartered in 1974 or later.  

Our decline over the last fifteen years has been by and large a function of (1) continued decline in the older churches and (2) a lack of new church starts, good strategic mergers, and moves over the last twenty-five years.  

Here is the point:  attendance is down by 10,000+ since 2001.  

Hold that thought -- in one of the most critical metrics of how we measure our effectiveness, we are down by right at 30% over the last fifteen years.  I do not wish to sound here like a "Chicken Little" screaming that the sky is falling.  I do believe that the focus of our accumulated "treasure" should be directed towards a better focus on our prime directive -- making disciples for Jesus Christ at the local church for the transformation of the world.  

I confess that one person's need for urgency can be construed by someone else as anxiety.  I don't know how to solve that, but I am not trying to inject anxiety into the system.  I expect that anxiety makes a system that doesn't always work well in the first place, work even less well.  But I do hope we can raise the temperature on what is the most important task we have in front of us:  transformative disciple making.  

I hope you keep reading.  

Selah, Dennis Shaw   

The next blog is HERE 

Getting Started

I am initiating this blog in order to share with laity and clergy in the Rocky Mountain Conference (RMC) of the United Methodist Church (UMC) thoughts on financial transparency.  My "so that" is "so that the churches in the Rocky Mountain Conference are better informed on financial matters."  

I believe if that "so that" is accomplished, trust will be enhanced.  

I quite simply conscientiously object to the way we are currently (June, 2017) sharing information. 

I do not believe we are working with a strategic goal of informing the local churches what is going on financially, with a particular emphasis to those matters that are "off budget." 

Our conference budget is supported by what the RMC calls Connectional Giving. This giving is across the connection called "the apportionment" and is the means by which the regional church, the conference, and the national and international church is funded.

This coming year, 2018, a small portion of that budget within the RMC will be met with money from other sources than the local church in 2018.  It is "safe" to say that the vast majority of the 2018 budget will come from sharing by the local churches of the conference, i.e. all but about $50,000 or so or less than 1%. 

I expect over time, I will engage in some excursions on the budget.  That said, most of my quest for clarity is with resources found in our cash and investments.  Most of these resources are associated with pensions, health benefits, and property.  

My issues here are not ones of fraud or waste.  I will reserve judgment temporarily on the potential for abuse.  I expect to come back to that element of potential abuse some day, but not in this piece. 

I do not remotely suggest the issues are fraud. There is information, if at times challenging to get to and often deeply buried inside of reports or footnotes, to address much of my frustrations if one knows where to look and what to ask.  

I see the issue first as a distinct lack of transparency. I simply believe that the people, represented through the local church, who in much of this actually share their hard earned treasure deserve more clarity about money.  

Here is a dilemma.  One person's transparency is to another, too much information. I will do all in my power to avoid too much information, and try to focus on the narrative behind the numbers.  

The second issue is one of principles.  My view is that the sources of money should be appraised of rebates or under spending.  It is my principle for example, that if the original source of money is the local church, the local church should be told with great intentionality what happens with a rebate or budgetary under-spending.  

If that last paragraph is right now not clear, I hope over time, it will.  I invite you to come back to this periodically and reread as I develop more material for this intentional sharing.  

That is a good place to stop for this post.  

There is no fraud or waste going on here.  I cannot emphasize that strongly enough. 

Selah, Dennis Shaw

The next blog is HERE