At the Annual Meeting of the Congregation
May 23, 2012
Shalom!It is with deep regret that I am delivering this Treasurer’s report to you. Marty Klitzner, of blessed memory, who was our treasurer, passed away several weeks ago, and I am filling in, sadly, for him. He was a wonderful leader at Congregation Beth Israel and many other Jewish organizations in San Diego, and a wonderful husband and father, and he is missed by all who came in contact with him and worked with him.
You have been given a handout that summarizes the results for the last three years, as well as information on our endowment and our balance sheet. The comments which follow relate to the information in the handout.
We evaluate the operations of CBI through 4 separate entities – the largest is the Temple, which includes the clergy, the personnel who help to operate CBI, and all the overhead costs associated with it. The other three entities are the Religious School, Early Childhood Education, and the Cemetery and Mausoleum Association.
On June 30, 2012, in 5 weeks, we will complete our 2011-2012 fiscal year, and the amounts shown in the handout for 2012 are estimates of the expected results for the year. We are estimating that the cash loss will be approximately $230,000, an improvement from previous years, but still a poor result and one that we are not happy with. Achieving even this result depends on a successful end to the Torah project campaign – which may stretch into the following fiscal year. If that happens, then income we expected in 2012 may be realized in 2013, causing the loss in 2012 to be larger than expected and benefitting results for 2013.
If you look at the page titled “revenue and support”, you can see clearly that our largest source of revenue is dues – your contribution to the maintenance of our Temple. The other major source of revenue is the educational fees – primarily the tuition for religious school and early childhood education. In each of these two cases, you can see that results for the 2012 fiscal year are somewhat better than in previous years, but not by much.
Contributions were higher this year, due to the Torah project, and other sources of revenue were relatively constant.
As you can see, from the sheet titled “Operating expenses,” Education is our largest expense, with the other categories all representing relatively large and constant costs to our Temple. What characterizes all of our costs is the importance of personnel – we are a service organization, and the services we provide to our members come through the people employed by the Temple. Thus, personnel costs represent about 2/3 of our total expenditures every year – a ratio that has been quite constant over time. This factor has made it very difficult to deal with our deficit problem.
If you turn to the page marked “Summary of activities” you can see that we have made some progress this year. While the loss for the Temple Operations has increased in 2011-2012, the loss at the Religious school has declined sharply, and early childhood education
is doing quite a bit better than in previous years. Thus, our overall cash deficit is smaller.
Let’s take a quick look at the first page of the handout – which summarizes our endowment and other funds. AS you can see, our endowment grew during the year to $6.1 million. This was a result of contributions of $762,000 and gains of $104,000, offset by allocations to programs of about $220,000 and loans to the Temple to offset deficits of approximately $350,000. Our policy, for the last 8 years, has been to direct 4% of our endowment, on a rolling 12 quarter basis, to operations.
In addition, we have two other funds, the Capital improvement fund, which grows as new members make their capital improvement pledge, and is used for capital repairs and improvements. This fund is currently at $234,000. In addition, there is the Cemetery and Mausoleum fund – which consists of cash of about $110,000 and an inventory of approximately $1 million of burial plots and crypts to be used in the coming years, as needed.
Finally, let’s look at the balance sheet, which is the last page of the handout. This shows what the Temple has, and owes, in dollars. As you can see, our Temple is in excellent financial condition. Total assets amount to $23.8 million, including investments of $6.6 million at March 31, while we had no debt, and only current liabilities of $266,000, which relate to ongoing operations of the Temple.
As we look forward to the next fiscal year, which begins on July 1, 2012 and will end on June 30, 2013, the budget approved by your board of directors does provide for a break-even cash flow. In order to achieve this, a number of personnel changes are being made, although we do not expect them to significantly impact the services our members will receive. Perhaps the most obvious, to most members, will be that there will be a receptionist only Tuesday through Thursday; and we will make other provisions to answer the door and phones on Monday and Friday, which are generally lighter days for visitors and phone calls. Another factor which helped in producing a balanced budget was the agreement by all of our clergy to forego the raises that they were entitled to in their contracts. We deeply appreciate this. In producing a balanced budget, we have made certain assumptions, including additional success with our endowment campaign and a temporary 1% increase, to 5%, in the allocation of endowment income to operations – and we will be monitoring all aspects of our expenses and income in order to make every effort to achieve the balanced budget.
As I have noted in my comments at previous annual meetings, greater revenue remains a key to improving the financial results for temple operations at CBI. A key factor in the failure of revenue to grow sufficiently has been the effect of the recession on our income from membership dues. Some people have resigned their membership, citing the economy as the reason; others who had financial problems have accepted the offer of CBI to continue their membership at a reduced cost level, in order that we don’t lose them as members, and they continue to benefit from the services that we offer.
I am hopeful that the number of members will rise in the coming years, and if it does, it will go a long way toward helping us solve our deficit problem. However, during the last few years, we have experienced declines in membership, so I am hopeful but not optimistic about the possibility for growth in membership in the coming years. Thus the key to financial stability will be greater revenue from the endowment, and that means a larger endowment. We are in the midst of an endowment campaign, and I hope that ultimately every family in the Temple will donate to that campaign.
If anyone has unanswered questions, please don’t hesitate to contact Lesley Mills, David Malone or I and we will get you an answer to your question.
Before closing, I’d like to publicly thank those who participated in the financial management of CBI – our treasurer, Marty Klitzner, of blessed memory, Lesley Mills, Executive Director, David Malone, Finance Manager and Barbara Thompson, bookkeeper. I’d also like to thank the members of the Finance committee – David Bark, Amy Corton, Bob Filderman, Herb Hafter, Emily Jennewein, Jane Sagerman, Mitch Siegler and Jerry Sampson. They all did a terrific job and our committee discussions led to some very useful suggestions.
Thank you.
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