by Rebecca Pace, HUUC Treasurer & Board of Trustees Member
Dear Heritage members and friends,
As HUUC Treasurer, I need to let you know about a serious situation facing our church. You might call it a “perfect storm.” Our congregation is currently in a cash crunch resulting from recent developments beyond our control. The HUUC Board of Trustees is working on various solutions. We will discuss assorted resolution alternatives during the Sunday, May 4, 2025 congregational town hall meeting held in the sanctuary and on Zoom directly following the morning worship service. In this letter, I want to provide everyone with the background that led to our current dilemma, leaving the “where we go from here” discussions for the May 4 meeting.
We started this fiscal year (FY 2024-2025) in a good monetary position. We had $34,000 in our checking account and $113,000 in reserves, not to mention nearly $100,000 in the endowment fund. However, we’ve had some challenges, changes, and unexpected expenses that have drained our reserves and we still have bills to pay.
The financial outlays needs, created by numerous different causes, fall into five groups.
- Unexpected Repairs (including the roof, road sign, and sound amplifier)
- Ministerial Search Expenses
- Fundraising Shortfalls
- Security Upgrade Projects Grants Reimbursement Delays (Doors & Cameras)
- Employee Retention Credit Reimbursement Delays
Of course, we are always looking for the most cost-effective solutions to these situations. As previously mentioned, possible problem-solving will be discussed at the May 4, 2025 town hall meeting. Until then, let me explain all of these outlays in more detail and how they lead to our current situation.
1. Unexpected Repairs:
Recently and unexpectedly, we experienced the need for three costly repairs.
First, we were told we needed to spend $50,000 to replace our roof. However, we called in other contractors, and repaired the leaking kitchen roof for $5,800.
Second, you may remember that the lighted sign by the road produced a random pattern of lights and could not be repaired. A replacement would have cost thousands of dollars, but Susan Conley came up with a creative way to renovate the sign for only about $500.
Third, you may have been in the sanctuary during the Sunday morning service when the sound amplifier blew out with a loud pop. We had to replace that speaker at a cost of $2,700.
These payments were partially and temporarily financed by delaying the Sharing Our Abundance payments, a sum which grew to $5,800. This figure now must be paid. The goal is to have that balance paid in full by June 30.
2. Ministerial Search Expenses:
This spring, we’ve also begun to incur some expenses in our search for a new minister, when Bill Gupton retires next month. We decided not to take the UUA route, which would have been very expensive, but we didn’t want to do a Minister Search alone. We entered a contract with experienced consultants. We’ve made some token payments on their contract, but we need to complete their $18,000 payment schedule in early summer.
3. Fundraising Shortfalls:
The fundraising goals, set last year, were overly optimistic. In spite of a phenomenal rummage sale, our fundraising activities are about $12,000 short of our goal.
4. Security Upgrade Projects Grants Reimbursement Delays (Doors & Cameras):
You may remember, we were awarded a $147,000 FEMA (Federal Emergency Management Agency) security grant in October 2023. We began getting bids and incurred some expenses. We submitted our paperwork and received reimbursement as promised. We were comfortable with the process.
We had a congregational meeting in August 2024 to approve a $98,000 contract with the door vendor, LaForce. We made the 50% down payment, $49,000, in September of that year, expecting delivery in November. Still, the doors were not delivered until March. Finally, the installation is almost complete.
While we were waiting on the doors, we started work on another FEMA grant project, the security cameras. That work was completed in February, and the reimbursement request for about $23,000 was submitted in March.
From our experience with the process, we expected the reimbursements turn-around to take about three weeks. We expected reimbursement for the $23,000 for the cameras project in April, with sufficient time to add to cash on hand and pay on time for the doors project. We expected the final $98,000 reimbursement by June.
On April 7, 2025, I received an e-mail from our grant specialist. He said he had learned that although he was never told funds were frozen, there was a “review” that could delay funding. His e-mail said, “We don’t envision wholesale cancellation of awards, but nothing is ever guaranteed in this environment. We do anticipate reimbursement times going from about 20 days on average to three to four months.”
Our contract with the door vendor requires payment on completion. I have spoken with their finance chief who has agreed to give us extra time, but we must pay all contractors and vendors in full by the end of November. If we choose to reduce the scope of the work (perhaps by having volunteers paint and finish the trim) we would be out of compliance with the terms of the grant and would not qualify for any reimbursement on this project.
We are now faced with our payment obligations for the door installation contract and related work to complete the project totaling $64,800.
5. Employee Retention Credit Reimbursement Delays:
Our payroll service, Paychex, submitted five payroll-quarter claims for the Employee Retention Credit on our behalf. These claims, totaling $49,000, were submitted on September 14, 2023. That happened to be the same day the IRS placed a moratorium on processing these claims. The moratorium has been lifted, so you would think that our claim would be at the top of the stack. However, after months of no word from Paychex or the IRS, in early April, 2025 I received an e-mail from Paychex informing me that the IRS had no record of one claim. New claims are now disallowed, so Paychex is appealing and has sent the IRS proof of timely delivery of the original claims.
I believe we will eventually get paid for both the FEMA Grant and the Employee Retention Credit, but not this year. In the meantime, our reserves are gone and we have bills to pay.
Please join us at our town hall meeting Sunday, May 4, 2025 after the morning service in the sanctuary or on Zoom, to talk about possible solutions such as a short-term loan, a mortgage, help from the endowment fund, and/or cutting expenses so that we can carry our community forward. More details will be available at the May 4 town hall meeting. We will vote on our budget and any possible loans at the June 1 congregational meeting. Our financial statements are on our website — HUUC.net.
Sincerely,
Rebecca A. Pace, CPA
HUUC Treasurer and Board of Trustees Member
Image source: https://tinyurl.com/9s95f86c