2025-2026 Annual Proposed Budget
Members and Friends of Second Unitarian Church (2U),
As we gather to chart the financial course for the coming year, let us be guided by the spirit of generosity that enriches our community and resonates with the principles of The Generosity Path. This budget is more than a simple accounting; it is a reflection of our shared values, our collective aspirations, and the path we walk together in service and fellowship.
Please review this budget document and share your thoughts, questions, and comments with "All.” We extend our deep gratitude to ALL who contributed in bringing this budget draft together, particularly, Tom Denio and Diane Sander, for their diligent work in preparing this draft. Please note that the Board of Trustees may have some final adjustments.
Here's a summary of the proposed budget for Fiscal Year 2025-26:
Total Revenue: $473,670, a 14.8% increase over FY 24-25's $412,770
Total Expenses: $494,459, a 13.9% increase over FY 24-25's $434,261 (includes $15,000 for sabbatical minister)
Deficit: $20,789
Deficit (excluding sabbatical minister): $5,780 (sabbatical minister's expenses are covered by dedicated reserves)
Adjusted Cash Decrease: $14,072 (after including mortgage principal on the "old" $70,000 mortgage). This represents our projected cash outflow for FY 25-26.
The Finance Committee proposes addressing this adjusted deficit with an anticipated surplus from the current fiscal year. We also acknowledge that our current fiscal year revenue includes $7,893 in pre-paid pledges for FY 25-26, which we believe can be allocated to the upcoming year.
The generosity of our community has placed us in a strong position. The surge of pledges in March and April, including the unexpected arrival of delayed mail containing multiple pledge checks, has been truly heartening. As of April 30th, we project a surplus of approximately $61,000 – a remarkable testament to your commitment! While we recognize that we experienced a loss of $21,000 in May and June of last year, we are now confident in projecting a surplus for FY 24-25.
What are the major proposed revenue changes in the budget?
Pledges (gross): We celebrate reaching our revised goal of $350,000, an 8% increase! This reflects the deep commitment of our members, with 141 households pledging amounts ranging from $5 to $24,000.
Fall Fest: We have set an ambitious goal for our Fall Fest. Can we, once again, exceed $42,000? We also hope to secure a matching gift of approximately $7,500.
Rental Income: With the completion of construction, we anticipate a $11,500 increase in rental income, expanding our connections with the wider community.
What are the major proposed expense changes in the budget?
Staff Compensation (excluding sabbatical minister): We are committed to supporting our dedicated staff, with compensation (salary and benefits for our Minister, Director of Music, Director of Faith Development, Director of Administration, and Digital Producer) rising as follows:
Proposed FY 25-26: $310,535
Actual FY 24-25: $287,930
Change: $22,605, an increase of 7.8%
Specifically:
Reverend J's compensation is increasing by 6.5% or $8,202. This includes a 3% cost-of-living adjustment (COLA), a partial restoration of professional expenses (recognizing his gracious $4,000 reduction this year), and increased health insurance premiums. If we consider his typical professional expenses, the actual increase is 4.15%.
The Director of Music's compensation is being brought in line with the UUA minimum guideline, with an increase of $3,805 or 10.9% for his 25 hours of service per week.
The Director of Faith Development and the Director of Administration will receive 3% COLA increases.
Other Cost Changes:
Sabbatical minister expense of $15,000 reflects that we have not previously recognized an expense for this planned expense, even though we set aside cash from government amounts received in the pandemic for this purpose.
Administrative costs are rising due to increased insurance expenses and greater utilization of services, with some increase in other office costs.
Utility costs are projected to increase by $1,420, reflecting increased usage, and include $300 related to support for migrant families.
We anticipate savings through the generous efforts of our volunteers, with projected reductions of $800 in snow removal and approximately $3,000 in cleaning services (fingers crossed!).
We have approved the Religious Education program's request for increased funding, raising it to $6,000 (from the current $5,000), reflecting our commitment to nurturing the spiritual growth of all ages.
Mortgage: While our income statement will show an increase of $4,883 in mortgage expense, this is primarily due to the impact of the expected additional loan for funding our capital campaign. Our actual cash mortgage expense is expected to remain relatively stable. The mortgage is due on September 1, 2025, and our current assumptions are:
7.0% interest rate
7-year amortization
Balance increasing to $120,000, including approximately $50,000 in new capital campaign borrowing.
This scenario yields a projected monthly payment of $1,811, which is less than the $1,900 we were paying previously, and less than the $1,983 after the recent interest rate jump. We also want to assure you that any capital campaign pledges received after September 1st will be used to reduce the mortgage principal, directly supporting the capital work funded by the $50,000 borrowing. These figures are subject to change, as we continue our discussions with Devon Bank, and factors such as the length of amortization and the interest rate are still being finalized. Our current interest rate is 6.5%.
How are we using bequests from Nanna Cross and Gene Horcher?
We are grateful for the lasting generosity of Nanna Cross and Gene Horcher. Bequest income of $5,000 from Nanna is being used to reduce the the cost of the Music Department to support our accompanist, and $3,000 from the Horcher bequest has been directed to Social Justice initiatives. We anticipate similar levels of support from these funds in FY 26-27 and beyond, allowing their legacy of giving to continue to bless our community.
Thank you for your time and attention in reviewing this budget. We welcome your feedback and will refine the budget before distributing it to the wider congregation at our 2025 Annual Meeting.
In the spirit of generosity and shared purpose,
