The proposed budget is a decrease of 4.4% or $319,664. There is a 3.9% decrease in the apportioned budget and a 5.1% decrease in the cost to the churches for pension and insurance. The 2019 budget proposal is an intentional effort to provide an affordable and aligned budget.
Why the large decrease? There are a couple of reasons for the decrease. The primary one is that the budget is underspent each year. The 2019 budget proposal is more realistic to match with actual spending. When reviewing the specific budget areas, there are some substantial decreases from 2018. No programs are being cut. The amounts reflect spending in 2017.
The second reason for the budget reduction is to allow for a future decrease in apportionment from 16% to 15%. The proposed modification is possible for several reasons. Camping is on target to become apportionment neutral. Bakken Oil Rush in Watford City is continuing to work toward the same goal and other mission ministries are working to identify additional streams of revenue to support their mission. Numerous other smaller adjustments are being made to allow for a future reduction of the apportionment percentage.
One of the challenges in establishing new congregations is finding the right leader. Very few churches survive without the right leader. Even with the right leader, starting a new congregation is very difficult. In 2017, getting the right leaders in place was difficult therefore, the expenditures were less than the amount budgeted for new church starts. In 2018 and 2019, we should see spending pick up in this area. Efforts to find the right leaders are starting to pay off. We will see two new congregations in Bismarck, the second campus of Bismarck Legacy and recovery congregation of Bismarck McCabe. A new congregation will launch in Fargo. In Box Elder The Bridge UMC has begun weekly worship. Kenmare ReNew has acquired worship space and no longer receives conference support. Salem Unite has decided that they are strong enough to end conference support a year early. Fargo First African continues to receive conference support and mentoring from Fargo Calvary.
Operational reserve fund
Currently the Dakotas Conference has healthy reserves for the Board of Pensions and the Board of Trustees. Investment accounts provide fund for new churches, campus ministry, archives and history, and ministerial student aid. Operational reserves are very low. In 2019, the Conference will establish an investment account with the Dakotas United Methodist Foundation to act as an operational reserve. Our goal is to build this reserve to 25% of the total budget, approximately $1 million. The 2019 proposed budget has $100,000 for this purpose. Monthly deposits would occur. The operational reserve would help us through any economic downturn and position us to take advantage of any opportunities that come our way.
Pensions and insurance
The Board of Pensions has determined that we will join the HealthFlex Exchange in 2019. The Exchange will give pastors and conference lay employees the choice of six HealthFlex plans, plus dental insurance and expanded vision coverage. HealthFlex provides a web tool to help individuals make the best decision based on their circumstances. Leana Stunes, benefits officer, will be available to assist as well. The cost to the churches will be similar to the previous amount under the current HealthFlex plans.
This will be the first time in history that the Dakotas Conference Board of Pensions will request zero apportionment dollars, because of the tremendous investment gains in 2017.
For the detailed 2019 budget proposal see pages 5-11 of the 2018 Conference Workbook.