United Church of God, an International Association
Council of Elders Meeting Report
Aug. 24, 2009—Teleconference

Chairman Roy Holladay called the meeting to order just after 5 p.m. Eastern Daylight Savings Time, with prayer by Doug Horchak. All members of the Council were connected to the teleconference. Connected as well, were Clyde Kilough, president; Jason Lovelady, treasurer; and Larry Salyer, Media and Communication Services operation manager.

Reallocation of Funds

Aaron Dean focused the Council on the agenda item—reallocation of budgeted funds—that did not have closure at the previous face-to-face meetings earlier this month. The Strategic Planning and Finance Committee reported that it wanted to ensure that media efforts did not stall and hoped that there would be sufficient funds, even beyond the budget, to jump-start the Church’s media efforts. The committee realized that there are so many fixed costs that, if income turns down, media is the “soft” area in the budget that is usually cut. The committee pointed out that last year the allocation for the move was an easy cut and the unspent media budget did help cash reserves, but does not believe that is prudent a second time. Thus the committee recommended that the administration seek to curb costs in other areas to make a 1 percent additional allocation to the media budget this year a possibility.

Mr. Dean reported that preparing for such an allocation would allow for two contingencies:
1) If a media mix is developed by December, as hoped, the contingency could be available to increase the media budget.
2) If income drops because of the poor economy, cuts in other areas would already have been planned for and the only cut in media would be this reallocation to the media budget.

Mr. Dean pointed out that, if the income were above expectations, the other “held” budgeted items could be reinstituted, if desired.

Mr. Horchak said that he is not against a reallocation of the budget at some time, but finds it difficult to reallocate funds until we know what the media mix is. Mr. Lovelady reiterated that he would want to follow the approved budget that was just passed by the GCE. Possibly through the planning process, he continued, no extra funds would be needed, but he cautioned against reallocating funds until a plan is in place.

Mr. Dean asked if we are spending the money evenly throughout the year, or are smaller items being paid for upfront, as opposed to the larger amounts being saved for the latter part of the year.

Mr. Lovelady said that there needs to be contingency plans in place—especially if the income does not hold up. Robert Berendt stated it seems from what he is hearing that the approach is that it is okay to not spend all of the media budget and have it go into reserves, so he doesn’t understand why there is a problem trying to add more money to the media budget now.

Mr. Lovelady responded that there was a large component in the media mix that was not agreed upon until February of last fiscal year.  Mr. Berendt said that, if he follows this reasoning, then, if there is no media mix approved, then there should be no money budgeted for media this year either.

Robin Webber said the Council does have the authority to make an adjustment to the budget so long as it is 5 percent or less. He further stated that he wants the administration to understand that the Council wants to have a trigger mechanism in place, once the branding is put into place, that will allow the 1 percent reallocation to the media budget to be put into place by December or at least sometime this fiscal year. He would like the administration to have contingency plans in place so a reallocation can be made rapidly.

Bill Eddington said that he would like the administration to look at soft areas that can be cut in case the income does not hold up or the 1 percent media budget reallocation is requested by the Council. He said that this contingency should be ready by December of this year.

Darris McNeely mentioned that he would have no problem passing a resolution today to authorize the reallocation of funds to the media budget. Scott Ashley asked if contingency plans are automatically built in by the administration when the next fiscal year’s budget is considered by the Council, should the income fall or rise. He also asked about the $800,000 unallocated in the current media budget—will those funds go back into reserves, if there is no media plan and those funds are not used this year?

Mr. Lovelady responded that there is not a contingency presented to the Council, but this past December, the Council had to consider contingencies because the income was trending downward. He stated that this will be considered this December as well.

Mr. Lovelady said that the media budget is there, but the plan for releasing those media funds has not been put into place. At this point, the budget shows a larger amount being spent in the last two quarters, because he had to place those funds somewhere in the budget for the time being.

Paul Kieffer said that he agrees that there needs to be a media mix prepared by December, but he wants to make sure that the 1 percent increase in the media budget is not forgotten for next year’s budget. Mr. Webber said that the figure is at least 1 percent to be added to the coming fiscal budgets.

Mr. Dean said that he just wants to make sure the administration knows where the Council is coming from. He stated that he does not want to lose ground on subscriptions. Mr. Kilough agreed that this is the best thing to do, but wants the Council to know that subscriptions are not slacking—as set according to the Strategic Plan.

With that in mind, Chairman Holladay stated that he would like for the administration, between now and December, to do some preparatory work, if the branding and media mix come together, that will allow for a reallocation of funds to the media budget. He said that, by that time, the Council and administration will have a better view of the income trend—whether to reallocate or to cut the budget. He confirmed that the Council definitely wants to give direction to the administration to add at least 1 percent to the next year’s media budget.

At 5:50 p.m. Eastern Daylight Savings Time, the Council moved to go into executive session to discuss two other agenda items.

-end-
Gerald Seelig
Council Reporter

© 2009 United Church of God, an International Association