Figures are for July through January 2017
For the first seven months of the fiscal year 2016/2017, our income was more than expected and our expenses were less than what we budgeted. This left us with a positive Net Operating Income (NOI) of $35,147.
Using our usual forecasting model (difference between our NOI year-to-date this fiscal year, compared to the NOI for the same period in fiscal year 2015/2016, less the loss we incurred the previous year) we see ourselves ending the year with a positive $10,653. This number is $4,000 greater than our forecast last month. It is above the mid-range when looking at the projections for the first seven months which have run as low as -$11,333 to a high of +$20,960. Fluctuation is normal, but we are hoping to see those numbers maintain the $10,000 mark for the remainder of the year.
We have some GREAT news! Jay Street Ministries, through the Renovation Team, has been able to come in just under the budgeted $30,000. That was quite an achievement, reached by hard work and dedication! In MORE great news, as most of you know, the Mahlo family has moved into 25 Jay Street. Jay Street Ministries is the Lessee and Start Fresh is the Lessor. We have an 18-month lease, which can be extended indefinitely (with changes to some of the terms). For this lease period, we will be receiving $300 monthly ($3,600 annually) from Start Fresh; our current annual cost (real estate taxes and insurance) for the property is $3,595. The tenants are responsible for all utilities, so Jay Street Ministries will be breaking even starting now (which is exactly how we intended this to work).
As you consider your financial commitment to All Souls for the Fiscal Year 2017/2018, please keep in mind that we have high operating costs. As indicated last month, it costs approximately $32,000 a month to operate everything (total costs). We have been able to cover these costs with our current financial commitments. All Souls is in a period of growth and with that comes additional operating costs, specifically, staffing. In order to sustain our growth and continue our momentum, we need to make some changes to our staff as was indicated by Reverend Carolyn in these pages (see page 3). Additional information will be shared by the Stewardship Committee in the coming months. As Treasurer, I invite you to seriously consider increasing your financial commitment as much as possible. We are doing such great things and we want to, and can do, more; but we need to faithfully fund our efforts.
Verizon Project Off the Table
The Board of Trustees voted on November 3 to discontinue negotiations with Verizon.
As many of you know, the Board of Trustees began negotiations with Verizon to lease land from All Souls Congregation in the Summer of 2015. We were interested in the partnership because of the potential income it would provide. The land that Verizon wanted to lease was directly behind Unity Hall, and the arrangement was for Verizon to construct a building to act as a hub to bring certain services to sections of New London.
Given All Souls’ involvement with refugee resettlement and the purchase of 25 Jay Street to house refugee families (now known as “Jay Street Ministries”) we hoped to offset some of the costs involved with this endeavor with the rental income from Verizon. The Board planned to apply this income directly to Jay Street Ministries and bypass All Souls’ Operating Budget. The Board was excited that All Souls could use the revenue from this agreement to further our vision of providing a safe-harbor and shelter for refugees. The congregation voted to allow the Board to negotiate an agreement with Verizon.
However, there were several congregants who expressed concerns with this endeavor; the Board took that seriously. Concerns raised included Verizon’s employment practices and the environmental impact this might have on the neighborhood.
Over the past 18 months, the Board worked closely with the attorneys, Waller, Smith & Palmer representing All Souls. We also interacted with Verizon’s attorneys and their real estate consultant. The Board and our attorneys spent many hours working on the lease agreement so that the Congregation’s interests would be well served. Verizon’s legal counsel and real estate consultant’s response was a seeming lack of commitment, communication and of greatest concern, contract features were consistently changed from the original understanding and agreement. For example, the original building plans were changed from a two-floor structure to a single floor structure although the change didn’t dramatically reduce the total square footage. In addition, Verizon changed the fuel for the back-up generator from natural gas to diesel, which was not acceptable to us due to the environmental impact.
The Board was concerned that this behavior was indicative of our future relationship with Verizon.
After working on the lease agreement for over a year, with little progress, we stipulated that a draft version of the lease was to be delivered to the Board on or before October 31, with a final lease agreement to be executed by 12/31/16. The Board clearly communicated this to both Verizon’s legal team and to their real estate consultant. On November 3, after not hearing from Verizon, the Board decided to stop negotiations. All Souls had never executed a Letter of Understanding, or any other agreement, so we are free to walk away from the deal.
The Board is disappointed in the loss of potential income for All Souls. However, given our negotiations and lack of communication with Verizon, the Board feels strongly that we made the right decision to discontinue all negotiations.
The Board is also cautiously confident that we will be able to fund Jay Street Ministries through the anticipated rental income.
Please speak with any Board member if you have any questions or concerns.