From the Session and Board of Trustees December 12, 2011 During the next months the empty cottages on our campus will be demolished. As you probably know, these “cottage apartments” were acquired with the Best Is Yet To Come purchase of 22 acres in 2008.

When the cottages came under our ownership in 2008 we were advised by our legal counsel not to maintain any rentals on the campus. The advice was that while our appeal of the pending property tax issue worked its way through the Ohio Department of Taxation, having a rental arrangement on the acquired property would be a negative influence on achieving a successful decision on the property tax issue. At stake could be hundreds of thousands of dollars over the years. We are still awaiting the Ohio Board of Taxation decision. And there are other complications involved when a church expands into rental arrangements. When acquired, the majority of the ten cottages were in a neglected state. They were in need of a significant commitment of money and time. From the outside the cottage apartments looked OK, but our Trustees quickly determined that repairing and upgrading them to a usable standard was not fiscally in the best interest of the church. In addition, there would be continuing direct and indirect costs of maintaining a residence program. So, through the prayerful recommendation of the Trustees, it was decided to demolish the cottages when available funds allowed. That time is now. Demolition should be completed this January. Before the actual demolition our DIRT team will glean useable components from the buildings and donate them to Habitat for Humanity, and salvage other recyclable components.

The Administrative Expense portion of the church operating budget is the second largest section of our church operating budget. Only the Staff Expenses section of the budget (salaries, benefits, payroll taxes and the like) is larger at 68% of the total operating budget.

In fact, for this fiscal year, Administrative Expenses represent 25% of our church operating budget. What are these expenses? Administrative expensed items pay for running the church buildings and provide the business support needed to sustain them. These costs are utilities, building maintenance, services such as fire protection and security, transportation, insurance, copiers, traffic control and many smaller categories. For instance, office supply costs are a small portion of this category. While many of these expenses are absolutely essential, they are often driven by costs that are set and out of our control (for instance our electric utility costs). Even with this difficulty, Central College Presbyterian Church, through our Trustees, has successfully held these costs in check. In fact, we have made some nice reductions.

Examples: Last fiscal year (July 2010 through June 2011) our actual spending in Administrative Expenses was $432,000 compared to $407,000 budgeted. While the spending did exceed the budget, spending included paying all the major parking lot paving expenses. (The majority of these costs were originally budgeted for payment this current fiscal year.) Also, Central College Presbyterian Church has reduced costs for running our copiers. Costs for our general property and liability insurance have been lowered while at the same time increasing coverage. The phone bill and internet connection costs are now less than what they were a few years ago. Three years ago the Trustees joined a natural gas consortium with other Presbytery churches and lowered our natural gas costs. Then for the last two years the church has opted not to participate in the consortium, and that has proven to be the better fiscal choice for those years. Administrative costs are sometimes hard to control. The Trustees are currently evaluating management systems aimed at reducing our building operating costs, and will continue to seek out any and all ways to reduce church operating expenses without any loss in quality of service. Your suggestions are always welcomed. See details and a chart on page 3 of the January Beacon.