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Financial challenges ahead: leaders gather to discuss possibilities

Financial challenges ahead: leaders gather to discuss possibilities

e-Review Florida United Methodist News Service

Financial challenges ahead: leaders gather to discuss possibilities

March 2, 2006    News media contact: Tita Parham* 
800-282-8011    Orlando {0453}

NOTE: See related commentary “Strong, but challenged,” e-Review FUMNS {0454} at

An e-Review Feature
By Tita Parham

LAKELAND — The conference's financial situation last year was the best it has been in many years, but with higher insurance costs on the horizon and a declining membership, United Methodists in Florida may need to start thinking about "doing church" differently to meet financial challenges and continue vital ministry.

A dozen conference leaders, most of whom work with the insurance, property and pension issues of the conference, discussed what that might mean Feb. 13 during a financial summit called by Bishop Timothy W. Whitaker.

The meeting was prompted by the recognition of several realities: a number of churches in the conference are struggling to pay this year's increases in property and casualty insurance costs, premiums will likely continue to increase each year for a number of years and market-driven increases in health insurance are also expected.

The group looked at every aspect of the conference's finances — apportionment dollars received, health and property insurance costs, pension benefits, conference property maintenance and improvements, capital campaigns, United Methodist Foundation resources — and possible ways to alleviate costs to churches.

The Rev. Jeff Stiggins suggested it may be time for the conference to begin making adaptive, versus technical, changes. Stiggins is superintendent of the East Central District and represents the conference's district superintendents on the Florida Conference Council on Finance & Administration.

With a technical change, he says, the mindset is "if we put our minds together we can fix it." Thinking adaptively, on the other hand, means recognizing "the situation is so in flux that we have to think in a very different way ... change the whole paradigm," he said.

That could mean finding less capital-intensive ways for churches to be in ministry — starting new churches that aren't tied to property; churches sharing worship space with other congregations or worshipping in alternative spaces, such as schools or community centers; forming more circuits of churches; closing churches and starting new ones using different ministry models.

The heart of the issue is the cost of being the church today. This year churches are seeing, on average, an increase of about 65 percent in the cost of property and casualty insurance premiums. Costs for 2007 will likely increase a minimum of 25 percent, according to Roger Bond, chairman of the Florida Conference Risk Management program, and Marilyn Swanson, the program's interim executive director.

Randy Casey-Rutland, the conference's treasurer, said next year's increase could be higher if the hurricane season is "more than mild."

Further muddying the issue is churches have not yet felt the impact of Hurricane Wilma in terms of potential cost increases. "That will come next year," Bond said.

"Technically, we've done everything we can with the (property and casualty) insurance program," Bond said, from saving money in other areas, such as the auto program and Workers Compensation, to providing a subsidy to churches last year so they would not have to assume the full cost of increases in property and casualty insurance premiums occurring then.

Churches damaged by recent hurricanes have received more than $35 million in claims for 2004 and 2005, according to Bond and Swanson. An additional $13 million has been reserved, based on the value of claims still to be settled, bringing the total that will be given to churches to repair and reconstruct buildings to more than $48 million dollars. The conference has paid a little more than $18.2 million in premiums for 2004 and 2005. Casey-Rutland said the claims payments to churches from insurance amount to a "significant financial asset" in the form of capital improvements to those churches.

Whitaker asked if the conference should continue providing property and casualty insurance. Bond said churches would be spending millions of dollars more without it.

"Getting rid of the program would not solve the problem. It would make it worse," he said, adding the market and the trend toward higher premiums is the issue. He warned some types of insurance would not be available and the cost for insurance would be too prohibitive in some instances.

Not every church has been equally affected, adding to the complexity of the situation. The state is divided into seven wind zones, with rates varying from zone to zone. Churches that fall within wind zones in interior parts of the state are less affected. Churches in coastal or low-lying wind zones, including those in the conference's South East District, are most affected. 

Property and casualty insurance increases aren't the only issue. Clergy health insurance costs are expected to rise by an average of 15 percent or more per year, according to Casey-Rutland. 

Overall giving in 2005 was well above average with churches paying 89.7 percent of apportionments, compared to 87.6 percent in 2004, and $3.9 million toward general Advance Specials, mostly hurricane relief. But membership and worship attendance have decreased .8 percent and 1.1 percent, respectively, each year since a peak in 2001. Casey-Rutland said payments for apportionments and property and casualty insurance don't vary according to membership or worship attendance, but they could be offset with increases in worshippers.

Most of the group agreed the increases in insurance are prompting a serious consideration of the survivability of churches in the future and what it means to be in ministry now.

Conference Lay Leader Bill Walker said he sees the current situation as a great opportunity for Florida United Methodists to make changes that could positively affect the work of the church. "This is a God-given opportunity blown into the state," he said.


This article relates to Florida Conference Finances.

*Parham is managing editor of e-Review Florida United Methodist News Service.