Where do funds come from to pay for major repairs, replacement, and other capital improvements to our buildings?
We maintain a reserve account designated for use by the Vestry and Property Committee to pay these expenses. The property reserve account funds our longer-term needs for maintenance, repair, and replacement, as determined using past expense records and the previous estimates of a property consultant. This might include things like new carpet, painting, or kitchen appliances.
What is the status of our current property reserve account?
At this writing, we do not have sufficient reserves to cover all known and expected needs.
How did this happen? Haven’t we been putting money into a reserve account all along?
We have! After a comprehensive analysis of our non-recurring property needs a decade ago, the Vestry has regularly allocated between $30,000 and $65,000 a year to a property account to address these needs. Unfortunately, our aging facility is requiring an increasing amount of annual financial support, and our reserves are just not keeping pace. This deficit must be addressed. The costs for routine property needs and maintenance (about 6% of our annual operating budget) will continue to be paid from the operating budget but we need to specifically address restoring our reserves.
Doesn’t St. John’s have other special investment accounts with monies that could be used for all these property needs? No, we do not have additional assets for this purpose beyond our property reserves. All restricted investment assets have been placed in our existing Endowment Fund to better satisfy the varied wishes of the donors. Unrestricted assets have been placed in our operating reserve accounts to bring those balances to appropriate targeted levels.
How about the St. John’s Endowment Fund? Can’t those monies be used for property needs?
There is a property account within the Endowment which, when adequately funded, could cover property expenses into perpetuity without touching the principal. However, our Endowment is just ten years old and doesn’t yet have assets sufficient to provide an annual distribution of earnings to fund future property needs while allowing the principal to remain intact.
What is being done to address our property needs? What is our path going forward?
The Vestry has discussed this issue for some time and has approved a plan for moving forward. It will take an investment from all of us to ensure that St. John’s remains a prominent, active, and vital institution in the Roanoke community. While St. John’s is much more than a set of buildings, our facilities are the center of numerous ministries and activities involving hundreds of people each week. These facilities were provided by those who came before us, and now is our time to make sure they are cared for and preserved for future generations. That will be OUR legacy!