Väino Einola – There is no Business Case to sell St. Peter's (11)
Eestlased Kanadas | 24 May 2023  | Väino EinolaEWR
On May 19, 2023, The Congregational Council presented for the first time a comprehensive backgrounder on their rationale for dealing with what they believed to be a serious financial predicament faced by the congregation. In it they outlined their justification for the actions that they have taken.

We now have an insight to their actions. Examining their rationale can begin a process of identifying the real issues and how to solve them.

We need to face up to the underlying issues and deal with them without prejudice and examine the issues without becoming defensive.

The first issue is to be forthright about our financial situation. We must behave responsibly to ensure the viability of this church and the survival of the congregation. We need to interpret the financial picture from a management perspective. What does it mean and what can we do about it.

Let me state very clearly the narrative presented by the church executive that the church will be bankrupt within two to three years is ABSOLUTELY FALSE.

As a registered charitable institution the Church has to file their annual financial statements with the Canada Revenue Agency. These numbers are indisputable.

The record is available on-line from 2017 to 2021. We see that at the height of Covid-19, on Sept20, 2020, when the sale of the church property was first raised with the congregation, the operating surplus was $9,284. The following year the operating surplus was $5,997. The numbers for 2022 have yet to be made public.

Moreover the church recorded cash assets of $823,986 in 2020 and $812,052 in 2021. The church also has a trust account for the columbarium, which is separate from church operating funds and contained $79,088 in 2021.

The church property itself has a cost value of $1,473,279 which now has a net depreciated value of $881,884.

The council is well aware that the church is a not-for-profit charitable organization and therefore it does not pay taxes on its income or municipal taxes on its property.

The financial statements that are relevant to the yearly health of the church are the ones that pertain to the yearly revenue and the yearly cost for running the church. The physical asset of the church property is a separate item as is the investment portfolio of the church i.e. the unrestricted long term cash investments are a separate item.

The problem with their bookkeeping is that the PK financial statements include amortization as an expense item. This is a relevant number for a tax paying business, as it allows it to reduce its revenue for tax purposes. It is not relevant at all for a charitable organization like St. Peter’s church which does not pay taxes. Similarly, the unrestricted cash assets are invested, (wisely we hope) and they generate an interest income for our recorded revenue. Obviously with the bank interest rate being 1-2 % these funds were invested prudently in the market. (they yielded 6.7% in 2021). However, should they incur an unrealized loss in book value it should be left in the investment portfolio and not be reflected as a loss in our operating revenue.

Our total revenue in 2021 was $270,986. Our operating cost excluding amortization was $264,989.

We have been fortunate to have secured the Salvation Army as a tenant that has boosted our rental revenue to $108,225. And we also benefited from the Federal Government COVID-19 support payments in 2020, and 2021 of $30,661.

We know that the Salvation army will probably end their tenancy in April of 2024. And the Covid support payment has already stopped. Fortunately we have the ability to replace these by pursuing other lease options. We identified these in our business plans which we shared with the council and the membership. We know that we can tailor our operation to suit our needs. Whether it be administration, or the pastor, or the music director, our finances will dictate what we should do.

Our operations budget will be balanced. There is no fear of imminent bankruptcy.

There is no business case for selling the church.

On an even more positive note, our church has been recommended for heritage designation by both the Toronto Preservation Board and the North York Community Council. This designation opens the door to government funding for the various building deficiencies that the council identified.

The resolution to sell the church should be denied.

Väino Einola

 

Viimased kommentaarid

Kommentaarid on kirjutatud EWR lugejate poolt. Nende sisu ei pruugi ühtida EWR toimetuse seisukohtadega.
Oleg08 Jun 2023 21:28
I will write an article on any topic, contact:
ovgyelyxclojzwy@mail.ru
Peeter Bush31 May 2023 14:25
I am not a member of this church and never have been. I ceased belonging to church seven decades ago. As with many of my generation it simply was not relevant in my life. I have no axe to grind with those that do believe. I find it somewhat amusing that a church would have or need a "business plan".
As I understand Vaino's numbers the church has more or less been in a breakeven position on a cash flow basis. Once they lose the Salvation army rent there will be a shortfall of about $100,000 each year if no other tenant is found. Given that the church has about $800,000 in cash it certainly won't run out of money in 2 years but it will run out, probably at the same time the roof collapses.
It strikes me that there is a glut of old churches for rent now and more will be coming down the pike shortly so its extremely unlikely that another tenant will be found. Lets face it barring a miracle (yes there have been many-people even purportedly arose from death) secularization of our society is well past the point of return.
Yes, they can hold on to the church for a few more years but why? Each year the pews will get even more empty and the building more forlorn through lack of maintenance.
Soon the last one out will just turn off the lights for good.
It strikes me that its better to leave on your own terms rather than have it forced on your congregation.
Ilmar Lepik30 May 2023 11:07
JULGUS,LOOTUS,USK
Väino, ma ülentan oma käsi teile et teha koostõõd. Ma nõustan et Peetri Kiriku seisukoht on parem kui mis Juhatus värvib, ja Peetri võiks tulevikus olla Põhja Amerika Välis Eesti kindel paik. Kui lastaks kuritegu kiriku ukstest sisse siis on väga raske sellega tantsidega. I observed before the Covid Lockdown a shaping drive to sell the church. At Vana Andres, we received two letters in May 2021 and June 2022 to discuss unification of our churches. We held executive discussions on this topic and responded within a month, that due to Covid Restrictions it was not feasible at the time. A limit of 25 people to congregate, and other financial limitations to comply with, gathering at Cemetary Memorials etc..There was not MITU rejections from us for discussions claimed by this PK Juhatus. Who in their right mind would have gone nose to nose under Lockdowns. 55K Canadian lives lost to this terrible recombinant virus. Does this not matter? Just returning from the West Coast, I see again, a hysteria on short notice, to vote again on a Wednesday night to sell PK. This intent is CONTRIVED. Another sahkermahker to sell a community Ikon. There is no need to sell this church in a rush. No need to listen to these unbelievable offers. Misinformation built on misinformation does not build community confidence or make for good relationships. Lets move forward with new ideas, Plats Puhtaks,and develop a more fruitful path to our Luteriusu mission. Julgus on vaja mitte müüja Toronto Eesti Ühiskona Temple,Varandus ja Süda

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