Bid Contracts Regularly

Posted on August 13, 2019 Written by
  1. Once you get to know a vendor, it is comfortable to stay with that company indefinitely. They know the building and the equipment and the church knows the service tech. However, best practices are to bid out your contracts every 3 to 5 years. This includes EVERYTHING from the food supplier, elevator maintenance, electrician, plumber, dumpster, commercial property insurance, copiers, postage meter, phone service, financial audit, custodian supplies, etc.
  2. Some companies are so hungry they’ll cut prices to get enough business to keep their employees busy (so they don’t have to lay off anyone). They know they won’t make a profit but they will also retain good talent and they know they’ll still make a profit. Some companies are willing to do anything just to keep good customers which could mean even revamping a contract halfway through the term. In every instance, insist that the savings not affect the quality of service.
  3. One case in particular: building insurance
    1. First, ensure that you have the proper valuation on your building and contents. Never be over or under insured or you’ll be paying too much or not have sufficient coverage. An appraisal may cost a few thousand dollars every ten years or so but it can save you tens of thousands in premiums.
    2. Get the right kind of coverage for your operations specifically for child abuse, owned & non-owned vehicles, umbrella coverage, and employment practices. When looking at how much coverage to get, think about what you would do if you were starting anew today versus recreating a building that was built by a prior generation for the needs of that era.
    3. Get rid of coverages that you don’t need including terrorism insurance which is automatically charged but is unnecessary due to the limitations Congress imposed on it. Seriously, remove the terrorism insurance coverage and save money.
    4. Get at least three bids from companies that specialize in church insurance. Some national insurance companies do not understand the particular needs of churches.

Lead On!

Steve


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More Banking Savings

Posted on August 6, 2019 Written by
  1. Pay bills by ACH and online
    1. It costs about $1 to process a paper check: the check stock, envelope, ink, stamp, and time all add up.
    2. Paying bills online is cheaper (there are still bank processing fees and time) and has some residual benefits. Your money stays in your bank account longer and you can earn a little more interest. You know when a bill was paid because you’re controlling when the money goes out the door; you avoid payments getting “lost in the mail.” It is easier to reconcile bank statements when bills are paid online.
  2. Use a Rewards Credit Card
    1. If you have a church credit card, ensure that it accrues rewards. Over time, you’ll earn enough points to get some neat things, even a computer or tablet. When redeeming points, I suggest getting things which have a lifespan as opposed to airline miles or hotel stays. The latter are one and done whereas tangible things last several months or years which means you’re getting a better value.
    2. Some rewards cards have an annual fee. Do the math to see if you charge enough in a year to far more than offset that fee to make it worthwhile to get the card.

Lead On!

Steve


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Banking

Posted on July 30, 2019 Written by
  1. Have one checking and one investment account, not multiple accounts of each type.
  2. Some churches have multiple accounts to stay under the FDIC coverage of $250,000, but please know that in almost 90 years of its existence, the FDIC has covered every single deposit of every bank that has gone under regardless of the size of the account. No one has ever lost money because they had more than the FDIC limit.
  3. Having one bank makes it easier and faster to reconcile your bank statement each month. And, having one investment account also speeds up the monthly reconciliation. Also, if you have multiple bank accounts, you’ll spend time, check stock, and money transferring money around unnecessarily.
  4. There is no need to have different bank accounts for different funds (an operating fund, building fund, etc). Separating the funds is an accounting function; do not mix accounting functions with banking. Banking is the physical location of your money while accounting is tracking what your money is to be used for.
  5. Multiple bank accounts is a way to embezzle money. When money gets transferred between banks and accounts, it gets harder and harder to track (certainly takes a lot more time to trace) and thieves count on that complexity to cover their misdeeds.
  6. Use a Community Bank: There are national, regional, and community (local) banks. Community banks know their cities and neighbors far better than the other two. Also, they’re rates and fees are better because they don’t have to pay for several levels of executives in other cities. They are more willing to make exceptions because they know who they’re dealing with and, in some cases, actually worship in the churches they’re working with. Stay local.

Lead On!

Steve

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Paying for Energy Efficient Improvements

Posted on July 23, 2019 Written by

Expenditures on items to improve your energy efficiency should have a payback of five years or less. Most churches do not have ready cash to make major investments in their building to reduce energy consumption and financing arrangements often are self-defeating (the energy savings go to pay for the bank loan and by the time the loan is paid off, the equipment needs to be replaced). Here are some ideas to offset these expenses.

  1. On electrical work, always use a licensed electrician. Poor electrical work can lead to fires which won’t be covered by insurance if it wasn’t done properly. Your church may have a member who is a licensed who will do some of this work pro bono or at cost – take advantage of those skills (and thank them publicly!).
  2. Have a capital campaign or special offering for specific equipment. Ask interested members to give to a purpose which ignites their passion. You may be surprised at what some members will give and how much they’ll give. Younger members are especially attuned to environmental matters.
  3. If you need to pay from your budget, here are a couple of ideas
    1. Have the work done at the end of a fiscal year (December) and then pay the bill from two fiscal years (December and January). That will have less of an impact on your budget and your electrician still gets paid within 30 days.
    2. Do the work early in the fiscal year and pay for it out of two separate budget lines: the maintenance budget and the utilities budget. Since the utilities expense will be less for the rest of the year, it is reasonable for the utilities to absorb some of the maintenance cost in January and reap the savings over the rest of the year (and future years).
    3. Do both of the above paying out of two fiscal years and two budget lines. That spreads the expense even further.

Lead On!
Steve


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More Expensive but Beneficial Measures

Posted on July 16, 2019 Written by

Here are some savings on electricity which cost more, but which also have benefits beyond energy efficiency. Here are some ideas.

  1. Wooden windows need to be painted every 5 to 7 years. Instead of painting, use the money and replace them with double-pane windows. Vinyl windows are relatively cheap (about the cost of 2 or 3 paintings) and they are good for north, east, and west-facing sides of your building. South-facing windows take the brunt of the sun’s heat and UV rays and aluminum windows are recommended for that side. Aluminum windows won’t sag in the middle under the intense sun. Double pane windows also mean you can clean the windows easily from the inside.
  2. Wooden window frames can be replaced with the entire window but a cost-saving measure is to wrap the frames in aluminum. Aluminum comes in a variety of colors and it never needs repainting. Wrapping the wood eliminates forever the cost of painting.
  3. As your HVAC units die, replace them with higher SEER rated units. They will cost more but they’ll be more energy efficient. Get as high a SEER rating as you can afford each time.
  4. Older model gas boilers were 60% efficient. That means that 40% of the heat they generate goes up the chimney. New models are 97% efficient. They cost twice as much but over the 20-25 year lifespan of a boiler, it will pay for itself several times over is gas savings (and pollute less).
  5. Tankless or “on-demand” hot water systems are efficient ways to have unlimited hot water. A hot water tank holds 40 or 100 gallons and keeps that water hot all the time. A tankless system heats the water only when it is needed eliminating the constant use of electricity on a tank system. Tankless systems also use less space in the boiler room.

Lead On!

Steve

www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

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Natural Energy Efficiency Improvements

Posted on July 9, 2019 Written by

Nature itself can be used to help your utility bill. These methods are popular and they are quite effective.

  1. Green Roof. If you have a flat roof, install as much greenery as possible. Plants on a roof will absorb heat and rain water, which would otherwise land directly on the roof. Plants will also provide flowers and homes for bees and other insects. Do NOT put soil directly on your roof; instead, buy plastic kiddie pools and put them on your roof. If possible, the children and youth can help fill them with dirt and plant seeds – get them involved in caring for their church. You can even use some as a vegetable or flower garden.
  2. Renewable energy. Roofs can also be used to generate energy by installing windmills and/or solar panels. If you have good access to steady sunshine and/or wind, these can make a significant reduction in your electric bill and your electric company is required to buy any excess energy you generate.
  3. The initial cost is pretty high and the payback period is 5 years or so. You’ll need .  You might ask some members to specifically contribute toward these due to the high up-front costs.
  4. Be careful with salespeople’s promises. Call their former clients and even pay them a visit to see what was done. You don’t want work that will be aesthetically ugly to your building.

Lead On!

Steve

www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
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Motion Sensor Equipment

Posted on July 2, 2019 Written by

For a multitude of reasons, people in churches don’t turn off lights. Fortunately there is motion sensor technology that can do this work for us. There are a variety of motion sensors that can save money while providing what we need.

  1. Motion sensor light switches turn off lights when no one is in the room. These cost $15 to $20 at a hardware store and are pretty easy to install. You’ll see immediate savings.
  2. Paper towel dispensers with motion sensors provide just enough for a person to use. Many times people will pull off lots more than they actually need but they don’t want to wait for a machine to dispense the towels.
  3. The same is true for soap dispensers and water faucets that are motion activated. Having these provide just enough will save money.
  4. Motion sensor flush valves in toilets ensure they are flushed after each use and are thus clean and ready for the next person.
  5. Motion sensor thermostats, even on commercial HVAC equipment, can save a lot of energy in churches. Ensuring rooms are heated or cooled when people are present is a challenge and all too frequently the AC or heat stays on long after people have left the room. A sensor in each room can turn on and off the HVAC unit serving that area. HVAC use is up to 30% of an electric bill so controlling this expense is vital.

Lead On!

Steve


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Better Lighting Techniques

Posted on June 25, 2019 Written by

Many church buildings are not energy efficient – they were built when electricity and gas were cheap. Today, the utility bills of church buildings are a major budget item. Churches can reduce their energy bills by taking small steps every year which, over time, will have a significant impact. Here are ways to save on your electric bills.

  1. Meet with your electrician and ask him for ideas in their industry. Get them to be part of the solution, not just a repairman. While salespeople visit with all kinds of new gadgets, they leave after the work is done but your electrician has a vested interest in ensuring your building is up to code and working efficiently.
  2. Have a meeting with a representative from your electric company.
  3. Find out if you’re on the right billing rate
  4. Ask about rebate programs for installing energy efficient lighting
  5. Ask about deals for other energy efficient equipment for your church kitchen, hot water tank, exit signs, etc.
  6. Change your lighting to energy efficient lamps and bulbs. Many churches use 4 foot T-12 lamps. T-8 lamps are 30% more efficient and 30% brighter; they cost about $5 each. LEDs are the rage but they are still pretty expensive.
  7. Reduce the different types of lighting to two or three. Many churches have up to a dozen different types of lamps and bulbs. You may have to change some fixtures but in the long run, having only 2 or 3 types of lighting will save money. For instance, remove 2×2 fluorescent fixtures and replace them with T-8 2×4 lay-in fixtures. 2 ft U-shape lights are more expensive than long 4 ft tubes.
  8. Replace incandescent bulbs with CFLs (corkscrew bulbs). CFLs come in different types of light, from yellow to bright white so you can get whatever shade you want.
  9. Replace exit signs with LED exit signs which are more efficient and don’t use expensive bulbs. Many old style exit signs use incandescent bulbs which run hot and use up to 50 watts 24/7. New LEDs exit signs use 3 watts – that is immediate savings.

Lead On!

Steve


www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Filed Under: budget, buildings, church administration, church finances, facilities, planning Tagged: , , , , ,
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