[Lnc-business] scheduling an LNC budget review session

Fri Nov 28 20:42:11 EST 2014

Thank you, Tim.  Looking at the equation in spreadsheet cell N204, I now
see how that calculation was made, and it's good to know that the starting
point for our hole is only $10,402.33 rather than $85,402.33.  However, the
derivation of that number is not at all obvious, and will especially be
non-obvious to anyone who merely sees a printout of the Account Details
sheet and does not have access to the Excel spreadsheet itself.  I suggest
that you add another note at the bottom, with a reference letter in cell
Q204, which explicitly describes that calculation.

I notice that the $75,000 in Capital Expenses does not include the decline
in the mortgage principle due to the non-interest portion of the monthly
mortgage payment.  I'm mildly curious why that should be so from an
accounting standpoint, if the $60,000 pay-down is considered a Capital
Expense.  However, this is mere curiosity, since it doesn't impact our cash
flow if that number is simply being folded into the total monthly mortgage
payment.  Conceivably it would be more informative if we included an
ongoing calculation of our remaining mortgage balance at the end of each
year, based on those Capital Expense flows.

Dan Wiener

On Fri, Nov 28, 2014 at 4:39 PM, Tim Hagan <timhagan-tyr at yahoo.com> wrote:

> You are correct that the $75,000 Capital Expeses incorporates $60,000 to
> pay down the principal on the mortgage plus $15,000 for other capital
> expenses, such as IT. The $10,402.33 deficit takes into account the $75,000
> for capital expenses. When calculating the Unrestricted Operating Surplus
> (or Deficit), we did not include the Legal Offense Fund and the Campus
> Outreach Fund since these are projects with their own restricted funds, and
> we did not allocated unrestricted moneys to go into these funds next year.
> The calculation on the Acct Detail sheet, with the row numbers, is:
>
> 196 Net Revenue or Loss:                 61,597.67
>  52 Legal Offense Fund:                     -8,900.00
> 132 Project-Related Expenses:         11,900.00
> 205 Capital Expenses & Mortgage:  -75,000.00
> __________________________________________
> 204 Unrestricted Operating Surplus: -10,402.33
>
>
> Tim Hagan
>
>   ------------------------------
>  *From:* Daniel Wiener <wiener at alum.mit.edu>
> *To:* Tim Hagan <timhagan-tyr at yahoo.com>; "lnc-business at hq.lp.org" <
> lnc-business at hq.lp.org>
> *Sent:* Friday, November 28, 2014 11:42 AM
> *Subject:* Re: [Lnc-business] scheduling an LNC budget review session
>
> We have a revenue line item "4108 - Building Fund" of $67,300 which
> represents the amount of money we need to raise (including fund-raising
> costs) to satisfy the Policy Manual requirement of paying down the
> principal on the mortgage by at least $60,000 during off-election years.
> All well and good.  But I don't see any corresponding line item expenditure
> in the budget beyond the $7,300 (in "7085 - Building Fund Fundraising Exp")
> to account for the $60,000 mortgage pay-down.  I assume that the $60,000 is
> incorporated into the $75,000 which is listed at the bottom of the
> spreadsheet as "Capital Expenditures plus Release to pay off Mortgage"
> (with the other $15,000 being the non-interest portion of our monthly
> mortgage) because accounting-wise it is a capital expenditure rather than a
> normal budget item.  However, we are still going to have to spend that
> $75,000, and the $10,402.33 projected Unrestricted Operating Deficit does
> not include it.  *So from a cash-flow perspective we are actually looking
> at a $85,402.33 hole for 2015*.  Am I missing something?
>
> Dan Wiener
>
> On Fri, Nov 28, 2014 at 9:37 AM, Tim Hagan <timhagan-tyr at yahoo.com> wrote:
>
> The draft budget is attached. As you can see on the bottom of the
> Operating Budget sheet, this budget is has a deficit of $10,402, so we will
> need to make decisions on where to put our resources. The numbers in the
> Operating Budget sheet come from the Acct Detail sheet. Comparisons to the
> last two off years (2011 and 2013) and to this year are included. The
> bottom of the Acct Detail sheet has notes explaining the numbers.
>
> The budget expects the Chair and the Executive Director to solicit $20,000
> each, with the rest of the LNC also raising $20,000.
>
> Administrative costs (number 40) are reduced due to savings from the
> building purchase. The actual Office expenses for next year are shown in
> the Office Exps sheet, copied to 8170-Total Occupancy & Related on the Acct
> Detail sheet.
>
> Compensation is based on the salaries and benefits for 2014, including the
> last salaries for the Receptionist and LP News Editor positions that became
> open this year. The budget does not include the potential of $25,000 for
> staff bonuses, which depend on meeting revenue goals.
>
> $15,000 was budgeted for Affiliate support.
>
> We budgeted $5000 for candidate training such as the Who’s driving
> educational program.
>
> The Campus Support fund has $3287 in it, so we budgeted $3000 for campus
> support.
>
> We budgeted $5000 for Initiatives Campaign support.
>
> The number of LP News issues is back to four per year, which is the same
> as the last two off years. Each LP New issues costs $8600.
>
> Per the Policy Manual, $60,000 is to be raised for the Building Fund to
> pay down the principle on the office mortgage.
>
> Capital expenses gets $15,000, which includes IT.
>
> There is a possibility of getting the maximum annual allowable ($32,400
> plus the inflation adjustment) from a bequest. This is not finalized, so we
> did not include the amount in the budget.
>
> Tim Hagan
>
>   ------------------------------
>  *From:* Alicia Mattson <agmattson at gmail.com>
> *To:* lnc-business <lnc-business at lp.org>
> *Sent:* Tuesday, November 25, 2014 12:27 PM
> *Subject:* [Lnc-business] scheduling an LNC budget review session
>
> The Executive Committee has reviewed and made some adjustments to the
> draft budget.
>
> You may recall that in the September LNC meeting in Alexandria, we adopted
> a motion, "that the LNC have an informal conference approximately 2 weeks
> prior to the December session in order to review the draft budget to be
> proposed at that session."
>
> In terms of scheduling a time for this review, Robert Kraus will be off
> work following the Thanksgiving holiday until December 2nd, and we need him
> to be available to field questions during this review.
>
> The current proposed time to have a budget review with the full LNC is
> December 3rd at 9pm Eastern / 6pm Pacific.
>
> How well does that proposed schedule work for the rest of the LNC?  Please
> respond to let us know if you would be available then or not.
>
> Alicia Mattson
> LNC Secretary
>
>
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>
>
> --
> *"In general, we look for a new law by the following process. First, we
> guess it (audience laughter), no, don’t laugh, that’s the truth. Then we
> compute the consequences of the guess, to see what, if this is right, if
> this law we guess is right, to see what it would imply and then we compare
> the computation results to nature or we say compare to experiment or
> experience, compare it directly with observations to see if it works. If it
> disagrees with experiment, it’s WRONG. In that simple statement is the key
> to science. It doesn’t make any difference how beautiful your guess is, it
> doesn’t matter how smart you are, who made the guess, or what his name is.
> If it disagrees with experiment, it’s wrong. That’s all there is to it.”*
> -- Richard Feynman (https://tinyurl.com/lozjjps)
>
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>

-- 
*"In general, we look for a new law by the following process. First, we
guess it (audience laughter), no, don’t laugh, that’s the truth. Then we
compute the consequences of the guess, to see what, if this is right, if
this law we guess is right, to see what it would imply and then we compare
the computation results to nature or we say compare to experiment or
experience, compare it directly with observations to see if it works. If it
disagrees with experiment, it’s WRONG. In that simple statement is the key
to science. It doesn’t make any difference how beautiful your guess is, it
doesn’t matter how smart you are, who made the guess, or what his name is.
If it disagrees with experiment, it’s wrong. That’s all there is to it.”*
-- Richard Feynman (https://tinyurl.com/lozjjps)
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