1. FUTURE OF FOOD MINISTRY HIGHLAND UMC and Beyond

2. THE PAST EXPERIENCE In 2013, served over 160,000 meals out of our kitchen. In 2014, we have already exceeded 160,000 meals; as of 10/15/14, we are at 160,140 meals. Employ 2 full-time people, and 28 part-time youth Have generously subsidized church budget; food ministry costs the church nothing. Participate in 2 government programs: Summer food service program (SFSP) – 42 sites Child and Adult Care (CACFP) – 14 sites

3. THE PAST EXPERIENCE-CONTINUED Paid for the following capital improvements: New Youth Room Floor (14k) Air conditioning in fellowship hall (50k) Supplied Kitchen with new equipment Slicer Small wares (pots/pans) New Ice Cream machine (20k) New freezers/refrigeration New state of the art fryers Paid the majority of Pastor Larry’s salary/benefits

4. CURRENT SITUATION Pastor Larry at new appointment; ¼ time food, ¾ ministry Food ministry continues to grow Great reputation Better food than most other sponsors Monthly requests to take on new sites Currently leasing kitchen at Children’s Home of Northern KY Serve 40 residents 4 meals a day, 365 days a year Full-time kitchen manager at CHNK Serve 70 staff lunch meal, and residential staff 4 meals a day Top of the line facilities at CHNK

5. CURRENT SITUATION (CONT) Pastor Larry currently working ½ time food, ½ time ministry (based on 60 hour week) Food ministry paying 20% of total pay package

6. FINANCIAL ACCOUNTING Food ministry has separate divisions for accounting Child Nutrition Program Summer Food CACFP CHNK CACFP CIPS (Covington Independent) National School Lunch Program Underground Twisty Grill Wednesday Night Other Ministry YMCA Pool CHNK non-CNP programs

7. THE FUTURE PLAN CREATE NEW STAND ALONE CORPORATION UNDER THE 501(c)(3) TAX-EXEMPT STATUTS OF THE GLOBAL UNITED METHODIST CHURCH Sponsoring organization is the Covington District of the United Methodist church (Currently, sponsoring organization is HUMC) All responsibility for maintaining and managing program moves OUT of HUMC and to the new 501(c)(3) district level corporation

8. WHY??? Moves PRIMARY legal liability to the new corporation and out of HUMC General liability (slips/falls, workman’s compensation, negligence) HUMC can still be sued, but less exposure Product Liability (we send out tainted food) Drivers Liability Allows us to grow past what HUMC can handle Duplicates what HUMC has been able to develop at a district/state level; living into our connectional call and relationships Deep need for child nutrition programs in Northern KY

9. WHEN? January 1, 2015

10. UNSERVED/UNDERSERVED CNP We are here Maysville Trinity

11. NEW 501(C)(3) STRUCTURE District Level Made up of: District Superintendent Representative of all kitchen leases HUMC CHNK Maysville Trinity ???? At Large Youth Pastor from district At large local pastor from district Ex-officio members Pastor Larry (CEO) Jenny Turnbull (Food Ministry Director)

12. BENEFITS TO HUMC Shielded from primary liability Duplicates the ministry HUMC started to go district/state wide Shielded from Federal/State financial liability Ensures the future of Food ministry beyond current CEO Wider pool of people from which to choose Bishop has the option to appoint the CEO (elder/deacon/LP) Provides an un-restricted flow of income to HUMC (currently, all income to HUMC is restricted/designated income to reimburse actual expenses)

13. FINANCIAL EFFECTS TO HUMC HUMC gets 100% of the surplus (or absorbs loss) from: Wednesday night Twisty Grill YMCA POOL Underground The Larger CNP grows, the less in house ministries must shoulder the cost- sharing aspect of any improvements HUMC receives a “per meal” rental fee for kitchen, in addition to surplus from in house ministries

14. NEW CORPORATION STILL PAYS FOR: Maintenance and purchase of current/new equipment Repair non fully-depreciated equipment Replace (at Food Ministry discretion) fully-depreciated equipment EXAMPLE: Steamer All “attached” equipment purchased with Food Ministry Monies remains the property of HUMC All “smallwares” purchased with Food ministry monies are the property of the new corporation; able to be used at any location Surplus CNP monies only used for: Personnel New/additional equipment at kitchens

15. IF PLAN WERE IN EFFECT IN 2013… HUMC would have received about 7k more in revenue than it did Per meal rate for CNP programs All surplus (pretty hefty) from in house ministries THE GREAT VARIABLE MOVING FORWARD: UNDERGROUND!!!

16. NEGATIVE FINANCIAL ON HUMC Difficult to think “outside the box” for cost sharing projects Limited projects left that directly benefit CNP Potential liability for In-House programs experiencing a loss Some cost share items no longer available: Audit cost sharing

17. POTENTIAL POSITIVE TO HUMC Larger CNP means: Rent local freezer space Rent local dry storage Able to share employees Able to move production in emergency or planned situations HUMC better able to define peramiters when setting up contract Storage areas Church needs clause

18. GROUNDWORK TO DATE Presented to Highland UMC Trustees Food Ministry Staff Finance APPROVED BY: District Superintendent District Trustees Conference Attorney

19. NEXT STEPS Being reviewed by Tom Yocum for HUMC Congregational informational sessions Vote in November by HUMC Administrative Council