Date: May 10, 2016 Place: LCGS Room 160

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1 Date: May 10, 2016 Place: LCGS Room 160 Present: Diane Graf, Susan Kavanaugh, Scott LaViolette, Jim Parent, Dave Schoening, Naomi Specht, Julie Triplett, Johanna Vaughn Staff: Darcy Huffman, Communications & Resource Manager Pastor Amy Guests: Bishop Jacob Mameo, Barb Robertson Gathering Time 1. Call to order. Johanna called the meeting to order at 7:05 p.m. 2. Opening Prayer: Pastor Amy 3. Adopt the agenda. Motion carried. 4. Approve minutes from April. Approved. Presentation Pastor Amy welcomed and introduced Bishop Jacob Mameo from Morogoro, Tanzania. Bishop Mameo presented information on the various projects happening in his diocese and around the country, including building a school, a women s center, and the Bishop s House. He also spoke of the challenges facing the church there amidst a growing number of congregations. He thanked Good Shepherd for our support in the way of scholarship money, prayers, and also the support he received while earning his Master s degree. He concluded by challenging all of us to help encourage each other, and he invited us to visit there someday. New Possibilities We discussed Chapter 8 of Facing Decline, Finding Hope. We talked about a looking at the reign of God as being here and now, as opposed to not yet/not ever. We also discussed some attributes of Good Shepherd s DNA as being accepting, welcoming everyone (even if a bit reserved about it), progressive, open to the community, open to new ways of looking at theology, and possessing a deep interest in theology. Items Needing Action 1. Set agenda for annual meeting. Scott L moved to approve the agenda and Diane G seconded. Approved. 2. Approve revised budget. It was moved by Susan K. and seconded by Naomi S. to approve the revised budget which includes a line item for emerging ministries. Approved. 3. Change to by-laws. From a recommendation by the task force on investment funds, it was moved by Scott L and seconded by Diane G to change the name from unrestricted endowment fund to unrestricted ministry investment fund ; from local concerns to local concerns ministry investment fund ; from world concerns to world concerns ministry investment fund. Approved. 4. Approve proposed revision to investment policy. It was moved by Dave S. and seconded by Scott L. to approve the proposed revision to the investment policy set forth by the investment task force. Approved. 5. Approve investment in Thrivent Diversified Plus Fund. It was moved by Naomi S. and seconded by Diane G. to approve the investment of some of the funds left by Chuck and Marlene Heimbigner (approximately $220,000) in the Thrivent Diversified Plus Fund. Approved. Accountability The council received the following reports:

2 Darcy Huffman verbal Scott Laviolette-verbal Pastor Amy-verbal Sending Announcements: Naomi will attend May staff meeting. Lord s Prayer Adjourned 9:50 p.m.

3 LUTHERAN CHURCH OF THE GOOD SHEPHERD ASSETS Current Assets Cash Statement of Financial Position On May 31, 2016 Unrestricted Temporarily Restricted Permanently Restricted First Citizens Checking $287, $239, $47, Mission Invest. Fund - Checking/Youth $ $ $287, $239, $47, $0.00 Invenstments - Thrivent $110, $110, Vanguard - Restricted & Unrestricted $144, $109, $13, $21, Common Stock - Donated $0.00 Accounts Receivable (Dedicated and other Assets Due) $ $ Total Current Assets $543, $349, $171, $21, Total Fixed Assets Original Building + Additions $4,050, $4,050, TOTAL ASSETS $4,593, $4,400, $171, $21, Current Assets not carried on our books: Investments - Lutheran Community Foundation/InFaith Community Foundation Scholarship Fund as of 12/31/14 (per 2015 Annual Report) $136, $114, $21,917.25

4 LIABILITIES LUTHERAN CHURCH OF THE GOOD SHEPHERD Statement of Financial Position on May 31, 2016 Unrestricted Current Liabilities L&I Payable $0.00 $0.00 Undistributed Stock $ Other Payable $0.00 $0.00 Due to Synod $0.00 $0.00 School Rental Deposits $4, $4, B Payable $0.00 $0.00 Dedicated Funds Payable $157, $157, $162, $0.00 $157, $4, Long-Term Liabilities $624, , TOTAL LIABILITIES $787, $624, $157, $4, EQUITY Prior Year End $3,424, Current Period: Mortgage Principal- Thrivent $32, Mortgage Principal - Balloon Pymts $4, Current Period Operating Gain/(Loss) $235, $272, TOTAL EQUITY Current Portion (Current Assets Less Current Liabilities) $380, $349, $13, $17, Non-Current Position $3,426, $3,426, $0.00 $0.00 Total Equity $3,806, $3,776, $13, $17, TOTAL LIABILITIES & EQUITY $4,593, $4,400, $171, $21, Current Assets $543, Less Dedicated Funds $157, General Fund Reserve $385, Reserves Target - Operations $90, Less Actual Reserves $385, Reserve Target Surplus/(Deficit) $295, Temporarily Restricted Permanently Restricted

5 LUTHERAN CHURCH OF THE GOOD SHEPHERD Statement of General Fund Operations For the current Month and Fiscal Year to Date 11 Months ending on May 31, 2016 Current Month Fiscal Year to date INCOME rounded Offerings $48, $490, Interest $0.00 $11.41 Invested Savings Earn/Loss $0.00 $2, Mortgage to Mission $1, $15, Preschool Bldg Fee $1, $9, School Rental Income $11, $130, ASTP Income $ $6, Other $2, $28, Unrestricted Reserves $0.00 $226, Total Income $66, $909, EXPENSES rounded Called Staff $8, $97, Facilities $12, $171, Operations $17, $192, Mission $16, $157, Communication $ $5, *Benevolences $4, $49, Total Expenses $60, $673, INCOME LESS EXPENSE $5, $235,836.33

6 Statement of Income & Expense for Fiscal Year 2016 The Lutheran Church of the Good Shepherd 11 months ending May 31, 2016 Actual Budget FY 2016 to Date to Date Budget Income: Offerings $490, $507, $547, Interest Invested Savings Earn/Loss 2, , , Mortgage To Mission 15, , , Preschool Bldg Fee Income 9, , , School Rental Income 130, , , ASTP Income 6, , , Other Income 28, , , *Unrestricted Reserves 226, Total Income 909, , , Expense: Staffing Expenses: Called Staff-Salary/Benefits 91, , , Travel/Continuing Ed./Misc 5, , , , , , Facility: Misc. Mortgage Expenses Mortgage Principal 32, , , Mortgage Interest 17, , , Insurance 10, , , Utilities 41, , , Vehicle Maintenance , , Property Maint 69, , , , , , Operations: Admin Staff 157, , , Office Operations 34, , , , , , Mission Expenses: Ministry Disciplines Faith Formation 47, , , Worship/Arts & Music 62, , , Preschool Expenses 13, , , Congregational Fellowship 4, , , ASTP Expenses 25, , , Congregational Council 1, Stewardship 1, , , , , Communications: Communication Expenses 5, , , , , , * Benevolences: SW Washington Synod 34, , , World and Local Concerns 14, , , , , , Total Expenses: 673, , , Income Less Expense: 235, ,

7 The Lutheran Church of the Good Shepherd Report of the Investment Policy Task Force May 9, 2016 The investment policy task force met on May 3. John Aakre, Gery Gerst, and Glenn Blackmon attended. Cindy Michael was unable to attend. Mike Rutherford did not attend the meeting, due to Glenn's use of an outdated address, but reviewed the draft report by . We reviewed the policy titled "Investment Policy - Endowment Funds" adopted by the Congregation Council on 4/10/2012. We concluded that the basic overall direction of the policy continues to be sound and offer several suggestions: 1. We recommend that the council establish an investment policy for the Local Concerns Fund and the Global Concerns Fund. Based on our understanding that these funds are used as a quasi-endowment with the expected total return being used each year for mission purposes, we believe that the "Investment objective and approach" for these funds would reasonably be the same as for the funds listed in the existing policy. 2. We recommend that the "Investment objective and approach" be modified to provide additional flexibility to make a more conservative investment, meaning one that has a lower risk of principal loss and a lower expected return, in a situation where the council has a specific spending plan that would be put in jeopardy by a market downturn. This could be accomplished by adding this sentence to the third paragraph, after the first sentence: "A portion of the funds may be invested in a more conservative mutual fund, with no more than one-third its portfolio in stocks, to protect assets that are intended to support a specific spending plan adopted by the council or congregation." 3. We recommend that the term "endowment" be reserved for the funds that have a specific restriction intended to preserve the principal of the fund, which would be the two funds that were created from the Doris Trent bequest. Many people understand the term "endowment" to mean a fund designed to keep the principal amount intact. A potential new name for the unrestricted endowment fund is the Unrestricted Ministry Investment Fund. Please note that this change would require an amendment to the congregation's bylaws. The task force also discussed the specific mutual funds currently being used to invest the funds. These are Vanguard Wellington Admiral Shares (Symbol: VWENX) for the unrestricted, restricted, and Sunday School endowment funds and Thrivent Moderate Allocation Fund-A (Symbol: THMAX) for the Local Concerns and Global Concerns funds. We believe that both of these funds are generally consistent with the investment objective and approach stated in the investment policy. Adding the Heimbigner bequest to the Thrivent fund would incur a sales charge of 0.5%, or about $2,300. The council may consider this amount to be modest in comparison to the benefits that the congregation receives through its relationship with Thrivent. We are attaching copies of independent reports of the two mutual funds, which may be helpful in making a decision about specific funds.

8 We commend the council for maintaining an investment policy and for engaging in this review. Please let us know if you have any questions about these recommendations.