SAINT MARY'S FINANCIAL REPORT We present our financial position as a comparison <strong>of</strong> our operating budget for the past school year and the upcoming school year. <strong>Our</strong> 2006/2007 actual numbers will be very close to the budgeted numbers but are not yet finalized. We believe the comparison <strong>of</strong> budget numbers is an appropriate measure <strong>of</strong> out financial performance. Revenues and expenditures relating to the Virginia G. Piper Education Center are not included in these numbers. The following page has some commentary on these financial reports. 2
SAINT MARY'S FINANCIAL REPORT: A COMMENTARY "Tuition & Fees" remain by far the largest source <strong>of</strong> revenues. This figure does NOT include financial aid to our families, which is carried as a separate revenue item, "Scholarship Revenues." The combination <strong>of</strong> these two items remains between 84% and 85% <strong>of</strong> total revenues. <strong>Our</strong> operations are heavily dependent on enrollment and our reliance on scholarship revenues is a critical factor in our ability to grow enrollment. In one sense, <strong>Saint</strong> <strong>Mary's</strong> is engaged in several lines <strong>of</strong> business. We expect our Food Services operation to be self-supporting and our Bookstore operation to be nearly so. <strong>Our</strong> Athletic program is conducted within restraints that recognize the strong educational component contained within this activity and the contribution it makes to enrollment. "Instruction" is the dominate expense item. Although Instruction as a percentage <strong>of</strong> total expense is budgeted to decrease, in fact, year over year, Instruction is budgeted to increase substantially in actual dollar amounts. The divergence is caused by the large increase in "Maintenance and Plant Operations" and "Depreciation," caused by the inclusion <strong>of</strong> the Virginia G. Piper Education Center in our operating budget for the first time. <strong>Our</strong> salary scales are set by the Diocese and are uniform throughout the Diocesan school system. Payroll and payroll related items account for 65% <strong>of</strong> our annual operating expense and are present in varying degrees in each budget category. CAPITAL CAMPAIGN – PHASE 2 Status <strong>of</strong> the Project In May, 2006, the Diocese authorized <strong>Saint</strong> Mary’s to begin construction <strong>of</strong> the Virginia G. Piper Education Center, with the understanding that the project would remain a shell until additional funds had been raised or pledged. Firm bids were limited to this scope <strong>of</strong> the project. In January, 2007, the Diocese authorized a loan to <strong>Saint</strong> <strong>Mary's</strong> that would allow the full completion <strong>of</strong> the Education Center and we are now performing the additional work to bring the project to completion. We estimate that this new loan will be in the range <strong>of</strong> $1.6 million, depending on final project bids and additional Capital Campaign receipts, and be repayable, both principal and interest, over a 10-year period. Why We Need Your Help While the diocesan loan decision is very good news, assuring project completion, the additional debt service will negatively impact the school's operating budget. The loan is an unplanned substitute for the funding that would have been provided by a timely receipt <strong>of</strong> expected Capital Campaign contributions. Without additional equity contributions, our tuition rates will increase in a manner that might place in jeopardy our historic mission to bring Catholic education to every segment <strong>of</strong> our community. As we head toward our Centennial Celebration, we once again rely on our alums and benefactors to respond to this very real need for more equity for our plant and facilities and reduce our reliance on loans. We also need help from outside our community from people who respect our ability to create leadership among underrepresented community groups, with more than 90% <strong>of</strong> our very diverse student body continuing with education after graduation from <strong>Saint</strong> <strong>Mary's</strong>. Why Is It Always About Money? <strong>An</strong>swer: It isn’t about money. It's about kids. Good kids. Ambitious kids. All kinds <strong>of</strong> kids. Some come from comfortable families. Others come from struggling families. Many cultures are represented here. Christ is the reason for this school and all who come here share in His love for His children. This Capital Campaign is all about our ability to continue to make a difference in the lives <strong>of</strong> teenagers <strong>of</strong> all kinds. We have been there for generations <strong>of</strong> children, posting 90 years <strong>of</strong> service to God, Country and Home. We hope to be there for future generations. Please be generous. Some History <strong>Saint</strong> Mary’s moved to its present location in 1988, to make way for the Arizona Center. Initially the school functioned without a cafeteria, science labs, a library, a chapel, a gymnasium, or an auditorium. A capital drive (and increased debt) brought a much-needed multi-purpose building to the campus in 1990, adding a cafeteria, basic science labs, additional classrooms, a library, and a chapel. Still later, in 1992, in what can only be described as a “barn raising” exercise, <strong>Saint</strong> Mary’s added a gymnasium, using volunteer labor and mostly recycled components, including the steel frame, the floor, the bleachers, and a host <strong>of</strong> accessories. Despite these improvements, <strong>Saint</strong> Mary’s remains incomplete. The school lacks an auditorium for larger group meetings and public performances. The school’s art rooms are two regular classrooms with few additional features. Both the drama and music classes meet in basic classrooms carved out <strong>of</strong> one end <strong>of</strong> the cafeteria. Dance classes meet in the snack bar overlooking the gym floor. The computer labs, once state <strong>of</strong> the art, now are in need <strong>of</strong> rejuvenation. <strong>Saint</strong> Mary’s commenced a new Capital Campaign ("Forward <strong>Saint</strong> <strong>Mary's</strong>") to solve its facility deficiencies and move into the 21st Century. The Virginia G. Piper Education Center will solve most <strong>of</strong> the deficiencies in our facilities. It will have more than 35,000 square feet <strong>of</strong> space, divided among a lower level and two above-ground levels. The lower level will be home to a fine arts department, with an art studio, an art classroom, a music studio, a band studio, and the stage level for a 250-person auditorium. The ground floor level will have three classrooms, a teacher’s lounge and workroom, and seating ramping down to the auditorium stage. The second floor will house four classrooms and three computer classrooms. 3
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