Campaign tops financial report - Catholic Courier

Campaign tops financial report

The effects of the Partners in Faith capital campaign can be seen throughout the Diocese of Rochester’s recently released 2003-04 financial statements, according to James M. Rinefierd, chief financial officer.

A condensed version of the diocese’s annual report appears as a supplement after page B8 of this edition. The report was prepared by the independent auditing firm of Bonadio and Co., LLP, of Pittsford. The complete financial statements can be found on the diocesan Web site, www.dor.org.

Partners in Faith “was tremendously successful,” Rinefierd said, noting that the capital campaign was conducted primarily in 2004. “The results for the diocese would look significantly different but for Partners in Faith.”

The diocese posted a surplus of $199,395 in Pastoral Center operations for the fiscal year ending June 30, 2004, and an overall increase in net assets of $12.9 million. This represents a dramatic improvement over the previous fiscal year, in which net assets declined by $489,650. This year’s total revenue amounted to $53.3 million, with total expenses coming in at $40.4 million.

Gifts and pledges from Partners in Faith in 2004 totaled $32.5 million, representing 61 percent of total diocesan revenue for the year.

Pledges to Partners in Faith exceeded the campaign goal of $50 million by 10 percent. Proceeds were earmarked for parish projects, enhancement of the priest pension fund, and endowments for Catholic schools, Catholic Charities and faith formation. Proceeds also were designated for the construction of the new Pittsford campus of St. Bernard’s School of Theology and Ministry and for the renovation of Sacred Heart Cathedral.

The bulk of pledges will be paid within the next three to five years, and the $32.5 million total reflects an estimate of the number of pledges that might not be paid in cases of extenuating circumstances, such as donors moving to another diocese before their pledges are fulfilled, Rinefierd said.

The diocese did not conduct a Thanks Giving Appeal in 2003. Instead, $4.5 million in Partners in Faith proceeds went toward the Pastoral Center’s $10 million operating budget, which is usually supported by the Thanksgiving Appeal, he said.

Partners in Faith proceeds totaling $13.4 million have been disbursed in payments for the renovation of Sacred Heart Cathedral, campaign costs and $7 million in payments to parishes for their share of campaign proceeds, Rinefierd said.

While the campaign enhanced the diocese’s overall financial position, its success at the same time overshadows some financial challenges the diocese continues to face, he added. Proceeds from the capital campaign are restricted and can only be used for the purposes originally outlined, so they cannot simply be shifted to an area that needs more funds, he added.

Each year, diocesan parishes are charged for a contribution to the Priests’ Pension Fund based on the number of active priests in each parish, Rinefierd said. The diocese paid out $1.2 million in benefits to retired priests during this fiscal year, but only took in $360,000 from parishes — slightly less than the total amount parishes contributed in the 1998-99 fiscal year, Rinefierd said. Although the amount collected from parishes has remained relatively flat, total pension benefits have gone up 50 percent as the number of retired priests has increased, he added.

“The Priests’ Pension Fund was a goal of Partners in Faith. It will be funded in future years as the Partners in Faith pledges are completed, but Partners in Faith doesn’t solve the problem of the Priests’ Pension Fund,” Rinefierd said.

Payments into the diocesan self-insurance program amounted to nearly $3 million in the past fiscal year, primarily because the diocese increased by approximately 25 percent the premiums it charges to parishes, schools and affiliated organizations, Rinefierd said. Outlays from the fund totaled $3.9 million, with $2.1 million for claims such as fire, property damage, personal injuries and workers compensation, Rinefierd noted. The insurance program has experienced deficits for several years, he added.

“Even though premiums were raised and 2004 represented a year of positive investment income, the fund still had a deficit of $1.1 million for the year,” he said.

Rinefierd also noted several other highlights of this year’s financial statements:

* Net investment income for this fiscal year totaled $3.6 million, a sharp contrast to the $530,432 loss posted the previous year. This is due to the changing climate of the investment market, Rinefierd said.

* The diocese received $899,227 in grants, marking a 161 percent increase from the $344,535 received in the previous year. A grant in support of Catholic education was the key factor in this increase, Rinefierd said. Partly through receipt of this grant, the diocese was able to spend 9.96 percent more — or a total of $6.4 million — on Catholic education than it did in the previous fiscal year.

* Expenses related to the development and support of qualified pastoral leadership totaled $897,044, marking an 18 percent decrease from the previous fiscal year’s total of $1.1 million. A number of factors — including staff reductions, vacant positions, reductions in overhead and reduced spending at Becket Hall — contributed to this decrease, Rinefierd said.

* Expenses associated with subsidies, gifts, grants and assessments totaled $1.9 million, up 75 percent over the $1.1 million spent in this area during the previous fiscal year. This is largely due to a $900,000 gift the diocese gave to St. Bernard’s School of Theology and Ministry toward construction of the school’s new facility, Rinefierd said, noting that this gift did not come from Partners in Faith funds.

* The diocese spent nearly $2 million on support for parishes, marking a 15 percent decrease from the previous year’s total of $2.3 million. The key reason for this drop is a decline in the number of parishes that voluntarily contributed to the diocesan Parish Building Fund, Rinefierd said. In 2003-2004, the diocese did not receive as many parish contributions as in prior years to this fund, which is used to assist parishes needing to improve their buildings, so was not able to make as many grants to parishes, Rinefierd explained.

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