Although the diocesan Pastoral Center ended its 2007-08 fiscal-year on a solid financial note June 30, diocesan officials say they are reviewing 2008-09 budgeting in light of double-digit stock-market losses that occurred after last fiscal year’s close. (A detailed reporting of diocesan 2007-08 finances appears on pages B7-9 of this edition.)
The diocesan Stewardship and Finance committees will be meeting soon to discuss investment losses, said Lisa Passero, chief financial officer for the diocese.
Passero noted that investment losses affected both the diocesan endowments and the Pastoral Center’s $10.2 million operating budget. Preliminary loss projections are just being received, but have been consistent with the double-digit losses of the overall market, she said.
“We’re no different than any other organization, and we’re subject to the market conditions,” she said.
She noted it also is too early to tell whether contributions to the annual Catholic Ministries Appeal, which began in October and runs through May, also will be affected by the economic downturn. Each year, only a few contributions are received in stock, so that should have a minimal impact on the appeal, Passero said.
On a positive note, during the 2007-08 fiscal year, the diocese saw a $1 million increase in its unrestricted net assets due to cost reductions in employee-benefits programs and the diocesan self-insurance program, she said.
“It was a positive year for us,” Passero remarked.
The diocese focused throughout 2007-08 on promoting risk management to help reduce claims against its self-insurance pool, which provides workers’ compensation, property, liability, automobile, crime and short-term disability coverages.
For the 2008-09 fiscal year, which began July 1, 2008, the diocese has revised the way it allocates insurance premiums to participating diocesan entities, including parishes, schools and Catholic Charities.
Whereas the self-insurance fund’s previous formula assessed all participating entities on an equal basis, now “the allocation of premiums is based on market rates and experience rating (of prior claims for each participant),” Passero said.
The diocese also has offered participants training on how to reduce the risk of workers’ compensation claims, established a risk-management committee, hired a risk manager and a claims manager, and developed new policies intended to reduce risk, she said. Organizations throughout the diocese now seem to be more vigilant about their insurance claims, she noted.
“Because the premium is partially based on experience, there’s a renewed awareness toward risk management,” Passero said.
Another highlight of the financial report is improved collections of unpaid bills due from parishes.
“We’re working with the parishes to help them plan financially,” Passero said, noting that past-due amounts due from parishes consist of contributions to the self-insurance fund as well as overdue payments for such employee-benefits programs as health insurance, which parishes and other related parties purchase through the diocese’s group contracts.
“For a couple (parishes), as they’ve merged and sold buildings, they’ve had cash available to pay off their debt,” observed Mary Ziarniak, the diocese’s director of financial services.
Some parish mergers also have resulted in the combination of staff, which has led to a decrease in benefit costs, she said.
On the Statement of Activities, restricted gifts for the Sacred Heart Cathedral organ caused a significant year-over-year increase in gifts and bequests revenue, and a corresponding increase in parish-support expense. Three donors, including the late Father Emmett J. Halloran, gave $1.5 million for the Halloran-All Saints organ to be built and installed in the cathedral.
The financial statement also reflects positive support of the 2007-08 Catholic Ministries Appeal campaign by parishioners throughout the diocese, with last year’s pledges and receipts topping $5 million for the first time. The average CMA gift was $140 last year, up from $132 in the prior year. Forty-two parishes exceeded their goals, and another 20 parishes achieved at least 90 percent of their goals.
“I think all of our parishes did very well, as evidenced by the strongest response we’ve had,” Passero said.
The financial statement also indicates continued collections — and dispersal of parish shares — related to the five-year Partners in Faith campaign, as well as an adjustment for uncollectible Partners in Faith pledges.
“We’re at the end of the (campaign’s) five years now,” Passero said, observing that although additional PIF pledges will be collected, further PIF pledge writeoffs are not anticipated.
The financial statement does not reflect transactions related to the June 30, 2008, closing of 13 Catholic schools in Monroe County. The financial implications of the closings primarily will affect the financial statement of the Monroe County Catholic School System for 2008-09. This data is not consolidated into the report for Pastoral Center operations, Passero said.