Saturday, February 20, 2010

"Electric City"... Eye-Popping Debt

Whoever he is, whenever he's named, here's hoping the cleric who'll emerge in due time as the tenth bishop of Scranton comes prepared to face more than his share of headaches.

First on his plate: restoring lasting calm following the contentious six-year tenure of Bishop Joseph Martino, whose divisive administrative style and outspoken presence on the national stage roiled one of the US church's staunchest bastions, pressuring the bookish, brilliant 63 year-old's early retirement last August....

Then, he'll need to deal with the fallout over the arrests of two of his priests during the interregnum on respective charges of possessing child-porn and attempting to buy cocaine....

And somewhere along the way, he'll need to manage a 350,000-member local church operating in the red, to the tune of multi-millions:
[Losses] for fiscal year 2009 totaled almost $15.5 million, according to financial statements published Thursday in the Catholic Light, the diocesan newspaper. That is more than twice the $7.1 million loss reported in 2008 and the $6.7 million in 2007 by the 11-county diocese.

"While the diocesan finances are deeply troubling and present formidable challenges, with God's help we will find creative ways to meet the challenges and reverse the significant losses that are evident in the published financial statement. I ask for your prayers for our Diocese," [apostolic administrator] of the diocese Cardinal Justin Rigali wrote in a letter accompanying the annual report....

Of the $15.5 million deficit, $7.1 million is for bad debts, most from parishes that borrowed money to fund Catholic schools, according to the letter from Rigali.

School consolidations, tuition increases, program cuts, major fundraising efforts and more options are all on the table, said Bill Finnegan, head of the Holy Redeemer School Board.

"I can't get into any details because we still have to sit down and look at the decisions to be made," Finnegan said. "It's a multi-layered situation."

In a release last Feb. 11, the diocese reported $15.2 million in non-performing loans. The majority are directly related to schools or made to parishes for supporting schools. In addition, during the last two years, schools had an operating loss of $5.6 million, according to the release....

In addition to school-related losses for the diocese, $3.6 million is related to changes to the pension system, according to the financial statements. An additional $1.5 million is from unrealized losses on investments, an effect of the struggling economy and financial markets.

Improved market performance this current fiscal year could help the diocese recover some losses on investments, Rigali wrote.

During 2009, the diocese had a $3.2 million operating deficit, as compared to a $640,000 deficit in 2008 and a $1.4 million surplus in 2007.

In a bright note, donations and bequests jumped from $28,000 in 2008 to $1.4 million in 2009. The reason was not clear from the report.
This might just be one high-profile example... as things stand, however, more Stateside dioceses are at the fiscal brink than one's able to keep atop of.