Commission on Finance Minutes - November 8, 2011

Diocese of Rhode Island

Commission on Finance

Meeting, November 8, 2011

Higgins Room

Present: Robert Batchelor; Robert Bergstrand; Brian Ehlers; The Rev. Dcn. Edwin Hallenbeck; Scott Nicholson; The Rt. Rev. Geralyn Wolf; Jamie Worrell.

Also present: Canon Ty Creason; Canon Elizabeth Fornal; Ronald Turnbull.

The meeting was called to order at 10:00 am by Chair Nicholson. An opening prayer was offered by Bishop Wolf.

The Minutes of the meeting of October 11, 2011 were approved as distributed.

Treasurer’s Report for October 31 was briefly reviewed, noting that apportionment payments continue to run well in comparison to the running five year average. Expenses are near budget with the exception of line 415 Administration which includes Title IV legal expenses for which no budget was carried in 2011.

Apportionment Report through October shows 40 months of arrears, five more than a year ago at this time. Churches two or more months behind are listed below:

#	Months in Arr		Parish / Location	Comments
	2010	2011
6	Spec	Spec	St. Michael’s, Bristol	OK per agreed plan of 6/28/11
19	0	2	St. David’s, Cranston	Interim-Self study
38	1	6	Christ Church, Lincoln	Interim, see below
43	2	2	St. Columba’s, Middletown	Interim
53	0	3	Trinity Church, N Scituate
78	1	3	St. Mark’s, Riverside	Considering merger
83	4	5	Ascension, Wakefield
89	3	3	St. Mark’s, Warwick
93	4	4	Christ Church, Westerly	Interim

Old Business:

• St. Matthias, Coventry. The best use analysis has been completed and the church renting the property has returned to its home church. Following discussion it was Moved, Seconded and VOTED to recommend to Executive Committee of Council that the property be offered for sale as a single property of both Church at $450,000 and Rectory at $190,000. With an understanding that either parcel could be sold separately.

New Business:

• Christ Church, Lincoln. The Treasurer noted that not only is Christ Church, Lincoln 6 months behind in apportionment payments, it is also 5 months behind in two revolving loan payments. New leadership is starting, and needs time to clarify issues and problems. It is hoped they can meet with us in December. Mr. Batchelor will offer to meet with them.

• Late Report Filings for 2011. It was reported that all churches have now filed Parochial and related Reports. Three churches missed the national church final deadline resulting in underreporting of Diocese of Rhode Island data. There followed a lengthy discussion of what could be done to enable prompt filing of required reports. It was Moved, Seconded and VOTED to recommend to Diocesan Council that Reports due for 2011, including *Parochial Report; *Apportionment Report; *Annual Treasurer’s Report; *Trust and Endowment Report; and, *Budget for the Current (2012) Year shall be filed when due, and that if not received when due will result in disqualification of delegates to the Electing Convention for the 13^th Bishop of Rhode Island on June 2, 2012. The due date is January 31, 2012 as required by The Episcopal Church Canons and for purposes of this Convention the date shall be March 1, 2012.

• St. Matthias, Coventry, Chimney. During replacement of the roof it was determined that the chimney is damaged. Two bids for repair were received. Following discussion it was agreed to take no action at this time.

• Review of Properties. Mr. Creason reviewed problems and costs associated with several closed churches noting expenses of the Diocese related to holding and maintaining these properties now being offered for sale. It was suggested this be factored into establishing a realistic sale price. Further discussion considered establishing two oversight committees, as subcommittees of COF:

>Real Property Oversight— to deal with best use and sale price.

>Property Management— to oversee taking care of property.

This will be considered further for future action.

Additional Item: Bishop Wolf provided a preliminary view of the recommendations for the Cathedral Close area, which will probably suggest three potential uses for the area; a) Assisted Living; b) Low Income Housing for Elderly; and, c) Re Use of Edwards Homes by upgrade and renting at fair market value. No suggestions have been made for addressing the Cathedral needs.

The meeting was adjourned at 11:35 am

Respectfully submitted

Edwin F Hallenbeck, Secretary

Next Meeting: Tuesday, December 13, 2011 10:00 am – Higgins Room

Commission on Finance - Minutes October 11, 2011

Diocese of Rhode Island

Commission on Finance

Meeting, October 11, 2011

Higgins Room

Present: Robert Batchelor; Robert Bergstrand; Brian Ehlers; The Rev. Dcn. Edwin Hallenbeck; The Rev. John Pallard; The Rt. Rev. Geralyn Wolf; Jamie Worrell.

Also present: Canon Ty Creason; Canon Elizabeth Fornal; Ronald Turnbull.

The meeting was called to order at 10:05 am by Bishop Wolf who offered an opening prayer.

The Minutes of the meeting of September 13, 2011 were approved as distributed, noting Mr. Bergstrand’s name was misspelled.

Treasurer’s Report for September 30 was briefly reviewed, noting that apportionment payments continue to run slightly ahead of the running five year average. It appears that cash flow is within budget and should lead to a balanced year end.

Apportionment Report through September now shows 41 months of arrears, three more than a year ago at this time. Churches two or more months behind are listed below:

#	Months in Arr		Parish / Location	Comments
	2010	2011
6	Spec	Spec	St. Michael’s, Bristol	OK per agreed plan of 6/28/11
19	0	2	St. David’s, Cranston	Interim-Self study
38	0	6	Christ Church, Lincoln	Interim, see below
53	0	3	Trinity Church, N Scituate
66	1	3	All Saints Memorial, Providence	Interim
78	0	2	St. Mark’s, Riverside	Considering merger
82	0	2	Holy Trinity, Tiverton	Interim
83	3	5	Ascension, Wakefield
89	4	4	St. Mark’s, Warwick
93	4	4	Christ Church, Westerly	Interim

Old Business [Mr. Ehlers assumed the Chair]

• Update on St. John’s, Newport. Bishop Wolf and Canon Creason reported on a recent meeting with the Senior Warden. He and others in the parish appear to be fully aware of the situation they are facing. Income is not what was expected and serious building issues need to be addressed. They expect to finish 2011, however moving forward to 2012 will be very difficult. They have decided not to sell the Rectory and must address personnel issues. It is not possible to build a 2012 budget until personnel matters are resolved, therefore it is not possible to project apportionment. It was agreed to use $24,000 projected apportionment until a budget figure is available.

New Business

• Retired Lay Pension Fund. Mr. Turnbull distributed a summary of the current status of the Fund, now discontinued, but still serving six former employees, all except one over 80. The fund is viewed as actuarially sound with sufficient funds to cover anticipated payments. It was suggested we explore transferring to an external annuity to avoid reporting expenses.

• St. Mathias Vicarage Roof. Two bids were received, noting the house is up for sale. Following lengthy discussion it was agreed to accept the bid of Roof Doctor, Inc. of Warwick following review by the Realtor and electronic confirmation vote.

• Christ Church, Lincoln. Recent conversation with the Senior Warden indicates that financial records are not up to date. A new treasurer and assistant treasurer have been appointed and will address the matter as soon as possible. It is hoped current information will be available by next month.

• 2010 Reports Due from Parishes. Update on September report of three churches with no Reports. St, Mary’s, Portsmouth has been received. To date no Reports have been received from Trinity Church, Newport and St. Paul’s Church, Pawtucket.

• Charlestown Land Proposal. Canon Creason stated that the Diocese is not in a position to develop recent land acquisitions. Church Woods Affordable Housing Charlestown is interested in developing the vacant lots, north and east of the Church for affordable housing units. Following discussion it was Moved, Seconded and Voted to accept the indemnification agreement to Washington County Development Corp, subject to due diligence review of property in Charlestown adjacent to Church of the Holy Spirit, subject to final approval by the Chancellor.

• Cathedral Close Update. Bishop Wolf reported that the Feasibility Study of the Cathedral Close project has concluded that we cannot proceed with constructing condominiums. Too many are already for sale in the area. What may work is Assisted Living and upgrading the Edwards Homes may be workable. Addressing the needs of the Cathedral building, however, is a problem.

• Audit. The Audit of 2010 has been received and is available on the web site and in hard copy.

The meeting was adjourned at 11:20 am.

Respectfully submitted

Edwin F Hallenbeck

Secretary

Next Meeting: Tuesday, November 8, 2011. Higgins Room

Commission on Finance - Minutes September 13, 2011

Diocese of Rhode Island

Commission on Finance

Meeting, September 13, 2011

Higgins Room

Present: Robert Bergstrand; Brian Ehlers; The Rev. Dcn Edwin Hallenbeck; Scott Nicholson; The Rev. John Pallard; The Rt. Rev. Geralyn Wolf.

Also present: Canon Ty Creason; Canon Betsy Fornal, Ronald Turnbull.

The meeting was called to order at 10:00 am by Chair Nicholson. Opening prayer was offered by Bishop Wolf.

The Minutes of the meeting of July 12, 2011 were approved as distributed.

Treasurer’s Report for August 31 was briefly reviewed by Mr. Turnbull. He indicated there are no surprises and that income is in line with prior years at this point in the year.

Apportionment Report through August now shows 42 months of arrears the same as a year ago, while in previous months arrearage was much lower. Churches 2 or more months behind are listed below:

#	Months in Arr		Parish / Location	Comments
	2010	2011
6	Spec	Spec	St. Michael’s, Bristol	OK per agreed plan of 6/28/11
19	3	3	St. David’s, Cranston	Interim-Self study
36	1	2	St. Matthew’s, Jamestown
38	0	6	Christ Church, Lincoln	Interim
43	1	2	St. Columba’s, Middletown
53	0	2	Trinity Church, N Scituate
66	2	2	All Saints Memorial, Prov	Interim
78	8	4	St. Mark’s, Riverside	Considering merger
82	1	2	Holy Trinity, Tiverton	Interim
83	3	5	Ascension, Wakefield
89	3	3	St. Mark’s, Warwick
93	4	4	Christ Church, Westerly	Interim

It was agreed that Chair Nicholson will contact Sr. Wardens of churches that are behind. Several churches are exploring mergers.

Old Business:

• St, John’s Church, Newport has run into some roadblocks, including problems with the Rectory, that have prevented completing a plan for submission to COF.

• Parochial Report Review Committee. Mr Turnbull reminded the COF that this committee, which reviews all reports from churches is in need of members, one lay and two clergy. Mr Bergstrom agreed to serve and Fr Pallard agreed to serve with Fr. Dennis Bucco nominated to be contacted.

New Business:

• St. Mark’s, Warren. Canon Creason presented a best use analysis and appraisal of the current market value report prepared by Leslie Hogan, Hogan Associates Real Estate, Middletown. Following discussion it was Moved, Seconded and VOTED to recommend to Diocesan Council Executive Committee to place both properties on the market with Hogan Associates.

• St. Matthias, Coventry. Canon Creason presented an description and appraisal of the current market value of the house at 1 Rectory Drive, adjacent to the church facility prepared by Brian Carpenter, Long Realty & Insurance Co. Following discussion it was Moved, Seconded and VOTED to recommend to Diocesan Council Executive Committee to place the house on the market with Long Realty.

• Draft Budget. Canon Creason distributed copies of the draft Narrative Budget and the four page summary that will be distributed at the Budget Hearings. COF members were encouraged to attend as they are able. He further noted that planning will begin soon to consider how best to reallocate staff functions to be lost thru personnel reductions.

• Close out of NSF Accounts. Mr. Turnbull reported that three NSF accounts had been closed as their functions had ceased.

• 2010 Church Reports outstanding. A memo from Mr. Batchelor reviewed all reports not received for 2010. Of particular importance are the 2010 Parochial Report; 2010 Annual Treasurer’s Report and 2012 Apportionment Worksheet. These reports are important to the Diocese, and also result in omitting this information from National Church data when not submitted by September 1^st. Missing Churches are:

Trinity Church, Newport

St. Paul’s Church, Pawtucket

St. Mary’s Church, Portsmouth

It was agreed that a member of the COF would visit each church to discuss the matter.

The meeting was adjourned at 11:05 am.

Respectfully Submitted

Edwin F Hallenbeck, Secretary

Next meeting: October 13, 2011 at 10:00 am. Higgins Room.

Commission on Finance - Minutes July 12, 2011

Diocese of Rhode Island

Commission on Finance

Meeting, July 12, 2011

Higgins Room

Present: Robert Batchelor; Brian Ehlers; The Rev. Dcn. Edwin Hallenbeck; Scott Nicholson; The Rev. John Pallard; The Rt. Rev. Geralyn Wolf.

Also present: Canon Ty Creason; Canon Betsy Fornal; Ronald Turnbull.

The meeting was called to order at 10:05 am by Chair Nicholson. Opening prayer was offered by Bishop Wolf.

The Minutes of the meeting of June 14, 2011 were approved as distributed.

Treasurer’s Report for June was distributed by Mr. Batchelor, noting that most lines are pretty much on budget, with the exception of Title IV legal expenses, which were not budgeted for in 2011. Also distributed in the same format as the Treasurer’s report was the 2010 Audited Summary Report, which will be posted on the Diocesan website.

Apportionment Report. Apportionment payments continue to be received in a more timely manner than recent years, with 24 months arrearage compared to 48 months at this time last year. Churches 2 or more month behind are listed below:

#	Months in Arr		Parish / Location	Comments
	2010	2011
6	Spec	Spec	St. Michael’s, Bristol	$11,970. Negotiation in process
19	3	2	St. David’s, Cranston	Interim-Self study
38	0	4	Christ Church, Lincoln	Interim
78	6	2	St. Mark’s, Riverside	Considering merger
83	1	3	Ascension, Wakefield
93	3	3	Christ Church, Westerly	Interim

It was suggested the improved payment pattern has been helped as some churches have merged or closed.

Old Business.

• St. Michael’s Bristol. The Treasurer reviewed recent correspondence with the parish Treasurer. St. Michael’s has agreed to pay the arrearage due over 15 months beginning in July 2011. The matter appears to be resolved.

• Insurance Retention Fund. The Treasurer reviewed recent action by Council at its June meeting allocating funds to support the Bishop Search Process with up to $140,000. from the Insurance Retention Fund. This is in addition to amounts in the 2011 and 2012 Budget. An amount slightly in excess of $40,000 remains in the IRF to be dealt with at a later date. There was a brief discussion of the prospect of receiving gifts for the Search process, noting the set budget would remain as adopted.

• St. John’s, Newport. Following the conversation at the June COF meeting a plan is being developed and should be available at the next COF meeting.

• St. Luke’s, Pawtucket and St. John’s, Ashton. Several issues relating to the merger are being worked out including: a) St. John’s revolving loan outstanding balance of $51,888 with no recent payments. It is stated this will be resolved shortly. b) The churches have different insurance carriers now needing to be resolved. c) Appraisals of the St. John property are being undertaken in preparation for sale.

• St. James, Woonsocket. The Treasurer reported a question raised regarding the action at the June COF meeting regarding unemployment insurance costs. Following discussion it was agreed the apportionment reduction agreed upon applies to 2011 year only.

• St. Anne’s, Block Island. The Treasurer and Chancellor visited the Island on the day of the proposed house purchase inspection. Several unique situations were encountered during the inspection involving structural and foundation matters. The result is we withdrew from the proposed purchase.

• St. Mark’s, Warren. Mr. Creason distributed a May 24, 2011 Best Use Analysis and Appraisal for the Church and Parish House. This was viewed as a more balanced statement than previous data. Following discussion it was Moved, Seconded and Voted to place the Church and Parish House of St. Mark’s, Warren on the market for sale.

New Business.

• Parochial Report Review Committee. Mr. Turnbull noted that the Committee has lost two members recently and is in need of at least one clergy and one lay new member in order to function. He asked for suggestions. Experience in church finance is essential.

• Budget for 2012. The Treasurer reported the 2012 Proposed Budget as adopted by the Committee on Program and Budget for consideration by COF and transmittal to Council. These was considerable discussion regarding a number of details. It was Moved, Seconded and VOTED to approve the 2012 Budget as presented and forward it to Council for their consideration. Changes following budget hearings may require further review. The budget bottom line is:

Apportionment Funded $1,898,437.

Expected Apportionment $1,900,000. Apportionment @ 17%

Net Gain (or Loss) $1,563.

• Diocesan Resource Fund. Mr. Creason reviewed the history and status of this fund, suggesting that its several sources are quite different and not adequately reflected in the current application of the funds. He stated he will prepare a working paper for COF to consider the matter further with a view to possible changes in the policy governing the use of these funds.

The meeting was adjourned at 11:15 am.

Respectfully submitted

Edwin F Hallenbeck, Secretary

Next meeting: September 13, 2011

Minutes of the Commission on Finance for June 2011

Diocese of Rhode Island

Commission on Finance

Meeting, June 14, 2011

Higgins Room

Present: Robert Batchelor; Robert Bergstrand; Brian Ehlers; The Rev. Dcn. Edwin Hallenbeck; Scott Nicholson; The Rev. John Pallard; The Rt. Rev. Geralyn Wolf; Jamie Worrell.

Also Present: Canon Ty Creason; Canon Elizabeth Fornal; Ronald Turnbull.

For part of meeting: Michael Lofaro, St. Ann’s, Block Island; The Rev. R. Trent Fraser. Edward Carnes,Treasurer and Ron Turgeon, Junior Warden, St. John the Evangelist, Newport.

The meeting was called to order at 10:05 a.m. by Chair Nicholson.

Opening prayer was offered by Bishop Wolf.

The Minutes of the meeting of May 10, 2011 were approved as distributed.

The Treasurer’s report for May 2011 was distributed by Mr. Batchelor without further discussion.

St. Ann’s By-the-Sea, Block Island. Mr. Lofaro joined the meeting. A Vicarage Recommendation working paper, submitted by the Bishop’s Committee was distributed in advance of the meeting. It is proposed that to continue the growth and development of St. Ann’s, adequate housing for the Vicar and better space arrangement for parish functions of all kinds is needed. A number of options have been explored. The most viable solution is purchase of an existing house. A purchase and sale agreement has been negotiated for a house at a cost of $625,000 plus 3% land trust tax of $18,600, total cost $643,600. It is proposed to purchase the house as follows:

St. Ann’s Growth & Endowment Fund $100,000.

Parishioners Capital Fundraising ($100,000 in hand) 200,000

Revolving Loan Fund, Diocese 343,600.

Total project cost $643,600.

The project and St. Ann’s ability to carry out both the financial and growth aspects was discussed at length. It was considered to be a well planned and reasonable proposal. It was noted the house contains a separate rental apartment that produces an estimated seasonal income of $14,000. A commitment to the sale is needed by July 15, 2011. Mr Lofaro left the meeting.

The proposal was reviewed in detail also considering St. Ann’s operating data for the last several years and the importance of having a full time Vicar. Following discussion it was Moved, Seconded and Voted to recommend to Diocesan Council that a Revolving Loan Fund loan for 30 years at prime minus 1% be made for up to $344,000 to St. Ann’s By-the-Sea for purchase of a Vicarage. Note: ample loan funds are available.

St. John’s, Newport. Fr. Fraser, Mr. Turgeon and Mr. Carnes joined the meeting. A letter was received from Frank Jenks, Senior Warden, apologizing for not being able to attend the meeting and summarizing recent history of problems relating to St. John and his hope to continue developing a long term viable plan with the Diocese. There followed a lengthy discussion of current problems the parish faces and steps being taken. The aim is to pay full apportionment with earlier estimates to do so being overly optimistic. It will take another two or three years to complete corrections. St. John’s representatives left the meeting.

It was Moved, Seconded and Voted to continue St. John’s, Newport apportionment at the rate currently being paid at $1,800 per month, $21,600 for 2011. It was further agreed that St John’s representatives and Diocesan staff will meet by mid July to agree on a working figure for 2012 apportionment to assist in both parish and Diocesan budget planning for 2012.

Apportionment Report. Parishes continue to respond well in paying apportionment on a current basis with the total of months in arrears about half of 2010 at the same time. The chart below lists all parishes two or more months behind.

#	Months in Arr		Parish / Location	Comments
	2010	2011
2	0	3	St. John’s, Ashton	Merger in process
6	Spec	Spec	St. Michael’s, Bristol	$9,975. Negotiation in process
19	2	2	St. David’s, Cranston	Interim-Self study
38	0	3	Christ Church, Lincoln	Interim
43	2	3	St. Columba’s, Middletown
83	4	3	Ascension, Wakefield
93	2	3	Christ Church, Westerly	Interim

Note: All Parishes two or more months behind will be listed each month.

St. Matthias, Coventry. Vicarage boiler bid proposals were received from three companies. It was Moved, Seconded and Voted to accept the bid/work proposal of Santoro Oil Company for $5,385 to remove the present boiler and install a Weil-McLain PUO-3 Ultra oil boiler with Beckett NX oil burner.

New Business.

St. James, Woonsocket, apportionment request. A letter from the Rector stated that in the 1980s the Vestry elected to reimburse any unemployment insurance rather than participate in the State of RI system. In 2010 with terminated employees the cost became significant. In 2011 it is estimated to cost $13,000. The parish requests not to pay apportionment on this cost. Following discussion it was Moved, Seconded and Voted to reduce half the apportionment due in unemployment insurance costs in 2011 when documented as an actual cost at year end. It was noted that St. James has since joined the Unemployment insurance system.

St. Lukes, Pawtucket. It was noted that in the process of merger with St. John’s, Ashton, an outstanding diocesan revolving loan fund loan with an outstanding balance is still in effect and now in areers. A letter from the Rector states they are aware of this and with some other matters hope to formulate a plan to resolve these outstanding issues. They request some time to come up with a plan. It was agreed to hold the matter for the time being for a future agenda.

Budget Amendment. The 2015 Task Force for Strategic Needs and Planning was created by the 2010 Convention and given a series of tasks. It was not given funds to carry out this work. The Task Force has requested funds in the 2012 budget and is now beginning its work in following up The State of the Churches meeting and gathering other data. A budget line of $1,000 for 2011 is requested to begin this work. It was Moved, Seconded and Voted to request Diocesan Council to Amend the 2011 Budget by adding a line for the 2015 Task Force for Strategic Needs and Planning and appropriating $1,000 for this purpose.

It was agreed to schedule a Commission meeting in July given the volume of business at hand.

The meeting was adjourned at 12:30 pm.

Respectfully submitted

Edwin F Hallenbeck, Secretary

Next meeting: July 12, 2011 at 10:00 am - Higgins Room

September 13, 2011 at 10:00 am – Higgins Room