Commission on Finance - February 12, 2013

Diocese of Rhode Island

Commission on Finance

Meeting, February 12, 2013

Higgins Room

Present: Robert Batchelor; Robert Bergstrand; Dennis Burton; The Rev. Dcn Edwin F. Hallenbeck, The Rt. Rev. Nicholas Knisely; Michael Lofaro; The Rev. John Pallard; Stephan Sloan.

Also present: Joan Decelles; Canon Elizabeth Fornal; The Rev. Canon Linda Grenz; Ronald Turnbull.

Others: The Rev. Casey Shobe (St. Peters-by-the-Sea); The Rev. Ronald Crocker, Jim Bethel, by phone, Dr. Walter Scott, Marilyn Fletcher (Christ Church, Lincoln).

The meeting was called to order at 10:10 am by Chair Lofaro. Bishop Knisely offered an opening prayer.

The Bishop stated that Mr. Lofaro had been asked to serve as Chair of the Commission and had accepted. The COF members offered their thanks and congratulations.

The Minutes of the meeting of January 8, 2013 were approved as distributed.

Treasurer’s Report. Mr. Batchelor noted the report for January is very early in the year with no unusual items at this time.

Revolving Loan Application, St. Peter’s-by-the-Sea, Narragansett. Fr. Shobe summarized the current project under way. A Capital Campaign has secured pledges of about $350,000 to be paid over 3 years for a major restoration of the interior of the Church and conversion to Natural Gas. Work is under way to complete these projects. The loan request for $250,000, viewed as a “Bridge Loan,” to enable contractor payments as the church awaits capital campaign payments. The application was reviewed together with the Campaign Brochure and Vestry Minutes approving the application. Mr. Turnbull reviewed the terms of the loan, Four year term at prime minus 1% is a rate of 2.25%. It was also noted that DIT holdings may be pledged as security further lowering the interest rate by .5%. Following discussion it was MOVED, Seconded and VOTED to recommend to the Bishop, Standing Committee and Diocesan Council that a Revolving Loan of $250,000 be granted to St. Peter’s-by-the-Sea, with a four year term at prime minus 1% currently 2.25%. The motion was approved 6 Votes, Yes; 2 Abstentions. Note: Following the meeting, Mr Turnbull further reviewed the interest reduction with DIT funds pledged, as stated in the rules for Revolving Loans, which is .75%. The actual net interest rate will therefore be 1.50%.

Review and Update - Christ Church, Lincoln. Fr. Crocker, Jim Bethel were present, Dr. Scott and Marilyn Fletcher joined the meeting by phone. Dr. Scott reviewed the 2013  church budget as adopted at the annual meeting. The review was detailed with a number of questions, responses and comments. The general conclusion is that Christ Church had budget balanced year for 2012. As the church moves forward in seeking to hire a part-time Rector, the Bishop stated he will assist with this process, and that he sees a realistic view of the church moving forward. It was noted that for 2012 a cash operating surplus of $32,775.22 was realized and proposed surplus of $39,586 is stated in the 2013 budget. Dr. Scott commented that there are two reasons for the surplus: first, Christ Church must have funds available to hire a Rector; and second, it is important to be prepared for unanticipated costs due to the older buildings. It was further noted that Christ Church is significantly better off than at the last leadership visit with COF in February 2012 and record keeping is much improved. Based on these observations and plans for 2013 it was agreed that Apportionment should be increased, based on a current year funding rate, at $35,000 for 2012. Chairman Lofaro thanked all at Christ Church for their hard work, and Bob Batchelor for his effort on behalf of the Diocese.

            Fr. Crocker stated that he had accepted a three month contract, which has been extended to six months, ending in June. He is seeking to develop a model for part time clerical ministry in a church that can be extended to other churches facing difficult circumstances.

Apportionment Report. The Report for January states only 11 parishes behind one month compared to 20 at the same time in 2012. Following review of outstanding prior years unpaid apportionment it was Moved, Seconded and Voted that the Commission on Finance recommend to Diocesan Council that the set up of  2012 Apportionment Receivables be set in the amount of $41,556.91 and that the Uncollectable Apportionment Reserve remain at $8,235.

Episcopal Church Requirements for Parish Audits.  The primary statement is that an audit should be done annually, with specific requirements stated by each Diocese.  Rhode Island requirements are: a) Professional external Audit; b) Internal Audit Team; c) Vestry appoints an external person and church member to conduct the audit. Under current circumstances it was agreed that the Diocese of RI requirements need to be revised. It was Moved, Seconded and VOTED to request the Chair, the Bishop and the Treasurer to appoint a sub-committee to review and revise the Diocesan Audit requirements, create better language to provide parishes with better understanding and instructions, and to prepare any Canonical changes that may be needed for COF consideration and action at 2013 Convention.

Insurance Retention Fund. The current status of this Fund was reviewed, with a current balance of $41,123.41. No further consideration of use was made at this point. The Bishop suggested that the Diocese might consider a special insurance policy in the life of the Bishop with the Diocese as beneficiary to provide funding for a search in the near term before the cumulative annual budgeted funding builds up. Mr. Turnbull will research this with CPF, and report to Program and Budget Committee. The Chair suggested we may wish to consider assigning the balance to the Bishop Search Fund.

May House Sea Wall. Two bids were received for repair to the recently damaged seawall. The bids were significantly different both in proposed scope of work and cost. Neither proposal addressed issues related to a Bay front property and any regulatory requirements. It was agreed to Table the matter, refer it to the Chancellor, review the type of construction and permitting needed, and leave it on the COF agenda until resolved.

The meeting was adjourned at 12:15 pm

Respectfully submitted

Edwin F Hallenbeck, Secretary

Next Meeting: March 12, 2013

Treasurers Workshop: March 16, 2013. St. Mark’s Church, Warwick, 9:00 am to 1 pm.