Minutes — November 18, 2014

Diocese of Rhode Island

Commission on Finance

Meeting, November 18, 2014

Higgins Room

Present:  Robert Batchelor; Robert Bergstrand; Dennis Burton; The Rt. Rev. Nicholas Knisely; Michael Lofaro; Stephan Sloan; The Rev. Joyce Thorne.

Also present:  Joan DeCelles; The Rev. Canon Linda Grenz; The Rev. Edwin Hallenbeck.

Guests: All Saints’ Memorial Church, Providence: The Rev. David Ames; Rebecca Silliman, Treasurer.

St. George’s, Central Falls: The Rev. José Roberts; Ceasar Delcompare, Senior Warden; JW; Martha Pantoja, Treasurer.

The meeting was called to order by Bishop Knisely at 10:00 a.m. The Bishop offered an opening prayer.

The Bishop welcomed Michael Lofaro (reappointed) and Stephan Sloan (reelected) to new terms on the Commission. The Bishop appointed Mr. Lofaro as Chair of the Commission, and Deacon Hallenbeck as Secretary. Both appointments were affirmed by unanimous vote.

The Minutes of the meeting of October 14, 2014 meeting were approved as distributed, noting that Mr. Sloan’s name was omitted from those present.

Financial Report for October is near budget with most variances due to timing matters. Mr. Batchelor expects year end to be very close to budget expectations. It was noted that monthly budget allocations are currently on a 1/12^th basis. The accounting program is able to accept anticipated variations, and an effort will be made in 2015 to accommodate some of these. There was additional discussion of cash needs to reduce checking account balance. This is still under discussion and will be considered further in December. The matter of guarantee of loans for clergy housing was discussed and noted as an idea for consideration. It was agreed that the COF has several matters, such as this, needing extended consideration at a Retreat Day, to be set in early 2015. Members are asked to suggest other matters that could be discussed. [Please send to Joan or Ted]

Apportionment Report. Payments are running somewhat slower, as is often the case this time of year. There are three churches with significant issues: St. George’s, Central Falls; St. David’s, Cranston; and St. Paul’s, Pawtucket.

All Saints’ Memorial Church, Providence, Revolving Loan Request. Guests from All Saints’ joined the meeting and provided a summary of the work under way leading to the loan request. Despite advance planning, a successful capital campaign, once the work on the window was begun the scope of deterioration in and surrounding the window was significantly worse than expected, requiring additional work. The total project cost is now $101,154. All Saints’ is providing $61,000 with a loan request for the balance. A  foundation grant request is pending which would reduce the amount need by loan. The guests left the meeting.

Following a further discussion, it was Moved, Seconded and VOTED to Approve a Revolving Loan of up to $40,000 at 2.5% for 5 years, subject to reduction should a foundation grant for the project be received.

St. George’s, Central Falls, Revolving Loan Request. Guests from St. George’s joined the meeting. With the assistance of Robert Bergstrand, who assisted in defining and securing bids for the project, provided a summary of the need for, and work required, to convert to a gas fired energy system for three heating zones. A special problem is three non-operating radiators. The extent of repairs needed will not be known until the new system is running. Based on the low bid a loan of $44,850 is needed.  There was a lengthy discussion about how best to structure a loan that will work for the church. The guests left the meeting.

Following a further discussion it was Moved, Seconded and VOTED to Approve a Revolving Loan of $34,000 for 10 years at 1.50% with no payments prior to January 2015. This approval is based on the assumption that $10,850 in funding will be available from an alternate source as suggested by the Bishop.

In addition it was also Moved, Seconded, and VOTED that unpaid apportionment due for 2014 in the amount of $7,610 be waived as requested by the Church officers present at the meeting. Every effort will be made to collect salary account reimbursement as stated in the Church and Diocesan budgets.

St, John the Evangelist, Newport, Mudrak Fund request for Hearing Aid assistance. The proposal was reviewed at length, with the conclusion that as presented it is unclear what the cost is for the sound system and what the cost is for the hearing assistance add on. It was Moved, Seconded and VOTED to ask St. John to resubmit the application for Mudrak funds with a clearer statement of sound system costs and supplemental hearing assistance costs.

Audit Report. The Audit management letter was briefly discussed, noting that this was a clean audit for 2013 and the matters reviewed in the management letter either have been or are in the process of being addressed by staff. Further discussion and review is deferred to the December meeting of COF.

Council Representative. It was agreed that Mr. Robert Bergstrom will continue to serve as the Diocesan Council representative of the COF as required by Canon.

St. Michael’s Church, Bristol has inquired if its Rectory knob and wire electric system is eligible for a grant to correct code deficiency.

A gift has been received for the Revolving Loan Fund of $50,000 from a donor advised fund at the Rhode Island Foundation. Acknowledgement has been made.

The Finance Office will contract with the current auditor to perform some functions previously done by the Comptroller.

Church of the Beloved, Pascoag, new Fire Alarm system is up and in operation as of today.

The meeting was adjourned at 12:15 p.m.

Respectfully submitted

Edwin F Hallenbeck, Secretary

Minutes — October 14, 2014

Diocese of Rhode Island

Commission on Finance

Meeting, October 14, 2014

Higgins Room

Present:  Robert Batchelor; Robert Bergstrand; Dennis Burton; The Rt. Rev. Nicholas Knisely; Michael Lofaro; Stefan Sloan; The Rev. Joyce Thorne.

Also Present: Joan DeCelles; Canon Elizabeth Fornal; The Rev. Canon Linda Grenz; The Rev. Edwin Hallenbeck; Ronald Turnbull.

Guests: The Rev David Lucey, Chair, Program and Budget Com. St. Mark’s, Warwick: The Rev. Susan Wrathall, Rector; Shirley Kolarik, Treasurer.

The meeting was called to order at 10:04 a.m. by Chair Lofaro, with an opening prayer by Bishop Knisely.

The Minutes of the meeting of September 9, 2014 were approved as distributed.

Financial Report for September was reviewed by Mr. Batchelor, noting the Balance Sheet accounting is running well and may be found at the end of the report. Revenue and Expense Report shows that expenditures are lagging in some categories, expected to catch up by year end. Staff is still researching ways to tighten up and shorten the report document.

Apportionment Report was distributed in two forms. The first showing all churches, the second showing in greater detail all churches not current in apportionment payments. Currently there are 22 months of arrearage compared to 33 months in 2013. The new Report is  viewed as useful and both Reports will be available for the time being.

Revolving Loan Fund Report states all loans outstanding and payments through September. This view is very helpful and will be available monthly.

Draft Policies: Major Gifts Policy. Canon Grenz stated that The Episcopal Church has created draft language appropriate to TEC church structure and she hopes to have this available by our next meeting. Transfer of DIT Funds is a more local matter and Mr. Batchelor will continue to work on draft language.

Travel Funds. It was noted that the Bishop’s Travel fund is now over expended due to the high cost of the unusual expense of the House of Bishops meeting in Taiwan. At the same time more funds are allocated to General Convention than will be needed next year. Following discussion it was Moved, Seconded and VOTED to move $8,000 from Triennial General Convention Expenses to Bishop’s Travel. There was one abstention from this vote.

2015 Draft Budget. Chair of the Budget Committee, The Rev. David Lucey reviewed the proposed budget in some detail, noting why some items had been shifted to new locations and why some figures had been shifted either up or down, The budget for 2015 is balanced at a total of $3,820,055. Following a lengthy discussion and a number of questions is was Moved, Seconded and VOTED to commend the 2015 Diocese of Rhode Island budget to Diocesan Council for consideration and forwarding to Diocesan Convention. Following the vote a question was raised regarding churches that are overspending endowments in some cases to pay apportionment. This resulted in a discussion concluding that this problem is as much a cultural/political matter as it is dollars, needing a change in awareness and willingness to address the matter and make changes. Ongoing discussion will be needed.

St. Mark’s, Warwick Revolving Loan Request. Guests from St. Mark’s noted above joined the meeting and reviewed the need for completion of roof repair and complete redoing of the church parking area. Both matter were reviewed in detail, noting receipt of $8,750 in insurance recovery on the roof project. It is anticipated the projects will proceed immediately. It was suggested that a reduction of 0.75% on the interest charge could be made if the church places its current reserve funds in the DIT with a pledge to the value of the loan. The guests left the meeting.

Following a brief discussion it was Moved, Seconded and VOTED to Approve a Revolving Loan of $41,000 to St. Mark’s Church, Warwick at an interest rate of 2.25% or 1.50% with DIT pledged funds and forward the matter to the Standing Committee for their consideration.

Depreciable Assets Policy. Mr. Batchelor offered a draft policy statement stating how the Diocese treats long-lived assets costing $3,000 or greater. It is strongly recommended that this policy be adopted and followed by parishes and missions so that such properties are treated consistently. Following discussion it was Moved, Seconded and VOTED to adopt the Depreciable Assets Policy for the Diocese of Rhode Island and commend the same to all Parishes and Missions for their use. Once effected this policy will be posted on the Diocesan Website available to all.

Next Meeting. Due to the November 11 Holiday it was agreed the next COF meeting will be November 18, at 10:00 a.m.

The meeting was adjourned at 11:45 a.m.

Respectfully submitted

Edwin F Hallenbeck

Secretary

Minutes — September 9,2014

Diocese of Rhode Island

Commission on Finance

Meeting. September 9, 2014

Higgins Room

Present:  Robert Bergstrand; Dennis Burton; The Rt. Rev. Nicholas Knisely; Michael Lofaro; The Rev. Joyce Thorne.

Also present: Joan DeCelles; Canon Elizabeth Fornal; The Rev. Canon Linda Grenz; The Rev. Edwin Hallenbeck; Ronald Turnbull.

Guests:

Holy Trinity, Tiverton: The Rev. John Higginbotham, Rector; Karen Corr, SW.

St. Augustine’s, Kingston: Jane Grenier, Treasurer; The Rev. Linda Grenz.

The meeting was called to order at 10:05 a.m. by Chair Lofaro. Bishop Knisely offered an opening prayer.

The Minutes of the meetings of June 10, 2014 and June 13, 2014 were approved as distributed. The Secretary noted one typo in each which will be corrected with a final copy forwarded to Ms. DeCelles.

Financial Report for August was reviewed by Mr. Turnbull. Most items are at or near budget. Further simplification of the report by omitting columns makes it more readable. Some additional suggestions were offered.

Review of Revolving Loan Fund. It was noted that St. Columba’s has made no payment to date, while the loan was made in May. Churches are not currently billed for payments due. It was suggested a billing process be designed and initiated. Canon Grenz reported on recent meetings with representatives from Washington Trust, during which favorable interest was expressed in making commercial loans available to Episcopal churches on terms similar to the Revolving Loan Fund. This would work well for churches with established financial experience, leaving the RLF available for churches experiencing difficult circumstances. There are one or two churches with current RLF loans that might be encouraged to shift to Washington Trust. Canon Grenz will follow up. Conversations were also held with Thrivent Credit Union exploring how they might be of assistance to Episcopal churches.

Apportionment Report. With a small number of months of arrearage, only two churches are three or more months behind. The most behind is St. George’s, Central Falls, 6 months in arrears. They are also behind in salary reimbursement to the diocese. Reviewing further, in 2013 St. George’s also still owes $3,986.25 in apportionment and $3,500 in salary recovery, a total of $7,486.25. Further discussion indicated payment of either item is unlikely, therefore. It was MOVED, SECONDED and VOTED to write off St. George’s, Central Falls 2013 debt to the Diocese of $7,486.25 as noted above, as a Bad Debt.

Revolving Fund request, Holy Trinity Church,  Tiverton. Fr. Higginbotham gave a summary of the requested funds to convert three furnaces from oil to natural gas for a significant cost saving. Details were reviewed and a number of questions answered. It was noted that no endowment is currently in the DIT, which, if pledged, could reduce the loan rate. The request is for $18,500 with specific quotes available. A related issue noted is a heavy use of endowment funds. There is a clear need for strategic planning toward a sustainable level. The guests left the meeting.

Revolving Fund and Grant request, St. Augustine’s Church, Kingston. Ms. Grenier gave a summary of the project, stating the Church is actually two buildings built at different times with five different levels of working space. There are some external ramps that do not meet ADA standards. The project focus is making levels as accessible as possible meeting ADA requirements. The project will be carried out in two stages, the first immediately, and the second, interior work in winter when students are away from school. A grant of $10,000 is requested from the mission church accessibility and safety fund, and a Revolving Loan Fund loan of $10,000, timing to be negotiated as the project proceeds. DIT funds will be pledged to secure an interest rate reduction. Additional funds needed are being raised within the parish. The guest left the meeting.

Holy Trinity Church. The request was review by the COF with the following action:

It was MOVED, SECONDED and VOTED to approve a RLF loan to Holy Trinity Church of $18,500 for 5 years at 2.25%, with an option to reduce the interest by .75% with a pledge of DIT Funds. It was further stated that Dennis Burton representing the COF meet with parish leadership and the Vestry to discuss the concern about strategic planning and working toward financial stability.

St. Augustine’s Church. The request was reviewed by the COF with the following actions: It was MOVED, SECONDED and VOTED to approve a grant to St. Augustines Church of $10,000 from the mission church accessibility and safety fund, and further VOTED to approve a RLF loan of $10,000 for 5 years at 1.5% with a DIT pledge.

May House projects. Mr. Burton reported all projects are completed. He noted work on the driveway is needed, as well as reseeding disturbed areas. He was asked to proceed with these needed items.

Diocesan House Building Needs. Canon Grenz reviewed several needs, and was asked to proceed with study of how best to carry them out. Key matters are upgrading the HVAC system and providing vertical accessibility. It was noted that a portion of the Diocesan House upper parking lot retaining wall collapsed overnight. Insurance coverage will be sought and study of how best to repair the damage.

The meeting was adjourned at 12 noon.

Respectfully submitted

Edwin F. Hallenbeck, Secretary                      Next meeting: October 14, 2014 at 10:00 am

Minutes — June 13, 2014

Diocese of Rhode Island

Commission on Finance

Special Meeting, June 13, 2014

Higgins Room

Present:  Robert Batchelor; Robert Bergstrand; Dennis Burton; The Rt. Rev. Nicholas Knisely; Stephan Sloan; The Rev. Joyce Thorne.

Also Present: Joan DeCelles; The Rev. Canon Linda Grenz; The Rev. Edwin Hallenbeck.

The meeting was called to order at 11:00 a.m. by Bishop Knisely.

The purpose of this special meeting was to address unfinished business from the meeting of June 10, 2014.

Role of the Revolving Loan Fund (RLF). It was agreed that the RLF is the bank of last resort for churches in the Diocese of Rhode Island in emergency situations. Further discussion reminded the Commission that it needs to keep on hand as a reserve some funds to be available in emergency situations.

Current Status of the RLF. The total funds available: $1,600,000. Loans outstanding: $591,700. Charlestown land loan $402,000. Available funds estimated at: $606,000. Note: All numbers are rounded, therefore the estimated available funds is approximate.

Reserve. Following additional discussion it was Moved, Seconded and VOTED to establish a policy that Commission on Finance will hold 10% of the Revolving Loan Fund total value as a Reserve Fund to be available for emergency situations in churches that must be dealt with immediately. At this time this is estimated at $160,000. It is recognized that the actual Reserve will vary from time to time depending on use.

Rules for Participation. Following the above discussion and action it was agreed that the Rules currently published on the Diocese Web Site need revision to reflect these limitations. Messrs Burton (lead), Bergstrand and Sloan will work over the weekend to craft new language for the introductory Statement of Purpose. When agreed upon this will be presented to Diocesan Council for ratification.

Further Consideration of Revolving Loan Fund Requests of 6/10/2014 (see Minutes).

Following lengthy discussion the following actions were adopted:

St. Luke’s, Pawtucket ($110,000). It was Moved, Seconded and VOTED that the Revolving Loan Fund request is denied. It is recommended that the church seek alternative funding sources with the assistance of the Treasurer and Canon to the Ordinary and that ways be explored for the Diocese to assist in this process.

St. Peters-by-the-Sea, Narragansett ($100,000). It was Moved, Seconded and VOTED that the Revolving Loan Fund request is denied. It is recommended that the church seek alternative funding sources with the assistance of the Treasurer and Canon to the Ordinary and that ways be explored for the Diocese to assist in this process.

St. James Church, Woonsocket. ($100,000).  Action on this request is deferred pending firm costs for priority work and development of a repayment plan that is acceptable and realistic for the parish to support. The church is urged to schedule a meeting soon with the Canon to the Ordinary and others to explore ways of addressing these needs.

Amendment of Minutes of Meeting May, 13, 2014.

Page 2. St. Paul’s, Portsmouth, Revolving Loan. A loan was approved, and at the same time an Accessibility Grant to mission parishes was discussed, to be made by the Congregational Development Commission. It was thought at the time that COF approval was not needed. It was subsequently found necessary to secure COF approval. Following discussion it was Moved, Seconded and Approved to grant $10,000 out of the Accessibility Grant Fund for construction of a new access ramp for St Paul’s Church, Portsmouth.

The meeting was adjourned at 12:22 p.m.

Edwin F. Hallenbeck

Secretary

Next Meeting: September 9, 2014. 10:00 a.m.