Minutes — September 13, 2016

Diocese of Rhode Island

Commission on Finance

Meeting, September 13, 2016

St. Luke’s Church, East Greenwich

Present: Robert Batchelor; Sarosh Fenn; The Rt. Rev. Nicholas Knisely; The Rev Erik Larsen; Michael Lofaro, David Terry.

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

Guests: Grace Church, Providence: The Rev. Jonathan Huyck, Rector; Polly Daly, SW; Bill Galligan, JW; Josh Klemp, Clerk; Laurie DiBatista; Liz Wheeler.

The meeting was called to order at 5:02 p.m. by Chair Lofaro. On opening prayer was offered by Bishop Knisely.

The Minutes of the meeting of June 14, 2016 were approved as distributed.

Finance Report for August 2016 was reviewed by Mr. Batchelor, noting that the Balance Sheet has been updated to reflect changes as stated in the Audit for 2015. Income and expenses show some variations due to timing sequences. It is anticipated that year end may show a small surplus.

Apportionment Aging Report. Two churches, St. George’s, Central Falls and St. Thomas, Greenville are behind more than two months.

Email Votes. Following the June meeting, e-mail votes of approval were made for the following previously approved Fire Safety grants with final actual cost submitted by each church: St. Paul’s, Portsmouth, $6,500.; St. Michael’s. Bristol, $2,396. In addition, a Mudrak fund grant was approved for a hearing loop for St. Peters-by-the-Sea, Narragansett, $3,173.28.

Revised Revolving Loan Application. A revised Application was presented with changes requesting additional information from the church: a) Balance Sheet; b) Unrestricted status of Assets to be pledged. It was noted that questions regarding these matters related to an application may be discussed with the Finance Office. It was Moved, Seconded and VOTED to approve the Revised Revolving Loan requirements and Application Form. A copy will be available on the Diocesan Web site.

Grace Church, Providence, Apportionment discussion. The guests from Grace Church (Rector, S. Warden, J. Warden, former Treasurer, Chair B&G Committee) joined the meeting. Following introductions it was noted that a series of background data sheets and papers were submitted to COF prior to the meeting, including a 2015 Parochial Report for Grace Church altering the apportionment calculation, resulting in a decrease of $41,895 in apportionment to be paid by Grace Church in 2017, and a summary memo of a meeting June 15, 2016 of Robert Batchelor and Dennis Burton with four representatives of Grace Church. Liz Wheeler presented an overview of Grace Church’s current situation. Key factors:

• Grace is a downtown church, extensively used by community during week. • No longer a wealthy church. • Sold Grace apartments, will use funds for new building, will reduce income.

• Conducted capital campaign for 1.5million to help fund new building. • Vestry reviewed budget, downtown location, apportionment structure and need to think in new ways we can move forward.

Q and A responses: • Grace Church investments are not in the DIT. • Income is from Pledge & Plate and Investments only. • Rector agrees with approach, but notes there are consequences. •Grace cemetery costs $25,000+ with no income. • New Parish Hall building is costing $4.3million, will lose parking spaces and income. • Church has significant deferred maintenance in building and organ renovation is needed in the future. • Mr. Batchelor responded that under the Canons of the Diocese the suggested revision of apportionment is not acceptable, however a small deduction for PICA support would be deductible. • Bishop Knisely confirmed with the Senior Warden the church is not able to achieve a balanced budget and might not be sustainable long term. He asked if Grace would be interested in a conversation with the Diocese looking to the future, there are a variety of options available such as converting to a mission or aided parish status? The Grace Church guests agreed to discuss the Bishop’s offer and respond, then they left the meeting.

Mr. Lofaro suggested there are two questions needing discussion and perhaps vote by COF:

1) The Apportionment proposal.

2)  Continuing conversation with the Diocese.

It was agreed to defer further discussion and action to the October meeting.

Endowment Draw. Mr. Batchelor submitted a proposal to change the prudent management of endowment draw from a calculation based on three years (twelve quarters) to quarterly market values averaged over 16 quarters (four years) immediately preceding the year in which the withdrawal is made. It was Moved, Seconded and VOTED to approve the prudent endowment draw recommendation from a three year calculation to 16 quarters.

St. Luke’s Church, East Greenwich. A request was received for Mudrak Fund hearing assistance in advanced of installing a loop to study and remediate interference on the AC current supply. Following discussion it was Moved, Seconded and VOTED to allocate up to $2,500 from the Mudrak fund to St. Luke’s Church, East Greenwich for an engineering study of interference in AC current supply.

Emmanuel Church, Newport. A request was received for a short-term bridge loan. The church is entering into a contract with Verizon for installing cell-tower equipment in the Church Tower and has agreed to pay for tower repair. The Church needs funding for the repair prior to the installation and reimbursement. The estimated cost is $90,000. The application process is incomplete. It was agreed that the bridge loan can be approved by email vote subject to filing with the Finance Office: a) A completed Revolving Loan Application; b) Signed Contract with Verizon stating reimbursement for tower repair costs; c) Accepted bid and construction cost for church tower work. Interest rate at 2.5%.

St. James Church, Woonsocket. Item deferred to October, due to Rector’s absence.

2017 Budget. Review. In the absence of Program & Budget chair Fr. Tierney a general overview was presented on slides by Canon Grenz and Dennis Burton. Key elements of cost units where changes have occurred were stated. No action taken as the presentation is not yet ready for prime time. Further consideration at the October meeting. A worksheet on future apportionment was distributed.

The meeting was adjourned at 7:35 p.m.

Respectfully Submitted

Edwin F. Hallenbeck, Secretary                                  Next Meeting: 5PM October 11, 2016

Minutes — June 14, 2016

Diocese of Rhode Island

Commission on Finance

Meeting, June 14, 2016

St. Luke’s Church, East Greenwich

Present:  Robert Batchelor; Sarosh Fenn; The Rev. Erik Larsen; Michael Lofaro; Stephan Sloan; David Terry.

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

Guests: All Saints’ Church, Pontiac: The Rev. Philip Devens, Rector; Fred Liddle, Senior Warden; Bruce MacNeil, Junior Warden; Meredith MarcAurele, Treasurer.

The meeting was called to order at 5:02 p.m.by Chair Lofaro. An opening prayer was offered by The Rev. Erik Larsen.

The Minutes of the meeting of May 10, 2016 were approved as distributed.

Finance Report was reviewed by Mr. Batchelor. He noted that the Balance sheet still has not been updated to the 2015 year end number which should be done soon. Income receipts are as anticipated with some timing variations. Expenditures show no significant differences from budget.

Apportionment Aging Report. The only Church significantly behind is St. George’s, Central Falls.

Church of the Redeemer. An application for a Fire Safety grant was considered. Only one bid was available at the time the application was submitted, for $27,625. Additional bids are being requested. The Vestry is considering a line of credit with Thrivent. No firm plan is yet in place. It was noted this is a church that is financially stretched thin. It is suggested that a COF member meet and review possible alternatives, Mr. Terry will do so. Following discussion it was Moved, Seconded and VOTED to allocate up to $10,000 for a Fire Safety grant awaiting additional bids and Vestry action.

CFO Report. Mr. Burton reported on progress with two projects. A) Financial Forecasting. He referred to two documents: First, an analysis of all budget lines, useful for reference. Second, analysis of Income Statement Variances, showing by category where variances occurred in the first four months of 2016, and what the cumulative effect of these is. This provides the opportunity to either explain the variations or plan for appropriate changes.

B) ECC Strategic Planning, especially looking at the financial implications. He asked that this be placed on the agenda for September for a broad consideration.

All Saints’ Church, Pontiac. The guests joined the meeting. An application for a Fire Safety grant and an application for a Revolving Loan were considered. The current low bid is $20,742. Two additional bids are needed. This project is essential for continued use of the church. There was an extended discussion of how All Saints’ endowment funds might be used to secure a loan or for payment of the balance of the cost. There was no firm conclusion with additional research needed. It was Moved, Seconded and VOTED to allocate a Fire Safety grant of up to $10,000 awaiting additional bid;. and further to give preliminary approval for a Revolving Loan for the balance of the project cost awaiting final confirmation of costs and the unavailability of alternate sources of funding. The guests left the meeting.

Endowment Funds at Churches. Following the above discussion the COF agreed that  it is important to review and consider the status of endowment funds belonging to churches. Some are held in the DIT and some managed independently. Of special importance is their status as Restricted or Unrestricted for use and by whom the restriction was made. Mr Lofaro agreed during the summer to take time to begin a review of the status of all churches endowments, especially restricted v unrestricted. It was noted that the COF is responsible for the integrity of such information on behalf of the Diocese. This is important, among other reasons, for pledging endowment funds for loan security, which must be unrestricted.

The meeting was adjourned at 6:35 p.m.

Respectfully submitted

Edwin F Hallenbeck

Secretary

Next meeting: September 13, 2016 at 5:00 p.m. St. Luke’s, East Greenwich

Or at the call of the Chair, if necessary.

Minutes — May 10, 2016

Diocese of Rhode Island

Commission on Finance

Meeting, May 10, 2016

St. Luke’s Church, East Greenwich

Present:  Robert Batchelor; Sarosh Fenn; The Rt. Rev. Nicholas Knisely; The Rev. Erik Larsen; Michael Lofaro; Stephan Sloan; David Terry; The Rev. Joyce Thorne.

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

Guests:  Sts. Peter & Andrew, Providence: Arthur Thomas, Senior Warden; Dorothy Lariviere.

The meeting was called to order at 5:00 p.m. by Chair Lofaro. An opening prayer was offered by Bishop Knisely.

The Minutes of the meeting of April 12, 2016 were approved as distributed.

Finance Report was reviewed by Mr. Batchelor, noting that in the Balance Sheet the value of the Investments-DIT will be updated to the 12/31/15 actual of $24.7 million. Income and expense items are running well with no unusual variances other than timing.

Apportionment Aging Report. Two churches are two months behind.

CFO Report. Mr. Burton stated that several questions are under discussion with Bank of America regarding the Line of Credit application with no specific answers at this time.

Sts. Peter and Andrew, Providence, Revolving Loan request. Guests (above) joined the meeting. Mr, Thomas provided an overview of the work needed and the importance of keeping the status of the residence building in excellent condition. Several questions helped clarify the relationship of the facility to the church and The Blessing Way program which uses the building for residences and offices. It was noted the Church is considering changing to Mission church status. Guests left the meeting with thanks.

            Additional discussion suggested that we encourage the church to develop cooperative working relationships especially with tenant organizations using its facilities. With additional consideration it was Moved, Seconded and VOTED to approve a Revolving Loan of $32,450 for five years at 2.5%, subject to further approval of the Standing Committee. It was suggested that the church consider a special joint fund raising effort with Blessing Way to reduce or pay down the loan.

Safety Code Grant Requests. Responding to last month’s request for fire code violation needs, the following Applications have been received:

1      Cathedral of St. John. Full Application. Request $10,000.

2      Holy Spirit, Charlestown. Full Application. Request $5,000. Subject to final cost figure.

3      St. Mark’s Church, Warwick. Full Application. Request $10,000.

4      St. David’s on the Hill, Cranston. Full Application. $10,000.

5      St. Michael’s Church, Bristol. Verbal request. $10,000. Subject to full Application.

6      Church of the Redeemer, Providence. Verbal Request. $10,000. Subject to full Application.

7      All Saints Church, Warwick. Verbal Request. $10,000. Subject to full Application.

Following review and discussion of these requests it was Moved, Seconded and VOTED to approve grants for the Cathedral of St John, $10,000.; Holy Spirit, $5,000 final cost TBD; St. Mark’s Church $10,000.; St. David’s on the Hill, $10,000.; and to reserve funds for the following Churches, subject to filing of complete Applications: St. Michael’s Church, $10,000.; Church of the Redeemer, $10,000.; All Saints, Warwick, $10.000.

            It was noted this group of grants uses all funds originally allocated for this purpose by Council. In addition to the above Requests for Safety projects other than Fire Code have been received and held for possible consideration should additional funds become available:

1.     St. John’s, Newport. Exit lights and upgrade.

2.     St. Andrew’s by the Sea, Little Compton, Upgrade Fire system phone linkage.

3.     Emmanuel Church, Cumberland, Access Ramp.

4.     Epiphany Church, Rumford, Access Ramp and doors’

In view of the use of available funds there was a discussion of possible additional funding for these needs. The Treasurer and COF were asked to research the matter and make a request to Diocesan Council for allocation of additional funds for Code Violation and Special Needs of Churches.

Mudrak Fund for Hearing Assistance. Three requests for sound system upgrades.

Church of the Epiphany, Rumford, $3686.22. Approved by email vote.

St. Barnabas Church, Warwick, $1,000. Approved by email vote.

Emmanuel Church, Newport, $1,855.75. Approved by COF vote at meeting.

Contributions by Diocese for Use of Church Buildings. Canon Grenz distributed a draft statement of a guideline for reimbursing churches for use of space for large events, recognizing that having a significant number of persons in a building for a prolonged time entails added costs. It was thought to be a good idea for sound practice. Some wording changes were suggested.

The meeting was adjourned at 6:35 p.m.

Respectfully Submitted

Edwin F. Hallenbeck

Secretary

Next Meeting: June 14, 2016 at 5:00 p.m., St. Luke’s, East Greenwich.