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