Meeting — November 14, 2017

Diocese of Rhode Island

Commission on Finance

Meeting, November 14, 2017

St. Luke’s Church, East Greenwich

Present: Robert Batchelor; Sarosh Fenn; The Rt. Rev. Nicholas Knisely; The Rev. Erik Larsen; Stephan Sloan; The Rev. Peter Tierney.

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

Guest: Richard Sellers, Consultant.

The meeting was called to order at 5:05 p.m. by Bishop Knisely, who offered an opening prayer.

Organization of Commission. The Bishop appointed The Rev. Peter Tierney as Chair of the Commission. Mr. Batchelor agreed to serve as the Commission representative to Diocesan Council.

The Minutes of the meeting of October 10, 2017 were approved as distributed. A copy of the Resolution of Thanks for Chair Lofaro was circulated for signature by all present.

ECC Solar Farm and Hydroponic Farm. Mr. Burton introduced Richard Sellers, who has served as project consultant to consider if such projects are appropriate and possible for land at ECC not presently in use. A presentation was made outlining the work to date, including risks and potential for economic gain. Following lengthy discussion, it was Moved, Seconded and VOTED to recommend to Diocesan Council that a formal Feasibility Study be undertaken for a Solar Farm project and a Hydroponic Farm project at the Episcopal Conference Center and that $50,000 be allocated from the 2017 surplus funds for this purpose.

Mr. Sellers left the meeting prior to the Vote.

Financial Report. Mr. Batchelor commented on the Report of October 31, noting nothing unusual and that all bills are paid. He forewarned the COF that in December it will be necessary to review with care and act on unpaid apportionment from three churches.

Apportionment Aging Report. Eight churches are more that one month in arrears. All but three are expected to complete payments by year end. As noted above by Mr, Batchelor problems relating to St. George’s, Central Falls, Grace Church, Providence and St. Peter’s & St. Andrew’s, Providence will need review in December as they are significantly behind.

CFO Report. Mr. Burton reported on the continuing negotiations for the sale of Mobile Station land at 389 Elmwood Ave, Providence. The remaining issue is use of parking area by the previously sold adjacent church. Mr. Burton was encouraged to complete the sale.

Old Business: • Holy Trinity, Tiverton, Revolving Loan Application. A revised Business Plan to support the loan was submitted and reviewed. The plan was viewed as relatively unrealistic. It was agreed not to approve the loan request at this time as further questions remain unanswered. Staff will discuss the matter with the Rector.

• St. John’s, Newport, Revolving Loan Application has been withdrawn for further study by the church.

ECC DIT Funds. Mr. Batchelor reported on his careful review of ECC funds currently held in Nine (9) separate DIT accounts, several of which are quite small. He proposed combining several funds into 4 Funds [Scholarship Fund; Capital Improvement Fund; ECC Endowment Fund] The Elizabeth Campbell Fund will remain unchanged. The aim is to simplify accounting and use of income with clearly stated use for each. It was Moved, seconded and VOTED reclassify ECC Funds in the DIT according to the analysis presented by the Treasurer.

Vacancy. It was noted that there is an appointed by the Bishop vacant position on the COF. All present were encouraged to suggest names to the Bishop of persons with financial management experience and interest.

Meeting time. Jim Segovis, the new member elected at Convention, is unable to meet on Tuesdays. It was agreed to meet on the first Thursday, subject to room availability at St. Luke’s.

The meeting was adjourned at 7:00 p.m.

Respectfully submitted

Edwin F. Hallenbeck

Secretary

Next Meeting: December 7, 2017 at 5:00 p.m.

Meeting — October 10, 2017

Diocese of Rhode Island

Commission on Finance

Meeting, October 10, 2017

St. Luke’s Church, East Greenwich, RI

Present: Robert Batchelor; Sarosh Fenn; The Rt. Rev. Nicholas Knisely; Michael Lofaro; Stephan Sloan; The Rev. Peter Tierney.

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

Guests: Church of the Ascension, Cranston: The Rev. Michael Coburn, Rector; Susan Wright, Senior Warden; Richard Burlingame, Treasurer.

Church of St. John the Evangelist, Newport: The Rev. Nathan Humphrey, Rector; Christopher Moe, Budget Chair.

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 September 12, 2017 were approved as distributed, with one abstention by a member who was not present at the meeting.

2018 Budget. The complete draft budget was distributed and reviewed by Program and Budget Chair Fr. Tierney. Major changes are dropping the Canon for Program, Canon Fornal is moving from current role to part time Director of Episcopal Charities on a consultant basis, and eliminating the Development Office personnel and replacing staff with consultants as needed. It was noted that the proposed reduction in apportionment from 16.5% to 15,5% will reduce apportionment income by about $108,000. Extensive analysis of projected parish apportionment income indicates current estimates are reasonably accurate for the next two years. Later years will require further study. The budget plan is that reducing apportionment will strengthen parish finances. Following additional discussion, it was Moved, Seconded and VOTED to approve and recommend the 2018 Diocesan Budget to Diocesan Council for further consideration.

CFO Report. Three matters were reported:

• Canon Grenz outlined issues at Sts. Peter and Andrew, Providence, now a mission church functioning under Diocesan jurisdiction. There is no plan in place to address current concerns or working toward the future. The Church owns three houses that have been rented as apartments. Issues in the buildings has resulted in nonpayment of rent by occupants. Review of building conditions, including a building engineer indicate serious deterioration to the point where they should no longer be occupied. Tenants are in the process of vacating. City tax, insurance and utility bills are accruing and need to be paid with no rental income. The Vicar is retiring with no income for a replacement. It is a difficult situation that will be considered as a new start-up. Use of Reserve Funds will be needed to cover existing needs. It was Moved, Seconded and VOTED to recommend to Diocesan Council that the Diocesan Reserve Fund be allocated to pay for City taxes, insurance and utility costs at Sts. Peter and Andrew Church, Providence, specific amounts to be determined.

• Mr. Burton reported that there are three firm bids for the Mobile Station land at 389 Elmwood Ave. Negotiation is in process to complete the sale in the near future. Details of the conditions of sale are complicated by several factors, they should be resolved soon.

• The ECC Solar Farm project development continues. National Grid has confirmed its power grid can accept the anticipated power generated. The acreage is available. Financial analysis is underway. An alternate hydroponic farm option is also being considered. There is an option to consider selling electricity directly, making ECC electricity available to churches at a discount price.

Church of the Ascension, Revolving Loan Application. Guests from the church joined the meeting. A completed application was received for review requesting a loan of $50,000 for five years. Fr. Coburn and Mr. Burlingame reviewed the church proposal and recent history evolving as a bilingual church including dual participation on the Vestry. With little maintenance and no improvements an upgrade to the heating system is essential. A much smaller upgrade of the boiler for the attached rectory was completed recently, which is now rented. The main boiler for the church will be converted to gas and replaced. Income from a small capital campaign over the life of the loan will enable repayment. Several questions were answered. The guests were thanked and left the meeting. Following discussion, it was Moved, Seconded and VOTED to approve a loan of $50,000 at 2.5%, including a .75% reduction for pledged DIT funds, over five years, and forward the action to the Standing Committee for further consideration.

            .

Apportionment Aging Report. At September 30, 11 churches were one or two months behind and not viewed as a problem. Five churches are three or more months behind and need to be watched with care. Two churches are significantly behind and viewed as unlikely to complete payments for 2017.

Church of St. John the Evangelist, Newport, Revolving Loan Request. Guests from the church joined the meeting.  A completed application was received for review requesting a loan of $150,000 for five years. Fr. Humphrey outlined the loan request projects, including work on several aging buildings and landscape revisions to provide accessibility. An objective is to complete all projects soon rather than continuing to expend $30,000+ per year, use that money to repay the loan. The proposed work has several projects, some clearer than others. The churches financial structure and plan was not clear and a number of questions were raised with some unanswered. There was a lengthy discussion. The guests were thanked and left the meeting. Following additional discussion, it was Moved, Seconded and VOTED to defer action on the request until November and to request responses to financial questions raised and ask the church Treasurer to be present at the next meeting.

Holy Trinity Church, Tiverton, Revolving Loan Request, cont. See discussion on September 12, 2017 Minutes. A smaller loan of $30,000 has been discussed, however no written material has been received changing the request or describing any change in the scope of the project. It was agreed to defer further discussion to November and request any changes in writing.

Finance Report. Mr. Batchelor briefly reviewed the September 30 Report, noting that there are no major matters outside budget expectations. The Analysis of Variance sheet distributed by Mr. Burton notes a number of accounts where number do differ from budget. As of 9/30 the net is an under expenditure of about $227,000.

Resolution of Thanks. Bishop Knisely Moved: Very special thanks to Chair Michael Lofaro for his service as Chair of the Commission for the past four years. During that time the work of the Commission has proceeded with increasing strength and diligence, attention to detail, calling upon the wisdom and experience of Commission members and Diocesan staff. His work is deeply appreciated and will be missed as his term expires at Convention. A rising vote of thanks was extended by all.

The meeting was adjourned at 6:50 p.m.

Respectfully submitted

Edwin F Hallenbeck

Secretary

Next meeting: November 14, 2017. 5:00 p.m.

Meeting — September 12, 2017

Diocese of Rhode Island

Commission on Finance

Meeting, September 12, 2017 St. Luke’s Church, East Greenwich

Present: Robert Batchelor; Sarosh Fenn; The Rev. Erik Larsen; Michael Lofaro; Stephan Sloan; The Rev. Peter Tierney.
Also Present: Dennis Burton; Joan DeCelles; The Rev. Canon Linda Grenz; The Rev. Edwin Hallenbeck.
Guests: The Rev, John Higginbotham, Rector; Sam Hester, Senior Warden, Holy Trinity, Tiverton.
The meeting was called to order at 5:00 p.m. by Chair Lofaro. An opening prayer was offered by Canon Grenz.

The Minutes of the meeting of May 9, 2017 were approved as distributed. Note: there was no meeting held June 13, 2017 due to a severe storm.
Finance Report for August. The full report was distributed. Several matters were noted. The DIT data is now being updated to market value on a quarterly basis, keeping it current. A separate Variance Analysis report is prepared stating items that are significantly off budget with a brief explanation. At this point Income is over budget by $68,526. Operating expenses are $203,816 under budget. It is expected this will move closer to budget by year end. Cash flow in bank remains high.
Apportionment Aging Report. A number of churches are one or two months behind similar to previous years, One is six months behind due to personnel issues, now catching up. Three churches are significant problems. St George’s, Central Falls has made no payments. Sts. Peter & Andrew, Providence has major issues is now three months behind. Grace Church, Providence continues to pay at its own formula and is projected to underpay by $39,021.
Grace Church, Providence. Mr. Burton reported on recent conversations. The new building is near completion and ready to open for use. It is now necessary to implement planning and activities for its use and income producing capabilities. It is expected this will require a three year cycle of activity. Discussions are under way about how to accomplish this and the financing needed. It was suggested the COF discuss this further at its next meeting.
CFO Report. Mr. Burton reported. •Church of the Advent, Coventry developed an oil tank leak in July requiring immediate cleanup of a significant spill of over 400 gallons. Cost of remediation was $56,000 to which must be added $3,600 for replacement tank. •The Mobile Station land at 389 Elmwood Ave, Providence has two potential buyers. A team of appraiser, broker and surveyor is working with the Chancellor to negotiate sale, noting the area has environmental sensitivity. •Solar Farm at ECC concept is under intense study to determine detail requirements and approvals needed. •Several items needing future attention have been identified for later discussion.

Commission on Finance — Minutes, September 12, 2017 Page 2 of 2

Holy Trinity Episcopal Church, Tiverton, request for Revolving Loan. Rev Higginbotham and Mr. Hester joined the meeting. An application for a $50,000 loan over eight years was received. It was stated that loans may not exceed five years. There followed a lengthy discussion regarding: budget implications for the church; should endowment funds be placed in the DIT to secure a lower interest rate; what are current investment return rates? Should the church consider rearranging the project to a smaller loan amount to keep monthly payments at a level it considers prudent. It was noted that the capital campaign undertaken this year has already paid for some improvements. The questions discussed need further study. The guests left the meeting.
Further discussion by the COF clarified questions to be answered. It was agreed to defer action pending answers and possibly a revised application.
Program and Budget Major Changes. Fr. Tierney distributed a sheet of major budget changes anticipated at this time. The biggest change is reducing apportionment from 16.5% to 15.5% which will drop Diocesan income by about $108,000. This will need to be made up mostly by reducing expenditures. Several possible changes were noted, none final. More definitive data will be available in October. Further study is needed about specific needs and costs for capital items.
The meeting was adjourned a 6:57 p.m. Respectfully submitted
Edwin F Hallenbeck
Secretary
Next meeting: October 10, 2017 at 5:00 p.m. 

Meeting — June 13, 2017

Note: No meeting was held due to a severe storm.

Next meeting September 12, 2017.

Minutes — May 9, 2012

Diocese of Rhode Island Commission on Finance Meeting, May 9, 2017

St, Luke’s Church, East Greenwich

Present: Robert Batchelor; The Rt. Rev. Nicholas Knisely; The Rev. Erik Larsen; Michael Lofaro; David Terry; The Rev. Peter Tierney (by phone).
Also present: Dennis Burton; Joan DeCelles; The Rev. Canon Linda Grenz; The Rev. Edwin Hallenbeck; Jim Rezendes (by phone).
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 11, 2017 were approved as distributed.

Finance Report for April. The full report was distributed for review. The Financial Variance Analysis report states Income and Expense items that that vary noticeably from budget. Income: Episcopal Charities is behind in its Drive for ‘17. Cumulated Expenditures are $161,000 under budget. Most variances are due to timing and are not viewed as unusual.

Apportionment Aging Report. Three churches are behind and viewed as problematic, with follow up needed: St. George’s, Central Falls; St. David’s, Cranston; St. Peter’s & St. Andrew’s, Providence. Grace Church, see below.

CFO Report. Mr. Burton stated that a study of a Five year Forecast of income is well under way. There are two primary income streams: a) Apportionment from churches; and b) DIT from investments. Both are being reviewed. Preliminary date from a small group of churches indicates a possible drop in income of 14%± with more data needed to establish a trend line. Additional churches have been invited to participate. This data will be of value to the churches as well as the diocese. Careful review of the DIT is needed to determine if revenue enhancement is possible using other investment models.

Grace Church Update. Grace Church continues to pay apportionment using a formula they created rather than that established by Diocesan Convention. The church has been informed that this does not conform with ECUSA Canons and procedures. The conversation is ongoing.

St. Peter’s-by-the-Sea Outreach. Mr, Terry reported that he recently met with the treasurer of St. Peter’s to discuss recent concerns and actions (see COF Minutes 2/14/17 and 4/11/17). While the matter is somewhat confusing the Treasurer understands and agrees with the COF interpretation of Parochial Report definitions relating to outreach.

Long Term Financial Succession Planning. Chair Lofaro indicated there are concerns that the personnel structure of Diocesan staff is aging and that changes appear inevitable in the next few years. The Bishop suggested that a high priority is to identify an Assistant Treasurer to work with Mr. Batchelor. Mr. Batchelor noted he has some ideas he is considering. It was suggested that a future Treasurer should preferably be a CPA. Additional discussion suggested that a

working team would be helpful addressing this matter. The Bishop suggested looking in detail how other similar size dioceses handle financial matters.

Property Committee. (Mr Rezendes joined by phone). Mr. Rezendes reviewed the history and activities of the Committee since its formation in 2014. A set of slides outlined the Committees work in some detail. A number of places and projects have been analyzed, recommended solutions, and in many cases accomplished actions. The Committee initially viewed itself as a pool of talent available to get things done. More recently the group has shifted from regular meetings to functioning on a project basis. This is difficult without knowing what it can do and how far it can go, and what is its working arrangement? Officially it reports to the COF but day to day it works with the CFO. At present a 2017 work plan is established. Emergencies need to be considered, and a work plan for 2018 and beyond needs to be worked on. It was agreed that the current working structure is working well and should remain in place, i.e. the Property Committee thru its Chair reporting to the CFO. The CFO in turn can keep the COF informed and request authorization and recommendations to Council as needed. It was also agreed that the Mission and Purpose of Diocesan properties needs to be defined and looked at for the long term, i.e. the next 50 to 100 years.
It was agreed that a list of properties that should be sold is needed and the CFO was asked to prepare such a list.

It was Moved, Seconded and VOTED to recommend to Diocesan Council that up to $25,000 be allocated for legal and related costs in connection with two ECC proposed projects, for developing one or more Solar Farms, and the possible sale of a Land Conservancy of waterfront land. Both projects are at the early idea concept stage.

It was Moved, Seconded and VOTED to recommend to the Standing Committee that we sell the land upon which a Mobile Station is located on Elmwood Avenue in Providence.

The meeting was adjourned at 6:52 p.m.
Respectfully submitted Edwin F Hallenbeck Secretary
Next meeting: June 13, 2017 at 5:00 p.m.