March 13, 2009
Question series: Diocesan investment and the operating budget
By PAUL R. LEINGANG (Message editor)
Editor’s note: Following is the second in a series of articles on questions asked — and answers given — at a series of “Bishop’s Town Hall Meetings” during the fall of 2008.
Among the questions submitted to Bishop Gerald A. Gettelfinger in the fall of 2008 were many questions and comments related to financial matters. Tim McGuire, the chief operating officer of the Diocese of Evansville, sorted them into the following group of three questions.
Questions
- Our parish had to cut staff due to insufficient funds to support the positions. Is the diocesan office reviewing its headcounts to determine which positions can be financially supported, rather than just continuing to increase CPC?
- Does the diocese rely heavily upon investment income for its operating budget? If so, in light of the current economic situation, is the diocese prepared to make spending cuts or will the revenue be replaced in the form of higher CPC assessments on the parishes?
- Why can’t the CPC be run like a parish budget. You monitor your spending and only spend what you take in? The CPC is planned from a budget, and the dollars are guaranteed from each parish. I think the CPC process needs to be reviewed and changed.
The Response to Question One was published March 6. A response to Question Three will be published March 27. Following is the response to Question Two:
- Investments by the Diocese of Evansville have helped to pay diocesan expenses without the need of higher assessments from the parishes.
- Over the past 10 years, investment income for the Diocese of Evansville has fluctuated, but on the average, investments have produced about $1 million a year that has been used for the operating expenses of the diocese.
- The money invested by the diocese is primarily from the Deposit and Loan Fund. Par-ishes deposit money not needed for ordinary operation into this fund, and their deposits earn three percent. Parishes needing additional funds for building projects may borrow from the Deposit and Loan Fund at a rate typically lower than from a commercial lending source.
- The income of the diocese is from three major sources: the Catholic Parishes Campaign, diocesan investments, and fees for services (such as the advertising and subscription fees from the Message).
- For the fiscal year 2009-2010, an earlier version of the budget discussion had included income of $1 million from investments. That inclusion was based on the average over the long run, and not on a prediction of what actual investments would pay.
- The final budget revised the investment income entry to $500,000 — zero from equities including stocks, $500,000 from fixed including bonds, according to Bob Cox, diocesan treasurer.