Goodbye

Leave a comment

First let me thank those of you who have written to ask why I have been so silent on the blog, without any reason. There is no easy way to say this and it has taken me until now to even be able to write this: my darling Ruth died in August. Her death was unexpected and overwhelming. This was not the way we had thought about our end—I think we both had expected I would go first, not her. At least that is the way my imagination worked. Perhaps I thought that because life without her was and is unimaginable. I go to sleep at night and sometimes, in bed, as the first light is filling the room, I can almost imagine she is still alive and all that has happened was a bad dream. And then I know this is not true and I still have to get up. I am dead too.

We had gone to Seattle just for an unplanned trip, just one of those random things we had dreamed of doing in retirement when the weather was too hot and the road and the dogs were asking to go somewhere, anywhere. Ruthie seemed fine, full of restless energy as we closed up the house and threw some extra coolers in the back of the Subaru. The trip all seemed very spur of the moment and exciting, as if we were skipping school and not telling our parents.

The trip up was relaxing and I remember thinking that it should always be like this, picking places to stay on a whim; making sandwiches on the hot hood of a car from ingredients bought in a small town grocery as our smarter dogs lounge in the shade nearby; scrubbing bug corpses off a windshield; trying to learn Italian off of a CD and laughing at Ruth’s bad accent; realizing that comfortable beds are highly underrated; drinking wine from a plastic cup in a motel… God, it was grand.

Seattle in the summer is lovely too, but we weren’t enjoying it as much as we could have. At first we thought Ruth had developed a summer cold. She had an upset stomach and heartburn soon after we arrived. She was tired just walking around when she shouldn’t have been. She took some aspirin and that seemed to help, but she was still dizzy and out of sorts. I remember she told me her back hurt. We thought it was the flu. A godforsaken virus. We didn’t even go to the doctor.

Theresa Ruth, my Ruthie, died of a heart attack on July 20, 2015. She was 68 years old, but she never seemed a day older than 18 to me. This is so hard. She’s from Franklin Wisconsin and we buried her back there with her parents. I used to love it there, but I don’t think I’ll ever go back.

I’ve sold the house here in Antioch. My son had moved his family to Belize years ago and now I am going too. The dogs have their import permit, the movers come on Monday. Everything is going into a shipping container. Johnny has convinced me not to just do an estate sale and empty the house to start over, but I really want to. Maybe I’ll just keep it all in storage there. Moving to Belize was something Ruth and I talked about doing, but even so I can’t get over the feeling that I am running away from her—that I should stay here in case she comes back. The absence, the permanence of this all still shocks. I cannot see how this will ever become commonplace; it hurts all over.

So this is my last blog entry. I can’t imagine writing anything about church finances at this point. Even this post has taken two days to get down. I’m tired in the way that does not seem to allow ever being fully awake again. If it weren’t for the prospect of seeing my grandson I’m not even sure I’d leave this house let alone leave the country. Food tastes bad and the world seems flat and gray. But I am alive and it seems I will go on being so for awhile. Maybe someday this will make sense. I will wait and hopefully see why I am still here.

Good bye and thank you for reading.

Servant of All?

Pleasanton’s Strategic Plan

I took a day off to have an extended email conversation with a parishioner from Pleasanton. Said parishioner sent along a scanned copy of the long-awaited Parish strategic plan, which I have reviewed. I had wanted to write a long screed on what I saw there, specifically what the document lacks and ultimately how disappointed I was with the effort. In the end, the parishioner and I agreed to leave my comments at that under the condition that the parishioner was going to take the matter up alone. This is after all this parishioner’s parish. The parishioner did agree to get back with me after their own internal conversations were complete.

Organization Charts?

I do want to briefly take up one portion of the document which, unfortunately has become all too common amongst churches in general these days. The strategic plan (as it were) contained an organization chart for the parish. On the surface, nothing really new there. The chart has the same pyramid shape, with the Pastor at the top and the parish below. Many of us have seen so many organization charts it is hard to think of an organization any other way. There is a very good reason that Catholic church insiders refer to the leaders of the universal Church as a “hierarchy”. One could almost be forgiven for publishing a document that stratifies clergy and laity into a hierachical reporting structure. I did say “almost forgiven” though.

First I would like to note that structurally the organization chart published by Pleasanton is canonically incorrect. The chart is showing what this Pastor thinks is operationally occurring and that is a bit dangerous. The chart shows the parish councils “reporting in” to the Pastor when in fact they do not (nor should they) have a subordinate or functionally submissive role. Parish councils, and specifically finance councils, have a consultative role. To properly show this in org chart parlance would have the councils in a “dotted line” relationship with the Pastor, at the same level. As shown, this organization chart at once diminishes and negates the consultative function these councils provide. This is an error.

Beyond that specific observation, my opinion is that Catholic organization charts with Pastors, Bishops and Popes in ever ascending levels of visual importance is rank clericalism. A pyramid shaped organization is the ego-produced product of someone who has taken ontological change to mean “operationally superior”—that is to say: clericalism writ large. This is definitively NOT the teaching we were given and I am constantly surprised how what we were taught was not, indeed has not been put into practice:

Sitting down, He called the twelve and said to them, “If anyone wants to be first, he shall be last of all and servant of all.” (Mark 9:35)

Then He poured water into the basin, and began to wash the disciples’ feet and to wipe them with the towel with which He was girded. So He came to Simon Peter. He said to Him, “Lord, do You wash my feet?” Jesus answered and said to him, “What I do you do not realize now, but you will understand hereafter.” (John 13:5)

So we learn from classic organization charts published by churches that in fact our pastors have not “understood hereafter”. A Jesus centric community is built on an organization chart that is an inverted pyramid, thereby visually attesting to the teaching that pastors, bishops and popes are in fact “servants of all”.

Show me someone publishing an organization chart like that and I will show you someone ontologically changed.

CCOP Organization Chart

Anger Management

Before I get into an overview of my own feelings and reasons for all this writing, a quick update from yesterday afternoon: a Pleasanton parishioner has been reading my blog and offered to help. This is wonderful news! The person emailed me a copy of a report that I thought at first was a mistake due to the dates on it. The dates are not an error: it is an old report but it is helpful. I am still reading it and will report back later. And for those wondering: no response from the Pastor or his council to any of my requests.

I think I have to pause here and remember why I am doing all this in the first place because I managed to make myself angry all over again as I wrote that post on the 17th. My anger surprised me.

Ruth does not like me scowling at the keyboard and Veronica hides under the kitchen table as if she were being scolded. I had thought I was no longer angry after the Cathedral was dedicated; it seems not. Perhaps I said some intemperate things in that post but I will not delete it.

Back in 2008 I was still working and hence didn’t have the time to really do anything about the Cathedral besides gripe — including working through my own conflicted feelings on the matter; but now with all this time on my hands I feel the need to revisit what happened and perhaps call attention to what is going on at the diocesan and parish levels that make the problem so pervasive. It made me upset then, but I did not have the inclination to deal with it beyond gossiping over coffees after Mass at Holy Rosary. I could talk to Fr. Roberto about it but, good person though he is,  he belongs to the problems and is not much help with this either.

Why am I angry?

I was angry as the abuse revelations came out, and angered further that a decision was taken to build a cathedral in Oakland while nothing regarding the abuse in our Diocese had really been settled. To call it Christ the Light while the true extent of the dark stain of abuse was still spreading… The audacity of the act left me (leaves me) breathless.

I am reminded why I dropped out of seminary all those years back. My dear brother, were he still alive, would, I’m sure, see a reason for compassion in all of this; but he was after all a Priest; they’re supposed to do that kind of thing. Me? All I see is waste. The waste of so much good from the hard work of the people of our diocese.  Our Bishops abused, built and borrowed and now as the magnitude of those collective errors are tallied, a new Bishop has decided to ask for even more in the form of a capital campaign. How much more are the people expected to pay without being clearly told the reasons, because our total is looking to be close to $250M!

I have a strong hunch, based on what I see in the figures, that the $65M being asked for is not nearly enough, which means even more will be asked for later. I  also suspect that Bishops and Pastors count on time as a tool that helps laypeople forget. Neither spends any siginificant time explaining “how we arrived here” because doing so would cause them to question the actions of their predecessors. There is a code amongst Priests that starts with silence about other Priests. That code is what led to the abuse scandal going on for so long and left the laypeople unprotected.

So, I am angry too at the willingness to unrepentantly ask for money while tacitly ignoring the decisions of the Bishops that brought us to this point. The debt, the abuse, the construction… All are a pattern of decision making that excludes the concept of layperson collegiality. Think on it for a moment and wonder: what if Bishop Cummins had consulted a lay review board and asked them if he should be transferring Priests accused of abuse? Do we really think a review board of our lay peers would have said the Bishop should go ahead and make transfers? But he did not consult a layperson (and if he did, he ignored the advice), he consulted other Priests. Aside from the incalculable harm that  was visited on the bodies and souls of our young people, we can in fact calculate the fiscal ramifications of the decision: you and I paid $30M (and funded his pension too).

My diagnosis, and of course it comes through the lens of my own financial experience, sees the corporate structure of the diocese as a tool reinforcing the tendencies of Bishops towards dictatorial behavior and sowing confusion as to whom our treasure actually belongs to. Our Bishops have acted with impunity and acted as if our money was theirs. The Diocese certainly shows a pattern of that behavior dating back to the 1970’s–just look at the results we have now. We laypeople might refer to some of our bishops as benevolent dictators, but the capricious nature of their financial decisions so far have turned benevolence to bankruptcy. Bishop Barber certainly was not here for any of the aforementioned issues, however, he works in a system designed to reinforce past decisions; to never question fellow Bishops and to protect his Priests. None of those structures that led to the abuse or financial mismanagement are different now. Yes, we have a thing called ‘safe environment’ designed to safegaurd the kids, but what about a program called ‘safe investing’ designed to protect  laypeople from the financial abuse of the Catholic hierarchy? If you are going to run a corporation sole, you should have a  financial background check and be certified to make financial decisions. If a Bishop can’t pass that inspection, then he shouldn’t be given a checkbook. This is just common sense.

Bishop Barber’s office, as that of all Bishops, remains suspect by what transpired in it prior to his arrival. The simple fact is that a pattern of fiduciary irresponsibility is evidenced in each of our prior Bishops except for this last one (so far). Bishop Barber must then be assumed to have the same poor financial acumen as his predecessors. Instigating a $65M capital campaign indicates I am probably right.

And it makes me angry.

Sadness and a Pause for Charleston, S.C.

On a day in which nine innocent lives are lost in South Carolina, I am taking a pause from writing to contemplate my own anger at the church.

Reflecting that these good people lost their lives in a church at a bible study, where, based on what I have read, the killer was invited in with the group… has given me pause.

Oakland’s Cathedrals and Corporations Sole

Alright, lets step outside the Catholics of Pleasanton and head about 30 minutes from there down I-580 to the Chancery offices on the shores of Lake Merritt. There you will find the Cathedral of Christ the Light and our debt; I mention them in the same sentence because both control our future here in Dioecesis Quercopolitana. Today I will cover two aspects of our situation that relate to the Cathedral and the debt. First will be the history that led us to the decisions the Bishops made, and the second is how the way a diocese is incorporated can have a direct impact on the way decisions are made on your behalf.

An Extremely Abridged History Lesson

What we think of as the Diocese of Oakland has its roots in 1962 with the Cathedral of St. Francis de Sales being established as our mother church and the installation of Bishop Begin as our first Bishop. Ironically as we shall see, Bishop Begin chose to refurbish the existing St. Francis de Sales rather than build a new Cathedral. He set the tone for stewardship at that point. My how that view changed. Essentially there have been two earthquakes over the past 53 years in Oakland which have materially damaged our Diocese, one literal and one figurative.

The literal earthquake occurred at 5:04 pm on October 17, 1989 and was centered just outside of Santa Cruz California. Called the “Loma Prieta” earthquake, it was a magnitude 6.9 and in addition to killing 63 people and being covered live on national television due to it occurring during a World Series broadcast, it severely damaged the Cathedral of St. Francis de Sales. Repair estimates showed the cathedral would cost $8M to fix, which was deemed (at the time) too costly. The Cathedral of St. Francis de Sales was torn down in 1993. This seems to be a decision of Bishop Cummins that honored the frugal and humble spirit of Bishop Begin’s original decision not to build a new Cathedral in back in 1962.

12 years later that $8M repair bill looked like a bargain for the laity of the Oakland Diocese. In 2005 then Bishop Vigneron determined that a new $131M cathedral was in fact, not costly at all. This means that the Bishops of Oakland decided in a span of little more than a decade that $8M was too much to spend and that $131M was just about right. The final cost of the Cathedral has since gone up to $190M. For those who remember, there was an extremely vigorous debate as to whether or not to build.  Bishop Vigneron, as we shall see, had final say.

The second and figurative earthquake was years in developing: the child molestation scandal. Our diocese, while not the only one to shield and move around abusive priests and failing to protect our children, seems to have had a particularly bad record (which I will not go into here) culminating in $60M being paid out in settlements to victims in cases dating back to the 1970’s. Bishops Cummins and Vigneron oversaw the settlements and about half of the amount paid came from insurance the diocese carried. The other half came from our own church assets. Neither Bishop was held personally liable for the transfers of the molesting priests that factored so heavily in this egregious problem.

In addition to all this, there is no mention of the cost of what must be an ornate and very expensive rotating door apparently installed on the Bishop’s office at the Chancery. To date we have had the following men occupy that office:

The Most Rev. Floyd Lawrence Begin for 15 years
The Most Rev. John Stephen Cummins for 36 years
The Most Rev. Allen Henry Vigneron for 6 years
Rev. Daniel Danielson (interim admin) for 9 months
The Most Rev. Salvatore Cordileone for 3 years
The Most Rev. Alexander Brunett for 1 year
The Most Rev. Michael C. Barber, SJ (2013–present)

I note the men here, because the first six of them are directly responsible for the current state of our Diocesan finances. Heavy emphasis must of course fall on Bishops Cummins and Vigneron as they signed off on approximately $220M ($190M Cathedral + $30M in settlements–I am netting out insurance here) in expenditures during their tenure. Bishop Cordileone must have seen where this was headed and begged for the quick exit, not before taking out a $114M loan for all of us though.

A Corporation Sole

As I have mentioned in a previous post, the Diocese is organized as a corporation sole. This vests sole legal and fiduciary authority in the Bishop. Here is a good a description as any as to how a Corporation Sole works especially when we compare it against what most of us think as “corporations” these days:

“The distinction between an aggregate and sole corporation, growing out of the different modes of constitution and forms of action, is striking and obvious. A bishop or parsons acting in a corporate capacity and holding property to him and his successor in right of office, has no need of a corporate name, he performs all legal acts under his own seal, in his own name and name of office; his own will alone regulates his acts, needs no treasurer, for he has no personal property except the rents and proceeds for the corporate estate, and these he takes to his own use when received. By-laws are unnecessary, for he regulates his own action, by his own will and judgment, like any other individual acting in his own right. These examples are sufficient to clarify the legal distinctions between the two classes of corporations.” ….. (The Massachusetts Supreme Court, in the case of The Overseers of the Poor of the City of Boston v. David Sears 39 Mass (2Pick) 122 at 128 (1839)”)

You would be forgiven for thinking that I am over emphasizing the independent nature of the expenditures of the Bishops in Oakland; that whole groups of people are involved in such decisions. And whole teams are, but it is also very fair to say that sole authority means sole responsibility. Please understand, the Diocese of Oakland is organized this way but this is in no way unique. Oakland is doing it the way most churches do. And lest we think this is a Catholic “thing”, many churches are organized this way, even the Mormons. Corporations Sole are in fact a very, very old corporate structure, so this is nothing new either.

But because organizing as a Corporation Sole is “common” amongst ecclesiastic institutions and  doesn’t make it right. Just because a tool is available doesn’t mean it is the best one. A corporation sole may be good for the Bishop, but it is not necessarily good for the laity. Because if you are a Bishop and your employees are harming children and you want to build a Cathedral with money you don’t have, you don’t have to really consult with anyone to get it done. A CEO in a run-of-the-mill C corporation would have to answer to his shareholders; a corporation Sole can regard its shareholders and its customers (because in a church they are one in the same) with impunity bordering on malfeasance. That is essentially what you have when you decide to spend money to build a Cathedral already knowing that you have seriously hurt children in your care. What single “corporation” in America breaks ground on new headquarters a full three years before settling the most horrible lawsuits imaginable against it? What kind of hubris does making a decision like that take?

With this background, tomorrow we will take on the mortgaging of the Oakland Diocesan treasure as a means to finance these decisions. In the meantime it is worth meditating on repentance.

The truly repentant don’t build a garden, they fix what they have and honor a people they have harmed. The truly repentant leave a vacant lot where a damaged cathedral once stood and pray for forgiveness. They look at their people and and say, “forgive us, please.”

A review of CCOP’s “financial” data

I have already provided a quick over view of parish finances from the standpoint of cash flows. I talked about how the structure of a parish works. Today I want to use that background to look at what the Catholic’s of Pleasanton have posted on their website. It is not very good financial data (in fact it tries too hard to be a narrative and not an accounting).

I have taken time to review the fall town hall meeting slides posted on their website. Bar charts are no substitute for balance sheets, but perhaps their finance council does not not know they should, at least in the spirit of the canon, be sharing that level of detail with their fellow parishioners. Nevertheless I think we can gather a few grains to eat as we wander through the grain fields of finance after sabbath.

Catholics of Pleasanton

First, you have a looming $10M capital campaign. Looming is an apt word. You effectively had negative cash flow in 2013. You barely broke even the previous year. You are not publishing real financial data. I am not saying you’re hiding anything, but you sure are trying hard to tell a story. It certainly looks like CCOPers will be suffering under never-ending capital campaign weariness.

CCOP: your overhead costs look large to me. Fully .45 on every dollar coming in goes to administration, clergy, rectory and the diocese. Why so much?

And speaking of your rectory, why is it repeatedly featured so prominently in your financials? There is “rectory project” under expenses and then rectory again in your pie chart. For a church looking for $5,000 to fix what looks like ground level electrical hazards (which is extremely serious), one hopes the rectory is the last thing to be fixed. Ground level hazard means “children hazard”. More on this in a moment as if you skip forward and look at the fall expenses list you will see rectory mentioned yet again. Odd.

You spent $344k on buildings and maintenance in 2013, outside of personnel this looks like it might be your largest single line item. But it is a large increase over the previous year, enough that I hope you parishioners discussed what the priorities were with your treasure. You did ask for a breakdown of maintenance expenses and timing didn’t you good laypeople?

Worrisome is the mention of “maintenance accounting change“. What does that mean? We hate to see a tacit footnote like this without clear explanation or notations as to what such consequences such a change might have had on previous year’s results. Such a note gives the appearance of changing measurement criteria on the fly. This is poor practice, even optically.

And then there is the wonderful parishioner who bequeathed her estate to the parish netting you fortunate people $1.4M. I am assuming some of the assets were illiquid and needed to be sold. Stocks, bonds, real estate require licensed agents to act on the behalf of a seller. Additional legal services are required. While it is not clear what assets were being sold the use of the language on the slide suggests third parties were involved. I want you to notice the phrasing used in the presentation because it is carefully worded: “over the course of 2013 her [Ms. Smith’s] estate was liquidated and CCOP received $1.4M in proceeds”. Which likely means that commissions were paid to third parties to dispose of the assets and that the estate was worth more, but the “net” (less commissions and fees) was $1.4M. So how much  was paid out and to whom? Perhaps you had parishioners who did it pro-Bono, if so great. If not, what process was used to determine who should get your business? Did people bid? My good people, the phrasing on this slide is so careful as to make me concerned.

Barring my questions about the process I think it is safe to say that your parish would be facing cut backs without Ms. Smith’s bequest to help shore things up. You have more cash flowing out than flowing in if you remove the bequest. It is no surprise that over 20% of those proceeds went into savings which allows a higher degree of latitude on what it can be spent on.  Based on these numbers about 45% of that will be spent on overhead in your parish.

 

Here is a summary checklist for you to ask your finance council and Pastor. I would ask (in fact I am asking), but so far I am being ignored:

1. Please break down by maintenance item and date what Parish buildings were fixed and/or improved? What process was used to determine the priority of the fixes and/or improvements? What process was used to defer items?

2. What is the “maintenance accounting change” and why was this change implemented now?

3. What commissions and fees were paid to liquidate Ms. Smith’s estate? To whom were they paid and what process was used to determine who should get the parish’s business?

Tomorrow we will turn back to the diocese as a whole as there are some other interesting areas in their financials to delve into, particularly the bond. After that I will return to Pleasanton’s Capital Campaign as the Fall Town Hall slides create more questions than not.

Parish Financial Health and Cash Flow

So, I want to turn my attention back to Pleasanton now. For those of you keeping the box score it has been 10 days since my requests were sent to their parish council, with no response.

But before I review Pleasanton a primer on cash flow and Parish financial matters is in order.

The All Important Flow of Cash

Here I must turn to cash flows which is really, in my opinion the quickest way to look at the overall health of parish finances. Cash flows are just what one would think the words mean: cash flows in; cash flows out and we hope that more cash flows in by the end of the measurement period than went out. Simple. The hidden component here is time, basically the “when” of cash coming in or out. When we spend money (cash going out) matters a lot. If, for example, we choose to defer an expense for a month or a quarter or longer, we can make the periodic numbers look better than they actually are. For example, suppose we know our church needs a new roof that will cost $100K to fix. If the Pastor decides that December (the end of his church fiscal year) is the time to have the roof fixed he will show a -$100K (reduction)as he writes the check to fix the roof in that calendar year. But if he just waits a couple of days and writes the check in January, that -$100K will show up in the following year. If your church is not publishing their numbers regularly, you, the parishioner (the one ultimately paying) would never know. Perhaps in the bigger picture it doesn’t matter. Or does it? Maybe without that -$100K showing up the Pastor can tell all of you with a straight face “we had a great year last year”, knowing that he has a full year to try to make up for the hole made by the roof fix costs in January. Would it change your giving if you knew that cash flow pattern? It would mine, because as a Pastor makes day to day financial decisions he is telling you where his heart is.

The simple fact of parish life (if you don’t have a school attached to your church) is that “income” is primarily “the Sunday Plate” that is collections at mass by the churchgoers and Confraternity of Christian Doctrine — Sunday school to you and I (nowadays they like to call CCD “Faith Formation”). Cash flows in come from you and I. Cash flows out are the sole province of the Pastor.

What about Finance Councils?

But what about the parish finance council you say? Yes, your parish has one, it must. The parish finance council is the only canon law mandated layperson body in your parish, a parish council is not mandated. That’s how important finances are to the church. The key fact though is that the finance council is a consultative body only: it simply advises. The entire finance council could vote against something and the Pastor could still do it the other way. The finance council CANNOT, in fact is forbidden, from making any decisions on its own.

Want to ask a great question in your parish? Ask how often your finance council meets, then ask how many of those meetings your pastor has attended. The ratio should be 100%. You may be surprised what the actual attendance record actually is. Did I mention that this is YOUR MONEY?

The Effect of the Pastor and Attendance On The “Flow”

What this means is that cash inflows are largely out of the Pastor’s hands. I know I’ll get some argument here on that but a great homily or two is not going to substantively change the finances of your church. Parishioners are going to pay whatever fees are set over in faith formation and they are going to put whatever they feel comfortable with in the basket. If Parishioners give more it is likely at the behest of other laypeople, not your Pastor and not the other Priests. Think about it for a moment and you will see that I am right.  Remember, despite all the wonderful things your parish is doing, the vast majority of the income is the Sunday collection and that donation decision came in either one of two spots:

a) when the wallet came out and the parishioner discovered what they brought to church, or

b) when the parishioner left the house, usually in a rush, and brought an envelope

In other words the individual giving decision is usually “spur of the moment” or made before the parishioner even left their home.

No single homily is going to improve those odds. So if your attendance is stable your finances will be flat. If it is going up, income will grow. If people are leaving income will fall. The Sunday plate is almost purely a function of census.

Christmas is usually an outlier for income as those “once a year” Catholics show up and make larger tax-deductible donations at year end.

Cash outflows however are where we learn what a Parish is actually made of. Why? Because the decisions come from one spot only (the Pastor) and are completely discretionary: he controls the timing, the priority and the amount.

With all that as a background we will see tomorrow how this all works in the Catholics of Pleasanton’s parish.

 

 

Our Body of Finances

Enjoying contemplating the Solemnity of the Most Sacred Heart of Jesus and wishing you all a blessed end to your day.

While I am not a sports fan, I will note the Warriors win last night as one cannot swing a dead cat (even here in sleepy Antioch) without hitting a Golden State fan. I, however will go against the grain and publicly declare my support the Cavaliers for giving prominence to Matthew Dellavedova “Delly” a graduate from my own alma-mater St. Mary’s here in our Diocese. Go Cavs!

Yet another day of silence from our Brothers and Sisters in Pleasanton in my vainglorious quest for a copy of their strategic plan. I am beginning to feel like Percival in search of the Holy Grail. I do wonder whether I have failed to ask the right question of the Fisher King! My latest failed attempt netted a kind note from a Secretary effectively saying “not my job” — which confirms that my notes are getting through and being ignored. Whilst I seek entrance to the Grail castle on that high hill in the East Bay, I will turn my attentions back to Quercopolitana as a whole.

I have taken a good read through the Moss Adams audit report from 2013. There is quite a bit there and far too much for this post this evening. I will start by making summary observations.

First, kudos to the finance team at the Chancery for a relatively complete set of financial statements. We must ask however, where are similar reports for 2014? This is especially important for an informed laity going into a diocesan capital campaign. For the financially inclined, here are some areas worth noting as you review our results. My advice to you, brothers and sisters, when reading financial statements is to read the footnotes first. That’s where all the juicy bits can be found. Here is what I saw when I started to read them:

1. Our diocese is organized as a “Corporation Sole” which is not unusual as religious institutions go, but is different than the average layperson would think of as a corporation in a modern business sense. A rather lengthy, but thorough review of the topic can be found here. The important thing to remember is that “RCBO” or The Roman Catholic Bishop of Oakland (as the corporation is known) is also a 501(c)(3) which gives the Bishop’s corporation tax exempt status.

2. We accountants like to use phrases like “consolidated financials” which is a fancy way of saying that we take the outputs of various entities all under the same “owner” and add them up into one big summary. We call these wholly owned entities subsidiaries. You might also take time to note that our Diocese has quite a few (too many for my liking) subsidiaries with names like: Adventus, Furrer Properties, Catholic Cemeteries, and of course the “Space Egg” (Christ the Light Cathedral), among others. Although you may read the Diocesan financials with a sense that they are a complete consolidation of all the subsidiaries, they are in fact not. So for example, when you look at our numbers you must bear in mind that they DO NOT include any figures from Catholic Cemeteries (amongst others). This is very, very important.

(and here I pause to point out that I have not even left the first footnote)

3. I will skip ahead in the footnotes to point out that the RCBO routinely makes loans not requiring collateral to related parties within the diocese and our auditors (Moss Adams) has made a determination that all the loans the Diocese has so far made are “generally not considered past due or delinquent”. That is worth considering as you read the financial statements. Remember, this is a corporation Sole. The Bishop has at his complete discretion the right to collect or even convert loans to contributions. That means he can make bad debt go away almost magically. If you think this makes doing the books a difficult thing, you are correct.

4. In 2013 the Oakland Diocese had a $69 Million loan outstanding to a related party known as the Catholic Cathedral Corporation of the East Bay. This is the Diocese loaning and paying paying money to itself. It sounds strange but there are good reasons to do something like this.

5. In 2013 Parishes, Schools, Institutions and Seminarians owed the Diocese $20.9 Million of which a determination was made that $4.1 Million was “doubtful” (this is a nice way of saying that they don’t think you are going to be paid back). We must ask why any of our good Seminarians would not pay a loan back (that is attempted humor, I hope).

6. And then the motherlode: we (you and I dear brothers and sisters) have a collective mortgage in the amount of $114,700,000.00 at an interest rate of 6.4%. Starting this year (2015) we have to pay back approximately $22 Million each year through 2019. We did this in a form of a bond (that’s the mortgage) with Deutsche Bank National Trust Company, and unlike the Bishop’s loans to related parties, this one is collateralized between cash and real property holdings here at our Diocese. We have agreed to always maintain certain amounts of cash and real property on hand. The converse of this is that if we do not have those specific amounts on hand at any point in time, we are in default. Any good christian will recognize the term used for this type of agreement: it is called a covenant. I will put out a whole post on just this topic, but this one point is worth considering right now: all of our treasure (as in the monetary, but not our time and talent) has been and will be mortgaged for at least the next five years. I am emphasizing the “we” because this is worth reflecting on the costs we already bear as the basket is passed this coming Sunday at Mass.

That is my introduction to our 2013 Diocesan finances.

I would like to point out that from an outsider’s look in, I find them needlessly complex. They are certainly incomplete and as such it is hard to put a complete value judgment on them as a whole. We have too many subsidiaries and too much going on for an entity our size. It may in fact be one of the reasons that we publish our financial reports so slowly. We should not be in June 2015 waiting to see what happened in 2014. I do not like the amount of debt we have. I do not like the fact that the financial statements are not complete. Did I mention that I don’t like the debt?

I would like all of you to consider first and foremost that this statement of treasure is a statement of stewardship around your treasure, our treasure; not a Corporation Sole, not Adventus, or RCBO or any other name the Chancery has wrapped around it. Those dollars are YOURS.

It is appropriate to review the finances “from the top”; that is to say the Bishop (or in this case RCBO) as that is where the numbers are consolidated (even if incompletely so). As a result we tend to think about the finances from the head. But we (you and I) are the body: the eyes, the arms, the feet; and the body does not consist of only one part but many… The head cannot say to the feet “I don’t need you”. The head cannot act like the feet do not exist. Just because we are subject to decisions, even financial ones, made by Pastors or Bishops does not mean that we are the “weaker” part of the whole.

On the contrary, those parts of the body that seem to be weaker are in fact indispensable, and the parts of the body that we think are less honorable are treated with special honor, and we make our less attractive parts more attractive. However, our attractive parts don’t need this. But God has put the body together and has given special honor to the parts that lack it, so that there might be no disharmony in the body, but that its parts should have the same concern for each other. If one part suffers, every part suffers with it. (1 Cor 12:22)

We are all one body. With respect to the finances in the Diocese of Oakland, I think it is time for us all to become less passive and more strategic.

On the Feast of St. Barnabas

Happy feast day, brothers and sisters! St. Barnabas is always welcome here in Antioch, even if this version is in California and not the middle east. We are also grateful for a day of rain here in drought stricken Northern California yesterday. Today has been hot and steamy in its aftermath.  At least I do not need to water the garden this evening! Instead I have just enough time to put out this entry before settling down for the evening.

Ruth took me to Santa Cruz yesterday, which we both agree was a mistake, but who could have predicted this weather? Archie and Veronica didn’t mind and happily ran up and down the beach while Ruth worried about her hair. We came home early and I spent the rest of the afternoon cleaning the car.

Sadly no responses from the emails to Pleasanton’s entire Parish Council looking for a copy of their strategic plan.  One can only hope those good people are more responsive to their own community. Which brings out my bias to suspicion. Why no response and why no plan? Logically only a couple of reasons are possible:

1.  There is no actual plan. Unlikely, as a parishioner who is a friend there told me it was repeatedly referenced at a town hall meeting.

2. The plan contains confidential data. Again unlikely. Parishes should be an open book and the parish website already has quite a bit of data on things like finances already there.

3. The plan is proprietary. This is my hunch.  As I have said before, the group that supposedly made the plan are all silicon valley executives. These people love to develop secret plans and insist things like non-disclosure agreements be signed etc. They show up for meetings and insist on confidentiality being maintained. Strategic Plans are seen as game-theory and meetings are held in “war rooms”; i.e. they are an asset to be jealously guarded. My guess is that said strategic plan is suffering from church-as-business syndrome which I talked about earlier this week.

If I am right, then the management (and yes, I will call them that), has decided that not sharing is some kind of advantage.

Which is a shame and does no good for the whole of Dioecesis Quercopolitana.