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.