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  Diocese Run Similar to a Business

By Rita Pearson
Quad-Cities Online [Davenport IA]
October 12, 2006

http://qconline.com/archives/qco/sections.cgi?prcss=display&id=309936

The corporate side of the Davenport Catholic Diocese is similar to other businesses, with a payroll to meet, insurance premiums to pay, and tax obligations.

The Davenport Diocese' filing for reorganization under federal Chapter 11 bankruptcy proceedings Tuesday offered a rare look into the business of Roman Catholic Church finances and its future options.

The diocese, the administrative arm of the American Catholic Church in southeast Iowa, is structured as a separate corporation from the Catholic schools and parishes, each organized as their own corporation.

John Cassidy remarks about the Roman Catholic Diocese of Davenport filing for Chapter 11 bankruptcy before going to Mass at St. Anthony Church at 324 N. Main St., Davenport, Wednesday.
Photo by Terry Herbig

The diocese owns property and hires staff to provide mostly educational services to more than 105,000 parishioners in 84 parishes in southeast Iowa.

Its revenue comes from its members. The Davenport Diocese has an annual operating budget of about $3.6 million, of which 70 percent, or $2.575 million, comes from contributions from its parishioners. The diocese receives additional revenue from interest income on various estate gifts and trust funds.

However, the diocese is faced with a $250,000 shortfall, said Deacon David Montgomery, spokesman for the diocese.

Catholics contribute money to their diocesan office in an annual financial campaign called the Annual Diocesan Appeal. Most Iowa parishes started their ADA campaign in September to coincide with the church's fiscal year, July 1, 2006, through June 30, 2007. (The Peoria Catholic Diocese, which includes Catholic parishes in the Illinois Quad-Cities, conducts its financial campaign annually in the spring.)

Prior to filing its court documents Tuesday, the Davenport Diocese had about $4.5 million in assets, mostly in property, and about $1.6 million in liabilities. Normally a corporation files bankruptcy when its liabilities exceed its assets, but the diocese' assets are not liquid and ongoing litigation related to claims of sexual abuse by some priests has eaten up the diocese's other investments.

Among its options under bankruptcy are selling its property and cutting staff. All options are on the table, but cutting staff is a last resort, Deacon Montgomery said.

The bankruptcy has had minimal impact financially on the parishioners, but could have a greater impact if the diocese has to reduce services to the parishes, Deacon Montgomery said. Among its educational services, the chancery provides conference and training to the parishes and schools, leadership training and social action leadership and services.

If the chancery offices at St. Vincent's were sold, it is hoped the buyer would allow the diocesan staff to remain in their offices and pay rent, Deacon Montgomery said.

In bankruptcy, the diocese relinquished to the court seven vehicles and four properties and their contents, including St. Vincent's Pastoral Center at 2706 Gaines St., a 26-acre farm at 3718 Telegraph Road, a duplex at 2761 Scott St. and a house at 803 E. 39th St., Davenport. A 1985 Chevy 1-ton truck with an attached snow plow and 2006 Chevy Silverado were among the vehicles listed as diocesan property.

The contents of each office and apartment were listed in the bankrupcty filing, from every wall crucifix, to the bookcases, wastebaskets and dinner plates in Bishop William Franklin's residence.

The diocese has a 99-year land lease with the Congregation of the Humility of Mary for the ground on which the religious women built their convent several years ago behind St. Vincent's. It is not yet known how the lease will be resolved in the bankruptcy proceedings.

The diocese has 120 days to submit a plan to the court. A federal judge will decide whether to accept the plan. The court will set up procedures for anyone who wants to file a claim against the diocese. The court will have hearings and a bankruptcy judge will oversee each step of the process.

In an effort to control expenses, the chancery office has been cutting staff for the past two years, Deacon Montgomery said. He did not know how many staff had been cut in the past two years. The current staff of 36 relies more on part-timers and volunteers, he said, adding that each staff member is now doing two or more jobs.

Bishop Franklin has four groups, besides attorneys, to help him with his decision on how to make up the $250,000 shortfall, Deacon Montgomery said. Those groups include a corporate board of diocesan trustees, a diocesan financial council of business professionals and other experts; a college of consultors, who are a small group of priests (as required by church law) and the chancery directors, or executive staff.

Diocese inventory

Here are some of the hundreds of items listed as inventory following the filing of Chapter 11 bankruptcy protection by the Diocese of Davenport.

These items are located in the first-floor chapel:

* Tabernacle on mini-altar

* Large wooden crucifix

* Wooden head of Christ

* Mary and Child ivory statue

* Six matching padded armchairs

* Three sets of Mass vestments

* One holy water stand with glass dish

Valuables in a safe deposit box

Corporate CEOs may dispose of their artwork and valuables before filing for bankruptcy, but not Catholic Bishop William Franklin of the Davenport Catholic Diocese.

In an inventory listing the contents of the Davenport Diocese's safe deposit box at a Quad-Cities bank were an array of gold and silver rings, crosses and watches.

Some of the valuables are enhanced with diamonds, amethysts and pearls. One Episcopal ring came from Vatican Council II and another is listed as a Pius VI brass medallion.

Davenport Diocese Budget

Total annual budget: $3,641,000

Parishioners donations: $2,575,000

Other investment income: $816,000

Shortfall: $250,000

Source: Davenport Catholic Diocese

 
 

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