Archdiocese releases financials for last year

The Archdiocese of Chicago released financial statements for the pastoral center April 6 that show a $4.6 million deficit for ongoing operating expenses in the fiscal year that ended June 30, 2015.

That’s a significant improvement over the financial picture as recently as three years earlier, when the operating deficit topped $75 million, according to the statements. Now the task is to maintain financial stability and continue to improve effectiveness.

“We’ve made significant improvements in recent years,” said Betsy Bohlen, the archdiocese’s chief operating officer. “Now we are looking at, how do we become more effective moving forward?”

Bohlen said improvements in the archdiocese’s operating expenses were the result of better management and keeping a tighter watch on spending as well as some difficult decisions, including cutting the number of pastoral center employees from 435 in 2012 to 365 now.

“We’ve been much more focused on what the role of the pastoral center is and what the pastoral center needs to do,” she said. “We are also more focused on bringing better facts, criteria and processes to making decisions.”

For example, Bohlen said, in past years, the archdiocese sometimes made loans to parishes that had no realistic ability to repay them.

Now, the archdiocese looks more closely at whether a parish actually needs the money, whether the parish is likely to be able to repay it, how urgent the need is and whether the loan will actually solve the parish’s problem.

“We can make a loan for a new roof, but sometimes that’s just the tip of the iceberg,” Bohlen said.

Some parishes are seeing good results from turnaround efforts that bring better management practices to bear in situations where the parish staff don’t necessarily have the skill sets they need, Bohlen said. Unfortunately, though, five parishes and 23 schools also closed during this time period. At the same time, the archdiocese has been hit by the financial cost of misconduct settlements, which have amounted to more than $140 million over the past 30 years. Costs associated with misconduct and retirement benefits make up most of the difference between the archdiocese’s $4.6 million ongoing operating loss and its overall loss of $60.7 million in fiscal 2015.

Funding for misconduct settlements comes from the sale and leasing of archdiocesan assets, not donations or parish assets.

Non-operating costs and a change in pension liabilities were the primary reasons for a reduction of $125.9 million in the pastoral center’s net assets, resulting in negative $45 million in net assets for the pastoral center, the reports said.

Going forward, some parishes and schools continue to struggle, Bohlen said. According to the statements, archdiocesan parishes and schools had an operating deficit of $58.8 million in 2015. The pastoral center made up about $25 million of that deficit, with the rest coming out of parish savings and other sources.

The need to make hard decisions in the future doesn’t come as a surprise to most people, Bohlen said, but that doesn’t make it easier.

“When you talk about very specific situations, it gets very difficult and painful,” she said.

Funding is not the primary focus of the Renew My Church initiative now being launched, although it is an element, Bohlen said.

“Renew My Church is looking at, first and foremost, how do we renew and revitalize parish life?” she said. “It will focus on evangelization, vocations, priest leadership development. Part of it is focused on looking at the parish infrastructure and communities we have. We have lots infrastructure serving very small communities being served by very small staffs, just trying to keep the lights on.”