Executive Council approves 2007 budget, adopts resolutions on mission, ministry
Episcopal News Service. March 4, 2007 [030407-04]
Mary Frances Schjonberg and Jan Nunley
The Executive Council of the Episcopal Church March 4 approved a revised 2007 budget for the church's mission and ministry.
The Council also issued a letter to the Church concerning the Primates' Meeting in Tanzania. An ENS story on the letter will follow.
While anticipated diocesan commitments have increased by 1.1 percent, to continue the mission and ministry of the Episcopal Church would have resulted in a $3.8 million deficit with some change to the 2007 budget.
So as not to have to reduce programs for the Church's mission and ministry, the council agreed in Resolution AF-21 to raise the investment income payout rate for 2007 from 5 percent to 5.5 percent, creating a one-year exception to the rate established in June 2005, and to take up to $2.3 million from short-term reserves to add to the 2007 budget's income.
Treasurer and Chief Financial Officer N. Kurt Barnes told the council March 3 that, while he generally supports leaving the payout rate at 5 percent in order to protect the endowment funds against "de-capitalization," the funds can withstand a one-year increase. Assuming the current 3.2 percent rate of inflation, the fund could withstand a 17 percent loss and still be able to make a 5 percent payout in 2008 from the income, he said.
Executive Council Standing Committee on Administration and Finance chair Josephine Hicks (Diocese of North Carolina) said that the two steps were a "hard swallow" on the part of the committee but that the only other choice was to cut the budget for mission. That was not an option, she said.
The shortfall, which is larger than the $820,000 predicted when the budget was approved in June by General Convention, is due in large part of "lower diocesan commitments on the revenue side," Barnes said. The dioceses of Newark, Pennsylvania and Southwest Florida account for most of that reduction.
In addition, income anticipated from the rental of two and a half floors of the Episcopal Church Center will not begin in 2007. The Church Center is currently negotiating with a potential tenant with the aim of occupancy in 2008.
Barnes also noted that the revenue projections for that budget were made nearly 18 months ago. The shortfall comes despite the fact that diocesan income is expected to increase 1 percent over that in 2006. Individuals and congregations in dioceses which do not pledge to the Episcopal Church budget continue give money to the church, he said.
The 2007 budget assume a 2 percent increase in salaries and an 8 percent increase in medical insurance costs. The costs of discipline issues and "property protection" litigation will continue into 2007, Barnes predicted.
The 2007-2009 budget, as approved by the General Convention in June, is available here.
The council passed two resolutions related to the budget process. Resolution AF-20 called for a task force to evaluate the council's role in preparing a proposed triennial budget and recommend ways for each of the council's standing committees to have more input into the process. Hicks said that the Administration and Finance committee feels that all members of Executive Council needs to have "more meaningful policy level input" at an earlier stage in the triennial budget development process. The group was asked to report to the council now later than the 2007 fall meeting.
Resolution AF-21, in addition outlining the steps to erase the 2007 projected deficit, calls for the council's presiding officers to appoint a task force to meet the canons' requirement of a balanced budget in 2008 and 2009 without having to take the steps the council must take to achieve a balance 2007 budget.
The resolution would also have the Standing Committee on Administration and Finance establish task force "to develop strategies for increasing participation and accountability by diocese that are not fully meeting their commitment to the budget of the Episcopal Church."
Barnes also reported that the 2004-2006 triennial budget is likely to end with a roughly $25,000 surplus. That surplus will come despite the 2006 budget having higher-than-budget expenses due to nearly $800,000 in unbudgeted Title IV disciplinary costs as well as legal assistance to dioceses, primarily in the area of "property protection," Barnes said.
Higher registrations and revenues from General Convention and "extra-diocesan" contributions made up for lower direct diocesan income due mainly to the Diocese of Pennsylvania's inability to pay most of its $835,000 pledge. Interest income on endowments saw a 17 percent increase after fees and expenses, Barnes said.
The Executive Council carries out programs and policies adopted by the General Convention, and oversees the ministry and mission of the Episcopal Church. The council is comprised of 38 members, including bishops, priests or deacons, and lay people, 20 of whom are elected by General Convention and 18 by provincial synods.
In other actions, the council:
- heard a report from the Rev. Dr. James Lemler, director of mission for the Episcopal Church, on possible strategies for major gift giving with potential areas of concentration including rebuilding efforts on the Gulf Coast and funds for communication, planting new congregations, funding future leaders global ministry, and spiritual enrichment.
- authorized the Episcopal Church Archives Strategy Site Selection Subcommittee to continue its work concerning the eventual relocation of the Archives from its current home at the Episcopal Seminary of the Southwest in Austin, Texas.
- called for the rebuilding of the Gulf Coast "in a manner that supports racial and economic justice" and is environmentally sustainable, and called for continued prayers for the people of the Gulf Coast, praised the efforts of Episcopalians who have participated in recovery work, and called on Episcopalians to "press the federal government to meet its commitments for the rebuilding of the Gulf Coast."
- recognized companion diocese relationships between the Diocese of Newark and the Episcopal Church of Panama and the Diocese of Western North Carolina and the Diocese of Durgapur of the Church of North India.
- called on the U.S. government to close the military prison at Guantanamo Bay and to oppose the use of extraordinary rendition, secret prisons and torture.
- called for continued work towards peace with justice in the Middle East.
The council passed the following resolutions:
Executive Council
EC-006: outlines plan to use $924,000 budget line item devoted to the Millennium Development Goals (MDGs) as seed money for a "MDG Inspiration Fund" to fight malaria and other disease
EC-007: procedural resolution about the authority of Executive Council
EC-008: authorizes the presiding officers of Executive Council to appoint a work group, chaired by House of Deputies President Bonnie Anderson, to consider the role, responsibilities and potential response of the Council to the issues raised by the Primates communiqué and report to the Council's June meeting
Administration and Finance
AF-011: Sets dividend rate (income payout rate) for 2007 endowment portfolio at $1.08 per share
AF-012: Approve the 2007 Revised Budget for the Episcopal Church
AF-013: Draws $70,000 from a trust fund to the Diocese of Lake Malawi to cover operational expenses including a security fence and replacements for stolen computer equipment and peripherals
AF-014: Accounts for use of the nearly $202,000 in income from the Allan and Florence Gerdau Fund
AF-015, 016, 017, 018: Related to trust funds for Trinity Episcopal Church, Staunton, Virginia
AF-019: Restates Episcopal Church Building Fund Certificate of Incorporation
AF-020: Appoints a task force to evaluate the Council's role and participation in the process of preparing a proposed triennial budget
AF-021: Raises investment income payout rate; mandates balanced budget task force; increase participation and accountability by dioceses not fully meeting commitment
AF-022: Delegates to Archives Strategy Site Selection Subcommittee further due diligence concerning location, funding and final recommendation of relocated Archives
Congregations in Ministry
CIM-002: Reaffirms commitment to funding Seminaries using 1% of net disposable budgeted congregational income. This was D014 from the 75th General Convention.
International Concerns
INC-013: Recognizes new Companion Diocese Relationship between Western North Carolina and the Diocese of Durgapur in the Church of North India
INC-014: Appreciation for newly assigned missioners and ones who have completed their term of service.
INC-015: Recognizes a new Companion Diocese Relationship between Newark and the Episcopal Church of Panama.
INC-016: Expresses concern for the Middle East; opposes U.S. military action against Iran; encourages the U.S. government to pursue a two-state solution in Israel/Palestine.
INC-017: Advocates action for refugees and displaced persons resulting from Iraq war
National Concerns
NAC-006: Review of Jubilee Programs
NAC-007: Regarding actions on stockholder resolutions
NAC-008: Urges members of Congress and elected officials to support reentry programs for prisoners and ex-offenders. Completes Resolution B027 passed by the House of Bishops.
NAC-009: Reaffirms equal human rights for homosexual persons. Completes Resolution A168 from GC 2006.
NAC-010: Reaffirms Principles With Regard to the Prolongation of Life; calls Church to become informed and commends chaplains as appropriate resource persons for discussions regarding end-of-life and medical futility decisions.
NAC-011: Supports racial, economic and environmental justice in Gulf Coast rebuilding. This is the completion of General Convention Resolution B034.
NAC-012: Offers prayers for hurricanes Katrina and Rita victims and thanks for all who have helped them; urges federal government to meet commitments for Gulf Coast rebuilding. This is the completion of Resolution D077.
NAC 013: Calls for closing of the military prison at Guantanamo Bay and an end to secret detention centers and "extraordinary rendition" of terror suspects. This resolution completes action on General Convention 2006 Resolution D028.
NAC-014: Urges no future General Conventions in states that prohibit domestic partnerships. Completes action on the General Convention 2006 Resolution C010.
NAC-015: Directs that a Refugee Program Liaison be appointed in each diocese where a refugee resettlement office of Episcopal Migration Ministries is located
NAC-016: Appoints Alice Webley of the Diocese of Virginia as an official delegate to the governing board of the National Council of Churches of Christ in the United States of America.
NAC-017: Promotes principles and practices of socially responsible purchasing in the corporate food industry in order to advance the human rights of farmworkers. Completes Resolution B010 passed by the House of Bishops.
NAC-018: Supports voting rights for District of Columbia residents
NAC-019: Condemns the use of torture and the practice of extraordinary rendition. Completes C033 of 2006 General Convention
NAC-020: Urges asylum for lesbian, gay, bisexual or transgender refugees or advocates for their rights (where illegal), and aid in their resettlement. Completes Resolution D073 from GC 2006.