The following is an update by Chancellor David W. Smith on the “Chancellor’s report on reconfiguration” which appeared on page 7 of the Aug. 12 edition of The Pilot.
Several members of the Reconfiguration Oversight Committee suggested that many of the lay faithful would be able to better understand a few line items of the Reconfiguration Report if I provided some additional information.
In my previous reports, I referenced that the Reconfiguration Fund had to borrow funds from the Archdiocesan Revolving Loan Fund. These temporary loans from the Archdiocesan Revolving Loan Fund were required to fund the reconfiguration expenses incurred during the process and prior to the sale of any reconfiguration properties. With the recent sale of reconfiguration properties, the Reconfiguration Fund has now repaid this temporary loan in full.
The Revolving Loan Fund can perhaps best be described as a mutual savings and loan for parishes. The fund provides an excellent depository for excess parish cash, with the excess parish cash most frequently related to fundraising for future capital and repair projects. The Revolving Loan Fund is operated through the Chancellor’s Office. It currently pays 4% on deposits and charges 5.5 % on loans. It has proven to be an excellent way for parishes to help one other. Because it is a mutual bank, needing only to cover its operating costs, the fund is able to pay more than local banks on deposits and charge less on loans. Earlier memoranda from Bishop Richard G. Lennon has mentioned the need to use portions of the Reconfiguration Fund assets to restore the equity diminished in this fund by the Jubilee Debt Forgiveness. Obviously, if debts are forgiven the money needs to be replaced in the fund.
Another category that I have been asked to clarify in a bit more detail is the line item entitled Direct Operating Aid to Parishes. This line item reflects the initial operating capital provided to the new parishes created during the reconfiguration process. Some examples would include the new parishes created in Cape Ann and in Concord. When parishes in these areas were suppressed and a new parish formed, the Reconfiguration Fund provided three months of operating expenses to the new parish. No debts were passed on to the new parish.
Contained under the heading Direct Construction Aid to Parishes is the assistance provided to some new parishes as a result of taking on pastoral support/needs from parishes that were closed. The vast majority of these financial needs have been for capital items. Examples would be the need for additional handicapped access at a couple of these sites and/or funding for emergency capital items where the continuing physical structures were in urgent need of attention.
As I continue to deliver these status reports on the use of reconfiguration funds, I will continue to provide additional information as needed to further enhance your understanding of the process. Thank you.