Report from York-Scarborough Pre-Synod meeting

Posted on October 25, 2011

The following is a report from the York-Scarborough Pre-Synod meeting, held Oct. 20 at St. Peter, Scarborough.

The meeting opened with a prayer and a hymn.

Report to Synod on 2009 to 2011
The report is found in Section B of the Convening Circular. The Rev. Judith Herron-Graham presented the report. Mr. Michael Joshua, the diocese’s Treasurer and Director of Finance, presented the financial highlights. Mr. Peter Misiaszek, Director of Stewardship Development, spoke about the diocese’s fundraising campaign Our Faith-Our Hope: Re-Imagine Church. There were no questions.

Highlights from York-Scarborough, 2009 to 2011
The report for the Area is found in Other Reports to Synod on the Synod webpage. Bishop Yu gave a report on the work of Area Council and highlighted the grants that Area Council approves for things like seed money for innovative ministry. Area Council also approved grants for clergy to attend Appreciative Inquiry and for churches taking part in Natural Church Development.  Bishop Yu also talked about the work of the Area’s Youth Animator.

2010 Financial Statements
The Report regarding the 2010 Audited Financial Statements is found in Section C of the Convening Circular. Mr. Michael Joshua presented the 2010 Financial Statements. Questions followed.
Q: Have we completed making payments to the Residential School Settlement fund?
A: Yes, about three years ago we completed the payments of our share, and that went through to the national church.

Q: Can you go through the various expense lines you’ve mentioned and tell us what comes under the umbrella of each?
•    A: Corporate Governance includes the Secretary of Synod, the Chief Administrative Officer, and the Administration of the Diocese that we’re required to have.
•    Church and Society is our support of diocesan ministries. In this case, we support All Saints, Sherbourne Street. In 2009, we were also supporting Flemingdon Park Ministry.
•    Parish Support includes our grants that are approved for parishes through the Ministry Allocation Fund and other funds.
•    Church Growth and Development is the work of our Congregational Development team that work with our parishes to provide support. Two examples are the Parish Selection Committee and Natural Church Development.
•    Fund Disbursement is similar to Parish Support. It is the use of funds outside of supporting parishes but where we’re using them for other purposes.

Q: Can you speak about Note #14 on Page 17?
A: This note is about the contingent liability. Every year, our auditors send a letter to our lawyers identifying any potential obligations that the diocese may have. The lawyers evaluate the likelihood of any type of payout. If there’s a high likelihood, based on the lawyer’s letter, the auditors require an accrual that is reflected in the financial statements, the income statement and balance sheet. If the lawyers determine that the likelihood of a payout is low, there will be a comment in the notes to the financial statements describing any open claims that are happening as of the audit report date.  Note # 14 is in regards to an open claim and is not reflected in the financial statements because the lawyers have said there is not a likelihood of this payout.

Q: There is a reference to gift annuities to the Anglican Church. Is that proving to be successful?
A: Gift annuities tend to be a vehicle of fundraising that are  largely promoted by the national church. In the umbrella of Planned Giving, we tend to promote securities, outright gifts of cash and bequests in the Diocese. They tend to be the more successful vehicles we’ve had in promoting legacies. I can say that the national church does have an annuity program and if an individual wanted to make an annuity to their parish or to the Diocese, the national church would help facilitate that process.

Priorities and Plans 2011-2013
The Priorities and Plans 2011-2013, including the high level financial picture, are found in Section D of the Convening Circular. The Rev. Canon Elizabeth Hardy, Chief Administrative Officer & Secretary of Synod, presented. Leslie Hajdu described the work of the Budget Working Group. Michael Joshua presented the high level financial picture.

Assessment rate
The parish assessment rate is found in Section E, page 1, of the Convening Circular. In order to meet the revenue needs of the Diocese for 2012, the assessment rate for parishes is being proposed at 24.39% for 2012. Questions followed.

Q: A .99% increase sounds good, but it is actually a 5.2 % increase. Has some consideration been given to reduce department increases to match the overall rate of inflation?
A: We have tried to hold the status quo with regards to the programming that we’re doing. There were programs and initiatives during 2011 that were not budgeted in the 2010-11 budget. To continue these programmes, we have adjusted the budget for 2012 and 2013 to reflect the costs of these initiatives. So while the budget has increased, the amount of service to the parishes and programming has remained the same. We haven’t added new initiatives to this budget. Whatever we have initiated has been based on the last two years.

Q: The budget for Episcopal Expense has climbed steadily over the years. By contrast, support to the wider church has gone down. I am concerned about the reduction of staff at General Synod. We need to find ways to give to the national church.
A: With regards to support for the wider church, it has remained relatively stable. When Diocesan Council decided that 10 % of income to the Ministry Allocation Fund would be tithed, it was decided that even though we’re not increasing support to the wider church, we are increasing how much money is going out by way of tithing the Ministry Allocation Fund. In 2010 alone, over $700,000 was put aside for tithing purposes to support those ministries that don’t usually get support from the Diocese. The Council of the North will also receive money from the Our Faith-Our Hope campaign. In 2010 and 2011, grants from the Ministry Allocation Fund tithe were disbursed to the Diocese of the Arctic, Council of the North, the Anglican Church in New Zealand, the Diocese of Wiawso and others. Also, within the Our Faith-Our Hope campaign, a portion has been dedicated to support the wider church.

Q: The Diocese is in the middle of a $50 million campaign. Has that been considered as a way of bringing down the assessment?
A: No, because the Our Faith-Our Hope campaign is not for the operating budget of the diocese.

Q: How will the Our Faith-Our Hope money come back to parishes and ministries?
A: We’ve already begun to distribute funds back to parishes. A total of 40% of the funds that are raised at the parish level are able to be retained by parishes to support their own programmes. That money starts to go back to parishes six months after they’ve completed their campaign and every three months thereafter. In addition to that, the bulk of the funds raised by the campaign will be compounded over a period of time. The pledge period is five years, and we do not foresee until 2013 that we will have amassed a significant capital base to begin distributing funds. In the meantime, a committee will be established to evaluate how a parish can apply for funds. That group will make their plans public in 2013 so parishes can begin to apply for funds.

Q: Will the 40% going back to parishes be assessable?
A: No, it will not be assessable.

Q: A 1% increase in the assessment rate is actually a 5.6% increase, which is higher than inflation. This needs to be more transparent.
A: As per the assessment rate, we are increasing it by about 1% from 23.4 % to 24.39 %, meaning an extra dollar on every hundred of assessable income. I included the example on the slide which illustrates that if a parish has assessable income of $100,000 for 2011 and 2012 (no change), the increase to the parish would be $990.  This does work out to be an extra $306,993 in assessment collected by the Diocese.  While in some parishes the amount that is paid to the diocese might go up, there are other factors with respect to the assessable income where it won’t go up as high or it might even go down for some parishes. It is not possible to say that everybody’s dollars to the diocese are going to go up by the same amount. The assessment rate is one factor in the amount that is contributed to the Diocese. The other factor is the deductions that are taken by each parish, which vary across the entire Diocese.

Q: Where would the funds appear that have already been received by Our Faith-Our Hope and where will they appear going forward?
A: As the money comes in, it will be reflected on the financial statements as Restricted Funds. Those funds will be earmarked and restricted for Our Faith-Our Hope purposes.

Q: Is there control over the calculation of the assessable base? Is that handled administratively exclusively through the control of the Diocesan Council?
A: Canon 4 defines the assessable base and talks about the different deductions that are available. A couple of years ago the canon was changed significantly. When we calculate the assessment, it is based on what is submitted in the Parochial Returns.

Area elections
Area Council
The following were elected Area Council members at large:
The Rev. Erin Martin
Ryan Ramsden

Diocesan Council
The following were elected Area Representatives to Diocesan Council:
The Rev. David Giffen
Leonard Leader
Sr. Elizabeth Ann Eckert

Constitution and Canons changes
Changes to the Constitution and Canons can be found in Section F of the Convening Circular. The Rev. Simon Li presented. There were no questions.

Motions to Synod
Two motions from Synod members will be coming to Synod. They can be found in Section A, page 20, of the Convening Circular.

Q: Regarding Motion #2, why was this not recommended by Diocesan Council?
A: Strictly from a financial perspective, it would require us to remove identify over $800,000 in the diocesan budget to afford that. The mover of the motion suggested there was a benefit to some parishes but assessment would have to go up to meet the diocesan budget requirements. So for a few parishes that would benefit, all parishes would end up paying more.

The meeting ended with a prayer and a hymn.

The final Pre-Synod meeting will be held at All Saints, King City on Oct. 25 at 7 p.m. for Synod members in the episcopal area of York-Simcoe.