Accountability Report
Accountability Report
Chief Financial Officer's Report
Our blessings bring some financial challenges
By Mary Beth Koenig
Chief Financial Officer
As the Diocese of Austin continues to grow, we are thankful for our many blessings. We have more seminarians than most dioceses in the country. With advances in health care and medicines, people are living longer and we now have more retired priests than ever before. We are opening new parishes and new schools whereas many parishes and schools are closing or consolidating in other parts of the country. However, each of these blessings also presents a signifi cant fi nancial challenge, and these challenges were magnifi ed in the fiscal year ending June 30, 2008.
It is common belief that the needs of seminarians and retired priests were met with the success of the Our Faith ~ Our Legacy (OFOL) capital campaign. The pledge phase of the OFOL campaign was completed as of June 30, 2007. We are thankful that pledges continue to be paid as expected even in a troubled economy. However, endowments to be established with funds generated from OFOL will assist in funding only a small portion of the needs brought about by our increasing numbers of seminarians and retired priests.
A decade ago the Austin Diocese was struggling with declining seminarian enrollment while the Catholic population was exploding. The number of men ordained each year was less than the number retiring. However, in 2008, this trend reversed and we are now ordaining more men to the priesthood each year than are retiring. This increase in seminarians is an incredible blessing and gift that will have an enormous effect on the formation of Catholics in Central Texas.
Our diocese provides the entire cost of seminarian education and formation (room and board, tuition, books and health insurance) as this is an investment in the future leadership of the church. The cost runs approximately $40,000 per year per seminarian. While funds from the OFOL campaign will be used to create an endowment for seminarian education, the amount of annual income generated from the endowment will fund the cost of educating and forming roughly fi ve seminarians per year. The cost of the formation of the remaining seminarians (currently 35) must be paid from the operating budget (funds collected from the Catholic Services Appeal), a special collection (taken up April 18-19) and other contributions and donations.
This is also the case in terms of the care of our retired priests. Funds from the OFOL campaign were used to build a 16-unit retirement center for our retired priests. While the priests living at the center contribute to the operating costs of the center, the diocese provides the majority of funds required to operate the center in addition to the health insurance for retired priests and assistance to priests with special needs that reside in assisted living and nursing home facilities. This new housing is an incredible blessing and gift for our retired priests that have dedicated their lives in service to the church because before this center was built, retired priests were financially responsible for their own housing. While funds from the OFOL campaign will be used to create an endowment for the care of retired priests, the amount of annual income generated from the endowment will fund less than 10 percent of the cost of their care. Therefore, most of the funds needed to operate the retirement center and fund their care will come from the Catholic Services Appeal and a special collection (taken up Dec. 12-13).
While our funding needs have increased, revenue from the Catholic Services Appeal was much lower in the fi scal year ending June 30, 2008 ($3.4 million) than in the fi scal year ending June 30, 2006 ($4.2 million). The annual Catholic Services Appeal was not held in the fiscal year ending June 30, 2007 due to the OFOL campaign. Additionally, our investment income declined in 2008 due to overall declines in the fi nancial markets.
These declines in funding sources caused us to use investments to fund a portion of our operating needs during the fiscal year ending June 30, 2008 and into the current fiscal year.
We are working on a plan to balance our budget in 2009 and reduce our expenses. Programs will be combined or eliminated to reduce our costs. However, as previously mentioned, the numbers of seminarians and retired priests continue to rise, so our budget will most likely continue to increase despite our best efforts to reduce it.
We are thankful we have not lost funds received from the OFOL campaign due to market declines because OFOL funds were conservatively invested in government-insured products, which served us well. Our investment balances have grown primarily due to funds collected from the OFOL campaign, which will be used to establish endowments.
Now, more than ever, in these tough economic times, we continue to rely on your generous support to meet the needs of our growing population. Thank you for your financial support of the Catholic Church in Central Texas. May God bless you for the sacrifi ces made to nurture the Catholic faith of future generations.