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Report shows solid finances

By Michelle Martin


The Archdiocese of Chicago’s Pastoral Center finished fiscal year 2007 with net assets of nearly $180 million, its strongest financial position ever, only two years after posting a negative $59 million balance.

“This is excellent news,” said Tom Brennan, the director of finance. “Everything was favorable.”

While the parishes saw a small decline in assets — from $941 million to $926 million — it was caused by an accounting change in how the costs of future medical care for retired priests are classified, Brennan said. Before the accounting change, parish assets rose slightly as well.

“Everywhere you look, it’s good,” Brennan said. “It’s really the hard work of the people in the pews, not just sharing their money but investing their time and talent in parish life.”

The rosy financial picture increases the archdiocese’s ability to minister to the people of God, by, for example, keeping all of the elementary schools open this year.

Parishes and schools received $11 million in grants from the archdiocese in fiscal 2007.

The Pastoral Center is the main administration arm of the archdiocese, and includes the cardinal’s office, the Office for Catholic Schools and ministries such as the Office for Racial Justice and the Respect Life Office.

Brennan said the move toward financial stability is the result of a plan put in place several years ago bearing fruit.

The archdiocese has seen record donations to the Annual Catholic Appeal, increasing contributions to Sunday and holy day collections at parishes, a favorable investment market, sale of more than $20 million in properties and ongoing cost control efforts.

Those efforts include the participation of more than 90 percent of parishes, with the Pastoral center, in the Resource Renewal program, which allows the archdiocese to negotiate lower costs for goods, such as office supplies, and services, such as telephones and cleaning.

The program saved parishes and the pastoral center $3 million last year, and $4.6 million since it started two and a half years ago.

“That’s a great thing that people are working together on,” Brennan said.

The largest change was the freezing of the archdiocesan pension plan as of July 1, Brennan said. It was a recalculation of future pension liabilities that led to the negative balance in 2005; by switching from a traditional, defined benefit pension plan to a defined contribution 403(b), pension liabilities are no longer a factor.

Employees who accrued pension benefits before July 1, 2007, will still receive them when they retire.

On the expense side, the archdiocese paid out $8.6 million in settlements arising from clergy sex-abuse cases, down from more than $24 million the previous year. No current donations are used to pay costs associated with sex abuse; the archdiocese has borrowed money to pay the settlements and then paid off the loans with proceeds from the sale of property and insurance claims.

Costs in future years may rise, Brennan said, especially as cases involving Father Daniel McCormack work their way toward completion. McCormack was sentenced in July to five years in prison for sexually abusing five boys.

Investments, which increased from $231.7 million to $278.5 million, may not increase as quickly with the market slowing down, Brennan said, but they have posted gains in the first quarter of the 2008 fiscal year despite more challenging market conditions.

For detailed information, see the annual financial report, Pages 1a-8a.