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October 25, 2009

Parishes, schools report capital needs

By Michelle Martin


Imagine running an organization whose operations are scattered among more than 350 sites — and the leaders of the organization have no idea what the capital needs are at each of those sites.

That’s the situation the Archdiocese of Chicago is trying to remedy with a survey that administrators say will give the archdiocese a more accurate picture of what its financial situation is, where it wants to go and how to get there.

All pastors and principals were asked to respond to a survey from O’Meara, Ferguson, Whelan and Conway, a financial consulting firm that specializes in helping dioceses develop and implement resource management plans.

The survey asks each parish or school to report not only on the assets they have, but also on the estimated cost of any deferred maintenance or necessary repair projects as well as on what projects they would like to take on.

The goal is to find out what the archdiocese actually needs, in terms of financial resources, and come up with a plan to get there, said Kevin Marzalik, the director of finance for the archdiocese.

“We’re not looking to see what they’re doing wrong,” Marzalik said. “We’re really looking at what they need to do.”

While parishes or schools with major financial problems will come to the attention of the finance office sooner or later, he said, right now the archdiocese has no way of knowing what additional resources parishes want or need to fulfill their missions.

“Say there’s a parish that needs a new roof for its church,” he said. “We’re going to hear about that. But maybe what they really want to do is build a parish center for their ministry. Right now, we have no way of knowing what’s on the wish list.”

Unmet needs

Some parish and schools officials reacted to the survey with a certain amount of suspicion, Marzalik acknowledged. By the Oct. 9 deadline for returning the survey, only about 50 of the 357 parishes had done so. However, he expected much wider compliance in the next couple of weeks.

He also expected to find out about a great many deferred maintenance needs.

“We don’t have a good handle on that,” he said. But with properties — including parish churches and schools — with a total replacement value of $9 to $10 billion, a standard depreciation schedule would lead one to expect about $200 million each year in repairs and maintenance.

“We don’t do anywhere near that much,” he said, leading him to believe there are many needs going unmet.

Yearly updates

The model being developed by O’Meara Ferguson will offer 15- and 30-year projections, which the finance office will be able to update each year as it gets updated financial information from the parishes, and it includes information from the parish center and other archdiocesan agencies. Because the model itself has been under development for some time, Marzalik expects to be able to share projections with the bishops by the end of the year, within several weeks of getting the survey responses compiled.

That won’t be the end of the project, however.

“This model will help us quantify what the needs will be,” he said. “It won’t tell us how to pay for it.”

Options might include another capital campaign similar to the Millennium Campaign undertaken in 2000, which raised more than $200 million for the archdiocese and its parishes, borrowing money by issuing bonds or some other alternative, Marzalik said. Notably, O’Meara Ferguson bought the company that ran the Millennium Campaign for the archdiocese.

“Financially, we’re a very strong archdiocese,” Marzalik said. “That gives us some room to entertain different options.”