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Orange Diocese Cuts Don't Faze Parishes -- Yet

Self-sufficiency at the local level insulates churches, but a moratorium on construction loans will have an effect later.

November 05, 2002|Jennifer Mena and Phil Willon | Times Staff Writers

A day after the Roman Catholic Diocese of Orange announced its second 5% budget cut this year, many Catholic parishes said Monday that they don't expect the financial woes to lead to significant reductions in their programs.

But after losing more than $14 million in each of two back-to-back years, the diocese will not be granting any new loans to parishes planning expansions or renovations. Diocesan officials have also frozen or cut about a dozen administrative positions, and other cuts may be coming as church leaders look for ways to trim expenses.

The cuts "are obviously going to be difficult. We started out with a pretty lean budget," said diocesan Chancellor Shirl Giacomi.

At churches around Orange County, many officials said they don't expect the cutbacks to affect their budgets because most parishes are self-sufficient and, in fact, help support the diocese by sending in a portion of collection plate proceeds and other donations.

"The average Joe Catholic will not feel this," said Jan Zimmerman, business manager at Holy Family Cathedral in Orange. "There could be delays in capital improvements, but overall, the impact will be minimal. In the church we sometimes joke we are moving on Vatican time anyway.... That means slow."

Last year, the diocese gave St. Joseph parish in Santa Ana a $200,000 loan to buy a neighboring house so St. Joseph could one day expand.

"We do need to expand further, and there's going to be a moratorium on loans for the time being," said parish financial manager Elena Schneider. "It won't affect us yet because we are not ready to go forward."

Father Eamon O'Gorman of St. Catherine of Siena Church in Laguna Beach said his parish's plans to renovate and retrofit the church to meet quake building standards may be delayed.

"We will be breaking ground next May," O'Gorman said Monday. "We're keeping a constant eye on the situation. We were told that if we need a [building] loan, it might not be available."

O'Gorman said his parish sees no need to make significant cuts to its programs or services. Still, there has been "a little belt-tightening" because collections at St. Catherine have been down about $1,500 a month since last year's terrorist attacks, he said.

On Sunday, the diocese reported that it lost more than $14 million for a second straight year, primarily because of losses in the stock market, a rise in insurance costs, $12 million spent on critical needs in poor parishes and $3.6 million to settle molestation claims.

They are the first back-to-back losses in the diocese's 27-year history. Three years ago, it reported a surplus of $21.5 million, thanks largely to a windfall from stock investments.

In July, Bishop of Orange Tod D. Brown ordered his department heads to cut expenses by 5%, and now has asked for an additional 5% cut to their 2002-03 budget. The diocese also imposed a one-year moratorium on granting new loans to parishes.

The diocese has $10 million in outstanding loans to parishes and $19 million in loans scheduled for the next two years.

"We've loaned out as much money that we can be fiscally responsible for," Giacomi said.

The diocese saw imminent problems when its annual budget took shape in July, she said. Besides the partial job freeze, two employees have been laid off.

Last summer, the diocese began communicating electronically with parishes to save money. As for other cuts, Giacomi said, only proposals are being floated, with nothing concrete until later this month.

"Maybe instead of having two lunch conferences, they will have one and serve a roll and coffee," she said.

The Orange diocese's losses over the last two years have depleted nearly two-thirds of available reserves. The diocese does have an additional $90.6 million in reserves designated for specific purposes. The stock market slide lowered the value of the diocesan investment portfolio from $227 million three years ago to about $182 million by the end of September.

Giacomi said the budget woes in Orange County pale in comparison to the those of the Archdiocese of L.A., where in September seven church ministries were suddenly eliminated and 60 workers laid off.

Dwight Smith of the Catholic Worker, a community service group running the largest homeless shelter in Orange County, questions the financial priorities.

Smith said church officials have been too busy trying to make money from their investments and have forgotten why parishioners donated their hard-earned cash in the first place.

"Once the buildings are built, and everyone has a seat, then we have to turn our attention to the plight of the poor," he said. "I don't understand why we're investing money at all. I would like to see an investment into filling the bellies of the poor, or in schools."

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