 |
|
Parish Debt or School Debt?
ANTHONY S. FOTI
NOREEN W. FOTI
770 Lantern Hill Road
Shavertown, Pennsylvania18708
(570) 696-3169
November 23, 2007
Mr. James Quinn
Diocesan Secretary for Financial Services and Chief Financial Officer
Diocese of Scranton
300 Wyoming Avenue
Scranton, Pennsylvania18503
Subject: 2007 – 2008 Parish Assessments for Schools
Dear Mr. Quinn,
Thank you for your letter of October 12, 2007. We acknowledge all the time and effort you and your committee have devoted to the school assessments, knowing through our own experience the time and effort needed to address these issues. Regardless, your formula is inequitable and in spite of all your hard work, your best effort is still flawed. We are disappointed that you have refused to seriously consider the alternate formula (refer to August 28 e-mail), which provides more fair and acceptable assessments across the board, and to issue adjustments, which is not an impossible task.
We find it interesting that you would bring up the parish debt due to the diocese. According to our records of a May 12, 2004 parish meeting announcing the interest moratorium, the debt consisted of approximately $490,000 in loans from the diocese for capital improvements to the Sacred Heart School, approximately $190,000 in unpaid diocesan assessments, and the approximate balance of $78,037 in accumulated interest on the loan, totaling the $758,037 referred to in your letter. In reality, the case can be made that the entire debt due the diocese is owed by the Sacred Heart School. According to financial statements published by our pastor, during the past seven years, over $1,500,000 of parish income has gone towards school subsidies, plus additional funds for capital improvements. The reason the parish was unable to pay certain diocesan assessments was that it had to cover shortfalls in the school maintenance expenses, operating expenses, and capital improvement costs that were never passed on to other parishes or the diocese, even though many parishes benefited from our school. Over the years, seven catholic elementary schools within two blocks to two miles of Sacred Heart School have closed (three located on the same street at Sacred Heart School). Many of these displaced students enrolled in Sacred Heart School. Unlike some parishes in the diocese which closed their elementary school, our parish has kept its school open at great expense and to the detriment of our financial position.
In reality, the handling of the debt adversely impacts Sacred Heart – St. John Parish in two ways. The debt due the diocese, which as of June 30, 2007 stands at $710,443.20 ($47,594 has been paid back in three years and two months), still remains the sole responsibility of our parish. It is noteworthy to point out that in addition to paying back $47,594 of the debt, Sacred Heart has also paid for capital improvements to Sacred Heart School during the same time frame to repair and replace the roof and parapets, and replace the boiler, at a capital cost of approximately $230,000. While our parish has been struggling to meet its financial obligations, the shortfalls of other schools have been rolled into an amortization schedule, and this debt service is included in the school assessments. In your letter of August 20, 2007, it is noted that other schools were relying on future income to pay current and past bills. For those schools, the diocese amortized these costs over twenty years, and included the $1,000,000 annual debt service as part of the $15,000,000 school budget for 2007 – 2008.
In summary, not only is Sacred Heart – St. John Parish expected to pay off its school debt without any assistance (had to withdraw $120,000 from its savings account in Spring 2007 to pay school bills), it is also forced to pay off the debt of other schools. And to add insult to injury, our parish, according to your unfair school subsidy assessment formula, has the highest assessment rate (45%), resulting in the highest penalty ($102,813 over the standard 25% assessment rate). We do not understand why the outstanding school debt that Sacred Heart – St. John Parish owes the diocese was not included in the amortization schedule, which should be shared by all parishes through the school assessments, and not just by Sacred Heart. Considering Sacred Heart provided catholic elementary education in the North Wilkes-Barre area for 99 years, this is a bargain.
According to Meitler Consultants, Inc., as quoted in the November 30, 2006 Catholic Light, the justification for closing Sacred Heart School was that “Sacred Heart Parish in not financially viable to support a school”. How is it that on one hand our parish cannot afford to keep its school open, yet on the other hand can be charged such an excessive, outrageous assessment?
In reference to interest charges, it is our understanding that Sacred Heart – St. John is not the only parish to receive an interest moratorium. We assume the diocese has made a distinction between parishes that borrowed money to invest in capital improvements to their church buildings and rectories, and parishes that went into debt as a result of supporting their elementary catholic schools (while still paying assessments to subsidize diocesan catholic high schools). Please clarify.
Regarding your reference to the discrepancy between the school subsidy paid by Sacred Heart/St. John for 2005-2006 ($282,144 in financial report provided to the diocese by Msgr. Sempa, versus $270,580 in the Parish Bulletin), we are enclosing a copy of the Parish Bulletin for your records. We recognize you did not prepare the bulletin or the financial report, and by copy of this letter to Msgr. Sempa, request that he explain and reconcile this $11,564 difference.
Finally, we are still waiting for a breakdown by parish of the $28,584,866 loans due from parishes and schools as of December 31, 2006, and an allocation by parish of the $12,936,290 portion owed by financially troubled parishes and schools, as requested in our letter of July 30, 2007. This is our third request for this information.
Sincerely,
Anthony S. Foti and Noreen W. Foti
Enclosure
CC: Most Rev. Joseph F. Martino, D.D., Hist. E.D., Bishop of Scranton
Most Reverend John M. Dougherty, D.D Vicar General
Msgr. Vincent J. Grimalia, V.G.
Msgr. Joseph C. Bambera, V.E., Canonical Consultant for Pastoral Planning
Father Michael F. Quinnan, E.V. for the Southern Pastoral Region
Father Philip A. Altavilla, E.V. for the Northern Pastoral Region
Msgr. John J. Sempa, Pastor of Catholic Community of North Wilkes-Barre
Father James J. Alco, Asst. Pastor
Joseph Casciano, Diocesan Secretary for Catholic Education and Superintendent of Schools
|
