Archdiocese of Philadelphia's finances inch nearer to break-even point
The Archdiocese of Philadelphia edged closer to breaking even financially in its core operations in the year ended June 30, officials said Thursday.
The Archdiocese of Philadelphia edged closer to breaking even financially in its core operations in the year ended June 30, officials said Thursday.
The Archdiocesan Office for Financial Services, which administers insurance, pensions, and other functions for parishes and church-related entities, reported a loss of $700,000 in its latest fiscal year, down from a $2.3 million loss the year before.
Both figures exclude certain items that do not reflect recurring day-to-day operations. (The World Meeting of Families - Philadelphia is a separate organization, and the pope's September visit did not affect the archdiocese's central operations.)
"Our core operating deficit continues to improve, and it's gratifying to have more stability and predictability with our operating results," said Timothy O'Shaughnessy, chief financial officer for the archdiocese.
He warned that the archdiocese is facing higher costs in the current fiscal year for tuition at St. Charles Borromeo Seminary because of a large number of Philadelphia seminarians.
"That's a terrific development, obviously, but it has an impact on our financial result," O'Shaughnessy said.
The 2015 results represent a huge improvement over the $17.6 million loss in fiscal 2012, the period during which Archbishop Charles J. Chaput arrived to find the archdiocese in financial freefall after years of deficit spending.
Chaput acted quickly, laying off about 50 people from archdiocesan headquarters in June 2012 and selling properties such as the cardinal's residence on City Avenue for $10 million to pay bills.
Beyond its core operating deficit, O'Shaughnessy also found then that the archdiocese had $354.4 million in long-term liabilities for self-insurance, in priests' and lay employees' pensions, and in a deposit-and-loan program for parishes and other church entities.
Additional deals, including the sale of its nursing homes for $145 million last year and the long-term leasing of its cemeteries, including an initial $53 million payment, reduced those liabilities to $229.6 million as of June.
The biggest remaining shortfall is in the Lay Employees' Retirement Plan, which was frozen on June 30, 2014. Its deficit was $162 million on June 30, 2015, up from $152 million three years earlier.
"It's frustrating to see our funding status slide back after the significant steps we have taken. We are facing our pension challenges head on, and we will continue to do so," O'Shaughnessy said.
The archdiocese has moved its non-pension investments to a new custodian, SEI Private Trust Co. of Oaks, from BNY Mellon.
It was the initial investor in SEI's new Catholic Values mutual funds for both stocks and bonds this spring. Those funds totaled $255.7 million in assets Wednesday. In June, the archdiocese had $141.3 million in those funds.
On the legal front, the archdiocese's audited financial statement said that three priest-sex-abuse cases were settled before their scheduled trials this year, but no financial information was disclosed.
Numerous cases were dismissed due to their being beyond the statute of limitations, but at least four are pending.
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