Pretty tough year’ expected in 2006, reports treasurer

By on November 1, 2005

There will be no reprieve for General Synod in 2006 with the financial outlook pointing to what treasurer Peter Blachford predicts as another “pretty tough year.” That reality resulted in a five per cent cut to the proposed 2006 budget and the layoff in September of six staff members at the Anglican Book Centre (ABC), the church’s retail and publishing department.

Under the proposed budget, to be submitted to the national church’s finance committee and to the Council of General Synod (CoGS) for approval this month, support grants to the Council of the North would also be slashed by five percent, or about $130,000. (The Council is composed of nine financially assisted dioceses spread out across 85 per cent of Canada’s land mass.)

“We’re really in a down period now. The reserves of the national church have been strained to the limit,” Mr. Blachford told the Council of the North during its regular fall meeting Sept. 28 to Oct. 3. “Spending is down but the income is down to a much greater degree.”

Mr. Blachford also told the meeting that General Synod has not recovered from the near-bankruptcy situation of the late 1990s, when litigation costs from the residential schools crisis squeezed the national church’s finances.

But he allayed fears of a possible bankruptcy saying a long period of recovery was “normal in a not-for-profit organization; we’re not selling a product where we can, all of a sudden, make sales.” In an interview, Mr. Blachford said that while General Synod has no line of credit at the moment, “we have a good rapport with our bankers and if … we needed the money, it wouldn’t be an issue to get (a line of credit) on a temporary basis.” He said that the directors of the national church’s departments did not feel it was necessary to borrow at this point. “We felt that unless we really needed (the money), why do that when once we have the (national office) building organized then we can get a proper line of credit in place and it’s there forever.” A line of credit would ease the cash flow problem, he said, particularly when payments and contributions to General Synod are delayed.

(The church sold its offices on Jarvis Street in Toronto to developers and moved in 2004 into a 21-storey tower a half-block away. The sale and the payment for the new building, on Hayden Street, have not yet been finalized.)

In 2000, TD Bank, General Synod’s bank for more than 30 years, canceled the church’s $2.4 million line of credit following reports of impending bankruptcy.

General Synod expenses decreased by roughly two per cent this year, but revenues are still below projected levels, Mr. Blachford said. Two or three dioceses “are having an increasing problem giving their proportional giving commitment,” while other dioceses, which have given more than their share, have likewise indicated that they are cash-strapped. Anglican Appeal, another source of revenue for General Synod, has projected a shortfall of $30,000 to $40,000 in 2006, he added.

“Indications I’ve had from a number of (diocesan) treasurers is that they have less room to manoeuvre; some of them are still trying to keep their commitments to us,” he said. Proportional giving from dioceses accounts for 84 per cent of General Synod revenue.

General Synod’s directors met for two days in early September to examine the budget and identified losses at ABC as one of the most serious pressures. (See related story). Following the meeting, six ABC staffers were laid off and the hours of the bookstore cut back.

The layoffs as well as reduced spending were meant to prevent a deficit and additional costs to General Synod, said Mr. Blachford. “You can’t keep having a deficit because you don’t have huge pots of money to rely on,” he said.

The 2005 budget, presented last fall to the Council of General Synod – the church’s governing body between General Synods – forecasts revenues of $10.57 million and expenditures of $10.72 million, the same as the 2004 budget. That budget was reduced midway last year to $10.3 million to avoid a deficit resulting from lower-than expected donations.

Meanwhile, a reduction in grants to the Council of the North dioceses was originally set at six per cent, until the diocese of Quebec volunteered to take an additional 15 per cent cut. Due to its reduced budget, the Council canceled its spring meeting and may meet by conference call or add its business on to the house of bishops meeting next April. Council bishops also agreed that dioceses which are paying allowances or stipend supplements in excess of generally agreed standards would have these “clawed back on a dollar-for-dollar basis” from their grants in 2006.

The Council relies heavily on national church support grants – $2.5 million out of a total expenditure of $10.5 million in the 2005 budget, the church’s second highest expense item.

In September, Mr. Blachford announced one member of his staff would be laid off as the department undergoes a restructuring. Two new staffers – controller Donna Locke, and assistant to the treasurer Benita Honig – have been hired.

On Sept. 20, the primate, Archbishop Andrew Hutchison, said the cuts to the bookstore mean “we should be on target for 2006” and no further layoffs are planned “for the foreseeable future.”

Author

  • Solange DeSantis

    Solange De Santis was a reporter for the Anglican Journal from 2000 to 2008.

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