A sharper-than-expected decline in Presbyterians Sharing income will result in the loss of up to five positions at the church’s national offices as well as the loss of a week’s wages for two years.
The budget called for Presbyterians Sharing to raise about $8.6 million in revenue for 2009, but indications are that only about $8.4 million will come in.
Stephen Roche, the church’s treasurer and chief financial officer, told staff at a meeting called to announce the reductions that there was no way to know if the drop in contributions was a result of the recession or whether contributions would recover.
Since 1999, Presbyterians Sharing revenue has ranged from $8.6 million to a high of $8.76 in 2006, but it has fallen short of budget expectations since 2003, thanks in part to budgeted levels being raised by $50,000 each year. In 2008, the budget shortfall was nearly $400,000.
The payroll cuts will come in the form of a one-week shutdown of the national office building in 2010 and 2011, during which time staff will be forced to take an unpaid leave. In addition, no cost of living allowances will be granted for the next two years.
Assembly Council approved measures earlier this week that will reduce national office payroll by $300,000 over the next two years and permanently reduce its staff by at least three and a half full-time-equivalent positions and possibly five by 2011.
“We have to have an impact,” said Stephen Kendall, principal clerk. “We have to let the church know something is being given up—a week of salary and also a week of work.”
The national office management team said the changes were necessary in order to avoid more drastic cuts in the future.
The 51 staff affected work for the Life and Mission Agency, apart from core Presbyterian World Service and Development positions, as well as the assembly office, financial services and support staff.
Pension and benefits staff, PWS&D and the Women’s Missionary Society are all separately funded, as are the Presbyterian Record and Presbyterian Church Building Corporation, which are separate corporations.
The savings are part of a complex package to temporarily reduce costs and increase revenue by $900,000 over the next two years and $800,000 a year permanently beginning in 2011. According to the budget framework presented to Assembly Council, $600,000 in temporary savings and $400,000 in permanent savings will consist of transferring money between various church funds.
The one-week closure of 50 Wynford is expected to save about $110,000 in salaries and utilities over two years. A yearly cost-of-living allowance is regularly approved by General Assembly and applied to salaries. A cumulative cost-of-living allowance will be restored in 2012, but will not be retroactive for the previous two years.
According to Gord Walford, convener of the finance committee, errors in the revenue and expenses as set out in the finance committee’s draft budgets, and overly optimistic projections of Presbyterians Sharing revenue meant the committee suddenly “saw a lot of red ink.”
Although the council presented General Assembly in June with gradual budget reductions of between $100,000 and $400,000 each year over the next three years for a total of $700,000, the committee had to make all the cuts for 2011, said Roche.
The grant provided to Presbyterian colleges will be cut by a quarter of a per cent, saving about $25,000 a year.
Other cuts include $41,000 cut from the General Assembly office, $110,000 from the LMA and $13,000 from Support Services. National committees will be restricted to meeting in the Toronto area, because it is the cheapest travel hub in the country, and travel budget restrictions have been included in the cuts.
To buoy the operating fund, council approved motions to increase up to eight times the amount of undesignated bequest money in the operating fund. Normally, $25,000 of an undesignated bequest is kept in the fund, with the remainder transferred out as deferred bequests. In 2009, 2010 and 2011, up to $200,000 from undesignated bequests can remain in the operating fund.
A number of large bequests received in the past few years prompted council to establish a stabilization fund from which the operating fund could draw up to $240,000. Beginning in 2011, the annual withdrawal limit will almost double to $440,000.
Another $200,000 will be withdrawn annually from the new church development capital fund, administered by Canada Ministries, and added to the operating fund. That fund, which held almost $6.7 million at the end of 2008, receives 30 per cent of the assets of dissolved congregations and generates about $250,000 in interest income each year.
General Assembly will also be asked to approve biennial assemblies starting in 2012 or 2013. Assembly costs about $350,000. If a “national event” were held in alternate years, it would save the church about $125,000 annually.
A recommendation at the 2009 assembly asked sessions, presbyteries and other courts of the church to vote on biennial assemblies and to provide feedback to be presented at the 2010 assembly.
The changes were not passed without critical comment. “As a member of the national stewardship committee, I’ve seen these numbers many times,” said Rev. Wes Denyer of St. Andrew’s, Brampton, Ont. as the proposals were presented for ratification.
“We continue to fail to find—or fail to attempt to find—a more creative way of funding the work of the national church. What I see is the way we do things isn’t working, and I see nothing in this proposal to change the way we do things.”
The council also approved a recommendation that the finance committee consider alternate funding models
