PASSED: Second Proposed Amendment to the Canons

Amendments

Replacement of the current Title I. Canon 14: Of the Diocesan Fund

Text of Proposed Amendment:

Title I. Canon 14: Of the Diocesan Fund

Sec. 1.    At each Annual Convention an assessment shall be made upon all parishes in the Diocese, according to the formula set forth in Section 2 of this Canon.

Sec. 2.

(a)     Beginning January 1, 2010, and in the calendar years thereafter, there shall be an annual assessment made upon all parishes in the Diocese as follows:

•    10 percent of the first $50,000 of Normal Operating Expenses (NOE) of a parish;
•    13 percent of that portion of the NOE above $50,000 and up to $150,000;
•    16 percent of that portion of the NOE above $150,000 and up to $250,000;
•    19 percent of that portion of the NOE above $250,000.

(b)     Normal Operating Expenses is defined as “All Other Operating Expenses” (line #14) less “Assistance from diocese for operating budget” (line #7) in the Line-by-Line Instructions for the preparation of the 2008 Parochial Report as provided by the Episcopal Church.

Sec. 3.

(a)     By February 20, each parish shall estimate an annual assessment based on projected or budgeted Normal Operating Expenses for the current calendar year, and shall use that estimate to calculate an average annual percentage rate of assessment to be used as described in Section 3(b) below. The average annual percentage is determined by dividing the estimated annual assessment to the Diocese by the total estimated NOE of the parish for the year.

(b)     Beginning February 20, 2010 and on the 20th day of each month thereafter, each parish shall pay to the Diocese a monthly payment determined by applying the average annual percentage rate of assessment for the parish to the parish’s Normal Operating Expenses for the preceding month.

(c)    No later than March 1, each year, each parish will determine its final assessment for the preceding year by performing an end-of-year reconciliation of its assessment due using the formula set forth in Section 2 above and the final Parochial Report data for the same year, to the total assessment payments made for the calendar year. Any overpayments may be applied to the parish’s assessment for the following year and/or may be recorded as additional support of diocesan program at the discretion of the parish.

Sec. 4.     Parishes in arrears on the day delegate certificates are canonically due shall retain seat and voice at following Diocesan Convention but forfeit their lay representation vote. Parishes are deemed in arrears when they fail to pay their Diocesan assessments in full for all months up to and including the last day of the fifth month prior to Diocesan Convention. There is no power entrusted to the Convention or any Committee thereof to waive this fault.

Proposer

The Assessment Review Committee

Rationale of the Proposer

History

•    The current assessment process has been in effect since 1998.
•    In 2006, Bishop Mark Hollingsworth requested a study of the assessment process. The result of this assessment was that the Diocese of Ohio assessment rates were in the middle range of assessment rates across the country. It was subsequently concluded that an overhaul of the assessment system was not deemed necessary at the time.
•    Last year, at the 192nd Annual Convention of the Diocese of Ohio two amendments to Title 1, Canon 14 were presented. After much discussion and debate the proposed changes were referred to an ad hoc Assessment Review Committee that was to perform a comprehensive review including, but not limited to,
•    The current funding mechanism for supporting the mission and ministry of the diocese
•    The system of reporting and making payments
•    Consequences for non-compliance with diocesan canons.

Funding Mechanism

•    Currently a graduated rate system ranging from 10%-16% is applied to the Parish’s Normal Operating Income (NOI) to determine the assessment due.
•    As the NOI, per the National Episcopal Church Parochial Report instructions, closely approximates the Parish’s operating expenses it results in assessment being paid on funds used to support the diocese, used for outreach, in addition to funds used for the operations of the parish.
•    Because of the mechanics of calculating the NOI, it makes it difficult for many parishes to easily calculate and accurately estimate to determine their monthly assessment due.
•    Under the proposed new canon, the assessment calculation will be based on the Parish’s Net Operating Expense (NOE). The NOE will not include funds spent for the Diocesan Assessment or local outreach expenses programs. Also excluded from the calculation is any diocesan assistance used to support a parish’s operating budget.
•    The proposed canon also recognizes the need for any new method to have a “revenue neutral” impact to the Diocese. Therefore, in addition to changing the calculation base to NOE and exempting the Assessment payments to the Diocese, the new graduated rate table changes the range to 10%-19%.
•    Overall, the Assessment Committee believes that these changes simplify the monthly assessment calculation; simplify the year-end reconciliation; and reflect the diocese’s commitment to outreach by not assessing a parish on funds used to support local outreach programs and the diocese.
•    If this proposed canon was in place for 2007 the impact for most parishes would be minimal. Most parishes will see a change in a range of +/- $1,000 on their annual assessment.
Reporting and Payment System
•    The current canon requires that by February 20th of each year each parish make an estimate of the assessment rate used for year. Monthly, along with payment, an assessment worksheet is required to be completed. At the end of the year, annual assessment reconciliation is required to be completed.
•    The proposed canon does not include any substantive changes in the reporting and payment requirements. However, the Assessment Committee believes that changing the calculation base to NOE will greatly simplify the estimation, monthly payment calculation, and year-end reconciliation processes.
Consequences for Non-compliance
•    The current canon provides that any parish reported as in arrears by the Treasurer of the Diocese shall not be entitled to any representation in any Convention of the Diocese.
•    The current canon does not specifically define what qualifies as “in arrears.” However, in practice, the Treasurer has considered in arrears as having outstanding assessment due more than 90 days from the date of the Convention. This has traditionally required payment through August of the year of the Annual Convention.
•    The proposed canon relaxes the consequences for non-compliance. It is proposed that any parish in arrears will retain seat and voice but will still forfeit their lay representation vote.
•    The proposed canon also specifically defines the parameters for being considered in arrears. This definition is also more generous than the current practice. It is proposed that parishes must be paid in full up to and including the fifth month prior to the Diocesan Convention, however this payment must be made by the due date for Delegate Certificate forms. The following are offered as examples:

•    For lay delegates to have the right to vote at an Annual Diocesan Convention in November, a parish must have paid all of its Diocesan assessments due, for all of January through June of the current year and all previous years, no later than 30 days prior to Convention.
•    For lay delegates to have the right to vote at a Special Diocesan Convention in February, a parish must have paid all of its Diocesan assessments due, for all of January through September of the preceding year and all previous years, no later than 30 days prior to Convention.