By Voice staff

Faced with a significant drop in revenue and an increase in expenses, the Oakland Diocese must trim its Central Services budget for 2010 and beyond, Bishop Salvatore Cordileone told Chancery employees Oct. 23. This means a reorganization of functions in the central offices and the “very real likelihood” of staff reductions.

The projected 2010 deficit of $1.3 million is caused by decreased income from the 2009 Bishop’s Appeal, a lower rate of return on diocesan investments, increased expenses related to operations at the Cathedral Center, and “significant” interest costs for refinancing the diocesan debt, the bishop said.

He also expects parish contributions to central services to be less than previous years because parishes are experiencing their own drop in plate collection revenue as parishioners cope with unemployment and other consequences of the global financial crisis.

These realities, the bishop said, necessitate “decisive action” to keep “expenses down for the long term.”

He said the initial consideration of an across-the-board 16 percent salary cut to preserve both jobs and ministries was not feasible.

“This is not a one-year problem,” he said, noting that no improvement in the fiscal situation is anticipated for the next several years. “We need a solution that will produce lasting budget deficit reductions.”

This is the second time in four years that a Chancery workforce reduction will take place to achieve a balanced budget. In January 2006, 17 full- and part-time positions in pastoral ministries and support services were eliminated to close a $1.2 million gap.

At that time, Father George Mockel, vicar general, said the deficit resulted from a widening gap between income and expenses and a $25 million settlement of lawsuits filed by victims of clergy sex abuse in the diocese. The settlement was financed through a loan.

In addressing the current situation, Bishop Cordileone said his Administrative Council will make budget-reduction recommendations that will be implemented by the first quarter of 2010.

In May, diocesan employees were told that beginning Jan. 1 they will pay five percent of their health care premiums. Previously, the full amount of an employee’s premiums was covered by the diocese.

Additionally, the diocese changed its policy regarding eligibility for benefits from 20 hours of work per week to 25 hours per week, effective Sept. 1 of this year. Co-pays and deductibles were also raised, effective July 1. Dependent coverage is paid entirely by the employee.

As of Oct. 22, the 2009 Bishop’s Appeal had raised $1.495 million toward its goal of $2.1 million. The 2010 Appeal is scheduled for February 14.

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