Dunedin diocese ‘proactively’ paying off $10-million debt

Dunedin diocese has set a path to pay off its $10-million debt through a 30-year repayment plan.

According to a Diocesan Finance Committee report published in The Tablet last month, the diocesan overdraft at the end of 2019 was just under $10 million.

While an offset agreement with the ANZ Bank meant no interest was paid on the debt, it also meant most of the money invested by parishes and the diocese in the Catholic Development Fund couldn’t “provide an investment return.”

The report says although the overdraft on the diocese’s operating account had been kept stable over the past three years, it is time “to proactively begin paying this debt off.”

“We have transferred the $10million debt into a new account, entitled the CDD Mortgage account, and we have created a 30-year mortgage repayment plan. Regular and graduated payments will be made into this account each month.”

“As the ‘mortgage’ is paid down, our CDF funds will gradually be freed up and be able to be invested. The plan is to make these monthly payments from rental and investment income, an income we need to grow.”

“The debt should not be our primary focus from now on.”

The diocese’s tendency in former years to sell assets to cover expenses means it has “very few diocesan and parish assets that can generate supplementary income,” the Committee says in the report.

“Now is the time to start rebuilding our asset base,” it continues.

“We are beginning to identify parish land and property that could be developed, so as to return an income. It is possible that we might be able to create joint ventures between the diocese and projects in parishes that will benefit the parish and diocesan income streams.”

Also in the report is a discussion about the Committee’s goal – and the steps it will take to reach it – to generate sufficient investment income to reduce the diocesan levy on parishes. While the levy is currently set at 25 percent of parish income, the Committee aims to reduce it to 20 percent by 2024 and 17 percent by 2030.

“This will mean more income is available for parish-based ministry,” the report says. No legacies or bequests would be used to for this purpose, it adds.

Referring to the “Impact of Covid-19”, the Committee reports that the diocese did not take the 25 percent levy from parishes in May and June. It says it also offered rent reductions for its Moran Building and Martin’s Bay tenants.

“While we will record a loss over May and June, we did receive the wage subsidy for many of our staff,” the report says.

Introducing a different funding formula for Holy Cross Seminary training in 2020 has resulted in the diocese’s costs being “significantly reduced,” it notes.

Dunedin diocese vicar general Fr Gerard Aynsley says the report’s purpose is “to provide some clarity around diocesan finances and to provide some assurance and confidence in the diocese’s financial plan.”


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