2019 Finance and 2020 Proposed Budget

Treasurer’s Report to Convention

Summary of the Financial Position of the Diocesan Corporation

Report on the Corporation Sole

Summary of the Financial Position of the Corporation Sole

2020 Proposed Diocesan Budget

2020 Narrative Budget Video

2020 Proposed Assessment Formula

2020 Proposed Salary Resolution and Mandatory Minimum Compensation

2020 Congregational Grade Structure
2019 Clergy Compensation Report

Treasurer’s Report to Convention

The Diocese, with input and oversight from the Executive Council and its Finance Committee, has continued to focus on improvements to the financial affairs of the Diocese during the current year. For example, earlier this year the finance staff implemented a much needed new endowment management software package which will make endowment tracking and accounting more efficient.

The financial statements of the Diocese are audited by the audit firm of Hood & Strong. A copy of the complete financial statements and the independent auditors’ report are made available on the website of the Diocese.

In the pages following this letter I have included a summary of the financial statements of the Diocese for the year ended December 31, 2018. The 2018 audit is not final at the date of this writing, but we do not anticipate any material changes to the results described below.

Financial Results for Calendar 2018

The financial books and records of the Diocesan Corporation are composed of five separate funds:

  1. the Operating Fund
  2. the Custodial Fund
  3. the Endowment Fund
  4. the Deferred Gifts Fund
  5. the Expanding Horizons Campaign Fund (a fund first established in 2016)

The Diocesan Corporation in total experienced a decline in total net assets of approximately $2.7 million during 2018. This decrease was due to a decline in the value of the Endowment Fund in line with the decline in equity markets during 2018. The decrease in the endowment was in the form of unrealized losses and did not affect the operating results or cash position of the Diocese. The endowment has recovered its value in 2019 as YTD returns at 9/30/19 are 15.0%.

The Operating Fund of the Diocese, which reflects the operating income and expenses of the Diocese, realized a surplus of $82,184 in 2018 compared to a surplus of $99,263 for 2017 and a deficit of ($81,371) in 2016. The primary sources of revenue for the Operating Fund are assessment income, gifts, fee income, and the annual distribution from the Endowment Fund.

The Diocese’s endowment funds are managed by the Domestic and Foreign Missionary Society of the Protestant Episcopal Church (“DFMS”), which is the endowment fund of The Episcopal Church. This endowment fund adheres to the social responsibility guidelines of The Episcopal Church, and more specifically, to the mandate of Resolution C045, “Environmentally Responsible Investing”, passed by the 78th General Convention of The Episcopal Church.

At the end of 2017 the Diocese had outstanding loans to various parishes, missions and Diocesan organizations of approximately $2.3 million under its program of providing financial support for Diocesan organizations seeking assistance for capital improvements to their properties. The Diocese continues to provide both payroll and personnel benefits services to churches and organizations within the Diocese, a service that is offered in very few other Episcopal dioceses. At the end of 2018 the Diocese had receivables of approximately $1.42 million for payroll and benefit advances under this program.

2019 Forecast and 2020 Budget

The Operating Fund is currently expected to finish in the black in the current 2019 year, depending on assessment relief granted and no unanticipated expenses arising.

The proposed assessment rate for 2020 continues to be the lower assessment rate approved by Convention in 2011, with a top rate of 17% (versus a top rate of 20% in earlier years).

The Program & Budget Committee and the Executive Council have recommended a 2020 Operating Fund budget that will result in a balanced budget for the year with a small surplus.   A copy of this proposed 2020 budget is included in the following pages. 

Please note that as has been the practice since the inception of the Expanding Horizons capital campaign, the salary and benefits of the director of development are being charged to the capital campaign fund and do not appear in the operating budget.

The 2020 budget assumed a cost of living increase for salaries estimated at 3.5%. The increase in the cost of living as measured by the San Francisco Consumer Price Index for All Urban Consumers for the year ending June 30, 2019 was 3.2%, and in keeping with prior years’ practice, the actual percentage increase of 3.2% as of June 30 is submitted to Convention for its approval as the recommended COLA for 2020 salaries.

Financial Policies and Procedures

The Finance Committee of the Executive Council holds monthly teleconference meetings to review the financial affairs of the Diocese. Its monthly discussions include a review of the year to date operating financials, the aging of receivables from the parishes and missions, and the line of credit loan facility available to parishes and other Diocesan institutions. A summary of these meetings is then presented at each month’s Executive Council meeting.

Three other committees of the Executive Council also have significant involvement in the financial affairs of the Diocese:

  • The Program and Budget Committee prepares the recommended Operating Fund budget for the coming year, which is then presented to the full Executive Council and subsequently to Diocesan Convention. Members of this year’s committee in addition to myself were Mary Jane Chetelat, Thomas LaFrance, Rev. Chip Larrimore, Jim McConnell, Susan McKenzie, Bruce Morrow, Richard Patenaude, Rev. Jane Stratford, and Mees Tielens.
  • The Investment Committee has oversight responsibility for the investments of the Endowment Fund.
  • The Audit Committee is charged with the responsibility of ensuring that the financial affairs of the Diocese are audited by an independent auditor and that appropriate accounting policies and internal controls are established and followed.

Corporation Sole

All of the assets of the Corporation Sole except for its real estate holdings were transferred to the Diocesan Corporation in December 2009. A separate report on the financial position of the Corporation Sole follows this report.

Other Matters

The Diocese and its member churches continue to experience financial constraints, and it is likely that we will continue to see many of our churches suffer from the strain of limited financial resources. This calls for the Diocese to be particularly mindful of its fiduciary responsibilities for the financial welfare of the Diocese and all of its churches and missions.   

I wish to express my thanks to Tom Ferguson, Joann Fite, Sarah Crawford, Jim Forsyth, and all the staff at Diocesan House for their hard work and assistance over the past year.

Respectfully submitted,

B. Bradley Barber, Treasurer

September 18, 2019

Summary of the Financial Position of the Diocesan Corporation

Report on the Corporation Sole

In May 2008 the Special Convention of the Diocese adopted governance revisions stipulating that the Corporation Sole be merged or otherwise incorporated into the Diocesan Corporation to the extent feasible by January 1, 2011.  However, the Convention resolution also provided that in the event that such a merger or other incorporation would result in a loss of assets to the combined entity, the Corporation Sole shall continue to survive to the extent necessary to preserve its assets.

As previously reported to Convention, a conclusion was reached that all of the assets and liabilities of the Corporation Sole could be transferred to the Diocesan Corporation without significant costs except for the real property holdings of the Corporation Sole. Transfers of real property in California are subject to significant real estate transfer taxes; religious and nonprofit entities are not exempt from these transfer taxes.  In December 2009 all of the assets of the Corporation Sole other than its real estate properties were transferred to the Diocesan Corporation. 

The balance sheet of the Corporation Sole as of December 31, 2018 (shown in the following pages) reflects the 32 real estate properties which continue to be held by the Corporation Sole.

Respectfully submitted,

Brad Barber, Treasurer

Summary of the Financial Position of the Corporation Sole

2020 Proposed Diocesan Budget

Click here to download.













2020 Narrative Budget Video

Watch video on Vimeo here.

2020 Proposed Assessment Formula

  1. 5.0% assessment on the first $80,140 of a parish or mission’s operating income for 2018 as defined on Line A of the 2018 parochial report
  2. 17.0% assessment on all such income above $80,140, provided that:
  3. No parish or mission shall have an increase over 2019 initial assessment (before appeals) of more than 50% or $21,445, whichever is less.

2020 Proposed Salary Resolution and Mandatory Minimum Compensation

Resolved, That effective January 1, 2020, the minimum annual compensation for clergy employed full time by the Diocese of California and by any parish or mission thereof shall be increased by 3.2% as reflected in the 2020 Mandatory Minimum Salary Schedule shown below.

Resolved, That Years of Experience be defined as Credited Service with The Church Pension Fund.

2020 Mandatory Minimum Compensation Including Self Employment Tax


  1. That any deviation below these minimums will be permitted by the Bishop for serious cause, with the Bishop using the Personnel Practices Commission as a council of advice.
  2. When a rectory is provided, cash compensation may be 30% below the minimum figures to parallel Church Pension Fund’s requirement that cash compensation be grossed up by 30% for pension assessment purposes when housing is provided.
  3. That employers of all clergy pay to each cleric 50% of the self‐employment tax assessed on the cleric's base compensation as a portion of total compensation (7.65% of base compensation). This amount is included in the schedule above.
  4. The Personnel Practices Committee strongly urges all churches, whenever possible, to increase the clergy and lay staff compensation by 3.2% for 2019 to accommodate for inflation.
  5. That the minimum transportation allowance be $0.58/mile for congregation‐related travel and is to be adjusted in accordance with IRS published rates for 2020.
  6. That associate clergy minimums are based on the cleric's years of service at two grade levels below actual congregation classification.

Note: Compensation increase is based on the annual increase in the Consumer Price Index for All Urban Consumers in San Francisco, Oakland and San Jose as of June 30, 2019.

Resolution as passed at the 1999 Diocesan Convention:

Resolved: That the proposed salary standards for clergy in the Diocese of California, as reflected in the joint report of the Personnel Practices Committee and the Clergy Compensation Task Force, are approved and shall be effective on a voluntary basis for the years 2000‐2004, and shall become mandatory for 2005 and later years.

2020 Congregational Grade Structure

Schedule adjusted to reflect cost of living increases since passage of salary standards resolution in 1999

Resolution as passed at the 1999 Diocesan Convention:

Resolved: That the proposed salary standards for clergy in the Diocese of California, as reflected in the joint report of the Personnel Practices Committee and the Clergy Compensation Task Force, are approved and shall be effective on a voluntary basis for the years 2000 to 2004, and shall become mandatory for 2005 and later years.

2019 Clergy Compensation Report (click here to download)