Current fiscal year will show $6 to $7 million loss

Detroit — In a letter to the people of the Archdiocese of Detroit and an accompanying document, Archbishop Allen Vigneron detailed the “urgent and significant reform” being implemented to stabilize the finances of the local Church.

The archbishop said that some of the archdiocese’s financial problems — which it has been addressing in earnest since 2009 — were cause by the area’s economic recession, but others were not.

“We are striving to be good stewards of that which the Lord has given to us,” Archbishop Vigneron wrote. “I pledge to you that we will continue to address these challenges directly, openly and thoroughly.”

A 10-page informational document accompanying the archbishop’s letter explained that the Archdiocese of Detroit began to lose money at a rapid pace in 2006. That pace worsened over the next two years, resulting in a $14.5 million deficit in the 2008-09 fiscal year. By mid-2009, the archdiocese announced that it was losing $42,000 per day.

The document also detailed major sources of the archdiocese’s financial problems, including the Pope John Paul II Cultural Center in Washington, D.C., in which the archdiocese invested $52 million to build and maintain; and the St. John’s Provincial Seminary in Plymouth Township, which cost $30 million to redevelop.

It explains that, although these investments certainly made the financial situation worse, they themselves did not lead to an unsustainable budget.

The archbishop, who was appointed the chief shepherd of Detroit in January 2009, appointed two task forces of lay financial experts and priests to help him analyze and act on the whole of the archdiocese’s financial situation.

“To stabilize our finances, I accepted several recommendations proposed by these two work groups,” he wrote.

Of major import, a 2009 restructuring of the archdiocese’s central services led to layoffs of more than 70 staffers at the “headquarters” of the local Church. Concurrently, spending was cut, among other steps taken to return to a balanced budget.

While it has taken time — and will take more time still — to realize deficit-free operations, the archbishop indicated that the archdiocese was on its way to doing just that.

The current fiscal year, which ended yesterday, will likely show a $6 to $7 million loss for the archdiocese, much of which is associated with the restructuring, archdiocesan subsidies to Catholic institutions in the archdiocese, and to launch fundraising efforts.

By this time next year, the archbishop said, the Archdiocese of Detroit will no longer operate at a deficit.

“Because of the selfless efforts and sacrifices of many, the archdiocese will operate with a balanced budget effective July 1, 2012,” Archbishop Vigneron wrote.

The amount of debt owed by the archdiocese to outside entities is $29.4 million, including $18.3 million on a loan to support archdiocesan operations and the Pope John Paul II Cultural Center — the building and land for which is now for sale — and $11.1 million on a bond that went to help Pontiac-area parishes and schools.

The document details the steps the archdiocese has taken to stabilize its finances, measures being taken to prevent future financial distress, and the current state of major accounts held by the archdiocese.

Archbishop Vigneron’s letter on the archdiocese’s finances is part of a series he has been publishing to update the faithful on the state of the local Church.