Like many businesses and families, borrowing has allowed the diocese to consolidate previous debt and finance necessary funding for various needs, while spreading repayment over a longer period of time to avoid adversely affecting ministries and services supported by the annual operating budget.
As with home or personal loans, total interest and principal paid over time is greater than the initial amount borrowed. To date, the diocese has paid $43 million in interest payments on its bond financing by utilizing Cathedral Center campaign pledge payments and through the diocesan annual operating budget. Pledges made for the Cathedral Center will soon be completed, and the operating budget cannot fully address the debt service without cutting current services. To answer the need, the Diocesan Finance Council has recommended the following:
Through Reclaiming Christ’s Mission Together campaign, $30 million will be raised, which, along with funds from the sale of properties and investments, will be used to reduce our debt by $50 million. Together, let us take responsibility and rededicate our diocese to financial health.
While the plan does not eliminate the debt fully, this balanced approach will help the diocese retain sufficient investments to support its annual operating budget, preventing large reductions in ministries and services; creating opportunity for improving ministries for our growing East Bay community; and improving the overall financial flexibility of the diocese. Further reduction of debt beyond the $65 million level will come from annual debt service payments, further liquidation of assets and potential future diocesan capital campaigns.