The meeting was held at St. Bride, Clarkson, on Oct. 19. Bishop Philip Poole, the area bishop, welcomed all to the meeting. The meeting opened with a prayer and a hymn.
Overview of Synod
The Rev. Canon Judy Herron-Graham gave a brief overview of Synod. She spoke about the theme of Synod, which is “Compassionate Service, Intelligent Faith, Godly Worship.” She said the agenda of Synod has been designed to be a time of worship, fellowship and continued growth in regards to our vision and mission for the Diocese. More information on the theme and agenda for Synod can be found on Page 18 of the Convening Circular. Canon Herron-Graham also recommended that first-time Synod members read “Synod for Beginners – What to Expect at Synod.”
Report Card for 2011-2013
Canon Herron-Graham described the work of the Diocese since the 2011 Synod. She said the Diocese has focused on four areas: strengthening local parishes, building the church for tomorrow, revitalizing our inheritance and giving to others beyond ourselves. For details of this work, see Pages 20-28 of the Convening Circular. Mr. Stuart Hutcheson, the interim director of Finance, gave the financial highlights of 2011 and 2012. He said the Diocese ended 2011 with a surplus of $1,374 and ended 2012 with a surplus of $5,183. For details of the financial highlights of 2011 and 2012, see Page 28 of the Convening Circular.
Bishop Poole said the following motion will be coming to Synod: “It will be moved and seconded that Synod receive the document entitled “The Anglican Diocese of Toronto: Priorities and Plans 2011-2013—Report Card as approved by Diocesan Council.”
Area Highlights
The Rev. Canon Al Budzin of St. Philip, Etobicoke, gave highlights of work being done in York-Credit Valley. This work includes outreach by parishes in the form of foodbanks and Out of the Cold programs, the support of Advent Conspiracy to provide fresh water for First Nations communities in Canada, efforts to merge deaneries to create fresh energy, commissioning churchwardens, clergy retreats and other successful initiatives.
Audited Financial Statements
Mr. Stuart Hutcheson gave a report on the Audited Financial Statements for 2012. Section C of the Convening Circular includes a full report from the Treasurer on the Financial Statements for 2012. The Audited Financial Statements for the Incorporated Synod, the Consolidated Trust Fund and the Cemetery Fund were approved by Diocesan Council in June 2013. The statements were posted on the Diocese’s website in early October.
The following questions were asked by Synod members in attendance and answered by Mr. Hutcheson and the Ven. Elizabeth Hardy, the Diocese’s chief administrative officer and secretary of Synod:
Question: You said that two of the three investments in the Consolidated Trust Fund under-performed. How long do we allow fund managers to under-perform before the Investment committee changes them?
Answer: (Mr. Hutcheson answered): There are styles of managers, such as “value” managers or “growth” managers. Value managers try to pick stocks that are, in their estimation, cheap and undervalued. Growth managers try to pick stocks that they see good growth for in the future. Typically, one of those styles or the other is out of fashion at any given moment. What we try and do is have a foot in each camp so that we have a manager that focuses on growth and one that focuses on value. Typically they don’t both perform well in a given year, but as we saw this year, if you have both, you stand a chance of coming out ahead in total. We don’t immediately remove a manager that has an under-performing quarter or year, but we will look at what their long-term trends have been and whether they’ve had turnover in their management staff. If the fund managers are changing, perhaps that’s an indication that things are a bit off the rails.
(Archdeacon Hardy answered): We changed a manager this year. One of our fund managers was not performing and we went through three quarters of bad performances and then made the decision. We split that portfolio between two others and took on a new fund manager for a portion of the Trust Fund, whose focus is investments in infrastructure projects. In the second quarter of this year, Diocesan Council gave permission to slightly change our investment policy because we were concerned that our rate of return was not as impressive as it could be. We’re very conscious of the fact that you can’t wait forever, because return on investments represents part of our Diocesan income and it also represents income to parishes, so we have a fiduciary responsibility.
Question: You mentioned the tithing of the Ministry Allocation Fund by 10 per cent. Some of us have read about the state of the cathedral in the Diocese of the Arctic and the fact that they’re $3 million short. As part of the tithing, has any thought been given to making some kind of grant because our northern dioceses are in such dire financial shape?
Answer: (Archdeacon Hardy answered): One of our first tithes was sending $100,000 to that project. At the time, it was noted that the project may come in slightly over budget. Since then, it has gone well over budget and there are concerns with the contract administration. The College of Bishops is waiting on an accounting of funds before the consideration of a further tithe.
Question: I remember at our last Synod that a Synod member asked about the nature of our investments – what we’re invested in and what ethical standards we’re using to choose. Was any work done on that?
Answer: (Mr. Hutcheson answered): There is a list of the investments that were held in each of the three funds in 2012, and that is on the website as part of the material for Synod.
(Archdeacon Hardy answered): One of the difficulties is that some of the vehicles that we’re invested in are bundled in such a way that it’s almost impossible to separate out every one. We try to make sure we’re weeding out the most egregious ones and the most obvious ones, although with some of these vehicles it’s very difficult. We make a conscious effort, we have a policy and we do our very best to identify the most egregious offenders and not be invested there. We are moving toward green-type products.
Question: Where did Michael Joshua, the Diocese’s former Treasurer and Director of Finance, go?
Answer: (Bishop Poole answered): He went to work as the director of finance for the Bible League.
Mr. Hutcheson said the following motion will be coming to Synod: “It will be moved and seconded that Synod receive the Audited Financial Statements for the Incorporated Synod of the Diocese of Toronto, the Consolidated Trust Fund and the Cemetery Fund for the year ended Dec. 31, 2012, as recommended by the Diocesan Council.”
Mr. Hutcheson also gave a financial update for 2013, which can be found on Page 35 of the Convening Circular. There were no questions.
Budget 2013-2015
Archdeacon Hardy and Mr. Robert Saffrey presented the budget for 2013-2015. Their presentation began with a short video about Archbishop Colin Johnson speaking about his priorities over the next two years. (The document, Priorities and Plans 2013-2015, can be found in Section D of the Convening Circular.) Mr. Saffrey, who was a member of the Budget Working Group, explained the budget development process and gave details on the financial picture, including the proposed assessment rate for 2014 and 2015.
Mr. Saffrey said there will be two motions coming to Synod:
“It will be moved and seconded that the Parish Assessment Rate, as defined in Canon 4, section 2, be set at 25 % for 2014 and 24.85 % for 2015.”
“It will be moved and seconded that Synod receive the document entitled Priorities and Plans 2013-2015 and the Financial Budget 2014-2015 and approve the priorities and financial plans contained therein. It will be further moved that Diocesan Council implement and report back to Synod on this plan and take corrective measures from time to time as best serves the needs of this Diocese.”
After table group discussions, the following questions were asked:
Question: I was curious about a comment made in an early presentation about not having a corporate synod in 2014. I remember a number of years ago the decision was taken to have synods every two years, with a financial Synod every year. There was some uncertainty about whether the provincial laws still require us to have a financial Synod. I’d like to know why we don’t need to meet in June for a corporate Synod?
Answer: (Archdeacon Hardy answered): The legislation has changed, and organizations can make an application to the Minister’s office. We made an application, first making sure that we weren’t overriding our own constitution and canons. We were permitted to make an appeal to the Minister’s office and we were granted permission. The only time we might need to meet between regular sessions of Synod is if something devastating occurred and we had to make a significant course correction.
Question: Has there been a change in the requirement for having the church finances audited each year according to the amount of money in the budget.
Answer: (Archdeacon Hardy answered): At this point, no. The change that we had been anticipating has to do with the Ontario Not for Profit Corporations Act, and the implementation of that Act has been delayed. There have been some amendments proposed and those amendments will have to be discussed. It’s possibly going to come back on the slate in June 2014, although what we’re hearing from our auditors and the government is that it’s probably going to be delayed to the fall of 2014. So at this point the standard that we hold, which is the $100,000 mark, continues to be the standard.
Question: Are there changes in the way assessment is calculated going forward?
Answer: (Archdeacon Hardy answered): No. At previous synods, there were proposed changes to Canon 4, which sets out a formula for deductions. The way assessment works is that there is an agreed upon rate and it is applied to only those funds that are applicable for assessment. For example, parish income in our last cycle was slightly over $60 million. After parishes took all the deductions they’re entitled to under Canon 4, the assessment rate was applied to slightly over $20 million of that. So about two thirds of the funds raised in the parish remain in the parish. The assessment is applied to the remaining one third.
Question: What is the gross management expense rate on the two funds as a percentage?
Answer: (Mr. Hutcheson answered): .45 % (45 basis points) on both funds. That includes the charges of the fund managers, the custodian who keeps control of the assets, and a small charge to the Diocese to reflect administration costs. The returns noted (8.2 % in the case of the CTF and 5.8 % for the Cemetery Fund for 2012) are calculated after these fees are deducted.
Question: Could you explain the process involved in matching the budget to the Priorities and Plans? I’d like to understand what the thoughts and conversations were?
Answer: (Archdeacon Hardy answered): The process started with the Fiscal Framework Working Group. The first document in our budgeting process was the Archbishop’s Priorities and Plans document. Once the Archbishop prepared that document, it went first to the Fiscal Framework Working Group. They spent some time looking at that document, and that helped them start to prepare principles under which a budget would be prepared. In reading the document, they pulled out some of his priorities—one of which is trying to leave more money at the parish level, which is why the suggestion came that we try to reduce our budget by 10 per cent and also try to reduce our assessment rate. We talked about the areas we needed to focus on, which is basically to be outward-looking or missionally focused. When departments were asked to form their budgets, they were asked to make a 10 % reduction, other than staff costs, and focus their programs to align with the Archbishop’s priorities. Departments are required to write down every activity that they’re doing, how that time and money is being spent and whether it hits those benchmarks that the Archbishop is speaking about. If they aren’t, then they’re asked to say why or how in the next budget cycle, or their budget will be radically altered. The Fiscal Framework Working Group provides us not only with the principles but also with a worksheet that makes those principles benchmarks for departments. So with those things in hand, we pulled together the Budget Working Group, and with the recommendation from the Fiscal Framework Working Group and submissions from all the departments and the episcopal area offices, the Archbishop’s office and other ministries, we applied them against the principles. We thought about really trying to reduce the assessment rate, we thought about fixing the elevators at the Diocesan Centre, and we began to work through those in our allocations. Some areas got cut because they didn’t fit the priorities. We were really insistent that we wanted to bring a reduction to the budget.
Question: I was impressed with how you could cut $300,000 in expenditures from the budget in 2014. There are four areas that have major cuts: episcopal expenses, administration, episcopal area budgets and stewardship development. How can you do that? Was that through staff cuts?
Answer: (Archdeacon Hardy answered): One thing we tried to do was not cut staff. As you’ll recall, in a previous budget cycle we stripped $1 million out of the budget and had to significantly reduce the staff at the Diocesan Centre. We are now at the minimum staff level we think we can be to both administer the Diocese, in terms of corporate compliance, and also to assist parishes. So in each of the areas you mentioned, the cuts came from programs that were coming to an end, a reduction in travel, a reduction in legal fees, and, in some departments, their staffing complement changed so that when someone in a senior position left and we hired someone to replace them, they came in at a different place on our salary grid. Regarding the cuts in the Episcopal areas, the areas make the decision how to allocate their funds.
Area Election
The following individuals were elected to Diocesan Council from the area:
- The Rev. David Harrison, St. Mary Magdalene
- Ms. Norah Bolton, St. Mary Magdalene
- Mr. Michael Gundy, St. Anne, Toronto
Constitution and Canon Changes
Archdeacon Hardy reported on revisions to the Constitution and Canon 29 (Designated Ministries) and Canon 36 (Audit Committee). These changes can be found in Section F of the Convening Circular.
Archdeacon Hardy said the following motion will be coming to Synod: “It will be moved and seconded that Synod approve the changes to the Constitution and Canons as approved by Diocesan Council and presented in the Convening Circular.”
Question: What is the change to the Constitution?
Answer: (Archdeacon Hardy answered): The change in the Constitution is to permit Designated Ministries to have Lay Members attend Synod on Diocesan Council’s approval when the circumstances are appropriate.
Question: Will these Designated Ministries be given the same distinctions as parishes in terms of their voting and any other privileges they have as members of Synod?
Answer: (Archdeacon Hardy answered): The reason why we’re making the change is so that, like parishes, the Designated Ministries will be able to elect lay members of Synod.
Question: My concern is that I don’t think there has been due consideration of where this is taking us in the long haul. It would have been helpful to have some sort of consultative process before we got here.
Answer: (Archdeacon Hardy answered): There was an extensive process for when Canon 29 was approved. We’re simply allowing those Designated Ministries the democratic option of having a lay person represented at Synod.
Question: How will the lay members of Synod be elected by the Designated Ministries?
Answer: Lay members of Synod will be elected at an annual AGM of the Designated Ministry.
Question: Can they serve in perpetuity?
Answer: (Archdeacon Hardy answered): No. The term of office would be the same as a member elected by a congregation – three consecutive two-year terms. The Secretary of Synod’s office tracks membership and alerts congregations/Designated Ministries when members have reached their term limits.
Question: Do we have two Designated Ministries? I knew about Flemingdon Park Ministry, but what is the other?
Answer: (Archdeacon Hardy answered): It is about to be one of our Anglican-Lutheran entities. Some folks think All Saints, Sherbourne Street is a designated ministry, but they’re under Canon 25, not Canon 29.
Question: There are criteria by which parishes can elect lay members, in regards to the numbers of lay members. For average weekly attendance of up to 100, a parish gets one lay member of Synod. Are there criteria like this to be applied to Designated Ministries, because if they can do whatever they want, they could elect 4 or 5 lay members if they choose to?
Answer: (Archdeacon Hardy answered): The criteria for number of lay members a Designated Ministry is entitled to elect is the same as a congregation, except that Diocesan Council’s permission is required.
Our Faith-Our Hope: Re-Imagine Church
Canon Paul Baston, chair of the Our Faith-Our Hope Allocations Committee, gave an update on the campaign. To date, the total amount pledged or received is $40,965,659. He encouraged parishes to apply for grants. The next deadline for applications is April 15, 2014.
Question: One of my major contributors died. What is my responsibility (in terms of the person’s pledge)?
Answer: (Bishop Poole answered): If someone died, I would consider it case closed and let it go, unless there was a provision in the person’s will. I don’t believe the notion that Our Faith-Our Hope was to put a hand in people’s estates. (The meeting was told that if a giver has died, please contact the Stewardship Development office.)
Evaluations
Those in attendance at the meeting filled in evaluation forms of the meeting.
Other Business
Question: Will there be WiFi at Synod
Answer: (Archdeacon Hardy answered): Yes, and it’s free and updated since the last time we were there.
The meeting ended with a hymn and a prayer.
