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THE DIOCESE OF NEWARK
The next meeting will be held on Wednesday, December 7, 2005 St. Agnes', Little Falls This will be the first Wednesday of the month & when the Draft Profile will be adopted.
Present: The Rt. Rev. John P. Croneberger; President; Mr. John Zinn, Treasurer, Mr. Michael Francaviglia, Secretary; Diane Sammons, Esq., Chancellor. Elected by Districts: Ms. Faith Gideon Brown, The Rev. Canon Gervais Clarke, The Rev. Lu-Anne Conner, Mr. Robert Harwood, The Rev. Kathryn King, Ms. Susan Kynor, The Rev. Paul Olsson, The Rev. William Potter, Mr. Don Roberts, Ms. Mary Sunden, Ms. Pat Yankus, The Rev. Fain Webb. Bishop's Appointments: Mr. Sidney King, The Rev. Prince Singh, Ms. Carol Taylor. Absent: The Rev. Christopher Brdlik, Ms. Glenda DeKruif, The Rev. David Gable, The Rev. Mariano Gargiulo, Ms. Lois Gray, The Rev. Janet Kraft, Mr. Andrew Piccirillo, Ms. Lynn Tyler, The Rev. Paul Williams. ECW: Others: The Rev. Gray Lesesne, member of the Congregational Vitality working group; and guests Mr. Gerard Haizel, acting director of ECD, and Mr. Michael James, Mr. John Webb and Mr. Peter Van Brunt, ECD Board Members; The Rev. Susan Sica and Ms. Meg Frigeri, warden, St. Gregory's, Parsippany. Staff: Canon R. Carter Echols and Ms. Kai Alston (for the Working Group time). COUNCIL WORKING GROUP MEETINGS The working groups met separately for Bible study (Matthew 25:14-30) and discussions. AGENDA Motion: It was moved and seconded to adopt the agenda with the addition of the minutes for ratification from the ECLF Board. The motion was adopted. MINUTES Motion: It was moved and seconded to adopt the minutes for the meeting of September 14, 2005. The motion was adopted. Motion: It was moved and seconded to accept the abbreviated minutes that listed the actions decided by e-mail votes because the meeting of October 12, 2005 was canceled due to inclement weather. The motion to accept the minutes was adopted. EPISCOPAL COMMUNICATIONS Bishop Cronberger's comments included: . Bishop Gallagher was attending a Native Women's Gathering in Hawaii. . The clergy conference was held in mid-October with Martin Smith; the event was productive and helpful. . The wardens' day had over seventy in attendance and was well received. . The Magnetic Church conference sponsored by the Church Growth and Evangelism Commission with Andrew Weeks drew a sizeable audience. . The deaths and funeral services of The Rev. Isaac Persaud and Ms. Clara Horsley. . An invitation to the presiding bishop for a spring 2006 visit with opportunity to meet the clergy and lay leaders. . Congratulated Prince Singh on receiving a Ph.D. recently. . Michael duPlessis was deposed for conduct unbecoming a priest. . The Panamanian delegation visited a number of sites and had good conversations around the diocese as part of the work to establish a companion diocese relationship. TREASURER'S REPORT Mr. John Zinn reported pledge income continued to run behind budget both on a monthly and yearly basis. Several churches behind on their pledges were those who historically were late, but paid the pledge eventually. Pledge results would be the major factor in determining the 2005 year end results. All outreach, mission and program lines had been funded to the extent requested. Operating expenses ran below budget on a year to date basis. A significant portion of the negative variance in the general and administrative category would be recovered by reimbursement for audit costs. At the end of October, the council had an operating deficit of slightly over $200,000. A check in the amount of $60,000 was received for a 2004 pledge payment. The national church was paid 25% on the amount received. There was an outstanding invoice claimed against New Jersey Transit for lost wages during those days in 2003 when the subway construction caused disruption to the staff work schedule. If the payment is received it would help balance the 2003 budget year. Motion: It was moved and seconded to accept the report, subject to audit. The motion was adopted. ST. GREGORY'S, PARSIPPANY REQUEST Ms. Faith Gideon Brown, convener of the Congregational Vitality working group, introduced the Rev. Susan Sica, vicar, of St. Gregory's, Parsippany, and Ms. Meg Frigeri, warden, who had submitted a request to Diocesan Council for a withdrawal of funds from the DIT. Ms. Brown noted that the transition toward ending the existence of the Department of Missions meant that there were responsibilities being shifted to Diocesan Council. One of those included approving requests from missions to withdraw endowment funds from the Diocesan Investment Trust (DIT). As part of the preparation for the withdrawal request, the leadership of St. Gregory's completed the Congregational Vitality Ministry Capacity Questions. Their responses were being shared with the Council concurrent with the request for withdrawal. The responses indicate that the congregation was thinking strategically about its ministry and its future. The church sought permission to invest $35,000, a portion of recently acquired endowment funds, in a three-year financial plan that would enable the church to end years of deficit spending. As of June 30, 2005, St. Gregory's had $434,000 of endowment funds in the DIT. The plan called for a running reduction of the deficit over the next three years, such that the projected deficit for 2006 of $20,000 would be zero in 2009 and the church operating on a balanced budget. Motion: Ms. Faith Gideon Brown moved on behalf of the working group that approval be given for St. Gregory's to withdraw endowment funds in the amount of $35,000 from the Diocesan Investment Trust (DIT). The motion was adopted. EPISCOPAL COMMUNITY DEVELOPMENT CORPORATION (ECD) REQUEST Mr. John Zinn introduced ECD board members in attendance: Mr. Peter Van Brunt, Mr. Michael James, Ms. Mary Sunden and Mr. Gerard Haizel, interim director. He presented the following report and resolution. The work of ECD began as a developer of affordable housing in 1991 and had expanded its work into a number of areas, including technical assistance for community development corporations and home buyer training. It was explained that recently ECD encountered significant financial and managerial problems that required a recovery plan to restore the organization's finances and enable the ministry to continue. Among the challenges were: the difficult fund raising climate since September 11, 2001; increasingly difficult development process in the City of Newark; construction management problems at ECD. The proposed solutions were: base future income projections on the current year's results with no projected increase, and focus away from grant sources onto individual giving; addressing together the development process difficulties and the construction management problems that will mean fewer, but more manageable, construction projects in 2006; and formation of a construction management committee consisting of staff and others with expertise. The challenges created deficits - $75,000 - in operating years 2004 and 2005. However, there were operating surpluses in the previous two years - $146,000 in 2003 and $82,000 in 2002. The loan would cover short term liabilities; repayment of the principal and interest would be over a ten year period. Motion: Resolved, That the Diocesan Council agrees to invest $325,000 of its endowment funds currently invested in Fund A of the Diocesan Investment Trust (DIT) into ECLF 2 with the money to be lent to the Episcopal Community Development Corporation (ECD) at an interest rate equal to the dividend rate on Fund A of the DIT. The loan will be repaid over a ten year period. During the careful and deliberate discussion, The Rev. William Potter expressed his discomfort on voting for a proposal that to him lacked additional financial information about expenses and income. He was concerned with a possible conflict of interest by having the chief financial officer of the diocese (the lender) proposing a loan to a subsidiary (the borrower) on which he sat as the treasurer. He suggested that the action be tabled until next month and that a committee be appointed to evaluate the request further. Others, including members of Council who served or were serving on the ECD Board, that time was critical and such a delay would hamper if not threaten the work of ECD. It was recognized that Mr. Zinn's relationship appeared complex, but he was instrumental in the founding of ECD and keeping it active. This was a sterling ministry and support should not be seen as a threat to the budget, since it's already included. Mr. Zinn responded that there was no conflict of interest because he was not voting on propsal. Additionally, the terms of the loan agreement will be negotiated by an attorney for ECD and the Chancellor. ECD Board Member Michael James reported that ECD was becoming one of the last developers of affordable housing left in New Jersey. The margin of profit was the lowest among other profit and non-profit developers. The work was even more valuable today than when the organization started. The motion was adopted with one objection. CHANCELLOR'S REPORT Diane Sammons, Esq., Chancellor, provided updates on Canterbury Village and Belleville Senior Housing project. Canterbury Village At the June meeting of Diocesan Council a presentation by Mr. Tim Carpenter, chair of the Board of Trustees for Canterbury Village (CV), included the request that the by-laws be amended so that the Diocesan Council no longer elected the CV board and returned to Canterbury Village the authority to amend the by-laws without Council approval. The change in the by-laws would permit Heath Village to take full control of the Canterbury Village since it had assumed all of its financial debts. Canterbury Village wasn't being sold, rather the ownership was to be transferred from current CV board to Heath Alliance for Care. The reasons for a transfer Instead of an outright sale included: the transfer eliminated a state tax situation and any need for new state approvals to run the operation, and wouldn't jeopardize any bequests pending. When first presented in June, the authority to make the decision was voted to the Officers and Steering Committee members because of time consideration expressed at that meeting. However, timing did not remain a critical factor and the matter was brought before the full Diocesan Council for decision. Chancellor Sammons reviewed several legal concerns that voiced earlier: 1. Did we have a property interest in Canterbury Village? 2. Was the Diocese still legally involved in sponsoring Canterbury Village, so that in moving forward, we could be potentially liable for acts over which we exercised control? 3. Was it advisable for the Diocesan Council to approve the by-laws that left the Bishop on the Board without any control or support around him? Were we leaving the Bishop unprotected? She expressed the opinion that: a. We need not vote on the by-laws at all as the transaction could occur without the approval of the Diocesan Council through the approval of the Trustees and the restated Certificate of Incorporation which then allows for the approval of new by-laws. In other words, the passage of the by-laws by this Council is not essential. b. It is, however, prudent to approve the by-laws, so there is no question that the Diocesan Council does not have control of this entity moving forward. This will act to clarify any lingering question as to whether the Diocesan Council is still involved and lessens the potential for liability. c. The Diocese does not sponsor Canterbury Village and Canterbury Village no longer relies on the Diocese for its tax-exempt status.d. As to the Bishop remaining on the Board, I believe it is the Bishop's choice and it does not hold undue risk for the Bishop or the Diocese: i. I have been informed that there is no sponsorship or written advertising that involves the Diocese and that Canterbury Village does not hold itself out as affiliated with the Diocese in any way. ii. There is no longer a connection between Canterbury Village and the Diocese's 501(c)3 status. iii. I have been informed that the Bishop is covered by a separate D and O policy that is paid for by Canterbury Village. iv. Tim Carpenter is on the Board with the Bishop v. The Bishop is free to resign at any time should he so desire. The chancellor recommended that a vote be take on the amendments as proposed in the prior minutes from the meeting in June. Motion: Ms. Pat Yankus moved and it was seconded that the Diocesan Council approve the amendments to the Canterbury Village By-laws that the Diocesan Council would no longer elect the board of Canterbury Village and return to Canterbury Village the authority to amend the by-laws without Diocesan Council approval. The motion was adopted with one no vote. Belleville Senior Housing The Diocesan Council had been approached by the town of Belleville through the office of Mr. Michael Rehill, Chancellor Emeritus, to sponsor a senior citizen building in the town. The sponsorship would provided HUD funds to construct the facility which had been done by the diocese in the communities of Hillsdale, Rutherford and Nutley. The Diocesan Council was the corporation for each of those projects. The same would apply for a building sponsored by the diocese in Belleville. Mr. Rehill brought the proposal to the Diocesan Council in May for The new senior housing project would be located on Mill Street in Belleville. This project was originally proposed by The Rev. Paul Walker, Rector of Christ Church, Belleville. The building would be constructed on property presently owned by the Township of Belleville. It would be a five-story, 81 unit building, which would be developed through a capital grant from HUD in the approximate amount of $9,658,116. HUD is accepting grant applications for such projects through May 31, 2005. The project, if funded by HUD, would be developed at no cost to the Diocese, nor would the Diocese have any financial risk or exposure by virtue of its sponsorship of the project. The project would be developed through a non-profit corporation to be known as Belleville Episcopal Senior Housing, Inc. It would be a single purpose, non-profit corporation controlled by the Diocese, with a membership consisting of the members of the Diocesan Council. Its structure would be identical to that of the other 3 senior housing projects. The corporation would have a Board of Trustees consisting of 15 members, all of who would be chosen by the Diocesan Council. The project would provide affordable housing to low and very low-income elderly persons and families. No person or family would pay more than 30% of his/her/their income for rent (including utilities). HUD under Section 8 would subsidize the rents. The amount of the rents would be maintained at a level adequate to meet all operating expenses of the project. There would be no mortgage liability. The Belleville Township Council had adopted and approved various ordinances authorizing the project. To date, there had been no formal action by the Diocese of Newark to sponsor the project and apply for HUD funding. For the project to continue and application submitted, four resolutions were required: (1) a resolution authorizing the creation of Belleville Episcopal Senior Housing, Inc.; (2) a resolution authorizing the execution of an option to purchase the property from the Township of Belleville; (3) a HUD form resolution, "Sponsor's Resolution for Commitment to the Project"; and (4) HUD form resolution, "Sponsor's Conflict of Interest Resolution." In May we learned that the project needed Diocesan approval by mid-May or the request for HUD funding would have to be postponed for a year. As the proposal lacked specificity and required additional research, it was tabled to be considered again for the following HUD funding cycle. In the June Council meeting and prior to the summer break, Chancellor Sammons presented a review of the liability risks of 501(c)(3)s to the Outreach working group. Since that time, she had spoken to other Chancellors who had confronted concerns regarding Diocesan sponsored housing projects, reviewed some case law regarding the legal risks inherent in such projects and engaged in conversations with Vice-Chancellor, John Garde, and with others who had devoted significant efforts to Diocesan housing projects in the past. Chancellor Sammons noted her reservations with the project, especially the "no risk" assurances and the lack of financial disclosures on the part of the interested parties other than the diocese. There was a wide array of opinion on churches sponsoring these housing projects. Some are quite comfortable since the project was funded by HUD that had extensive regulations. During the discussion it was suggested that the part of the decision process should include asking and answering the questions of whether senior housing was a mission and ministry of the Council, and does Council have the capacity to supervise and manage the project successfully? Because Mr. Michael Rehill indicated in a conversation with Chancellor Sammons earlier in the day that there was no urgency that a vote be taken this evening if that was the decision of council, it was decided that the Outreach working group would review the issues and provide an answer in December at which time the council would vote on sponsorship. The Outreach working group would meet at a time prior to the December 7 meeting of Council. The items that would be addressed and reviewed for presentation in December included: The proposed Certificate of Incorporation lists John P. Croneberger, Paul Hunt, Michael Francaviglia, John Zinn and Carter Echols as the first trustees. There was every indication in this document that they were assuming this responsibility in an "individual capacity". There ws no proposal for their protection, via insurance or in their corporate capacities. Moreover, these proposed trustees would not have adequate time to dedicate to pursuing their fiduciary obligations as trustees. If the Diocese were to proceed forward, there should be consideration of other trustees. There were no proposed by-laws, no proposed third party contracts for the architect or other proposed service providers. There was no indication that there was a consideration of other service providers other than those stated in the letter proposal. The Option Agreement provided that the Township grants the Diocese the option to purchase and redevelop the property. It appeared as if the option required the Diocese to purchase the property for $370,000, but there was no appraisal in support of the value of the property. Sponsor's Resolution for the Commitment to the Project. This form provided by HUD required a commitment from the sponsor that acknowledged the responsibility of sponsorship, long-term support, its willingness to assist the Owner to develop, own, manage and provide appropriate services in connection with the proposed project, and that the it reflected the will of its membership. It further required the Sponsor to make a commitment to provide the estimated start-up expenses not to exceed $10,000 and the estimated cost of any amenities or features that would not be covered by the approved capital advance. There was no list as to what HUD considers the responsibilities of sponsorship. There was no estimate of what the capital expenditures might be reasonably required besides the $10,000 capital advance. Moreover, there remained the question of whether it was appropriate for another Diocesan 501(c)(3) to pay the start up costs for this project as proposed by Mr. Rehill in his May memo. Sponsor's Commitment of Non-Conflict. This required that each officer and director of the Board of the Sponsor provide that they do not have and will not have during their term of office, any prohibited financial interest. This should not present an obstacle assuming the other outstanding issues were successfully resolved. There was a reference in the documents provided to a non-recourse mortgage, but there was neither proposed form attached nor explanation as to who became the mortgagee: the Diocese, the sub-entity, the Town, or some other party. There was no explanation as to the Town's commitment, obligation or responsibility to the proposed project after the closing on the property. ACTS/VIM BOARD RECOMMENDATIONS Mr. Michael Francaviglia presented the recommendations from the ACTS/VIM Board fall grant cycle. It was moved and seconded to adopt the recommendations and refer them to the December meeting for ratification. The motion was adopted. AV-05-17: Hasbrouck Heights, St. John the Divine - Care on the Corner, $6,000 AV-05-18: Hackensack, Christ Church CDC - Next Steps Initiative, $6,000 AV-05-19: Clifton, St. Peter's - St. Peter's Haven, $4,000 AV-05-20: Kearny, Trinity - Project Serve: Plant the Seeds, Reap the Vision, $8,000 AV-05-21: Newark, AIDS Resource Center CDC - Food Connections Program, $4,000 AV-05-22: Newark, Grace Church - Youth@Home, $5,000 AV-05-23: Jersey City, Grace Church Van Vorst - Arts at Grace presents "Godspell", $3,000 AV-05-24: Hoboken, All Saints' - Jubilee Children's Program, $6,000 AV-05-25: Paterson, St. Paul's - CityServe After School Program, $6,000 AV-05-26: Belleville, Christ Church - The Care Closet @Christ Church, $5,000 AV-05-27: Hackettstown, St. James' - St. James' Church Deaf Ministry, $4,000 AV-05-28: Fort Lee, Good Shepherd - Friends for Life, $5,000 AV-05-29: Dover, St. John's - Dover Family Program, $6,000 AV-05-30: Hope, St. Luke's - Haven of Hope for Kids, $10,000 Total Recommendation to Diocesan Council: $78,000 WARD J. HERBERT FUND BOARD RECOMMENDATIONS Ms. Mary Sunden, Board Chair, presented the recommendations from the third grant cycle. It was moved and seconded to adopt the recommendations and refer them to the December meeting for ratification. The motion was adopted. WJH-05-20: Little Falls, St. Agnes' - Education building window replacements, $10,000 WJH-05-21: Union City, Grace - Church boiler replacement, $8,000 WJH-05-22: Hackettstown, St. James' - Roof repair inspection & assessment, $728 WJH-05-23: Midland Park, Good Shepherd - Rectory roof/siding; steeple repairs, $8,450 WJH-05-24: Dover, St. John's - Classroom roof repairs, $20,000 WJH-05-25: Orange, All Saints' - Parish hall roof replacement, gutter repairs, $3,550 WJH-05-26: Washington, St. Peter's - Church roof repair, $1,378 WJH-05-27: Nutley, Grace - Rectory roof repairs, provisionally funded $10,625 Funding was recommended pending receipt of replacement bids and final approval by the Executive Committee. WJH-05-28: Montclair, Trinity - Rectory repairs: roof, porch, gutters; tree removal, $3,857 ($2,857 from Fund 1; $1,000 from Fund 2) Total Recommendation to Diocesan Council $66,588 EPISCOPAL CAPITAL LOAN FUND (ECLF) - GRACE, WESTWOOD Ms. Mary Sunden, Ward J. Herbert Fund (WJH) Board chair, presented for ratification ECLF minutes that approved a loan of $40,000 to Grace Church, Westwood. Because she was a member of the church, Mr. Sidney King, a member of the WJH Board, moved the ratification resolution. Motion: It was moved by Mr. Sidney King, seconded and adopted to ratify the minutes from the Ward J. Herbert Fund Executive Committee which approved an ECLF loan to Grace Church, Westwood in the amount of $40,000. The loan will fund plumbing renovations and asbestos removal as part of the efforts to make the buildings ADA compliant. It was projected that the loan would be repaid by 2008 (three-year term). The interest rate was 5%. The motion was seconded and approved. SEARCH/NOMINATING COMMITTEE Ms. Patricia Yankus, member of Council and co-chair of the Profile subcommittee of the Search/Nominating Committee, presented a status report on the work of the committee and specifically the work of the Profile subcommittee. A draft of the Profile was soon to be completed and posted on the website. Over forty congregations participated in the Reflection Sunday; 90 clergy attended a focus group session; more than 200 laity attended input meetings including church congregants, young people and diocesan staff members. The encounters were helpful in the production of the profile and formulating questions to ask prospective candidates. The expressed concerns were similar, as were the joys. There were four regional meetings scheduled for response to the Draft Profile including one for youth. Each meeting would begin with refreshments at 6:30 p.m., followed by the session from 7:00 p.m. to 9:00 p.m. They were scheduled for Monday, November 14 in St. Dunstan's, Succasunna; Tuesday, November 15 in Christ Church, East Orange; Wednesday, November 16 in Christ Church, Hackensack; and Thursday, November 17 in Calvary, Summit. Additionally there was a youth meeting on Sunday, November 13 in Episcopal House at 2:30 p.m. The final profile will be adopted by the Diocesan Council and Standing Committee on December 7. DISTRICT SHARING District 4: Ms. Faith Gideon Brown reported that a recent Chorale Festival was an appreciated event. District 7: Mr. Robert Harwood reported that the district agreed to establish a district outreach fund totaling $1,000 to which each church would commit a donation. District 9: The Rev. Kathryn King reported that the district held a church growth in suburbia conference and financed through the district funding budget line. The conference was well attended and feedback was favorable. District 10: The Rev. Prince Singh reported that The Rev. Charles Arlin was re-elected as convener. ANNOUNCEMENTS The Rev. Canon Gervais Clarke invited members to the 100th anniversary and rededication service at Church of the Epiphany, Orange on Sunday, November 20. The Rev. Fain Webb reported that Mr. John Tyler, husband of Lynn, was recovering from open heart surgery. The meeting was adjourned at 9:10 p.m. with prayer by The Rev. Kathryn King. Respectfully submitted, Michael Francaviglia, Secretary  --Return to Diocese of Newark Home PageReturn to Top of Page |