July 09, 2014

Dear Friends,

By now you have surely heard about the recent sale of the campus of the former St. John’s church. I am writing to explain a little more about the financial impact of that transaction on the life of our St. Pascal’s community. The news is both very good and quite challenging, and will require our best efforts to improve our stability for the future.

First the good news. As I indicated in the bulletin insert a few weeks ago the sale of St. John’s will allow us, over the course of the next three years, to completely eliminate our accumulated debt with the Archdiocese. The total debt was more than $975,000 as of the date of the sale. Unlike our mortgage loan, this amount was continuing to grow every quarter and had no prospects of being paid down anytime soon. It represents unpaid assessments, insurance, benefits and pension expenses, some of which extended back more than 20 years. We were “balancing” our budgets for years by not paying our bills. That practice has now stopped. The Archdiocese has been exceedingly generous with us in all this. A large portion of our debt will be forgiven because we simply cannot pay it all. And although the majority of the St. John’s sale proceeds will go toward paying off that debt, there will be enough cash left over to allow us to remain solvent for another couple of years. It’s a short-term solution for a bigger problem, but it will give us some breathing room while we address other budget issues.

And that brings us to the challenging news. We are confronted with two major financial concerns that will remain even after we have settled accounts with the Archdiocese and closed the books on the St. John’s transaction. The first is our mortgage debt with Premier Bank which stands currently at about $4.4 million. This is a very onerous responsibility for St. Pascal’s, and one that will remain with us far into the future. It represents the expenses of constructing our beautiful church and refurbishing our fine school building about 12 years ago. There is good news here too, though. For one thing, this long-term debt corresponds with our major long-term assets. It is appropriate that the cost of real estate improvements be carried over an extended time, and our facilities are in fine condition for the future. Additionally, our parishioners (you!) have been exceedingly faithful and generous in contributing to the mortgage fund, and we are keeping current on our monthly payments while reducing the balance of the loan. Thank you for your contributions, but we’ll need to keep up the good effort!

The second concern is more immediate, and it has to do with our annual budget. For at least the past two years we have been operating with a very significant deficit and an unbalanced budget. Actually, this problem extends back into history but it wasn’t being accurately recognized and reported on our financial statements until more recently. The budget that our Finance Council recently recommended to me for approval for FY 2014-15 carries an operating deficit of nearly $150,000. It is only because of the money received from the St. John’s property sale that we can absorb a loss like this, and obviously it can’t continue. This is the short-term breathing room I mentioned. The most significant cause of the deficit is our St. Pascal’s School support. We have experienced significant declines in student enrollment in recent years and therefore the loss of tuition income. The coming year will be crucial for us to realign our income and costs in the school and to invest in marketing, recruitment and enrollment to stabilize the situation. The Archdiocese is being generous with us for one more year, but has given notice that it, too, cannot afford indefinite subsidies.

So even as we take some encouragement from the improvement in our financial condition for now, we cannot let up in our pledges to continued generosity through regular financial contributions. We are at a critical moment in the history of St. Pascal’s, and our response now will determine how our parish and school will look for years to come.

Before closing, I want to acknowledge the extra work taken on by our parish administrator Mike Lentz and our maintenance supervisor Jim Tempel in managing the St. John’s campus this past year. Its sale will allow both to focus more completely on their responsibilities here at St. Pascal’s. I also wish to inform parishioners regarding the disposition of the furnishings, sacred items, and other objects from St. John’s. Many churches have benefited and now house items formerly at St. John’s, so, in a way, the spirit of the parish lives on. Please see the enclosed list for more information.

Once again, thank you for your extraordinary support of this great community of faith, and let us be firm in our dedication to our ongoing success.

Sincerely,

Fr. Mike Byron, Your Pastor

Distribution of Furnishings from St. John’s Church

High Altar	St. Pius V Catholic Church, Cannon Falls
1 Side Altar	St. Pius V Catholic Church, Cannon Falls
Baptismal Font	St. John the Evangelist Catholic Church, Excelsior
Pews	St. Pius V Catholic Church, Cannon Falls
Statue of St. John the Evangelist	St. Pascal Baylon Catholic Church / Chapel of St. John
Stations of the Cross	Transfiguration Catholic Church, Oakdale
Statue of St. Therese	St. Pascal Baylon Catholic School
Altar Railing	Church of All Saints, N.E. Minneapolis
Doors from 1 Confessional	Transfiguration Catholic Church, Oakdale
Ceiling Chandelier	St. Pascal Baylon Catholic Church
Cross from Baptismal Font	St. Pascal Baylon Catholic Church/Chapel of St. John
Statues of the Holy Family	Faculty of the St. Paul Seminary
2 Angels	St. Therese Home, New Hope
Vestments	St. Pascal Baylon Catholic Church
Vestments, vessels, candlesticks, linens and miscellaneous supplies	Archdiocesan Office of Missions & Fr. Dennis Evenson for Latin American Missions
Two Catholic churches expressed interest in confessionals, but both declined because of the expense and weight involved in moving them.

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