Dear brothers and sisters in Christ,

The next two pages of this edition of The Central Minnesota Catholic feature the annual report for the diocese’s offices and ministries for the last fiscal year, July 1, 2018, to June 30, 2019. We publish this report each year to be transparent and accountable to you — the people of the diocese — about our finances. The ministries and services we provide throughout the 16-counties of our diocese are only possible thanks to your generosity, and we seek to be good stewards of the gifts we receive.

It’s important for you to know that offices of the diocese work closely with our diocesan finance officer to create budgets that are fiscally responsible. During the last fiscal year, every office stayed within its budget.

I want to draw your attention to two items in the report: 1) earnings and investments for both seminarian education and vocations office expenses; and 2) legal fees.

First, investment performance was lower than expected during the 2018-2019 fiscal year; this resulted in lower earnings from funds designated for seminarian tuition and vocation office-related expenses. As we have done in some past years when investment performance waned, we used some of the principal from the funds to meet current expenses. We are able to build up the principal again in years when investment returns are better and/or when we receive additional gifts for these funds. Overall, these funds remain healthy and strong.

Second, our legal fees exceeded our budgeted projection during the last fiscal year. This is due primarily to the ongoing process to reach a consensual plan for bankruptcy reorganization. As you may recall, I indicated in February 2018 that the diocese planned to file for reorganization to settle 71 civil claims made as a result of the Minnesota Child Victims Act, which lifted for three years the civil statute of limitations for claims of past sexual abuse of minors. Discussions with plaintiffs’ lawyers and our insurance companies continue. Some progress has been made, and we remain hopeful that a consensual settlement can be reached before the diocese formally files for bankruptcy. This will limit the time we spend in bankruptcy court and keep the increased legal fees that are part of that process as low as possible. I will keep you updated on the reorganization process as we move forward.

It’s also important for you to know that your gifts to the Bishop’s Annual Appeal, which funds diocesan ministries, and designated funds, such as those for seminarian education, are used solely for these purposes. They are not — and will not — be used for legal fees or a bankruptcy reorganization settlement. Settlement funds will come primarily from insurance and other assets — mostly property — the diocese has.

During this challenging time for the Church, I want to thank you for your ongoing and generous support. I promise that we will use your financial gifts prudently to advance the mission of our diocese to be Christ’s heart of mercy, voice of hope and hands of justice.

If you have any questions about anything in this report, please feel free to contact diocesan finance officer Joe Spaniol at jspaniol@gw.stcdio.org or 320-251-2340. You may also contact me at the same telephone number or email me at dkettler@gw.stcdio.org.

I extend my prayerful best wishes to you and your loved ones.

Sincerely yours in Christ,

+ Donald J. Kettler

Bishop of Saint Cloud
Notes to the financial activities of

The Diocese of St. Cloud

for the year ended June 30, 2019

…………………………………………………………………………………………………………………

ORGANIZATION
This is the annual financial report for the Diocese of St. Cloud Corporation. The Diocese of St. Cloud Corporation is a civil corporation formed in 1900. It was organized pursuant to and operates in compliance with Minnesota State Law. The Diocese of St. Cloud Corporation holds and manages temporal assets, including real property, personal property and investments, for the purpose of assisting the bishop in his ecclesiastical obligation to provide for the spiritual care of the community of the faithful living in the Diocese of Saint Cloud. The ecclesiastical Diocese of Saint Cloud was established by the Roman Catholic Church in 1889, and currently includes the 125,000 Catholics living in 16 counties comprising the diocese. These counties include Stearns, Sherburne, Benton, Morrison, Mille Lacs, Kanabec, Isanti, Pope, Stevens, Traverse, Grant, Douglas, Wilkin, Otter Tail, Todd and Wadena, with a total area of 12,251 square miles.

…………………………………………………………………………………………………………………

BASIS OF PRESENTATION
The financial statements include all administrative and program offices and departments of the Diocese of St. Cloud. The financial statements do not include the assets, liabilities and operations of the parishes or schools, which are separate and independent corporations, nor does it include any other separately incorporated operations such as Assumption and Calvary Cemeteries, Catholic Charities, The Catholic Foundation, Society for the Propagation of The Faith (Mission Office), Deposit & Loan or Gabriel Media, each of which, as a separate and independent corporation, issues its own financial report.

…………………………………………………………………………………………………………………

DIOCESAN FINANCE OFFICER REPORT
The following comments elaborate on the major categories of revenues and expenses for the Diocese
of St. Cloud.
By Joseph Spaniol, finance officer

…………………………………………………………………………………………………………………