January 12, 2012

Episcopal Diocese of Virginia Faces Costs of Legal Victory

Diocese of Virginia photo via www.wn.com
Retired Bishop Peter Lee led the Episcopal Diocese of Viriginia to litigate against departing parishes. (Photo credit: World News)

recent court ruling in a dispute between current and former Episcopalians has awarded all church properties to the Episcopal Diocese of Virginia. Reports have focused on the theological disputes precipitating the legal battle. Less covered has been the cost of the conflict, both in finances and church attendance.

If the departing congregations decide not to appeal, the Episcopal Church has won a major legal victory – but one that may prove to be pyrrhic.

Who’s moving in?

Framing their litigation as “seeking to recover Episcopal Church property,” diocesan officials have stated that their goal is to “return faithful Episcopalians to their church homes and Episcopal properties to the mission of the Church.”

A majority of members in the seven Anglican churches in 2006-2007 voted to sever their ties to the Episcopal Church and the diocese following disputes over the redefinition and reinterpretation of Scripture. These churches became part of The Convocation of Anglicans in North America (CANA) under the authority of the Anglican Church of Nigeria. They included some of the diocese’s largest and fastest growing churches. In some cases, it’s unclear what Episcopalians will now reclaim evacuated church buildings.

The congregations of Church of the Apostles and Truro Church, both in Fairfax, Virginia, departed in their entirety; there are no continuing Episcopal congregations to inherit these buildings.

Other parishes, such as The Falls Church, in the city of Falls Church, and Church of the Epiphany in Herndon, Virginia, have seen small continuing Episcopal congregations separate from the much larger departing groups. These continuing congregations have meanwhile been meeting in nearby rented facilities. The state of these continuing congregations – often by their own admission – can be described as at best poorly prepared to maintain and operate large church properties, or at worst, teetering on the edge of being non-viable.

With an annual budget of approximately $6 million and an average weekend attendance of about 2,000, The Falls Church (Anglican) will be displaced by a continuing Episcopal congregation with an average 2010 attendance reported as 74 persons. Figures provided in the annual report of the continuing congregation list a budget of $249,406 that has the congregation operating in a deficit and receiving special grant money from the diocese.

“It is clear that this deficit cannot be sustained as we move forward,” wrote Jim Councilor, the Episcopal congregation’s treasurer. “Without increased income, our Vestry will need to make some difficult operational decisions to ensure that we operate within our means.”

Since the release of the annual report, the congregation’s priest-in-charge has left to assist at another congregation and has not been replaced. The former assistant now serves as the only paid staff.

While the continuing Episcopal congregation from The Falls Church currently pays $9,000 a year in facility costs to Falls Church Presbyterian Church for worship and office space, the Anglican congregation expends approximately $750,000 a year to maintain and operate the much larger home church campus.

Despite running a deficit, the continuing congregation in Falls Church seems downright stable compared to the continuing Episcopal congregation of Church of the Epiphany. This congregation quickly cycled through three different priests since the split, while a fourth (who serves part-time) is working with a consultant on “refocusing the sustainability of the parish.”

Before the split, Church of the Epiphany reported $800,000 in annual plate-and-pledge income and average weekend attendance of 380. The continuing Episcopal parish now reports plate-and-pledge income of approximately $50,000 and an attendance average of fewer than 20 persons in 2010. The mostrecent treasurer’s report listed that the church has $36,542 cash-on-hand.

The Epiphany continuing Episcopal congregation has “…fewer people than most people might consider viable…” according to the parish report of the current priest-in-charge.

In a position to subsidize?

The Episcopal Diocese of Virginia has itself faced difficult decisions related to finance. At a recent diocesan council, officials reported that they had drawn from a line of credit to fund litigation. Listing the expected sale of “non-consecrated” properties as a method of repayment, the officials implied that they would be selling structures other than worship houses awarded in their litigation against departing churches.

According to officials on both sides of the dispute cited in the Fairfax Times, both the Anglican group and Episcopal Diocese have spent in excess of $3 million each in litigation costs.

“Non-consecrated” properties owned by the churches could include rectories, administrative or education buildings. Both Truro Church and The Falls Church own such downtown properties, which could conceivably generate enough to pay down litigation fees. One-time property sales would not ensure ongoing operating income long-term, however.

While the diocese has provided small grants to the continuing Episcopal congregations, it is not in a position to subsidize them long-term, especially with increasing operating costs that come with church properties. Past Bishop of Virginia Peter Lee began retirement three months early, citing the need to reduce expenses for the diocese. Similarly, current Bishop Shannon S. Johnston has expressed dissatisfaction at the relatively low contribution from parishes in the diocese. According to the bishop, the average percentage of parish funds set aside for the diocese is among the lowest in the Episcopal Church.

It isn’t just a reduced level of giving that the Diocese of Virginia is facing. According to self-reported statistics, the diocese has lost 26 percent of its attendance in the past decade and has ceased planting new churches, despite significant population growth in Virginia. With the rapid increase of the median age of Episcopalians, there may not be “a future generation of Episcopalians” to worship in these properties.

A way forward?

With continuing Episcopal congregations either ill-prepared to maintain properties or altogether nonexistent, paired with a diocese that is stretched thin financially, there are few options for stewarding church properties awarded by courts. With the diocese indicating that the sale of non-consecrated properties will go to paying off legal costs, the only source of long-term revenue is either to grow the size of the continuing Episcopal parishes or to lease their consecrated property to others.

Having abandoned the practice of church planting, Virginia Episcopalians seem unlikely to grow their financially vulnerable congregations. The Falls Church continuing Episcopal congregation lists only an increase of 10 attendees in the past three years, with few baptisms and confirmations. Diocesan officials may be hoping that a large number of former Episcopalians will stay tethered to the property, thus returning to the Episcopal fold. If only 5 percent of the Anglican congregation remains with the property, it would more than double the attendance at the Episcopal parish.

In a press release issued immediately after the court ruling, diocesan officials may have indicated their own short-term proposal for the properties:

“We hope that this ruling will lead to our congregations returning to worship in their church homes in the near future, while finding a way to support the CANA congregations as they plan their transition,” said Henry D.W. Burt, secretary of the Diocese and chief of staff.

“Support” for the CANA (departing) congregations has not been a stated concern of the diocese in the past. In seeking to avoid both the public relations discomfort of empty buildings and the financial burden of maintaining such properties, the diocese may seek to enter into short term lease agreements with the Anglican parishes.

Other departing parishes that entered into earlier legal settlement with the diocese, including Church of Our Savior near Leesburg, Virginia, were given the option of leasing their existing spaces from the diocese in exchange for disaffiliation with the Anglican Church in North America (ACNA). It remains to be seen if such an option would be presented to the other departing parishes, or if they would accept. It also remains to be seen if the diocese ultimately attempts to sell consecrated properties. Collectively, the value of all properties for the departing parishes has been estimated to be worth as much as $40 million.

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