St. Paul-Minneapolis Archdiocese to lay off staff, cut budget

By Jean Hopfensperger
Star Tribune
November 11, 2014

http://www.startribune.com/local/minneapolis/282225521.html

John Nienstedt, Archbishop of the Archdiocese of St. Paul and Minneapolis.

The $5 milllion in cuts to the chancery's operating budget is linked to abuse cases and other spending.

The Archdiocese of St. Paul and Minneapolis will cut 20 percent of the chancery’s operating budget, or more than $5 million, in response to growing financial pressures resulting from clergy sex abuse lawsuits and other spending.

Staff layoffs in the central office as well as a reduction in some parish support services are expected in the move, which may be followed by the sale of some church assets.

Minnesota’s roughly 200 Catholic parishes and 90 Catholic schools are incorporated separately from the chancery and not directly subject to the budget cuts.

“Even without including unanticipated legal … fees, our current operational budget is unsustainable,” said vicar general Charles Lachowitzer in a statement posted on the archdiocese’s website.

Lachowitzer said budgets and staffing in chancery departments had expanded in the past several years, to provide “needed resources for parishes and Catholic schools and archdiocesan initiatives.”

The archdiocese has faced unprecedented expenses related to its handling of clergy sex abuse cases over the past year. Last month, it reached a comprehensive settlement with the more than 16 victims represented by St. Paul attorney Jeff Anderson who have filed sex abuse lawsuits. It now must reach financial settlements expected to reach millions of dollars in those lawsuits and future litigation.

The archdiocese also hired Kinsale Management Consulting, based in California, to review its files on clergy abuse last fall, and the local legal firm of Greene Espel to investigate allegations of misconduct by Archbishop John Nienstedt. It also hired two former leaders of the Minnesota Bureau of Criminal Apprehension to oversee its handling of abuse complaints.

Haselberger sees backlash

Jennifer Haselberger, a former archdiocese canon lawyer and clergy abuse whistleblower, said it’s the second time in the past decade that the archdiocese has tried to tighten its belt. From 2006 to 2008, employees were offered a volunteer buyout, she said, an offer disproportionately taken by some of the most qualified staff.

Haselberger said the budget crisis isn’t just about clergy abuse expenses. She attributed them to disenchanted church donors and poor management.

“I hear from people each day who do not want to foot the bill for the Archdiocese’s legal costs, the investigation into the Archbishop’s conduct, or the support of clergy guilty of sexual abuse,” Haselberger said.

“The Archdiocese’s current financial woes, in my opinion, are the logical result of years of mismanagement and poor decisionmaking, as evidenced by the belated discovery of embezzlement by the former head of accounting and the failed effort to pass a constitutional amendment prohibiting same-sex marriage.”

Haselberger said laying off 20 percent of the lay employees is significant, but if the layoffs remove staff responsible for the current crisis, “I would celebrate.”

“However, it is far more likely though that those individuals will be the architects and implementers of any proposed organization,” she said, “and that the negative consequences will fall most strongly on the innocent and good-hearted people who have tried to be of service to the people of God.”

‘It’s easier to lay off’

It’s not unusual for dioceses facing mounting legal expenses to cut their budgets, said Charles Zech, director of the Center for the Study of Church Management at Villanova University in Pennsylvania.

“I’m surprised it took this long,” said Zech, who is from St. Paul.

In addition to launching layoffs, dioceses have sold stock holdings, land holdings and retreat centers, he said. But those things take longer than handing someone a pink slip.

“It’s easier to lay off people than to sell assets,” Zech said.

The average settlement for victims in global settlements is about $100,000, Zech said.

Now that the archdiocese has a global settlement in place with clergy abuse victims, it has a better idea of what its cost may be in the future — and it does not have to deal with the legal expenses of fighting each individual case, he said.

The budget and staff cuts will be made at the archdiocese headquarters on Summit Avenue in St. Paul and at its Hayden Center on W. Kellogg Boulevard.

But parishes are likely to feel the ripple effects, Zech said. Archdiocese offices typically support parishes through clergy development as well as legal, administrative and planning services.