Niagara confronts cash woes.

Commenting that "the Visa bill has come due," Bishop Ralph Spence has begun trying to dig the Diocese of Niagara out of a $2-million hole.

In a Feb, 10 pastoral letter sent to the diocese's 117 parishes, Bishop Spence said Niagara "is experiencing significant financial problems which demand our immediate attention." A special synod is scheduled for early April to pass a revised budget for this year. The diocese's total budget is just over $3-million for 2000.

In the letter, Bishop Spence said the steps he is taking include: negotiating a reduced assessment to the national church for this year, eliminating regional grants for the year and scaling back the diocese's 125th-anniversary celebration.

The diocese will also be stepping up efforts to collect $1.8 million in receivables owed by parishes that have not paid their assessments in full, Bishop Spence said in an interview. "We are going to be sitting down and having some conversations with parishes," he said.

He had also written that the diocese had decided to cancel its summer children's camp, Camp Canterbury, but donations later arrived that will allow the camp to operate this year. The diocese normally spends about $160,000 a year on the camp.

In the interview, Bishop Spence also said the diocese, which has its main office in Hamilton, Ont., is reviewing all 15 staff positions. Former treasurer Ralph W. Malashevsky was moved to the position of director of planned giving last year. Bishop Spence said, but subsequently was let go last fall because "we didn't have the money to pay him."

The national church has agreed to cut the diocese's assessment to $500,000 from $800,000, Bishop Spence said. The diocese has also replaced its annual two-day residential clergy conference with a one-day event. The conference, generally attended by about 120 parish clergy and lay workers, normally costs about $35,000, he said.

The 125th-anniversary event, originally scheduled for Copps Coliseum in Hamilton, now will be held at Hamilton Place, a local theatre, "in a modest, but still very jubilant, way," the bishop wrote.

Bishop Spence, who took over from Bishop Walter Asbil in January 1998, said he first became aware of the growing financial problems late last year and by January 2000, "we were in full reality."

The problem stems from spending decisions made over the past 10 years, he said, which reduced the diocese's investment fund to $3 million from $5 million and led to an operating loss of $935,000 in the fiscal year ended Dec. 31, 1998. "They were spending more than they had in income," said the diocese's new treasurer, Bob McKinnell, who started last November. Figures for 1999 are currently being prepared.

Among the expenditures was $500,000 for All Saints Church in Hamilton, which needed to demolish a tower damaged by a minor earthquake in the fall of 1998. "There was nothing illegal or immoral about what was done. This has been a collective series of decisions from synods, but the reality is you can only go to the well so many times." Adding to the diocese's headaches is a lawsuit seeking $11 million in damages, alleging that a now-deceased choirmaster at St. James in Guelph, Ont., abused various choirboys. Filed several years ago, it is currently in the discovery stage, said Michael Emery, counsel to the diocese.

Despite all the challenges, Bishop Spence said he's feeling better about things, having discovered the scope of the problem. "It's like the flood in the basement. Yes, we had leakage, but we found out where it is and stopped it," he said.