The Adjustment Board
Policy and Guidelines
For printable pdfs of the following and of “How to Apply for Deferral or Reduction of Assessment,” please click on the links in the right sidebar.
The Adjustment Board’s mission is to support an important purpose of the Diocese – to help parishes to grow in the strength of their ministries of worship, nurture and mission.
As members of an Episcopal Diocese, we are a church catholic, bound together, not only by law and canon but by mutual agreement, in the body of Christ. The work of the Church and clergy orders stems from the Bishop.
Although the work is done mainly through the congregations, it is through the Bishop and the Diocese that we maintain our universality and union. Parishes are not, nor can they be, congregational entities. Not to pay a diocesan assessment clashes with this catholicity that binds us together. If we wish to eliminate diocesan missionary programs, if we wish to eliminate our apportioned share for the national church or any of the other things we do as a Diocese, we need to do that in Convention. We are tied to each other in Christ and bound to work together toward our mutual goals. These goals are represented in the Diocesan Budget we adopt each year.
A parish’s assessment represents its participation in those goals’ being achieved. The assessment is a basic parish operating expense as well as the way we engage in mission together. That is why every parish needs to pay the full assessment currently in quarterly installments or, if it believes it cannot do so, needs to be fully engaged in working with the Adjustment Board and the Diocese as described in these guidelines.
What Canon 18 of the Diocese Says About the Adjustment Board
Section 1. “3. Adjustment and Appeal Procedure: Any congregation may appeal to the Adjustment Board for a reduction in its apportioned share in accordance with the guidelines established by the Adjustment Board and approved by the Trustees.
“The Adjustment Board, which shall be a committee of the Trustees consisting of not fewer than seven members appointed by the Bishop, shall conduct all adjustment hearings and may affirm or reduce the apportioned share payable by any congregation requesting a hearing. The Adjustment Board shall inform each congregation requesting a hearing of its decision within a reasonable time after such hearing.
“Any congregation may appeal the decision of the Adjustment Board to the Trustees, which may affirm or modify any decision of the Adjustment Board. Appeals to the Trustees must be made within 30 days after receipt by such congregation of the decision of the Adjustment Board.”
A parish’s “apportioned share” is often referred to as its “assessment.” A parish that is a member of the Congregational Support Plan pays a “contribution” on a different basis, works with the Congregational Support Plan Committee and staff, does not pay an assessment and cannot appeal to the Adjustment Board.
The Adjustment Board and the Staff
The Bishop has appointed the Adjustment Board. One of its Co-Chairs is a Trustee of the Diocese. The Adjustment Board meets regularly throughout the year.
The CFO and the Controller serve as the staff liaison to the Adjustment Board.
For each parish not in the Congregational Support Plan, the Controller calculates its assessment toward the end of a year, based on the parish’s Normal Operating Income for the two preceding years. For example, a parish’s assessment for 2013 is calculated toward the end of 2012 based on the parish’s Normal Operating Income for 2010 and 2011.
Under Canon 18, the assessment is based on actual Normal Operating Income, calculated in the same manner as that term is defined from time to time in the Instructions for the Episcopal Church Parochial Report as set forth in the Manual of Business Methods in Church Affairs of The Episcopal Church (see sidebar).
To assure fairness for all parishes in the Diocese, the staff will continue to review parochial reports for consistency and appropriateness of the reporting of Normal Operating Income. Where there are questions about a parish’s reported NOI (for example, where reported NOI is materially less than Normal Operating Expenses), the staff will seek clarification from the parish. The Controller will calculate the assessment based on his or her determination of NOI, and any dispute will be reviewed immediately by the Adjustment Board.
What is a “Parish Not In Default In Assessments”
Assessments are due in four quarterly installments, on the fifth day of January, April, July and October.
In November 2009, the Diocesan Convention amended Canon 18 to add a new consequence for a parish in default in assessments – authorizing the name of the parish being read out at Convention and, after its name has been read out for two consecutive years, if the Bishop recommends it, authorizing Convention to vote to convert the parish into a mission of the Diocese. That portion of Section 4 of Canon 18 reads as follows:
“2. Parishes in Default in Assessments: Prior to each Annual Convention the Adjustment Board shall notify the Bishop of any Parish that does not satisfy any of the conditions listed in this subsection (2), noting that the Parish may be designated as a Parish In Default in Assessments. The Bishop, with the concurrence of the Trustees of the Diocese, may then designate the Parish as a Parish In Default in Assessments, and the Chancellor shall inform the Annual Convention that the Parish is a Parish In Default in Assessments. No Parish shall be designated as a Parish in Default in Assessments, and no Parish designated as a Parish In Default in Assessments shall remain a Parish In Default in Assessments, if the Parish satisfies any of the following conditions:
“1. The Parish is current in the payment of its assessments through all but the most recently due quarterly installment, or
“2. The Parish has a completed application pending with the Adjustment Board, is actively participating in the Adjustment Board process by meeting with its members and representatives of the Diocese as requested by the Adjustment Board, and is making payments on account of assessments in a minimum amount specified by the Adjustment Board for Parishes that have applications pending, or
“3. If the Adjustment Board has made its decision and the Parish has chosen to appeal the decision, the Parish has a completed appeal pending with the Trustees, or
“4. If the Adjustment Board has made its decision on the application that, after any appeal to and any modification by the Trustees, is final and no longer subject to appeal, the Parish is current in its payment of all its assessments as they may have been adjusted through all but the most recently due installment and is in compliance with any conditions imposed by the Adjustment Board or the Trustees in approving any adjustment, which conditions may include participation in programs organized by the Diocese to help a Parish address problems in the Parish.
“3. Remedial Process for Certain Parishes In Default in Assessments: If two consecutive Annual Conventions have been informed that a Parish is In Default in Assessments, and the Parish continues to be In Default in Assessments, then upon the recommendation of the Adjustment Board and the concurrence of the Standing Committee and the Trustees of the Diocese, the Bishop may in the Bishop’s discretion initiate the remedial process described in this subsection (3), which may result in converting the Parish into a Mission Congregation of the Diocese.”
Note that this definition is tied to being current in assessments (as they may be adjusted) through all but the most recently due quarterly installment. Thus, if the Annual Convention takes place in November, the parish, to be current, must have paid 100% of its assessments for prior years (as they may have been adjusted) and have paid the installments due on the fifth days of January, April and July, or 75% of its assessment for the calendar year (as it may have been adjusted), or must be working with the Adjustment Board.
This definition is different from the criterion for denial of lay delegates’ votes at the Diocesan Convention—failure to pay the full assessment for one or more prior years. Under Canon 18, unless waived by vote of Convention, the lay delegates from a parish that has not paid its full assessment for one budget year can be seated at the next year’s Convention but cannot vote, and the lay delegates from a parish that has not paid its assessment for any two budget years cannot be seated (and therefore cannot vote) at the next year’s Convention.
First Steps for the Adjustment Board
When parish leadership believes it cannot pay the full assessment, it should get in touch with the staff to discuss the situation. Their contact information appears below.
At least quarterly, the Controller prepares a report for the Adjustment Board, the Bishop and the Trustees listing every parish in the Diocese that is subject to assessment. (Congregational Support Plan parishes pay “contributions”, which are handled separately.) The report shows for each parish whether it is “Not In Default In Assessments,” and, if it is In Default In Assessments, the status of any application by the parish to the Adjustment Board.
The Adjustment Board reviews these reports at least quarterly. As part of these reviews the staff may be directed to communicate with any parish that is more than 90 days late in payments. The Board may also ask to meet with the leadership of any parish that is more than 90 days late in payments.
Eligibility for Diocesan Funding
If a parish is In Default In Assessments, the Bishop may direct that the parish is ineligible to receive any payments from Diocesan programs or funds, including:
Applying for an Adjustment
A parish that wishes an adjustment in the amount of its assessment or in its schedule for payment must submit an application in the form of a letter, together with supporting information, following the attached instructions. If the Adjustment Board has previously reduced or deferred the parish’s assessment for a particular year and the parish seeks further relief regarding the same assessment, the request is treated as a new application.
The Adjustment Board will review all completed applications and discuss them with staff, and hear from staff about their conversations with parish leadership. In some cases the Adjustment Board will make a tentative decision and ask staff to discuss a potential adjustment with parish leadership. The parish can then either accept the potential adjustment or ask that a hearing be scheduled. In other cases, the Adjustment Board will not make a tentative decision but will hold a hearing when it can be scheduled.
During discussions with staff, and during hearings with the Board, a parish may be asked to work with diocesan entities or staff toward the goal of strengthening the parish. An adjustment may be made conditional on the parish’s continuing to work with these diocesan entities and staff.
How the Adjustment Board Reaches a Decision
The Adjustment Board will make a decision that it believes to be fair in light of the circumstances – fair to the applicant parish, fair to other parishes and fair to the Diocese.
The Diocese offers a broad range of assistance to parishes facing issues of many kinds, and in many cases a parish coming to the Adjustment Board may also turn to these resources for assistance. The Canons for Congregational Development have helped many parishes. The Property Support Director has helped many parishes with issues surrounding their buildings. The Stewardship Officer has helped many parishes plan their stewardship programs. In addition, the financial office can help in many ways. The Adjustment Board encourages parishes to use the diocesan resources that they would find helpful.
Each appeal to the Adjustment Board is judged on its own merits. The Adjustment Board considers the parish’s current circumstances and changes in its circumstances, and changes in its income, its expenses, its property, and its endowment, if any. A specific item of expense might be deemed essential in one case and discretionary in another. Level of endowment, effectiveness of ministry, continuity of program, and relative needs within the parish community and the Diocese, and other adjustments the parish has made in its budget to save money in light of its financial situation, are among the many considerations the Adjustment Board must weigh. The existence of sound fiscal and fiduciary practices is also a concern. In addition to reviewing the parish audit and stewardship program, the Board must satisfy itself that, to the extent feasible, all necessary steps have been taken to prevent a recurrence of the situation or condition which has led the parish to come to the Board. The Board may condition an adjustment on the parish’s continuing to work with diocesan entities and staff toward strengthening the parish and its mission. The Board will also refer to the Trustees or any other appropriate body, for review and assistance, those parishes where the Board feels further discussion would be helpful.
Potential Actions by the Board
The Board may act to reduce past, current and future assessments and may forgive past assessments, may defer payment of assessments, or may permit a congregation to pay an arrearage over time while remaining up-to-date with current assessment payments.
Staff will immediately inform the parish of the Board’s decision.
Appeal to the Trustees
Within 30 days of receiving the Board’s decision, a parish may appeal to the Trustees by giving written notice to the staff whose contact information appears below. The notice of appeal should set forth the parish’s basis for the appeal.
The Trustees will review any appeal, including the material originally submitted by the parish, the decision by the Adjustment Board and material submitted by the parish with its appeal to the Trustees, and will reach a decision as promptly as possible. The Trustees’ decision is final. Staff will immediately inform the parish of the Trustees’ decision.
Working with the Parish
After acting on an appeal, the Board will work with a parish as the parish seeks to grow stronger in carrying out its mission, including the payment in full of its assessment.
Reporting to Convention and to the Diocese
At least four days prior to each Annual Convention, the Adjustment Board will post on the diocesan website a report showing, as of one week prior to Convention, for each parish subject to assessment
The report will include all parishes in the Diocese except those in the Congregational Support Plan, because CSP parishes do not pay assessments.
Prior to each Annual Convention the Adjustment Board will notify the Bishop of any parish that is In Default In Assessments. The Bishop, with the concurrence of the Trustees of the Diocese, may then designate the Parish as a Parish In Default in Assessments, and the Chancellor will inform the Convention that the parish is In Default In Assessments. The Bishop may from time to time ask the Co-Chairs of the Adjustment Board to report to Convention on the Adjustment Board’s work.
Adjustment Board Contact
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