>> Other Reports
Parochial Cost Recoveries for 2002
(A report from the Standing Committee.)
1. This report is made to the Synod under clause 2(2) of the Parochial
Cost Recoveries Ordinance 1999 (the "1999 Ordinance") which requires
that the Standing Committee report to the 3rd session of the 45th Synod
(a) a description of the "ministry and property costs" payable in
2002 and an estimate of those costs; and
(b) the "cost recoveries charge" payable by each parochial unit
in 2002 and details of how that charge is calculated.
2. For this purpose, "ministry and property costs" are the costs, expenses,
charges or contributions which, in the opinion of the Standing Committee,
have been incurred, or will be incurred, on behalf of or in relation
to a parochial unit or any members of the clergy licensed to a parochial
3. In 1999, the Synod agreed the formula by which ministry and property
costs would be recovered from parochial units in each of 2000, 2001
and 2002. The agreed formula is set out in the Schedule to the Parochial
Cost Recoveries Ordinance 1999. The amount determined by that formula
to be payable by each parochial unit as its contribution to total ministry
and property costs is known as a "cost recoveries charge".
4. The agreed formula provides that the cost recoveries charge payable
by each parochial unit in a particular year is the total of the following
charges for that year -
(a) the "Fixed Charge" - This charge reflects the principle
adopted by the Synod in 1999 that all parochial units should pay the
"on-costs" associated with a rector or curate-in-charge. It is calculated
as the sum of the costs of superannuation, long service leave, stipend
continuance insurance and assistance to cover the cost of a temporary
minister during sickness or accident.
(b) the "Assistant Minister Charge" - The same principle
was also applied to mean that all parochial units should pay the "on-costs"
for each assistant minister licensed to the parochial unit. The charge
for each assistant minister is the sum of the costs of superannuation,
long service leave, stipend continuance insurance and assistance to
cover the cost of a temporary minister during sickness or accident.
(c) the "Variable Charge" - This is the contribution of
the parochial unit to other central ministry and property costs (excluding
those recovered as part of the Fixed Charge or the Assistant Minister
Charge) and is expressed as a percentage of the net receipts of the
parochial unit, as determined under the Assessment and Charges Ordinance
1975. The ministry and property costs which are funded by the Variable
Charge include the parish property and officer's insurances, the Archbishop's
Professional Standards Unit, the accounting, tax and employment relations
advice for parishes and the Parish Assistance Fund. In 2002 the new
parish property resource will be added to these costs funded 50% by
the variable charge.
5. Under the agreed formula, if the Fixed Charge for a person acting
as the minister of a parochial unit is paid by another parochial unit
or body, the cost recoveries charge payable by the parochial unit may
be reduced by an amount equal to the Assistant Minister Charge for 1
Parish Assistance Fund
6. A consequence of the adoption by the Synod of the formula
referred to in item 5 above is that the financial concession to provisional
parishes in years prior to 2000 (being a 50% reduction in the minimum
cost recoveries charge) is no longer available. The Synod considered
that this form of financial concession was invisible and undesirable,
and too broad a policy to serve a strategic purpose.
7. The Synod has established a Parish Assistance Fund for the development
of parish ministry. Each year, as part of the Variable Charge, each
parochial unit will make a contribution to the Fund. The total amount
of those contributions will then be distributed among parochial units
by the regional councils for the purpose of assisting parochial units.
8. As a transitional measure, in 2000 and 2001, the Parish Assistance
Fund was used to provide a rebate to each parochial unit which was required
to pay a cost recoveries charge of an amount which is greater than the
charge that would have been payable had the charge been calculated using
the formula applicable in 1999.
9. For 2002 the amount of the total contributions by parochial units
to this Fund was again determined by calculating the aggregate total
of the amount by which the cost recovery charge for each parochial unit
exceeds the charge that would have been payable had it been calculated
using the formula applicable in 1999. For 2002 the distribution of funds
from the Parish Assistance Fund will be determined by the regional councils.
Each regional council will have available for distribution the total
of the amount by which the cost recovery charge exceeds the amount that
would have been payable using the 1999 formula, for all parochial units
in its region.
10. Having agreed in 1999 the formula to calculate the cost recoveries
charges payable in 2000, 2001 and 2002, an ordinance is not required
to be promoted to the Synod in 2001 to adopt those charges for 2002.
Rather, the Standing Committee has authority to apply the formula agreed
in 1999 and calculate the cost recoveries charge payable by each parochial
unit in 2002.
Ministry and property costs for 2002
11. Attached as Annexure
A is a description of the ministry and property costs which the
Standing Committee considers are payable in 2002, and an estimate of
the amount of each of those costs, totalling $4.663 million (2001 -
$4.166 million). The one new category of cost for 2002 relates to the
funding for 50% of a new property resource within the Diocesan Secretariat
to assist parochial units to manage their property. (The other 50% of
this cost will be met by the Secretariat from its allocation under the
Synod Appropriations and Allocations Ordinance 2001.)
12. It is expected that the total of this cost will rise by
12.9%, reflecting mainly an increase in the number of parish clergy.
The cost per minister increases 4.9%, principally due to an expected
increase in stipends for 2002.
Long Service Leave
13. The anticipated cost for 2002 reflects an increase of 28
in the number of qualifying clergy, an increase in the premium rate
and the need to cover an expected deficit in the fund at the end of
2001 compared with a surplus brought forward the prior year.
14. The increase in the anticipated cost for 2002 takes account
of the need to fund the substantial increase in benefit agreed during
2001 (benefit now 75% of minimum package instead of 75% of minimum stipend).
Assistance to cover Sickness and Accident
15. The cost rise results from the need to cover a small expected
deficit at the end of 2001 and the increased level of claims experienced
during 2000 and 2001.
16. The overall cost of insurance for parochial units in 2002
is expected to be $1.070 million (an increase of 2.4%). Within this
cost there is only a small increase in the sum insured, and a 20% increase
in premiums has been partly offset by a decrease in the new amounts
set aside for the provision for future self insurance and contingency.
Across individual insurance policies the premium for the primary property
and contents insurance has not increased because a fixed rate was negotiated
for 4 years from 1999. However, there have been significant increases
in the premiums for public liability, directors & officers, professional
indemnity, employment practices and fidelity guarantee policies.
As in prior years, part of the cost of insurance for heritage buildings
(that is insurance for buildings above a threshold value of $4.1 million)
will be paid by a grant under the Synod Appropriations and Allocations
Ordinance 2001. For 2002 this grant will be $206,000 (2001 - $200,000)
making the net amount to be recovered from parochial units only $864,000.
17. The question as to how best the Secretariat could support
parishes and regions in property matters has been debated in several
forums on several occasions. The proposal is that a senior property
specialist be appointed to the Secretariat with the brief to -
(a) assist parishes in property management strategy, project planning,
project management and presentation,
(b) assist regional councils in the development of local strategies
(c) provide support to the New Sites Committee and Church Property
Trust with a view to facilitating decisions and expediting projects,
(d) provide support to the Vision for Growth Committee in the development
and evaluation of vision proposals.
The intention is that utilisation of the resource be voluntary - that
is, there will be no compulsion to employ its services. In this way
the role person will have to earn the right to add value to local decision
making and local management. Initially 50% of the cost will be funded
from the parish cost recoveries with the balance coming from the Secretariat
as part of the Synod Appropriations and Allocations Ordinance 2001.
In time it is expected that by agreement funding will also come from
a fee charged to major projects managed by the role/person.
Professional standards unit
18. The professional standards unit is responsible for administering
the sexual misconduct protocol and child protection legislation. Following
the appointment of a full time director with secretarial assistance
in 2000, the cost of the unit in 2002, which includes an amount set
aside to increase the reserve for legal contingencies, is expected to
remain unchanged from the 2001 year.
Accounting, tax and employment relations advice
19. This is the estimated cost of accounting assistance and
advice (including the on-going development costs of the Sydney Anglican
Parish Accounting System) and the continuing update and assistance to
parishes provided in relation to taxation (including GST) and employment
Parish Assistance Fund
20. The amount of the Parish Assistance Fund in 2002 is estimated
to be about $300,000. This is the total of the amounts by which the
cost recoveries charge for individual parochial units exceeds the charge
that would have been payable had it been calculated according to the
formula applicable in 1999. A subtotal of this calculation by region
is shown in Annexure
B and it is this amount which each of the respective regional councils
will have available for the purpose of assisting parochial units in
Cost Recoveries Charge for 2002
21. The formula agreed by the Synod in 1999 for the calculation of
cost recoveries in 2000, 2001 and 2002 has been applied by the Standing
Committee to estimate cost recoveries payable by each parochial unit
in 2002. Annexure
B sets out the estimate for each parochial unit, together with subtotals
by region. (These estimates are exclusive of GST which will be payable
by those few parochial units not registered as part of the Anglican
Fixed Charge and Assistant Minister Charge
22. Based on the costs estimated above, for 2002 the Fixed
Charge for each parochial unit is calculated to be $8,118 (2001 - $7,464).
The Assistant Minister Charge is estimated to be $8,118 (2001 - $7,464)
for a senior assistant minister and $7,464 (2001 - $6,841) for each
other assistant minister. The following table details the components
of those charges.
|Long Service leave
|Stipend Continuance Plan
|Increase over 2001
23. As indicated in item 4(c) above, the Variable Charge
is calculated as a percentage of the net receipts of a parochial unit.
For 2002, the Variable Charge payable by each parochial unit is estimated
to be 3.47% (2001 - 3.30%) of the parochial unit's net receipts for
2000. In calculating the rate of the Variable Charge for 2002, the following
costs have been included - the insurances program referred to in paragraph
16 above, 50% of the costs of the property resource (paragraph17), the
costs of the professional standards unit (paragraph 18), the costs of
the accounting, tax and employment relations advice for parochial units
(paragraph 19) and the amount required to fund the Parish Assistance
Fund (paragraph 20).
Application of the Parish Assistance
24. As noted in paragraph 9 the distribution of the Parish Assistance
Fund in 2002 will be determined by the regional councils.
25. Standing Committee recommends that the Synod receive this report.
For and on behalf of the Standing Committee
Chief Operating Officer, Sydney Diocesan Secretariat
28 August 2001
BACK TO TOP