Introduction: In the two previous postings, we looked at the mission of the Central Administration as it is presently constituted (Part I) and the most recent Treasurer’s Report (Part II). Part III was going to be dedicated to a possible future that the OCA could take if it seriously looked at a Diocesan Model that emphasizes Evangelism. This model is presently in use in the Diocese of Dallas and the South, where ever since its existence, it has strived to subsidize mission formation (to much apparent success.) However, the commentary provided by many has necessitated that we look more closely at the finances of Syosset. Specifically, we have received more information about actual finances that could flesh out the present picture more fully. As such, “Back to the Future” will now be posted later as “Part IV.” We apologize for the inconvenience.
Part III. Syosset: Ends, Means, Wants and Necessities
Reorganization or Preserving the Status Quo?
One of the benefits of the prepared Officers Reports for the 16th AAC is a glimpse into the thinking of the Central Administration concerning the Diocese of New York/New Jersey’s proposed resolution of decreasing the assessment to $50.00 per capita (down from $105.00). Many in the OCA ponder what decisions must be made to survive the current crisis, and continue to fulfill our mission. The Central Administration’s first reaction seems to be “how do we preserve the status quo?” These reactions are not surprising; in fact they are classic reactions exhibited in most organizations facing significant budget reductions.
When the reality of the situation is acknowledged, and the shock fades, the critical questions that must be answered are
1. At this funding level, how do we restructure the organization to provide critical services necessary to carry out our mission?
2. What are these critical functions? and
3. What is the best way to accomplish these functions?
The Treasurer’s prepared report, in the following paragraph, clearly outlines the typical approach to significant change:
The second budget being presented, Budget #2, at $50 per dues paying member, translates into $1.1 million annually based on our current census of 22,000 members. This represents a 53% reduction from our current operating level, and this decline cannot be achieved by simply reducing or eliminating frivolous expenses. This drastic a cut would necessarily result in not just a decrease in the functions performed by the central administration, but the elimination of personnel and ability to function and to fulfill our duties. Without a plan as to how these tasks will be accomplished, or by whom, what would the result be for the Church, the Dioceses, the parishes and the faithful? These are questions that need to be addressed PRIOR to determining the level of assessment required.
Ms Ringa is not a stranger to this concept. In her cover letter to the 2008 Treasurer’s report she indicated that if the OCA followed its current trends, it was in danger of no longer being a going concern in the next several years. (We would supply the link to this comment, but it seems to have “gone missing” on OCA.org. If anyone knows where the letter is located on the site, a link would be greatly appreciated.) At any rate, this dire assessment by Ringa was made before +Jonah was elected as Metropolitan and was indicative a pattern of ecclesial decline.
Generally speaking, a report from the treasurer warning of the possible demise of the organization is a clarion call to action for the management team of any private sector concern. Generally an intense effort ensues to determine either where cuts are to be made or where revenue increases can be found. In this scenario, a new leaner budget is created, and operational plans are drawn to accomplish the mission with the available resources.
The trends in the OCA have been clear for a number of years (as Ms Ringa herself pointed out in the proposed budget for the 16th AAC). Thanks to the introduction of The New York Plan, the impact of such significant budget cuts have created an aura of reality for the Central Administration, one that had heretofore been absent in the estimation of many.
Since the Treasurer of the OCA has now asked, let us explore several options for how the Central Administration can function under under a $50 assessment. It may very well be late in the day as this financial crisis has been of longer duration than most of us realize. Regardless, it is better to at least ask honest questions.
Syosset as Currently Funded
The current assessment provides annual revenue of approximately $2.5 million annually. This is based on 22,000 “dues-paying members” as noted in the Treasurer’s report. Let us examine the budget and discover where that annual sum is spent. This analysis may give us some clues as to where cuts might be made without sacrificing the mission of spreading the Orthodox faith and the Gospel of Christ across America.
2. Cost & maintenance of the facility
3. Use of church assets
The current Central Administration office is located at 6850 N. Hempstead Turnpike, Syosset, NY 11791. In describing the facility in his prepared report for the AAC Fr Eric Tosi says:
The Chancery building sits on 14 acres with a large building that serves as the Chancery offices, Pension offices and a residence for the Metropolitan. The building was given to the OCA in 1950s for a total cost of $1. It represents the ONLY property owned by the OCA as an entity. There is no possible way that the OCA could ever acquire anything close to it on today’s market. While it does need some cosmetic repairs, the building itself is in structurally sound. Most work that does need to be done is repair and painting. The offices serve their purpose and there are a few rooms in the top floor available for people to stay.
The basement consists of storage rooms and the archives. It also houses one of the servers. The main floor has a wonderful chapel with the relics of many saints. This chapel is the heart of the work at the Chancery and it does have a small community who regularly worship there. There is also a sitting room, two meeting rooms, a solarium, a dining room, kitchen, file and copy rooms. The financial office is housed off the kitchen. The second floor has the Metropolitan’s apartment which has a kitchen, dining room, living room, bedroom and office. There are eight offices including a large office of personal files, and another formal sitting room. The top floor contains the offices for the Pension Board, three bedrooms and attic storage space. All together the space is well provided with the exception of a place for large meetings (we utilize a nearby hotel meeting room for free if needed). There are also gardens and pathways which have been restored over the past three years. It is a beautiful setting, under an hour from major airports and a fitting place to meet dignitaries and visitors.
The first question that needs to be asked is, “what is the purpose of the facility?”, not “what does it do today?” The second question is “What is necessary for the proper functioning of the OCA?” The purpose of a central church dministration for the OCA should be self-explanatory –it is the administration of the church. Common sense would dictate that any administrative staff needs adequate office, meeting and storage space. They probably don’t absolutely require sitting rooms, solarium, dining room, kitchen, Metropolitan’s apartment which (sic) has a kitchen, dining room, living room, bedroom and office, three bedrooms and gardens and pathways.
And if the facility were close to a parish or a cathedral would they need “a wonderful chapel with the relics of many saints?” Not necessarily. The Reliquary of the Church could be housed in a monastery. The chapel is certainly a nice touch but a central chancery in Washington located near the Cathedral would obviate the need for the one that exists presently in Syosset. That it is “…a beautiful setting, under an hour from major airports” is rather disingenuous as Syosset is quite remote from several airports. This really doesn’t tell us much. Does Syosset provide a shuttle service from the airports? If not, then this one hour ride necessitates a very expensive cab-ride (at a cost of $80.00 each way) to travel the distance from the local airports.
Earlier in Tosi’s article he opines that the Syosset facility “…represents the ONLY property owned by the OCA as an entity. There is no possible way that the OCA could ever acquire anything close to it on today’s market.” Left unsaid is whether the national Church should be buying property in the first place, especially in this economy. Are there plans for the Church as a whole to buy more property? If not, why not?
Is Maintaining Syosset a Wise Use of Resources?
Given our current situation in the OCA, how does owning this property assist in spreading the Gospel? The OCA has limited funds – somewhere between $1.1M and $2.5M annually. The first question about any asset in these times should be “is this the best use of church funds to achieve our goals, or should we dispose of the centrally-held assets and redeploy the funds for other church uses?”
Let us ask, what is the value of the Syosset property? In the current real estate market the property would be valued conservatively in the five-to-10 million dollar range. MLS Listings for houses which are situated on one acre lots in the Chancery area average over $1.0 million. The Syosset property is 14 acres. Therefore, based on these numbers the chancery building on two acres would be worth a minimum of $2.0 million. Undeveloped land in the Syosset area is valued in range of $650k to $1.0 million per acre based on location and the state of development. Using the current pricing for raw land, the 14 acres would be worth $9 million dollars on the low end (building included). Working with a developer, if the OCA were to split the property and sell the house and the remaining land, the property might be worth even more. Using a very conservative estimate of $4.5 million, we are back to the question of: is this the best use of valuable church assets, that is to say, to employ the present staff? And, could the same functions be carried out in a less expensive venue without doing violence to the mission of the Church?
The next way to look at the Syosset property would be to examine the current costs for upkeep and maintenance versus the cost of lease space in another location. The 2011 estimated budget for maintaining the Syosset property is $277,450, or roughly 12% of the budget. (Keep in mind, this is for property that is already owned by the Church.)
The OCA Secretary’s report tells us that the staff was lowered from 30 people to around nine on-site employees with an additional three part-time contracted employees. Of the nine on-site employees, 5 are full-time and four are part- time. Basesd on these numbers (and accounting for the addition of infrequent visitors), an interview with a professional office planner revealed that a comparable commercial office of about 5000 square feet could easily accommodate the present needs of the Central Administration. Therefore, in exploring alternative commercial office space, the current budget could support up to $55.50 per square foot for commercial office space with all the amenities. In most major cities including Washington D.C. (other than K Street), first class office space with all services including utilities, common area maintenance, and cleaning services can be leased for $20-$30 per square foot per year. Long term leases in good facilities can be even less expensive.
Let us expand on this. In Washington, premier office space could be gotten for $30.00 per square foot per year. This means that 5,000 sq ft would cost $150,000 per year, a seemingly exhorbitant sum until one looks at what we are paying now, for land we already own (which, as was noted above is a little over $270,000).
Should Syosset be Maintained?
The Chancery office in Syosset is a church asset worth (at least) $4.5 million dollars, employing nine administrators, and costing $277,450 per year to maintain, according to Fr Tosi. Not only is this an extravagant cost, it is located on some of the most expensive commercial real estate in America. The cost of residential real estate alone drives up salaries, otherwise few could afford to work there. There is simply no other way to put this.
As we reflect on our options and make our plans and consider the resolutions to be set before the All-American Council, we must remember that the Central Administration does indeed provide some important services to the Church. But the CA does not constitute the entire church. Many of the Dioceses have minimal staff and little activity because the lion’s share of the available funds go to support a very expensive central administration. As noted in Part II, the Bishop of New York receives a compensation that is paltry –about 35 percent–compared to the average employee in Syosset. In addition, parish priests often hold other jobs in order to supplement their income; alarmingly, some priests have to subsist on food stamps in order to keep their families fed. In any event, such outrageous conditions inhibit growth and outreach.
The problems faced by the OCA did not begin this year with the discussion of The New York Plan (or in 2008 for that matter). They have been of long duration and if anything, this new proposal simply brought the problem into sharp relief. To be viable as an entire church, the OCA must grow. The source of that growth is an increase in members. Both non-Orthodox and already-Orthodox have to be evangelized. The work to make that happen takes place in the parishes. These parishes must have direction provided to them by the Dioceses to which they belong. Simply put, a remote central chancery in a continent-wide Republic is not a viable model, especially when there are viable Dioceses located throughout 48 the contiguous states and Alaska. Starving the parishes and the Dioceses to support a bloated, out-of-touch central administration that has little to show for its efforts is a plan that has been tried and found wanting. A continuation of the present financing scheme is at this point, nothing but throwing good money after bad.
It is time to revisit our priorities, our budget, and our planning. The New York Plan is a good beginning.
Part III. Syosset: Ends, Means, Wants and Necessities (coming soon)
Part IV. Back to the Future? A History of the Diocese of the South (coming soon)
View entire essay (coming soon)