Council Approves Assistance to Diocese of Costa Rica
Episcopal News Service. February 22, 1979 [79045]
Greenwich, Conn. -- The Executive Council of the Episcopal Church, at its February 14-15 meeting here, approved an emergency grant of $27,862.65, together with a 10-month interest-free loan in the amount of $262,000, to the Diocese of Costa Rica to prevent bankruptcy by April 1.
In its movement toward autonomy, the Diocese of Costa Rica in 1975 had invested $501,000 of its money in a commercial enterprise, the Hotel Puerto in Limon, and the hotel had then negotiated a bank loan of $395,000. Profits from the operation of the hotel were to help the diocese achieve financial independence from the Episcopal Church.
However, the investment in the hotel business proved to be unsuccessful. The accumulated operating deficit as of December 31, 1978, amounted to $240,000 with further deficits at the rate of $8,000 per month mounting. The diocese and the hotel are faced with the necessity of repaying loans in the amount of $50,000 by March 15 and $211,000 by August 1. The business enterprise failed because the hotel occupancy rate fell far below expectations.
The $27,862.65 grant is designed to enable the diocese to meet its immediate budgetary needs, including salaries.
The loans had been secured by the diocese against its property at interest rates ranging from 18 percent on $211,000 to 72 percent on $6,000.
Money which the diocese had invested in the hotel included receipts from the 150th anniversary fund of the Domestic and Foreign Missionary Society in 1971 and from a United Thank Offering grant.
It is expected that the hotel can be sold within six months for $400,000 to $800,000 and the proceeds can then be used to repay the loan by December 31 to the Executive Council, according to Matthew Costigan, treasurer of the Church.
The resolution adopted by the Council provides that money from the Johnson Trust Fund will be used to protect the loan to the diocese. If the sale price is insufficient to repay the loan to the Council after Costa Rica meets its first obligations, there can be refinancing from the Church's loan fund.
Mr. Costigan pointed out that it is impractical -- if not impossible -- to refinance the loans in Costa Rica because of the greatly increased interests rates that would be applied. The financial position of the hotel makes it highly unlikely that additional loans could be negotiated.
The Rev. Robert M. Wainwright, Rochester, N.Y., chairman of the Council's Standing Committee on Finance/Administration, said that there is a "somewhat fluid situation" in the Costa Rican matter. He said there is "some risk" involved in the Council making the loan but the money is protected by the Johnson Trust.
The Rt. Rev. Donald J. Parsons, Peoria, Ill., Bishop of Quincy, remarked that he felt the Council had in some sense "let Costa Rica get into a mess. Now, what can we learn from the besides the financial controls?"
Mr. Costigan and the Rt. Rev. Milton L. Wood, Executive for Administration at the Episcopal Church Center, reported in response to a question that the Venture in Mission program has built in financial accountability and protection.
A number of other overseas dioceses of the Episcopal Church are in varying stages of movement toward autonomy as national or regional provinces of the Anglican Communion. The Church finds itself in the position of having to work out theories of partnership relations that will both allow the growth of these new bodies and secure and enhance the resources of the entire Communion.
The Council approved a resolution calling for a review of finances, reporting, internal controls and long range planning procedures at least every two years for all dioceses that are aided through the General Church Program budget. A training program for officials in overseas dioceses, which had been instituted in 1950 but which was discontinued in the 1960s, has been re-instated, effective January 1, 1979.
The Diocese of Costa Rica, until General Convention action in 1976, was a missionary jurisdiction of the Episcopal Church. The diocese at that time, under the leadership of its bishop, the Rt. Rev. José Antonio Ramos, petitioned the national Convention of the Church to grant them extra-provincial status and the diocese was placed under the metropolitical authority of the House of Bishops of Province IX, which includes the Latin American and Caribbean areas.
When Bishop Ramos resigned in the spring of 1978, the Diocese of Costa Rica elected the Rev. Cornelius Joshua Wilson to be its bishop. He was consecrated third Bishop of Costa Rica last September 15, the first Costa Rican to serve in the post.
The status of the Diocese of Costa Rica within the worldwide Anglican Communion is uncertain. The Rt. Rev. John Howe, Secretary General of the Anglican Consultative Council, maintains that no member-church of the Communion can unilaterally set up an autonomous jurisdiction. The issue is scheduled to come before the ACC at its meeting in London, Ontario, Canada, in May.