Legal organization of diocese and parishes

In 2007 the diocese was broken up and each parish was incorporated as a separate not-for-profit corporation. At the time it was announced this was done to make the legal organization match how the Church sees itself in Canon Law. That is probably true, but one suspects another motivation for the reorganization was to control and limit future liabilities in the wake of the abuse scandals of the early and mid 2000s.

Although the Diocese of Austin was not hit by large lawsuits (not that made the news anyway), other diocese around the country suffered enormous losses in legal judgements and settlements, resulting in bankruptcies and impairment of church mission due to lack of money. By making each parish a separate corporation and by making the clergy and lay staff employees of the local corporation, the lawyers who set this up were hoping to limit the size of future legal judgments. If a priest misbehaved, the victims got paid out of the pockets of the parishioners at that priest’s parish. Before 2007 the court could say the victims were entitled to be paid not just by the parishioners at that one parish, but by the parishioners at the next town over, and the next town over beyond that. The diocese as a whole would be liable. By splitting the big organization up into smaller ones, lawyers could argue in court that only the relatively poor parish was liable rather than the bigger and richer diocese. Whether the courts would buy this argument was unknown – it would not be tested until a real case come up – but that was the idea. The reorganization gave the lawyers a better argument in future litigation.

Every parish that I have looked up has

1. Exactly three directors. They are (1) the pastor of the church, (2) the bishop, and (3) the vicar general of the diocese (the vicar general is the number 2 guy at the chancery).
2. A president who is the pastor of the parish
3. A treasurer who is the vicar general

So this system allows the parishes to be separate while also being under chancery control. Two out of the three board members are chancery officials, so the parish can’t go rogue if the pastor decides to make it into a Presbyterian church or something.

At the time of this writing, the bishop is Joe Vasquez and the vicar general is Daniel Garcia.

The bishop and vicar general and their staffs are part of a corporation called the Central Administrative Office of the Diocese of Austin. It is larger than any parish in terms of budget, assets, and number of employees. The Central Administrative Offivr manages priest and deacon appointments among the parishes and acts as a bank and an insurance company for the parishes. The board of directors of the Central Administrative Office is the bishop, vicar general, and chancellor of the diocese (a leading administrator). The bishop is the president of this corporation. When people refer to “the diocese” as a legal organization, they mean this Central Administrative Office. Internally, the Central Administrative Office is sometimes called the CAO.

Catholic Charities of Central Texas is also a separate corporation. In terms of annual budget, it is much smaller than the CAO – only about as big as a large parish. The schools are also separate corporations.

Balance sheets show assets and liabilities. The largest assets of the parishes are the land and buildings. This real estate shows up on the balance sheets of the parishes, not of the diocese. The CAO balance sheet shows value for the building and land owned by the diocese, of course, but this is a small amount compared to what is owned by the parishes in total.

So if we go by balance statements, each parish owns its land and buildings. However, the county websites tell a different story. When I put the address of various parishes into the Travis County Appraisal District website, the property is listed as being owned by the Roman Catholic Diocese of Austin. The exception is St. Mary's Cathedral which is listed as being owned by John McCarthy. The Williamson County Appraisal District website lists the land St John Vanney sits on as being owned by St. John Vanney Catholic Church. They list the owners of St. Helen's Catholic Church and St. Williams's Catholic Church as Gregory Aymond, Biship of the Diocese of Austin. They list the owner of St. Dominic Savio High School as North Central Catholic School Corporation Some of the parishes in the eastern part of the diocese, are listed in their county websites owning themselves. The parishes are designated the owner, not the Roman Catholic Diocese of Austin or any current or past bishop. It’s strange that there would be this difference, and I am not sure if it is because different county appraisal districts have different practices, because the county records have not yet caught up to the 2007 re-incorporation. And I am still not sure who owns the land – the parishes or the diocese.

How much is the real estate worth?

If we could get ahold of the financial statements from all dioceses, we might get a handle on that question. In an address to the Assembly of Catholic Professionals in Sept 2014 https://vimeo.com/113746339, Bishop Vasquez said physical assets were worth "almost $450 million".

The values shown on balance statements are often different from actual market values. This is true for all business balance statements. And the market values change with real estate prices. However, based on financial statments, we can say

Central Administrative Office – $20 million

St. Theresa in Austin – $15.5 million

St. Albert’s in Austin – $8.9 million

So the bishop’s number of $450 million seems plausible.

Next: Money Flows