New Orleans Archdiocese projects $40 million deficit by end of year

Published: 2005-10-03

WASHINGTON (CNS) -- As the Archdiocese of New Orleans took small steps back to normalcy after the devastation of Hurricane Katrina, archdiocesan officials estimated a negative cash flow of $40 million by the end of the year. The projection was based on assumptions about drastically reduced parish giving and income from federal grants that are used to operate many Catholic Charities programs. Millions more could be needed to repair or rebuild facilities damaged by the hurricane, depending on whether insurers assess the damage as flood-related or wind-related. Although the archdiocese's insurance coverage for wind-related damage provides for full replacement value, it has only about $13 million in flood insurance. A preliminary assessment of about 50 archdiocesan buildings indicated there was at least $84 million in flood damage, leaving a shortfall of more than $70 million. The archdiocese hopes that regulations of the Federal Emergency Management Agency will allow for the reimbursement for cleanup of nonchurch facilities such as schools and residences. Under the current regulations, cleanup of churches is not reimbursable. Although the archdiocese kept all of its approximately 9,000 employees on full salary through the end of September, it recently notified them that an unknown number would be laid off Oct. 3 and receive two weeks of severance pay.

Copyright (c) 2005 Catholic News Service /U.S. Conference of Catholic Bishops. The CNS news report may not be published, broadcast, rewritten or otherwise distributed, including but not limited to such means as framing or any other digital copying or distribution method, in whole or in part without the prior written authority of Catholic News Service .