There’s a misstatement in the rector job description, and it’s something serious.
Specifically, the job description talks about working with the school, which is independent. But the school is NOT independent, and it’s important not to send confusing messages at this stage of the process.
Why does this matter?
It matters because vestry members have a canonical and legal responsibility in their roles as fiduciaries. That arises because the school has no legal existence apart from the church, and legally is part of the church, albeit largely self-governing.
Let’s use a hypothetical to illustrate the potential implications. It’s 2022, and St. Rita’s parish is closing, as it will consolidate with the larger parish on King Street. The current building is vacant, and in a gesture of goodwill, St. Rita’s agrees to sell the property at a reduced price of just $5 million. GES, which has long known that it could use more space, happily agrees to buy the property.
Unfortunately, a few months after the puchase, an outbreak of novel swine flu hits the school. Several children die, and many more are hospitalized. Not only is there a series of lawsuits, alleging that the school failed to maintain adequate safeguards, but numerous parents withdraw their children from the school over health concerns. As a result, GES faces severe cash flow problems, and the bank that financed the purchase of the building isn’t in the mood to negotiate. (Say hello to BB&T folks. I know that from first-hand experience with a charity that helps the homeless.)
As a result, the bank forecloses and brings suit against GES to recover the difference. In the course of litigation, the bank realizes that the church and school are legally the same entity and comes after the church endowment. The latter is successfully seized in court, and members are livid. What the hell happened? Why didn’t someone warn us? How did we get into this mess?
Next thing you know, members have sued the church, rector, and vestry members, alleging that they failed to exercise due diligence concerning the acquisition of the St. Rita’s property. Although the matter is settled out of court, Church Insurance, the church’s carrier, winds up paying out several million dollars. The recovery eases things for the time being, but the uproar causes severe problems for the church, and seven years later, it closes due to rapidly falling attendance and steep declines in pledging.
Sound implausible? Not really. Such things happen all the time, and it’s a foolish vestry indeed that fails to fulfill its legal and canonical duties as stewards and overseers of the church’s temporal affairs.
The upshot: As things are currently configured, the church is fully liable for school debts and liability in tort. Additionally, the 50/50 cost sharing arrangement means that, to this day, a big chunk of the church budget goes to subsidizing the school. Thus, much of the money that is spent on utilities reflects costs incurred by the school. And in a time of rapidly dwindling budgets. it’s important that members know this, both so they understand where their money goes, and so there is buy-in for the ongoing cost of supporting the school.
And if issues arise, it’s important for Sr. Moneypenny and her vestry to understand that they have a responsibility for the school. including seeing the financials, budgets, and board meetings. Relying on a once-a-year update from the school board members — or even monthly reports to the vestry — is not legally or practically adequate.
Meanwhile, you certainly don’t want to mislead Sr. Moneypenny or the other candidates on this important governance issue, or to start your relationship with a new rector off with this inaccurate statement.