Our Lady of Mt. Carmel Catholic School is one of Guam’s 10 Catholic Schools. Photo courtesy of MCS

BY MAR-VIC CAGURANGAN
For the Journal

The Archdiocese of Agana has lost more than $100,000 in monthly revenue from Catholic schools and parishes as a result of the COVID-19 pandemic that prompted the temporary shutdown of public and private establishments in Guam, according to court documents.

Based on monthly assessments, the archdiocese previously anticipated the collection of  $35,652 from schools and $91,137 from parishes, for a total of $126,789 per month.

“However, for April, we projected (to collect) $4,557.00 from parishes and $0 from schools,” Josephine Villanueva, finance officer at the archdiocese, stated in a declaration filed with the District Court of Guam on June 15.

For the succeeding months, Villanueva said, the archdiocese has projected to receive $22,784.00 from parishes, which accounts for only 25% of the regular amount; and $3,565.00 from schools, which is only 10 of the usual monthly collection.

Between the parishes and schools, the archdiocese is anticipating $100,440 in lost revenue per month, Villanueva said.

The archdiocese runs 10 Catholic schools and 26 parishes throughout the island. They are the primary sources of revenue for the archdiocese.

“The parishes derive a significant portion of their revenue from offertory collection during masses and, a significant portion of the offertory collections occur during Holy Week, which includes Easter Sunday mass. These revenues declined substantially because the parishes have been closed to their parishioners and the public,” Villanueva wrote.

The declaration accompanied the archdiocese’s lawsuit against the U.S. Small Business Administration filed with the federal court. It challenged SBA’s decision to reject the church’s application for the Payroll Protection Program under President Donald Trump’s Coronavirus Aid Relief and Security Act.  

The lawsuit argued that the archdiocese “has had to reduce its payroll from a five-day workweek to a three-day workweek,” as a result of Gov. Lourdes A. Leon Guerrero’s public health emergency declaration on March 14 after the first three COVID-19 positive cases were detected.

The directive required the temporary closure of most establishments in Guam and prohibited mass gatherings. Although some restrictions have since been lifted, the governor has extended the public health emergency declaration through July 31.

“Plaintiff, like many other businesses, has been financially affected by the COVID-19 pandemic in ways that could not have been foreseen,” the lawsuit stated. “Plaintiff also had to make two reductions in force, due to the loss of revenue. Currently, (the archdiocese) is unable to resume normal operations because it does not have sufficient funds to pay for its payroll.”

Besides the shrinkage of remittances from schools and parishes, the archdiocese also suffered reduced revenues from its real estate assets.

“We have also seen the Guam Reef Hotel lease rent reduced, and the TakeCare property lease rent reduced, which roughly approximates $30,000 per month, which is roughly 15% of the archdiocese’s total revenue on an average year,” the lawsuit stated.

Villanueva said the Guam Reef’s rent was reduced from $12,100 to $5,000 a month, while TakeCare has requested deferment of lease payments for at least three months at $23,799 per month.

“Even with a re-opening of Guam, it is anticipated that revenue will likely be severely interrupted for an extended period of time, and the archdiocese will struggle for several months to make its payroll payments, and potentially longer,” the lawsuit stated.

In a June 29 decision, Chief Judge Frances Tydingco-Gatewood of the District Court of Guam ruled in favor of the archdiocese.

“Without a doubt, the PPP funds would provide a lifeline to the financially distressed Archbishop of Agaña,” the decision reads. “While it will not resolve its financial troubles, the PPP funds will likely help facilitate a path towards a successful reorganization.”

SBA had denied the archdiocese’s PPP application on the grounds of its bankruptcy status.  But the court pointed out that an organization’s credit status is not on the list of eligibility requirements under the CARES Act. “For the reasons stated above, this court finds that Defendants exceeded its authority. Defendants violated the plain language of the CARES Act by imposing an additional eligibility requirement and going outside of what Congress had already established and intended.

The archdiocese filed for Chapter 11 bankruptcy in January 2019 when it began preparing to settle the civil actions filed by former altar servers who accused several priests of sex abuse. mbj