New Voice Media | Word and Way
     
 
Wednesday, August 27, 2014
Home arrow News arrow MBC dips into reserves to pay legal bills
 
MBC dips into reserves to pay legal bills Print E-mail
Tuesday, April 27, 2010

JEFFERSON CITY — Even though it has had a fund in place since 2003 for gifts to cover cost of litigation, the Missouri Baptist Convention will dip into its reserves to pay legal fees due now.

Meeting April 13 at the Baptist Building, Executive Board members approved a $150,000 bridge loan from general reserves to the Agency Restoration Fund to pay “immediate” legal bills, according to information posted on the MBC website. The loan must be repaid through the ARF within 12 months.

Legal costs stem from ongoing litigation between the MBC and five entities — The Baptist Home, the Missouri Baptist Foundation, Word&Way, Windermere Baptist Conference Center and Missouri Baptist University. The five institutions each changed their corporate documents to self-elect trustees — the Home in 2000 and the others in 2001. The MBC filed legal action against the five on Aug. 13, 2002, in an effort to force them to rescind the change.

Messengers to the 2003 MBC annual meeting agreed to establish the ARF to cover litigation costs. Last year, messengers voted to direct Cooperative Program gifts to the ARF through one of two CP giving plans. The default plan — Plan A — earmarks 3 percent of CP gifts for the ARF. Churches that do not want their CP monies to fund the lawsuits direct their gifts through Plan B.

April’s action is not the first time the MBC has authorized a bridge loan to cover legal fees. At their April 2008 meeting, the Executive Board approved a bridge loan for $316,000, with the stipulation that the loan would be paid back through ARF within 12 months.

However, according to news reports, the 2008 loan was paid back not with ARF monies but through a $500,000 line of credit from a Jefferson City bank. The Executive Board unencumbered $500,000 in reserves as collateral for that credit.

The convention’s business and financial plan calls for a contingency reserve fund of at least enough money to cover operational costs for three months. Money can be set aside from unused funds at the end of each fiscal year, or a line item for reserves can be included in the budget.

For a number of years prior to 2004, money was set aside at the end of the fiscal year. A separate line item for reserves was included in the 2004 budget, with the approved amount set at $303,000 or 1.88 percent of the $16.2 million CP allocation budget goal.

The percentage earmarked rose to 5.5 percent or $909,315 of the proposed 2005 budget of $16,533,000 ($16.7 million minus 1 percent for CP promotion). In 2006, the percentage remained the same at 5.5 percent or $928,373 of the approved $16,879,500 budget.

The approved 2007 budget of $16,335,000 included 3.5 percent or $571,725, with 1.6 percent or $261,360 of $16,335,000 in 2008. One percent was earmarked for the proposed 2009 budget of $16,177,750 ($16.3 million minus 0.75 percent for CP promotion).

According to a May 7, 2009, story in the MBC news journal The Pathway, the Executive Board removed the reserve line item from a restructured proposed 2010 budget at its April 2009 meeting. The original proposal had included $162,000 for reserves.

At that meeting, MBC associate executive director and controller Jay Hughes reported that reserves had grown to $2.5 million, its highest level since 2003.

The proposed 2011 budget Executive Board members adopted on April 13 also does not include a line item for reserves. The proposal, if approved by messengers in October, will be set at $15.1 million, anticipating half from each giving plan. The first 0.75 percent will be used for CP promotion, with 37 percent of the remaining $14,986,750 to be designated for Southern Baptist Convention causes and 63 percent for MBC causes. The proposal includes up to a 3 percent raise for staff in 2011, if funds are available.

The Executive Board also will recommend 2011 goals for the Lottie Moon Christmas Offering for International Missions at $4 million, the Annie Armstrong Easter Offering for North American Missions at $2 million, World Hunger Offering at $250,000 and Rheubin L. South Missouri Mission Offering at $750,000.

 
< Prev   Next >
Copyright © 2007-2014 Word and Way, All Rights Reserved.