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GAC Approves Financial Package to Aid Struggling Mary Holmes
PCUSA NEWS <email@example.com>
01 Oct 1998 20:02:32
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GAC Approves Financial Package
to Aid Struggling Mary Holmes College
by Kristin Searfoss
LOUISVILLE, Ky.-A 106-year-old Presbyterian racial/ethnic college in severe
financial straits has been given a chance to fight for survival.
Meeting here Sept. 23-26, the General Assembly Council (GAC) voted to
give Mary Holmes College (MHC), a two-year institution in West Point,
Miss., clear title to its property and to forgive debt totaling $444,156
plus accrued interest. The total debt is just over a half-million dollars.
The agreement between the GAC and the college, which Mission Support
Services (MSS) Committee chair John Rodgers called "a substantial
forgiveness of debt, including transfer of property," comes with some
contingencies and some obligations, including debt forgiveness by other
creditors of the school.
One of eight racial/ethnic schools and colleges founded by the PC(USA),
Mary Holmes College (MHC) is one of only two church-related schools still
owned by the denomination. The college has been unable to obtain its own
financing in order to complete much-needed capital improvements and retire
debt that goes back more than six years.
Should MHC cease operations as an institution of higher learning
related to the PC(USA) or change status from a nonprofit organization, the
property will immediately revert to the PC(USA).
Speaking about "why we are where we are today," new college president
Elvalee Banks told a joint meeting of the MSS Committee and the National
Ministries Division (NMD) Committee that there had been "problems with
stewardship, we will admit that. We had problems with mismanagement,
perhaps not minding the store like we should have, but that's something
that's in the past, with a lot of positive results."
The college has balanced its books for the second time in six years,
reduced its deficit and carefully gone over its records back to 1991, Banks
said. "We are moving in the right direction - we're riding the ship."
"It's time now," Banks said. "Either we take steps to turn this thing
around or we all just abort this mission."
Founded in 1892, MHC is committed to providing educational
opportunities for socially, economically and educationally disadvantaged
students, particularly those in the Golden Triangle region of Mississippi
and the southeastern region of the United States.
Many of the 406 students are the first in their families to go to
college. They come from areas where unemployment rates are extremely high,
and their families often live on plantations as sharecroppers, Banks said.
The student body is 98 percent African American.
Although it has historically served young people of African-American
descent, MHC offers its services to persons of all racial and ethnic
Under the agreement's Outline of Terms, MHC will obtain a secured loan
of $2.6 million to $3 million - using its newly owned property as
collateral - in the form of tax-exempt bond financing and/or lease
financing. Between $l.5 million and $2 million will be used for debt
retirement, and the balance of loan proceeds will be used for capital
The terms are subject to three prior contingencies:
l) The Walton Foundation will forgive the balance of its loan of
$l00,000 to Mary Holmes College.
2) The U.S. Department of Education will forgive half of the "program
review" debt owed to it by MHC from the present balance of $849,236, and
the remainder of the debt will be paid off with the proceeds of the
3) All debt of MHC will be removed except the secured loan, open lines
of credit as of the date of the agreement and the college's Neigh Dormitory
mortgage of $515,606, owed to the U.S. Secretary of Education.
Before approving the agreement, the GAC amended it to give its
Executive Committee "the authority to waive or modify one or more of the
prior contingencies in the event [it is] needed by developing
While acknowledging that helping Mary Holmes College might not make the
most business sense in the secular world, MSS Committee members placed the
issue in a mission context. In the joint MSS/NMD Committee meeting,
Rodgers, of McMurray, Pa., said, "As far as analyzing this on purely a
[financial] point of view - whether the recommendations can be justified in
that respect - I don't think it is as important as [that] we are acting as
the church. We've identified this as a significant mission, and we're
carrying through with our commitment to empower the college."
"If this is purely a business proposition, then it's a no-brainer,"
said the Rev. Grady Anderson of College Park, Georgia. But if it's about
mission of the church and helping those in need, then it must be addressed
on a different level, he said.
"Dr. Banks, you're a brave woman," said MSS at-large member Al Warren
of Grosse Pointe, Mich. "I wouldn't give you a plugged nickel's chance
Mary Holmes College's obligations, according to the agreement, include
* providing a Christian presence in the religious life of the campus
by offering regular opportunities for worship and Bible study, teaching
credit courses in religion by credentialed faculty, demonstrating an active
concern for social justice and human mercy among the entire campus
community, bringing special speakers of various Christian persuasions to
* seeking faculty, staff and trustees who are committed to the
Christian faith and its practice
* encouraging use of the facilities, faculty and staff of the college
by the various entities, governing bodies and congregations of the
Presbyterian Church (U.S.A.)
The GAC's obligations under the agreement include
* encouraging those who could benefit by the educational and spiritual
development offered at MHC to enroll there as students
* receiving not less often than annually program, financial and audit
reports on the status of the MHC and its mission
* encouraging and supporting the relationship of MHC with the
Presbyterian Church (U.S.A.) Foundation for assistance in deferred giving
to the endowment fund of the college.
From l999 through 2003, the PC(USA) will continue to pay the premiums
for MHC insurance coverage (including hazard, property, casualty, general
liability, and directors' and officers' liability insurance). The report
states that for l998 the annual cost of the premiums is approximately
Also at its September meeting the GAC agreed to fund unresolved budget
requirements of the Presbyterian Council for Chaplains and Military
Personnel for 1998 ($98,834) and 1999 ($173,250) through the Presbyterian
Mission Program Fund. However, effective with budget year 2000, the
organization is advised to "develop alternative sources of funding," such
as the Extra Commitment Opportunities program.
The GAC also created a work group of five people to plan a national
women's advocacy consultation in 2000. Carrying out a directive of the 1996
GA calling for a national advocacy or training event every four years
before the presidential election, beginning in 2000, the Women's Ministries
Program Area will staff the work group. The group will draft a working
purpose, goals and objectives, develop a budget and fund-raising
strategies, and develop and execute a detailed program for the
consultation. The Women's Advocacy Office will pay the work group's
Members of the work group are Sydney Brown of Palo Alto, Calif.; Hsin
Hsin Huang of St. Louis; the Rev. Reyna Mairena of Roswell, N.M.; Kristine
Thompson of Washington; and the Rev. Robina Winbush of the Bronx, N.Y.
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