wfn.org | GAC Approves Financial Package to Aid Struggling Mary Holmes

[PCUSA NEWS <pcusa.news@ecunet.org>]

Reply-To: wfn-news list <wfn-news@wfn.org>
College 
1-October-1998 
98320 
 
    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 
backgrounds. 
 
    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 
improvements. 
 
    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 
mortgage. 
 
    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 
circumstances." 
 
    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 
ordinarily." 
 
    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 
the campus 
   *   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 
$65,000. 
 
    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 
expenses. 
 
    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. 

 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
  This note sent by PCUSA NEWS
  to the wfn-news list <wfn-news@wfn.org>.
  Send unsubscribe requests to wfn-news-request@wfn.org