wfn.org | [PCUSANEWS] Financial woes that shut Mary Holmes now threaten

[PCUSA NEWS <PCUSA.NEWS@ECUNET.ORG>]

Note #8700 from PCUSA NEWS to PRESBYNEWS:

05180
April 2, 2005

School daze

Financial woes that shut Mary Holmes now threaten Barber-Scotia

by Jerry L. Van Marter
		  
LOUISVILLE -- With bankruptcy proceedings nearly complete for Mary Holmes
College in West Point, MS, the Presbyterian Church (U.S.A.) is facing the
demise of another of its historic black colleges -- Barber-Scotia College in
Concord, NC.

      The Mission Support Services (MSS) Committee of the General Assembly
Council (GAC) on Friday wrote off a $460,000 loan it made to Mary Holmes
College in 2000 in a last-ditch effort to preserve the school's federal
financial-aid funding.
 
     Knowing at the time that its action was was risky, MSS established a
"loss reserve" for the amount of the loan as a hedge against default.
Therefore, said MSS Director Joey Bailey, "Writing off the loan doesn't hurt
our bottom line."
 
     Classes were suspended at Mary Holmes in the fall of 2003. The college's
board of trustees threw in the towel this winter, declaring the school
bankrupt. The PC(USA), which owns the Mary Holmes property, will sell it at
auction, Bailey said.
 
     Meanwhile, said MSS member Walter Baker, Barber-Scotia "is on exactly
the same track as Mary Holmes." MSS officials met earlier in the week with
Barber-Scotia administrators and trustees to discuss that school's bleak
future.
 
     Barber-Scotia lost its accreditation last summer in the wake of an
academic-fraud scandal. Since then, enrollment has plummeted and the college
is awash in debt, with no cash reserves. According to Michael Agamemnonos, 
the MSS financial services manager, Barber-Scotia is more than $10 million in
debt with anticipated expenses between now and June of $1.6 million. "They
might have $5,000 in their checking account," he said.
   
   Last year, the denomination advanced Barber-Scotia most of its share of
the 2004 Christmas Joy Offering -- eight racial-ethnic schools and colleges
receive about $450,000 apiece each year from the offering -- but Bailey said
National Ministries Division (NMD) Director Curtis Kearns "drew a line in the
sand" and refused to do the same this year. The racial-ethnic schools relate
to the denomination through NMD.

     Prospects appear a little brighter for a third PC(USA)-related
institution, Menaul School in Albuquerque, NM. According to its new finance
director, Conrad Rocha, the elementary and secondary school, which serves
primarily Hispanic and Native American students, suffered "big losses" in
2003 and 2004, but enrollment is up this year.
 
     Enrollment increased by 18 students to 218, and is projected to be at
least 225 next fall. Officials of Wells Fargo Bank, which has extended a line
of credit to Menaul, is working with the school to stabilize its finances.
Menaul also has an outstanding $500,000 loan from the GAC. 
Rocha told the MSS Committee that for the first time, the school's trustees
have taken on a fund-raising pledge, promising to raise $100,000 before the
end of the school year.
 
     "Our major need and highest priority is to complete the business plan
that will insure our financial viability," Rocha said. An outline of the plan
was given to the MSS Committee last fall. Rocha said it is scheduled to be
completed by July of this year.

      Nevertheless, Baker and Bailey urged Rocha to develop contingency plans
in case the school cannot achieve its financial targets. One possibility is
the sale or lease of 15 acres of unused land on the Menaul campus.

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