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	June 9, 2005 .................... LCMSNews -- No. 46

	Concordia, River Forest, reports brighter picture

	Concordia University in River Forest, Ill., is reporting a
brighter financial picture as it nears the end of this fiscal year. For
the second year in succession, administrators will close their books
with an operating surplus on June 30, following operating losses between
1999 and 2003.

	Revenue from increased enrollment, cost reductions, and expense
containment account for the turnaround, according to Dr. Alan Klaas,
senior vice president for university advancement.

	Aided by one-time revenue producing measures, Concordia achieved
an operating surplus of almost $500,000 during the 2003-04 fiscal year
-- compared with a loss of almost $10 million the previous year.
Liabilities decreased by nearly $10 million, and net assets rose by
almost $5 million during the period.

	The university is projecting operating surpluses this year and
for the next two fiscal years, Klaas added.

	As part of the cost containment, the university eliminated 57
faculty and staff positions during the 2003-04 academic year. "It was
all part of an effort to bring expenses in line with realistic income
projections," Klaas said.

	Enrollment at Concordia reached 2,210 students this spring, a 29
percent increase from a year ago. The total includes 1,256 graduate
students -- about 800 more than last year -- most of them enrolled in
two master's degree programs.

	Klaas said the two graduate programs provide teachers with the
credentials they need to meet state requirements. "We are running
classes at approximately 37 sites -- mostly schools -- around Chicago.
By September we will be at 47 sites," he said, "We run the programs
where the students are, rather than requiring them to come to our
campus."

	During the past two years, the university's debt was reduced to
$37 million from $44 million. The university sold property adjacent to
the campus and received a $1.85 million grant from the Concordia (River
Forest) University Foundation that was matched by the LCMS Risk
Endowment Fund.

	Favorable interest rates also resulted in savings when the
university refinanced its debt into local banks. On Sept. 30, 2003,
loans and letters of credit covered by the Synod, Concordia University
System, and the Lutheran Church Extension Fund stood at $43 million --
$18 million in cash loans plus a $25 million loan guarantee. Today, the
university owes no money to the Synod, CUS, or LCEF, although LCEF is
guaranteeing a $12 million loan.

	"In my view this shows the improved financial strength of the
institution," said Dr. Thomas Kuchta, LCMS vice
president--finance/treasurer. "In the process of refinancing their debt,
Synod guarantees were not required."

	The debt reduction and loan restructuring save approximately
$1.5 million annually in interest and fee payments.

	Klaas explained that three factors led to the university's
financial difficulties:

	* extensive construction projects, including an $11 million
parking facility that was required by the village; improvements to the
track and football field; technology upgrades in dormitories; and
construction of the Christopher Center.

	* five years of operating losses funded with a line of credit
that was rolled into short-term debt, which created credit problems.

	* a decline in enrollment from an all-time high of 2,400 in the
1990s to 1,700 in 2003, without the university making related changes in
sizes of faculty and staff.

	Klaas credited a number of people for helping the university
turn around the financial situation. Spearheading the recovery was Dr.
Ralph Reinke, former president of Concordia Publishing House and
Concordia University in Seward, Neb., who joined the staff as special
executive in March 2003 and served as chief executive officer from July
2003 to November 2004.

	"Dr. William Meyer, president of Concordia University System,
and Merle Freitag, president of LCEF, spent hundreds of hours working
with their organizations, former Concordia creditors and many others,"
Klaas said. "They have helped assure that our university continues being
a leader in Lutheran higher education. We are extremely grateful to
these two churchmen and their respective boards."

	In a news release from the university, Tom Hallet, chief
financial officer since September 2003, attributed the turnaround to
many individuals' commitment to the long-term success of the university.
"This commitment came not only from the Board of Regents and management,
but also the faculty, the staff, and the LCMS," he said. "This combined
effort led to a total change in the inner culture of the organization,
making the turnaround possible."

	Dr. Fred Boos, senior vice president for academic affairs,
commended the faculty and staff for their involvement. "The faculty has
risen to the challenge of handling these huge enrollment increases while
still maintaining the quality of programs which has been a hallmark at
Concordia for the last 140 years."

	****************************************

	If you have questions or comments about this LCMSNews release,
contact Joe Isenhower Jr. at joe.isenhower@lcms.org or (314) 996-1231,
or Paula Schlueter Ross at paula.ross@lcms.org or (314) 996-1230.

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