Financial plight brings more Montreat layoffs
By John H. Adams, July 31, 2003
The financial crisis at Montreat Conference Center became personal Wednesday for six employees who were notified that they were laid off immediately. They received two weeks’ severance pay.
“That will take me me through August 13,” Bo Mallory, who lost his $33,000 job as director of the conference center’s Environmental Education Program, wilderness conservation and recreation, told The Layman Online. “My wife and I just recently bought a house, a fixer-upper in Black Mountain.”
Montreat is the mecca of retreat centers for the Presbyterian Church (USA), capable of hosting conferences up to 1,250 people. Its financial problems have mounted over the years as conference revenues declined and the Montreat board borrowed money to cover growing operating deficits and property acquisition and borrowed from its endowment to buy land.
“Montreat is going through what every other government agency, school, church and nonprofit is going through,” said Lynn E. Shurley of Paducah, Ky., a minister who serves as chairman of the Montreat Board.
“We’re not going to be spared the same realities others have to face,” Shurley added. “The financial reality is that all conference centers are down in numbers across the country.”
Although Shurley said Montreat’s problems were “nothing that Montreat is doing wrong,” R. James Henderson, the conference center’s interim president, provided a different perspective in a financial assessment he prepared for the board in April, a month after he took the job.
Henderson’s report is posted on the Montreat Web site – incorrectly dated April 2002, although the report was actually issued April 2003. His report depicted a conference center reeling in debt and fast-growing operating expenses.
“Every year since 1999 the Conference Center has expended more operating dollars than it has generated, and that deficit has grown each year,” Henderson said. “There has been exponential growth in expenses. A dramatic illustration can be found in the financial statements for fiscal year 2002. In 2002, our expenditures for program activities were up $370,000 (29%) over the previous year. Management and general expenses were up $353,000 (33%) over the previous year. Total operating expenses were up $971,000 (33%).”
He noted then that the center had $2 million in its endowment but only $250,000 invested in capital markets. Most of the rest was on loan to purchase real estate – “and there is no repayment plan in place.”
“In the fiscal year just completed, in spite of some mid-year cost containment measures, we spent about $200,000 more than we generated in operating dollars,” Henderson said. “The cumulative effect of this practice is the $800,000 in borrowing to cover cash flow shortages.”
Henderson’s July report was more upbeat. It included a plan to recover some of its loan-enabled real estate purchases by selling lots “as a way of repaying funds to the endowment. We see this as a swap of assets.”
The July report also cited the need to cut the payroll – “a painful experience. We’ve had to say goodbye to colleagues who have been faithful and dedicated to our efforts.”
The July plan includes consolidation of more than $1 million in debt owed to financial institutions.
Despite the payroll cuts and debt refinancing, Henderson says in the July report that operating within revenue in the current fiscal year will be tough. “What was seen a couple of months ago as a conservative revenue budget now appears to be a stretch,” he said.
The Montreat board hired Henderson in February for a six-month assignment. He succeeded Emile H. Dieth Jr., who resigned after serving as president of the 106-year-old conference center for five years.
On the day the center’s presidency changed hands, Shurley said, “Emile’s tenure at the Montreat Conference Center came at a critical time. His efforts over the past five years to set Montreat on solid ground and to secure is future are sincerely appreciated.”
Shurley told The Layman Online Thursday that a board search committee is diligently seeking a full-time president and that the board cannot expect Henderson to remain well past his agreement.
Henderson, who has spoken candidly about the conference center’s financial problems, described his own feelings about the job in his July report.
“I’ve often used a metaphor to describe my feeling in the early weeks of my presidency. I’ve stepped into a very deep hole, so deep that there is not enough light to perform my task.”
But, now, he says, he thinks he has seen the light. ” … I feel the sun has moved directly over this deep hole, and I can see to climb out and move forward.”