VP Wayne Mueller Explains the WELS Meltdown

Wayne Mueller, Voted Out of Office Two Years Ago, Then Voted Back In

Information assembled by Vice-President Mueller as of March 2007 COP



Financial Management of Synod Ministry Since 2001

What precipitated the synod’s crisis in ministry support in 2001?

•
Sudden loss of $8M per year in foundation support
•
9-11 and the subsequent recession
•
Much lower than projected bequest gifts for five years
•
Drop in enrollment sharply reduced schools’ income
•
Below cost of living averages in congregation mission support
Efforts to balance budgets and maintain schools with lowered income

•
Three million removed from Home Missions annual budgets
•
Lower budgets and enrollments force schools to vacate thirty professorships
•
Parish Services annual budgets trimmed in half by $1.5M
•
Over twenty World Missionaries returned home ($2M)
•
Cost-cutting measures implemented across all areas of ministry
•
President’s office staff cut in half; 11 administrative positions eliminated
Measures put in place to set our financial house in order

•
Special audit showed no illegal activity in regard to internal borrowing
•
New Chief Financial Officer hired
•
Independent accounting oversight committee put in place
•
New software and processes for gift and budget tracking
•
Additional staff hired for finance department
•
More detailed special funds reports; new transparency in financial reporting
Conference of Presidents efforts at maintaining offering support for our ministries

•
Annual Congregation Mission Offering encouragements
•
Stewardship programs through Ministry of Christian Giving/Adult Discipleship
•
Advancement offices opened at all schools
•
Annual “Walking Together” Sunday started
•
Focus of WELS Connection directed to synod budget ministries
•
Endowments started for schools and missions
•
Faith-Focused Finance seminars on the road
Current proposals to contain costs and effect savings

•
Limit cost of living and tenure raises to cost of living
•
Higher deductibles, co-pay and contributions for worker health care
•
Use unrestricted special funds to pay back internal borrowing loan
•
Look at forgiving or delaying loan repayments to ourselves
•
Use of replenishable restricted special funds for operating budgets
•
Proposal to synod convention to close Michigan Lutheran Seminary
Remaining financial challenges

•
All ministries operating at minimum levels
•
Lower enrollment has cut deeply into school funding
•
Synod support forecast for 07-08 lowered by $1.1M to reflect 1.4% CMO increase
•
Synodical Council is proposing closing MLS to meet rising deficits
•
A deficit of $2.3M faces 07-08 ministry budgets
•
Offerings are not meeting the increased costs of ministry
How may God bless us to maintain our ministries?

•
With honest repentance and renewed faith in Jesus
•
With thankful hearts that pledge support of congregation and synod
•
With specific goals for our personal and congregational offerings

WELS Pulls a Pentecostal Maneuver

I admit to being a little confused about this, due to lack of information. The Michigan District of WELS is loaded with information about the financial crisis, but I find only one other district (Southwest Wisconsin) addressing the matter from their WELS website location.

I picked links, then went to all links. The districts are found under groups. Each district has a link and some additional information on that linking page.

This is what I conclude. WELS seems to be angling for a change in the mission offering pledge, above what was already pledged before. The leaders want this new level to be the new status quo. Michigan has a slide show on this. No one else does. The plan seems to be - have a new set of figures for the WELS convention in New Ulm. They want another $5 million on top of the current pledges.

I call this a Pentecostal maneuver because this was described to me as a method used by professional pledge fund ministers at Pentecostal and Evangelical congregations. The Reformed have a big meeting and expect people to turn in signed pledge cards at its climax. The pledge cards are added up. Then one professional says, "I signed a card, but I am not happy with what I put down. I am going to tear it up and raise my pledge." The other man says and does the same thing. Then the cards are passed back to the audience so everyone can tear up a card and sign a new one. Some quick-thinking blog-readers are imagining they would put the same amount down. But no, the cards have been examined already. So the congregation feels the compulsion of the Law and signs new ones.

Someone wrote to a famous journalist about the congregation's fund-raising efforts. "We have had bake sales, slave days, donkey days, rummage sales, and many more things, but we still do not have enough money. What should we do?" His answer was, "Try religion."

Fooling WELS Members Part of the Time

WELS has been trying to fool all of the members all of the time, but the latest efforts of the leaders have torn the mask away.

The WELS Crisis Documents prove that the budget has been transformed for the last 27 years, tilting toward a top-heavy administration and world missions, away from their own school system.

How hard is this to picture:

1. Administration percentage steadily upward from 1980.
   
2. School subsidy steadily downward from 1980.
   
3. World missions trending upward since 1980?

The inevitable result is higher tuition costs. Here is a simple formula:

Tuition = Salaries = School Budget. Most of a school's cost comes from teachers' salaries. Most of the income is from tuition. All private schools are subsidized by endowments or by denominational transfers. When WELS began strangling its own school system, the tuition had to go up quickly. When WELS used school fees to balance the synod budget, tuition had to go up even more. When the tuition went up too fast, 600 students dropped out of the WELS system. That alone is an annual cost of 5 million dollars (more or less).

Another cost, difficult to calculate, is the price of alienating people. The top-heavy WELS administration has proven its incompetence year after year. Now matters are so bad that Gurgel will not run for president and rebellion has raised its head, albeit meekly. People do not give long-term from being scared to death, threatened, intimidated, manipulated. They give from Gospel motivation, sadly lacking for many years.

One WELS pastor said to me, "In the past the conventions were great because the pastors got together and made decisions. Now the Milwaukee guys tied up the debate and load the votes. Everythign is determined before the convention starts."

Evidence comes from the way the debate is being tilted toward - "Give more money or we will kill off another school. And your little dog, too!" (Wizard of Oz allusion. Ignore the frighened man behind the curtain.) This should not be a hostage situation. The synod has millions to use to reduce the administration by 75% and bring home the world missionaries that necessitate so many trips around the world.

They love their Management by Objective theory. Why not face the facts and do what is right, for once?

WELS Gets Scripture Citation Wrong

The WELS meltdown continues. Look for the WELS Crisis PowerPoint at the following location. I am picturing the Wicked Witch in Wizard Oz addressing Marvin Schwan:

I'm melting, melting! Who would have thought a little brat like you could destroy such beautiful wickedness!

Manifold and manifest are the ironies. Marvin Schwan died, leaving WELS in a panic. He was always bailing them out of their messes. Now what? Good news. He left his estate to his foundation, which owned all the Schwan stock. Marvin's brother then redeemed the stock with profits from Schwan Frozen Foods, year by year. Marvin's brother ran the trust and the company at the same time. The result was that WELS was flooded with incredible wealth at first, but that tapered off rapidly. If the money had built up slowly, the sect would have remained arrogant instead of becoming terrified of the facts.

The people who created this heart-wrenching PowerPoint made two huge mistakes. One is that they quoted from the Today's NIV. (Fred asks Martha: "You mean there is a translation even worse than the NIV?" Answer - Yes, Today's NIV.) Secondly, they quoted the cheerful giving verse and cited it as coming from 1 Corinthians 9 instead of 2 Corinthians.

KJV 2 Corinthians 9:7 Every man according as he purposeth in his heart, so let him give; not grudgingly, or of necessity: for God loveth a cheerful giver.

Anyone could make a mistake like that. People often do. But normally one has extra readers to spot errors like that. Or, since WELS is so Biblical, as they keep telling everyone, someone could send them an email and fix this blunder. It's not the typo, WELS, it's the cover-up, the failure to fix a goof.

PS - If you look over all the material at the website you will see a trend I suspected years ago. Every since 1980 the administrative part of the budget has gone up and the school portion has gone down. The world missions area has trended upward overall. The one steady change has been a consistent downward trend for the school budget, now called Ministry Education. The teachers are all ministers. The male teachers are ordained.

Michigan DP Seifert on the State of the Synod

Subject: Re: COP Special Presentation
From: MiDPWELS@aol.com
Date: Mon, May 14, 2007 2:53 pm

Dear Brothers

In response to some good questions for clarification, I'll send this to all
of you -- in case you run into something similar:


Does the "Sudden Loss of $8 Million" mean $8 million per year, and was
that designated money or general money.
That was from the WELS Gift Trust Fund - Generally Schwann Offering. The $8
million was in a year and is reported around the 7/2001 FiC. The high was
about $14 million per year. Since the drop, there have been increases so
that now
it is about up to $7.9 million. Still below the high amount, obviously.
The decision was then also made to spend down the Gift Trust fund at an
accelerated rate instead of over a period of about 8 to 9 years. In a
couple of
years it was spent, in anticipation that everything would pick up to previous
levels. That did not happen.



I think I can explain the Gift Trust Fund and Accounting Transfer Error,
but it would be very helpful to have a paragraph summarizing what each is
about. ....."
Gift Trust Fund - see above.

The Account transfer went like this, according to my understanding:
CMO and Restricted Gifts flow into the "operating budget."
CMO plus about $7.3 million was available and budgeted to be spent in a
given year from the "operating budget." It was. However, the accounting
transfer
was not made so it appeared that there was $7.3 in restricted funds that
could
be budgeted and spent in the next year. It was put into the budget. When it
was realized that the transfer had not been made in the first year, the
transfer was made. This resulted in the $7.3 million shortfall which was
"borrowed" and is in the process of being paid back.


I think it would be helpful to have a few specifics on things like
"Increase in Synod Mission Code Salary"--how much has that impacted the
budget?
The new mission code is an increase over the old mission code of about $3
million per year. I checked with Mark Bannan. That was the number addressed
when he was on the SC.

Or "Lower Bequests."
The old actuarial tables that had been used anticipated about $4-5 million a
year in bequests.
We are receiving less than $1 million a year in bequests.


If I understand the line about "Reduced Operating Budget Support for
Ministerial Education," the increase in tuition led to decreased
enrollment which has resulted in a net loss in BME funds. In other words,
if we hadn't raised tuition, enrollment would be so much higher that BME
would have more money today. Is that right?
That is part of the problem. We can't say that is the entire problem, but
there has been a trackable correlation between increased tuition and fees and
decreased enrollment.


Does the "If We Do Nothing" slide mean that we will lose all the schools?
The "If we do nothing" slide means that we will shut down the school system
in the order of MLS / LPS / MLC - one would hope not WLS. the other factors
will kick in too. The actions may not necessarily be in the order listed.


Is the $4.7-7 million estimate of the stop-gap offering what the COP
thinks we need in order to save the synod?


That's not a permanent number but it will at least allow a status quo and
time to address all of this situation. The understanding / prayer is that
such
an offering will not be a one time offering, but an increase to CMO -- the
'new base' mentioned in the PowerPoint presentation.

Thanks for the questions.

John

Pastor John C Seifert
President, Michigan District
_WELS MI District website_ (http://www.wels.net/jumpword/dimi)
Office: 989-835-1776
Cell: 989-859-9028
907 Mattes Drive
MIDLAND MI 48642

WELS College Out of Funds - Worse, The College President Cannot Spell College!

Posted on the WELS website:

MLC Report – October 2005


I. ENROLLMENT
The official MLC enrollment for the beginning of the 2005-06 school year was 818 of
which 404 are men and 414 are women. 627 are enrolled in Studies in Educational
Ministry and 191 are enrolled in Studies in Pastoral Ministry. They come from 33 states, one commonwealth, and eight foreign countries. Forty of them are married.

Seventy of the 184 freshmen are from prep schools (38%) and 80 are from ALHS’s
(43.5%). Pastor track stats are: Prep schools 24 or 54.5% and ALHS’s 14 or 32%.
Teacher track stats are Prep schools 46 or 33% and ALHS’s 66 or 47%. This is very
close to the historical percentages at MLC, however, the numbers are down
considerably from both sectors.

Enrollment at MLC in the range to 900 to 1000 is essential to maintain the programs
and curriculum either mandated or deemed necessary for the education of its called
workers for the 21st century. This is not a time to be going backward in our enrollment. We all – college, prep schools, ALHS’s, and Lutheran elementary schools need to intensify our efforts at recruiting young men and women for service to the Lord.

Three reasons we are hearing as to why young people may not choose to study for
ministry are:

1. The cost is to (sic) high (room, board and tuition at MLC is $12,400)
2. There won’t be calls available when we graduate
3. The WELS is not healthy and by extension – because WELS is not healthy MLC
is not a viable institution.

II.
MANPOWER
Please confer the MLC Impact Statement

The primary concern for faculty members is how can MLC operate with its immense
deficits in the next two years. In fact, they are hearing from the students that MLC is closing in two years. While these things are on their minds, nonetheless, this has not affected either their teaching or their dedication. The staff at MLC has grown over the years into a cohesive family dedicated to serving the Lord in the commission given them by the WELS – to be the WELS college of ministry.

III. MISSION ADVANCEMENT
The Mission Advancement team is nearly complete. Our Public Relations Director is
William Pekrul who was a former English professor retooled for the job. Our two
Resource Development Directors are James Hahn (DMLC grad, business consultant,
business manager, Thrivant (sic) agent – from Salt Lake City, Utah) and Katherine Tohal (employed half time by planned giving, then half with planned giving and half with MLC, and now full time with MLC). The secretary serving that position, Arlene Stolte, was formerly in the Records Department at MLC. The position still vacant is VP for Mission Advancement. The Governing Board has asked the president of MLC to fill that role for the time being.

The Mission Advancement Advisory Team continues to meet quarterly to brainstorm on
strategies that the Mission Advancement Office might employ in it work.

Gifts are coming in at a record pace – not enough to bridge the variance between
revenue and expenditures, but surely a good sign of what might yet be developed in
time.

We still await a WELS Gift Planning Counselor in New Ulm and assigned to MLC.
Pastor Kurt Lueneburg has accepted the call and we anxiously anticipate his
participation as part of our Mission Advancement Team.

IV. BUDGET
When MLC did its original budgeting for this biennium, it did so anticipating 920
students. We are 100 below that projection which caused a good deal of revision and
rethinking especially in view of the fact that our operating subsidy went from 5.4
million dollars five years ago to .7 million dollars this year. All said and done MLC is anticipating a 1.7 million dollar deficit this fiscal year (and that is after exhausting 1.3 million dollars in spendable reserves which means our savings account is empty) and then a 3.6 million dollar deficit next year providing we don’t have another loss in enrollment.

There are a number of ways we hope to attack this problem in the present fiscal year
(wages, TGP, gifts, redesignation of certain funds), but the next fiscal year will
determine the future of MLC

Our new billing procedures seem to be working. The new procedure calls for one
payment for the semester, two payments per semester, or monthly payments via
automatic withdrawals. Evidence of this is the fact that we are chasing after fewer
students for past due payment. Thus accounts receivable will improve over our already impressive record.

V. CAPITAL PROJECTS
The last bids on the new MLC chapel came in at about 9.2 million dollars (includes full unfinished basement under the chapel, link from classroom building to the student center but excluding organ, spire, seating, and sound system).

Monies available include around 6.8 million in FIC funds and 1.4 million in MLC funds which means we are once again short. Taking into consideration that approximately 1.2 million of the MLC funds are Governing Board designated and may need to be redesignated toward operating expenditures, the chapel project is on hold.

A designated offering for air conditioning for our gym, student center area, locker
rooms, exercise room, and offices has been received and we are in the process of
completing installation of the AC.

Gift money has allowed the creation of a “professors emeriti” room in the library. It will provide space for the emeriti to visit and work while they are on campus.

A grant from the Auxiliary designated for refurbishing the children’s literature room has been used to update the room and to make it more attractive to students.

The ongoing project of refurbishing Concord Hall (one floor per year) has been
completed. This is the first refurbishing since the dormitory was built some 40 years ago.

There are a good many projects which were scheduled through program maintenance
that remain on hold because of the shortage of monies in that BME fund.

Theo. Olsen
MARTIN LUTHER COLELGE (sic)