The Board of Regents of Concordia Seminary has received reports on how the current economic situation is affecting the Seminary’s finances, and it has responded. Meeting February 13, 2009, and again in a special telephone conference call February 26, the Board passed several resolutions to help the Seminary cope with the situation.
Faced with an expected $4 million operating deficit for the fiscal year ending June 30, 2009, and a significant decrease in expected income for the following fiscal year, the Board has authorized trimming payroll expenditures by some 20%. Initially, the Seminary will offer regular full-time faculty and staff who are at least 55 years of age and who have served the Seminary for at least five years a voluntary early retirement incentive offer. “While those who choose this option will no longer be full-time employees of the Seminary, some will continue their service to the Seminary in a limited capacity through adjunct teaching and other activities,” said Dr. Dale A. Meyer, Seminary President. “Because those who retire can continue to teach, we are confident that the Seminary will retain its reputation for having an exceptional faculty and staff.”
In a previous action, in January, the Board froze salaries for Seminary employees, accepted voluntary salary reductions from the President and Vice Presidents, and placed some maintenance work on hold. Mr. James Ralls, Chairman of the Regents, indicated that the Board “worked hard and long to address the current financial challenges.” Among the options cited by Mr. Ralls were “increased tuition charges, deficit spending, and cutting further into the value of the Seminary’s endowment.” The Board determined that these options would not be wise at this time and could jeopardize the Seminary’s ability to follow through on important elements of its strategic plan for the future.
The individuals offered the early retirement incentive will have time to consider the offer, which also includes some Seminary assistance for health insurance for those individuals and their covered dependents. To help them in their decision-making process, Concordia Plans will have benefit advisors on-site to answer their questions. “We want to take the best care of our people that we can under the circumstances,” said President Meyer. “We regret that cuts are necessary, but we remain confident that God can bring good from this situation. When we come out of the recession, we’ll see that Concordia Seminary seized the present economic downturn to take giant steps into delivering 21st century theological education. When that future comes, our ‘refined’ Concordia Seminary will be fulfilling its mission in the ‘new normal,’ not lost in the new realities. For now, however, the Lord is allowing us to be painfully refined.”
The early retirement offer is the first step in reducing the personnel expenses of the Seminary, but other personnel reductions will most likely be necessary. Expense cuts are also being made in other areas of the Seminary’s operations. Delaying some maintenance projects, freezing salaries, and tightening program budgets will contribute cost savings to help offset the anticipated deficit.
Dr. Meyer met with faculty and staff members on March 11 to explain the actions of the Regents. “I am not happy with this unexpected situation,” he said, “but by taking these actions at this time, the Regents are seeking to avoid accumulating debt and other consequences down the road that could jeopardize the Seminary’s mission.”
The Seminary is nearing the final year of its How Will They Hear? Campaign that, to date, has “been blessed with so many gifts from so many kind friends and supporters,” said Dr. Meyer. “We pray the Campaign is successful, despite the current economic conditions, so that the Seminary can regain a strong financial position for the important work it is called upon to do.”