Atlantic Union College
Years of problems at our Atlantic Union College is now ITEM: There is a move on foot
northeastern U.S. college has re- deeply in debt, with no logical way to close down most of our North
sulted in a financial crisis of to solve its mounting problems, and American colleges, and keep only
mammoth proportions. the resulting collapse will cost the two or three of the most liberal ones
The situation has become so church millions of dollars. open. This is being openly dis-
critical that there is little likeli- cussed by church intellectuals and
hood of saving the institution. Item: As reported by us several administrators.
This report will provide you years ago, on February 2, 1990, Dr.
with a brief overview of what is Lawrence Geraty, president of At- The question remains: Which
occurring—at what will be the lantic Union College, sent a letter will be the next college to go
first of our North American col- on AUC letterhead to “the faculty down? The others are experiencing
leges to totally collapse. and staff of Atlantic Union College.” continually lowering standards and
It announced the appointment moral decay.
In the past, there have been in- of “a Roman Catholic and well- As their financial structures
stances in which one or another of known in this area” as a finan- fracture, will any lessons have
our schools of higher education was cial consultant to the college. been learned from the experience
closed for various reasons. But we Dr. Frank R. Mazzaglia, the Ital- of Atlantic Union College?
have never had one go bankrupt! ian Roman Catholic, appointed to
How could this have happened? that position, apparently did his CURRENT DEVELOPMENTS
What could have prevented it? work well.
1 - There is some evidence that ITEM: A year or two ago, At- In a public announcement,
apostasy has occurred at Atlantic lantic Union College printed a ter- AUC interim vice president for
Union College, which, when it be- rible school yearbook, in which finance, Mark Hyder, announced
came known to parents and pro- blasphemous things were printed, that, at the present time, Atlan-
spective students, caused them to too terrible to repeat here. tic Union College owes approxi-
go elsewhere. ITEM: It seemed that, year af- mately $6.5 million, and needs
2 - As several problems resulted ter year, men were trying to destroy $3.2 million “to make it to regis-
in a continuing budget deficit, es- the morals of the school, until finally tration next fall.”
sentially nothing was done to stop many of the parents and students According to AUC president,
the money drain. With few excep- gave up on the school. James Londis, projections indi-
tions, everything continued to be ITEM: Atlantic Union College cate that Atlantic Union College
business as usual. students were sent to Wooster, will “run out of cash to make pay-
3 - As the crisis deepened, in- Massachusetts, for personal intro- roll and operate the campus some-
stead of calling a halt, closing the duction into the patterns of ac- time in mid-March .”
doors temporarily, or heavily reduc- tive homosexuals. It is clear that (as Ellen White
ing staff and class offerings, dedi- ITEM: It would almost seem as instructed in such cases) the college
cated funds were dipped into for if, year after year, efforts were made long ago should have closed its
day-to-day operation of the school, to sink the finances of the school doors to stop this continual hem-
and loans were obtained for the into an unbelievable deep hole. orrhaging need for money.
same purposes. They have succeeded very well. But, just as they have repeatedly
done before, the board of trustees more borrowed money and dedi- for interest and principle pay-
of the college have once again vowed cated funds are used to keep it in ments on this debt, during the
that they are committed to keeping existence. 1995-1996 school year. At this
the school open. They are willing When there is a problem, or- rate, Atlantic Union College will
to take down the finances of the ganizations like to appoint a com- take the entire Atlantic Union
denomination, if need be, so they mittee to study the matter. What down into the black hole within
can keep the doors of that dying they need to study is the Bible a few years.
school open. and Spirit of prophecy. Then they There are approximately 70,000
As a desperate measure, the would know what to do. members on the books of the At-
AUC board of trustees voted on The AUC board of trustees con- lantic Union Conference. There is
January 22, 1996, to invite An- sidered the matter significant no way the problems at the school
drews University to prepare a pro- enough, that it has formed two com- can be solved, unless those mem-
posal for merger with AUC. mittees: one, to explore further the bers get serious about the financial
This is partly a confidence- possibility of getting Andrews Uni- drain,—and take hammer and nails
building tactic. If Andrews Univer- versity to come to its rescue and, and board up the doors of the
sity will agree to such a merger, At- two, to consider other possible ways school.
lantic Union College might be able to solve the financial problem. ITEM: Money from Adventists
to swing more loans from denomi- If Atlantic Union College suc- in more than seven states, one is-
national headquarters and secular cessfully makes it to May 31, land, and six local conferences is
banking institutions to carry on its 1996, the total indebtedness will, flowing into AUC (Bermuda, Con-
day-to-day operations. AUC needs by that time, have reached $11 necticut, Maine, Massachusetts,
financial credibility in order to get million. The administration of the New Hampshire, New York, Rhode
more loans approved. school has announced that it in- Island, and Vermont).
But it is also partly a delaying tends to do that. ITEM: More than 20% of the
tactic. By diverting everyone’s atten- But the facts are that, as of tithe funds from the Bermuda,
tion to a possible later merger, the January 1996, AUC owed ap- Greater New York, New York,
constituency is less likely to de- proximately $6.5 million—and Northeastern, Northern New En-
mand that the school be shut down that it would spend an additional gland, and Southern New England
immediately. The letter of intent, $3.2 million to finish out the Conferences is poured each
said it this way: “June 1996: The school year and “make it to reg- month into the school. AUC says
AUC constituency decides about the istration next fall.” Thank you; keep sending it. To date,
merger; July 1996: The AU Board So, at this moment, the school there is no indication that the
of Trustees gives final approval to does not owe $11 million, but it church members will not keep
the merger plans.” This delay will will in a few more months. sending it.
enable the administration of Atlan- In February through May, it ITEM: Atlantic Union College
tic Union College to keep dumping will go through $3.2 million in has one of the highest levels of sub-
more money down the hole. That loans and dedicated funds. That sidy of any Adventist college in the
money will never be recovered. is $800,000 a month. world: $2.2 million. That amount
As far as Andrews University is On that basis, we should ex- of money goes straight from the
concerned, it has already clearly pect it to consume an additional conferences to the college.
refused to consider providing any $7.2 million, plus summer 1996 By way of comparison, South-
financial aid to the struggling col- expenses—for the 1996-1997 ern College is a much larger college,
lege. school year! in a much larger union; yet it re-
Why then should anyone wait Is Dr. Frank R. Mazzaglia, the ceives one third as much money
breathlessly for a possible summer Italian Roman Catholic financial from its constituent conferences.
merger to take place? It will not consultant, still on the payroll at ITEM: By trying to keep AUC
happen. Especially in light of the Atlantic Union College? alive for the rest of the school
fact that Andrews University has ITEM: The $11 million debt, by year, the North American Division
already declared it will not enter May 31, will be equal to the listed leadership is setting a dangerous
into a merger until Atlantic Union assets in the “plant fund” of the col- precedent. What will they do
College’s debts are totally paid! lege. This is what all the buildings when the next college in the U.S.
And, in view of the facts, that time and furnishings of the college would or Canada starts to go under?
will never come. be worth, if (if) anyone wanted to ITEM: No one has presented a
Yet the months pass by, the pay top dollar for the whole thing. practical way to keep the school
school remains open, and more and ITEM: $900,000 is being spent open for the rest of this year or
The Atlantic Union College Crisis 3
all through the next. Yet the Baptiste, Crumley, Osborn, and nancially, the doors should be
board, the administration,—and Prestol), and the board, faculty, and closed.
now the constituency—seem to do staff of Atlantic Union College. Londis also pointed out that
so anyway. A request was then made by the there was a high default rate on stu-
ITEM: Andrews University has chair for the agenda to be voted on dent loans, and enrollment drops
insisted that the merger could not and approved. (As you will recall in were decidedly below earlier pro-
possibly take place until the 1997- our analysis last year of the Utrecht jections.
1998 school year, and that all the Session, by initially approving the The administration had been
debt held by AUC must be removed predetermined agenda, nothing else criticized for their recent decision
before it will do so. With such prac- can be discussed or brought up at to go ahead with the dining com-
tical thinking, on the part of AU, the the gathering.) mons project, but he said that it
merger will never take place. The agenda, with the inclusion would begin in March only because
of an “alternate proposal,” was ap- the major donor had threatened to
ATLANTIC UNION COLLEGE proved. It was time for the consid- withdraw his money if it was not
CONSTITUENCY MEETING eration of hard realities to com- done. But Londis did not say how
mence. much money the college would be
On March 10, 1996, the At- First, James Londis, presi- putting into that construction.
lantic Union College constitu- dent of Atlantic Union College, In his presentation, Londis then
ency met at the South Lancaster presented a review of historical provided more sorry details of this
Village Church in South Lancas- facts leading up to the present deepening debt.
ter, Massachusetts, to discuss situation, commented on the cri- In spite of the fact that they were
the problem and arrive at solu- sis that now exists, and provided warned that the school was essen-
tions. a glimpse into the future. tially bankrupt before the 1993
They discussed many as- Londis noted several underlying school year began, they went ahead
pects of the crisis, and decided problems common to many schools with it.
to appoint more committees and at this time: Within the next few Nearly a year later, in July
postpone the matter until a later years, 400 to 600 small colleges in 1994, the college was deeper in
time. America will close. Tuition charges debt than ever. Instead of shut-
have gone so high, that many stu- ting the doors, they asked the
As you know, a “constituency dents will not attend if they are North American Division for $2
meeting” is a gathering of delegates raised anymore. Every college has million so they could get through
from the various churches, as- sent agents to beat the bushes, and the coming school year. This re-
sembled for specific purposes. prospective students expect schol- quest was granted by the 1994
This one was chaired by Ted arships to attend. Annual Council, even though it
Jones, president of the Atlantic Then there is the problem that, was against NAD working policy
Union. of the 430 students currently at- for a denominational institution
The meeting opened with a de- tending AUC, 140 of them have zero to borrow money for operating ex-
votional by A.C. McClure, president base income for financial aid pur- penses. The loan was arranged
of the North American Division. The poses. Add that to the fact that 80 through the Atlantic Union Revolv-
occasion was considered important percent of all the families in the At- ing Fund.
enough that he be present. lantic Union have incomes below As a condition in granting the
He said that, when the disciples $40,000 a year. loan, a fund-raising committee of
tried to cross the sea of Galilee in a At this point in his presentation, high-placed church officials was
small boat in a terrible storm, they Londis mentioned the revealing appointed to solve the problem.
were doing the right thing but their fact that, before he was hired in In his speech, Londis said the
efforts were fruitless. Then, when 1993, an auditor’s report had committee did not hold its first
help arrived (Jesus on the water), shown the college already to be meeting until seven months later!
they were afraid to accept it. With “essentially bankrupt.” At that (After Londis was finished speak-
this enigmatic opening, the meeting time, he said, AUC was already $3 ing, the chairman of the meeting—
began. million in debt. Ted Jones, Atlantic Union presi-
Important guests were next in- —Why then did they not close dent—said the fund-raising com-
troduced. This included Robert J. the school down in 1993? To do mittee did not convene earlier be-
Kloosterhuis of the General Confer- so would be to fulfill the command cause several of its members were
ence, four leaders from the North given in the Spirit of Prophecy: committed to raising funds for
American Division (McClure, When a school is not succeeding fi- other institutions, and it would have
been a conflict of interest for them In the State of Massachusetts, Blake then read a prepared
to help AUC! —Why then did they if a payroll is missed, employees auditor’s statement, which
not speak up when they were ini- can file a complaint and receive sounded very mournful and of-
tially asked to serve on that com- treble damages. In addition, if that fered little hope of better things
mittee, since they were not qualified happened, they would lose accredi- to come. Here is the concluding
to put their heart into it? tation and government student aid. paragraph in his statement:
Continuing on with Londis’ pre- So they decided to brave through “The accompanying financial
sentation, he next related how, in the 1995-1996 school year. Noth- statements have been prepared, as-
the fall of 1994, another consultant ing mattered anymore; somehow suming Atlantic Union College will
was hired to solve the college’s they had to get through the school continue as a going concern. As dis-
problems (you will recall the earlier year. cussed in Note 17 about the finan-
consultant in 1990, who was a So they began dipping into the cial statements, the college has suf-
“well-known” Roman Catholic. Per- endowment to make payroll. fered recurring losses from opera-
haps he was still in the employ of Three times they did this, until it tions and has a net capital defi-
the school by then; we do not know). was essentially exhausted. ciency that raises substantial doubt
The latest consultant said they Then they began selling most about its ability to continue as a
should change the academic struc- of the houses the college owned. going concern. Management’s plans
ture, reduce majors, cut staff, and At some point in the fall, the in regard to these matters are also
get more paying students. Another three vice presidents threw up their described in Note 17. The financial
committee, appointed to check this hands and quit. statements do not include any ad-
out, came to the conclusion that it Some help came from alumni, justments that might result from the
would save $700,000 in savings— but most wanted assurances that outcome of this uncertainty.”
but that would not be enough. By workable solutions were forthcom- And here is Note 17, which
the time that committee had ing. discusses the plans of the college
brought in its report, it was time Londis said that, at the present to solve its own problems:
to decide whether or not to hold time, the faculty and staff were try- “Note 17: The college has suf-
the next school year. (For the un- ing to figure out ways to finish out fered several years of declining en-
initiated, this is a decision which the current school year. But, un- rollment and depletion of working
must be made in the spring, before daunted, they wanted to plan for capital and has reached a point
teachers’ contracts are renewed and another school year—that of 1996- where merger and/or a necessary
the fall schedule and bulletin is pre- 1997! infusion of working capital coupled
pared and mailed out.) He said they had considered with a major restructuring has be-
At that pivotal juncture, union further downsizing in an effort to come immanent. Management has
leadership, Londis said, urged balance the budget. But it would be concrete options of either merger or
them to go ahead with another so severe they would lose students. refinancing currently before them.
school year. So faculty contracts Londis concluded by noting that However these options will require
were signed, and preparations it had been recommended that he time to consummate and it is un-
made for the 1995-1996 school initiate talks with Andrews Univer- certain, at the current level of op-
year. sity about the possibility of merg- erations, how long the college can
A strong student recruitment ing with AUC. continue to operate without an im-
campaign was started. Both fac- The chairman (Ted Jones) mediate infusion of working capi-
ulty and students took part, and then spoke, and mentioned that tal.”
447 students signed up for that N.C. Wilson told him that AUC So, in the above two paragraphs,
fall. But the extra scholarships, should not expect any money from you find the epitaph of the school.
used to persuade them to attend, fund-raisers until its survival was Aside from reading his report,
cost the school an additional clear. the auditor said little. But he did
$500,000. The constituency then voted say this: “Yes, the college is bank-
By this time, AUC was living to approve Londis’ report, and rupt. You’re out of students and
from month to month. In August Mark Hyder, interim vice presi- out of money.”
1995, the first payroll crisis oc- dent for finance at the college, The constituency voted to ac-
curred. They should never have arose. He began by introducing cept the auditor’s report.
agreed to hold the 1995-1996 Steven Blake, a partner with Cline,
school year; because, having done Brandt, Kochenower & Co., who Continued on the next tract
More WAYMARKS - from —
so, they were obligated to go had carried out an independent
through with it. audit of the college books. HCR 77, BOX 38A - BEERSHEBA SPRINGS, TN 37305
Atlantic Union College
Continued from the preceding tract in this series tried that before—and venders were were Andreasen’s remarks.)
now dealing with them on a cash Then, even before the “concept”
Next, Mark Hyder, interim vice only basis. Several bank loans had was told them, Londis moved that
president for finance, spoke. He been declined, he noted. it, the concept, be officially accepted.
compared and contrasted the finan- Hyder concluded by discuss- There was a motion and it was sec-
cial report which the auditor had ing the strait jacket that govern- onded. He then introduced Dr.
given them: ment student grants and loans Andreasen, from Andrews Univer-
In just five years, the operat- had placed them in: sity.
ing loss of AUC had gone from The default rate on the nursing Andreasen made it clear that
$39,000 to $1.9 million. During student loan program is too high; Andrews University was not eager
that time, the enrollment had yet, because they started with it at to rush into a merger, but was will-
dropped by 174 students. the beginning of the year, they were ing to consider one. He said they
When the 1994-1995 school locked into it till the end of May were only participating in this con-
year ended (on May 31, 1995), the 1996. stituency meeting because they were
school debt was $6.2 million. Of Other default rates were also asked to do so.
that amount, $1.6 million of it was high, placing other loan programs Andreasen said there were two
current, and the rest long term. Of in jeopardy. He said that, each year, possible ways Andrews University
the $6.2 million, $3 million was $800,000 in federal student loan could be involved: The “easy way”
owed to the Atlantic Union Re- funds, and $300,000 to $400,000 would be for Andrews to be consult-
volving Fund and $2.4 million to in Pell grants come from govern- ants. He said that, if he were a
the General Conference. ment agencies. If an audit report consultant, he would tell AUC to
From the end of May 1995 to was to conclude that AUC was not get rid of the debt, cut the bud-
December 31, 1995, another succeeding, they would have to post gets, recruit like mad, and get
$1.7 million had been lost. Hyder a cash bond to refund the federal better management. But, he
said the college had only made it programs; that is, if the semester added, these suggestions con-
this far through the current school was not completed. flicted with one another: Cost-
year by emptying out the endow- The constituency responded by cutting works against recruiting,
ment—and that was now all gone! voting to approve the treasurer’s good management would cost
In spite of that ongoing looting of report. more money, cutting the budget
dedicated funds, the school had Dr. Londis then arose to intro- would eliminate students.
nearly missed its August, Novem- duce Dr. Niels-Erik Andreasen of The “hard way” would be a
ber, and December payrolls. Andrews University. Londis said merger which, he said, “may not
Somehow, they managed to ob- that, in response to the AUC re- even work.” Perhaps it could take
tain a local bank loan, using the next quest to consider a merger, the the form of a “branch campus” of
semester’s revenue as collateral! AUC board of trustees had de- Andrews University, he said, headed
Then Hyder told the hushed vised a “concept document,” by a dean.
audience that now, as he spoke, the which it offered to AUC. Andreasen said there were
school [March 10, 1996] had less Londis, in turn, was now ask- probably many parents in Atlantic
than 10 days of working capital and ing that the constituency consider Union Conference territory who
did not have enough money to meet what Andreasen had to say, and would like a nearby college, and it
their next payroll on March 21. approve the concept document. already had a talented faculty. He
In addition, he said, they could (Oddly enough, the concept docu- suggested the basic teaching areas,
not let payables (30-day accounts) ment was never distributed to the which would draw the most stu-
build up again, because they had constituency; all they had to go on dents, should be found and kept.
This would enable the college to until the 1997-1998 school year. He great hopes that lots of people will
keep a four-year degree program. concluded by saying that “small campaign for great amounts of
But, he admitted, after all this rural college campuses are not a hot money to save the college. (“The top
time, no one still seemed to know commodity,” and that “if you come 50 donors will raise $100,000 each,
what those core areas should be. up with an idea so I can go home the next 50 will raise $75,000 or
(Throughout the meeting, no one and mind my own business, I would more, the next 50 will raise $50,000
seemed to know what degree pro- be a happy man.” or more, and the next 50 will raise
grams should be kept and which By this time, one would imag- $25,000 or more.”)
ones should be dropped.) ine that someone in the audience At one point in Kitching’s pre-
Andreasen said that, in some would arise and move that Atlan- sentation, he quoted someone as
programs, students could start at tic Union College be closed down saying, “Insanity is doing the
AUC and finish at AU. at the end of the current school same thing over and over and
All support services (account- year—but no one was suggesting expecting different results.”
ing, financial aid, records, student it. They needed to tack that one
accounts) would be transferred to It was now time for the ques- on the wall at this meeting, and
Berrien Springs. Extensive library tion and answer period. distribute copies to all the del-
changes would have to be made. Two or three comments were egates to take home and read to
Deep cuts would have to be ef- expressed from the audience, and the church members.
fected in classes and services, and then a nondelegate, Tony Romeo, But still no one arose to move
not all of the buildings would be arose to speak. Seeing him, imme- that the school be closed. The on-
used. diately the chairman jumped up going drain of millions was a blight
As for finances, Andreasen to cut him off, and asked whether on the Union, the General Confer-
said maintenance and deprecia- nondelegates should be permitted ence, and the whole church.
tion would have to be fully funded to speak. But the constituency voted Instead, they were trying to
before Andrews University would that they could have 45 minutes to devise ways to pour in more
consider entering into a merger. speak. money, so it could be kept open
Yet Andrews had not been able to Romeo then pled with the con- for yet another school year!
devise a way that the AUC budget stituents to help financially, and At one point, someone asked
could be balanced. said he would help also. But he said how much money the Union sent on
Another barrier would be the the improper activities at AUC must to the North American Division and
accrediting agencies. The North be stopped. We do not know who the General Conference. Someone
Central Association of Colleges Romeo is, but he must be a man of replied 1 or 2%. Then someone else
and Schools would have to exam- deep concerns. suggested that this figure be re-
ine and approve all the details, Then the chairman (Ted Jones, duced, and the money be given to
as well as other professional ac- the Union president) deflated the the college instead.
creditation organizations, such as idea that anything needed to be At this, Al McClure arose and
the America Association of Colleges changed in the activities at the col- said that money due to one organi-
and Schools of Business. (Do not lege, with the remark, “Tony always zation cannot be given to another.
forget that our schools, their fi- has ways of venting his spleen.” When the suggestion was again
nances, curricula, and operation The meeting was adjourned made later, the chairman said it was
are controlled by the world.) for lunch. difficult to change “the laws of the
Andreasen declared that, as When it reconvened at 2 p.m., Medes and Persians.” At this, some-
far as Andrews University was Will Kitching, a CPA who was one else arose and said, “It is time
concerned, the whole idea of a leader of the alumni ad hoc com- to move the Medes and Persians out
merger was still in the discussion mittee, presented the “alternative and bring in the Greeks.”
phase. He said, if it were to take proposal.” Too complicated to dis- But still no move to close the
place, it could not possibly begin cuss in detail here, it is keyed to failing school at the end of the
current school year. It was losing
While preparing this, a friend ing coerced and did not want to go.
shared her experience. She was at- They felt they did not have a prob- over a million dollars a year.
tending AUC in 1980-1981, and was lem and should not have to go there. Then someone proposed that
told by several concerned theology She was told that, as a result, some an offering be taken up right then
students that they were being pres- had become confused, when before to save the school. This was done
sured to go to Wooster (c. 20 miles they had not been. This did not help, and the 100-odd delegates and 150-
away) and attend a homosexual sup- since she was told there were homo- odd spectators gave about $9,000.
port group. They said they were be- sexuals in the men’s dormitory. A significant point was made by
The Atlantic Union College Crisis 7
Stennett Brooks, president of tic Union have other things to do March!
Northeastern, the regional confer- on Sunday, so they urge the church So this fateful March 10 meet-
ence in the Union. He said that his members to hold business meet- ing adjourned.
conference gave half its subsidy to ings on the holy Sabbath. How Before AUC finally goes down,
Oakwood, and that 100 of their stu- can anyone expect God to bless it will take even more church
dents were at AUC and 200 or 300 such efforts to save the college? funds down with it. Henceforth,
were at Oakwood. This is signifi- Instead of someone declaring, they will all be church funds. No
cant, in view of the fact that his con- “Why wait longer to close it down? outside banking institution will
ference has 45,000 of the 75,000 There is no money left!” Alvin Goul- any longer lend to Atlantic Union
members in the Atlantic Union. — bourne, Union secretary, arose to College.
So three fifths of the church mem- protest that the forthcoming meet-
bers in the Atlantic Union give ing really ought to be postponed, so CONCLUSION
only half their subsidy to AUC and the college would have more time.
send most of their students else- More time for what? In school year 1995-1996
where. Then Al McClure arose and alone, $4 million will have been
The above paragraph alone re- spoke a few words of common lost by the college. AUC will
veals that the Atlantic Union does sense: probably go through an addi-
not have enough participating Three issues remained to be tional $5 to $6 million in church
church members to effectively sup- solved, he said: (1) Where to get funds next year. Then they will
port its own college. the $3.2 million to finish the hold another constituency meet-
Elder Griffin, of the Greater school year. (2) A workable plan ing, take up a $9,000 offering,
New York Conference, noted that to financially get through the and vote to appoint more com-
541 Adventist students living in the 1996-1997 school year. (3) A long mittees and hold more meetings.
Union were currently attending term plan which would keep the
other Adventist colleges. school in the black. But many are hopeful that An-
Elder Malcolm, of the Northern According to the discussion drews University might enter the
New New England Conference, said that day, said McClure, both the merger proposal after all, and
that, at current debt levels, it merger plan and the independent somehow, magically, thus solve
would take 12-15 years to pay off continuation plan—only dealt AUC’s financial problems. We are
the debt. That, of course, is as- with the third aspect: the long told that the talk just now is about
suming no more debt was in- term plan. preparing a “comprehensive
curred. Another little detail which the plan,” which can be presented to
At this point, the vote was called delegates overlooked: By the end of a June constituency meeting.
on a motion to try to work toward a March, the administration of the It is of interest that Londis did
merger with Andrews and at the school must decide whether or not not even attempt to present a plan
same time continue with efforts to to hire teachers for the next school for how to keep the school open
keep the school independent. It year. As soon as that was done, the next year. No one else did either.
passed 66 to 33. college would be locked into an- No one budgets for an operat-
Still no one stood up to move other school year! Teaching con- ing loss, yet that is what AUC has
that the school be closed. tracts were one of the largest single every year—massive ones. What is
The chair then called for a expenses. Once they were issued, wrong? Examining the financial
special Union constituency meet- another school year was certain. reports, one finds that both rev-
ing, to be held on Sabbath, March Yet the constituency meeting enues and expenses remain es-
31, 1996, “to discuss this fur- accepted Ted Jones’ recommen- sentially the same. The problem
ther.” dation to stall any constituency is that, each year, the projected
Church leaders in the Atlan- decisions till the very last day in income is always set far too high.
It is assumed that lots of students
Londis said that the president situation keeps worsening. will attend the college; and, each
of Union College, in Lincoln, Ne- In a recent talk to the students year, only the same smaller num-
braska, had already discussed the and faculty of Pacific Union College, ber actually enroll.
option of merging with Andrews be- Frank Knittel, of La Sierra Univer- For example, in the pre-written
fore Atlantic Union College began sity (and former president of South- budget for the 1995-1996 school
a dialogue with Andrews on that ern College), called for the elimi- year, the expenditures were pro-
subject. Other colleges are also nation of all but two or three Ad- jected to be less than the expenses
having problems. Gradually the ventist colleges in North America. by $400,000! Each year it was as-
sumed in advance that there would ticed. The managers must guard ter, to close the school until the
be a very large increase in students. carefully every point, that there may mangers learn the science of con-
Year after year, this grossly be no needless expense, to bring a ducting it on a paying basis.”—6
overestimated amount of rev- burden of debt upon the school.”— Testimonies, 211.
enues led all concerned to ap- 6 Testimonies, 208. “Properly increasing the tuitions
prove the reopening of the school “If our schools are conducted on may cause a decrease in attendance,
next fall. right lines, debts will not be piling but a large attendance should not be
Probably the most radical so- up.”—6 Testimonies, 209. so much a matter of rejoicing as
lution to cutting the costs would “We must heed the instruction freedom from debt.”—6 Testimo-
require eliminating 18 teachers given, for we are nearing the end of nies, 211.
and 10 support personnel. Yet time. More and more shall we be “It would be far better to let the
that would only save $600,000 a obliged to plan, and devise, and many patrons of the institution
year—which is not even half the economize. We cannot manage as if share the expense than for the
amount needed to close the gap. we had a bank on which to draw in school to run in debt.”—6 Testimo-
What should be done? It is ob- case of emergency; therefore we nies, 212.
vious: Close down Atlantic Union must not get into straitened places. “Methods must be devised to
College! There is simply not enough As individuals and managers of the prevent the accumulation of debt
money nor students in the Atlantic Lord’s institutions we shall neces- upon our institutions. The whole
Union to solve the problem. sarily have to cut away . . and bring cause must not be made to suffer
Next, having closed down the our expenses within the narrow because of debt which will never be
college, then apply the conference compass of our income.”—6 Testi- lifted unless there is an entire
subsidies—toward vigorously ser- monies, 209. change and the work is carried for-
vicing of the current debt. As soon “The financial management in ward on some different basis.
as it is paid, the $2.2 million in sub- some of our schools can be greatly “Let all who have acted a part
sidies could be used to give more improved. More wisdom, more in allowing this cloud of debt to
than half the students, now at AUC, brain power, must be brought to cover them now feel it their duty to
full-tuition scholarships to An- bear upon the work. More practi- do what they can to remove it.”—6
drews! It would even pay for buses cal methods must be brought in to Testimonies, 213.
to carry them there! stop the increase of expenditure, “As church schools are estab-
which would result in indebted- lished, the people of God will find
SPIRIT OF PROPHECY ness.”—6 Testimonies, 210. it a valuable education for them-
COUNSEL “When the mangers of a school selves to learn how to conduct the
find that it is not meeting running school on a basis of financial suc-
To our knowledge, not one of expenses, and debts are heaping cess. If this cannot be done, close
the following Spirit of Prophecy up, they should act like levelheaded the school until, with the help of
statements was quoted at the businessmen and change their God, plans can be devised to carry
constituency meeting. In fact, methods and plans. When one year it on without the blot of debt upon
we do not know of any Scrip- has proved that the financial man- it.
tural statements quoted there. agement has been wrong, let wis- “Men of financial ability should
dom’s voice be heard. Let there be look over the accounts once, twice,
“That our schools may nobly a decided reformation.”—6 Testi- or thrice a year, to ascertain the true
accomplish the purpose for which monies, 210. standing of the school and see that
they are established, they should be “Debts must not be allowed to enormous expenses, which will re-
free from debt.”—6 Testimonies, accumulate term after term. The sult in the accumulation of indebt-
207. very highest kind of education that edness, do not exist. We should
“In the erection of school build- could be given is to shun the incur- shun debt as we should shun the
ings, in their furnishing, and in ev- ring of deft as you would shun dis- leprosy.”—6 Testimonies, 217.
ery feature of their management the ease. When one year after another
strictest economy must be prac- passes, and there is no sign of di- There are answers in God’s
ticed.”—6 Testimonies, 208. minishing the debt, but it is rather Word to man’s problems.
“Not only for the financial wel- increased, a halt should be called! — Vance Ferrell
fare of the schools, but also as an “Let the managers say: ‘We
education to the students, economy refuse the run the school any longer
should be faithfully studied and unless some sure system can be More WAYMARKS - from —
conscientiously and diligently prac- PILGRIMS REST
devised.’ It would be better, far bet- HCR 77, BOX 38A - BEERSHEBA SPRINGS, TN 37305