# LCMS Convention Workbook_St. Louis Missouri_2007_S104
# Machine transcription, uncorrected — CHI Digital Archive (demonstration)

104 SYNOD REPORTS

LCEF, and as of this date there are no borrowings against the line-
of-credit.

As mentioned previously in this report, corporate Synod must
continue to review its operations to ensure maximum efficiency
and cost containment. The Synod risk-management program is a
good example of effective cost containment. During the last trien-
nium, Synod’s insurance cost increases have been significantly
lower than the general insurance market. This was accomplished
by self-insuring certain lines of coverage, increasing deductibles
and retentions, and having favorable loss experiences. Currently, a
captive insurance company is being considered in an effort to lower
insurance costs even further. Also, Synod’s Risk Management De-
partment is attempting to lower the districts’ insurance costs by de-
veloping a master program for all districts.

As corporate Synod faces continuing financial challenges, it is
important that its assets be reviewed to determine that they are used
in carrying on ministry. Further, the economic impact to corporate
Synod of conducting the ministry should be analyzed. During the
last triennium, an appraisal was obtained for KFUO FM, a classical
music station that is owned and operated by corporate Synod. The
station serves the St. Louis listening area. As it appeared that min-
imal ministry was performed by KFUO FM, and the economic im-
pact of corporate Synod’s continuing ownership was determined to
be $2 million of annual lost opportunity, it was recommended that
KFUO FM be sold. This recommendation was rejected by the cor-
‘porate Synod Board of Directors. This asset, as well as all other as-
sets of corporate Synod, need to be continuously reviewed to
ensure proper stewardship.

This triennium has included many fiscal challenges to corpo-
rate Synod. Corporate Synod has been able to meet these chal-
lenges without incurring debt. However, we have depleted
corporate Synod’s cash and investment reserves. Corporate Synod
continues to have substantial net worth but minimal cash and cash
equivalents. Therefore, if the challenges of operating with reduced
revenues continue, it will be necessary to reduce national ministry
activities, incur debt, and/or sell assets in order to achieve a bal-
anced budget.

It has been an honor and a privilege to serve the church during
this last triennium. In serving, I have worked and partnered with
talented and committed brothers and sisters in Christ. If it be the
will of the convention, I look forward to continuing my service to
Him.

Thomas W. Kuchta, Vice-President-Finance—Treasurer

R7-04
LCMS Board of Directors

Introduction

The Lutheran Church—Missouri Synod has determined that:
“The Board of Directors is the legal representative of the Synod. It
is the custodian of all the property of the Synod, directly or by its dele-
gation of such authority to an agency of the Synod. It shall exercise su-
pervision over all the property and business affairs of the Synod except
in those areas where it has delegated such authority to an agency of the

Synod or where the voting members of the Synod through the adoption

of bylaws or by other convention action have assigned specific areas of

responsibility to separate corporate or trust entities, and as to those the

Board of Directors shall have general oversight responsibility as set

forth in the Bylaws” (Constitution XIF2).

The Board of Directors during the past triennium has not only
been aware of that responsibility, but with due diligence has striven
to fulfill it. It has not been easy because of numerous incidents and
challenges confronting it, but the Lord of the Church promises to
be with His people and indeed, that promise has once again been
fulfilled. Some of the same items that were in this report in 2004

2007 Convention Workbook

appear again. Some matters are still in the process of being re-
solved, but have not yet reached completion.

Funding of National Synod

The decline of support for the unrestricted part of the budget
has continued. (This in no way implies that God’s people are no
longer supporting the Synod. Millions of dollars are given each
year in the form of restricted [donor chooses specifically where/
how the gift is to be used] gifts.) The amount of gifts coming from
the congregations through the districts to national Synod (unre-
stricted) in this current fiscal year is about $20 million. This is a
decline of about $10 million since the late 1980s and early 1990s.
The districts have received less from the congregations and more
has been retained and used within the districts. Thus, the effect of
the domino process is felt at the national level. Dr. Thomas Kuchta,
Chief Financial Officer (and at that time acting Chief Administra-
tive Officer), reported to the last convention that at the International
Center about all the cuts in personnel that could be made had been
made. If the decline continues it can only affect program. It is im-
perative that the 2007 convention take some action necessary to
resolve the problem. May the Lord of the Church give guidance
to the convention delegates as they wrestle with the recommenda-
tions of the Blue Ribbon Task Force for “Funding the Mission.”

New Chief Administrative Officer

It was reported in the 2004 Convention Workbook that Dr. Brad
Hewitt had resigned this position. At a special meeting on April 2,
2005, the Board of Directors voted unanimously to extend a call to
Mr. Ron Schultz, who at that time was serving as the LCMS Exec-
utive Director of General Services. Mr. Schultz has served the
church for his entire 24 year professional career. On May 3, he was
installed and has served faithfully since. Added to the position de-
scription for the new CAO was: “Works to enhance relationships
with the districts.” Through meetings with the boards of directors
of the respective districts, this is happening.

Seminary and University Support

It is being shared throughout the church that the Synod is no
longer supporting our secondary schools, namely the seminaries
and universities. While support comes in much different ways than
it did in the past, the statement as such is simply not true. Almost
all of the support for these institutions formerly came from Sunday
morning offerings that came from the congregation, through the re-
spective district, through the budget of the Synod, and on to the
schools. While this is not happening today, the church is still
strongly supporting the schools. Very many of the members of
LCMS congregations are giving directly to the schools, indicating
for what and how the gift is to be used (but this is still support).
The budget for fiscal year 06-07 shows that $1,511,089 is sched-
uled for pastoral education and $6,871,826 is scheduled for uni-
versity education. While it is true that most of what is given for
university education is to be used for debt service, it still is sup-
port. These two figures added together constitute about 41 percent
of the unrestricted budget. The members of the Board of Directors
would like to provide more, but there is no more available if the
other parts of the Synod are also to operate.

Legal

Legal matters have required much attention and effort on the
part of the members of Board of Directors during this past trien-
nium. While there are usually about 8 to 10 lawsuits (11 at the time
this report is being written) filed or pending against the Synod, one
— the Anderson suit ~— received considerable attention. Details of
the resolution were reported in The Lutheran Witness and Reporter
after the case was resolved in August 2006.