SC okays synod debt consolidation
Filed Under: BME, Budget, Finance, Ministerial Education, MLC, MLS, Prep Schools, SC, Synodical Council
At the Synodical Council meeting Nov. 2-3 in Milwaukee, Wis., a proposal was approved to consolidate the synod’s four debts, totaling $22.4 million, into one single debt.
The move helps reduce confusion over the variety of interest rates and a feeling of inequity—a feeling among some that the Board for Ministerial Education was carrying a disproportionate share, $15.1 million, of the debt load. Now the entire debt will be consolidated into one line item in the synod’s general operating budget.
Even though all but $7 million of the debt is from internal borrowing from synod special funds, the loans must be paid back to honor donor intent.
The four debts are as follows:
- $7.3 million—for costs associated with the amalgamation of Dr. Martin Luther College and Northwestern College, and Martin Luther Prep School and Northwestern Prep in 1995.
- $7.3 million—for operational borrowing for 2001-03.
- $6.9 million—for the boiler house at Martin Luther College in New Ulm, Minn., and the science wing at Michigan Lutheran Seminary in Saginaw, Mich.
- $900,000—for a dormitory at Luther Preparatory School in Watertown, Wis.
The consolidated debt will be repaid over 10 years at four percent interest. The annual payment will be $2.7 million, an amount which will result in $550,000 in savings for the 2008-09 fiscal year budget.
