To Study and Recommend Improvements to the Process to Consolidate, Relocate, Separate, or Divest a College or University
RESOLUTION 7-04
Overtures 7-19; L7-26 (CW, pp. 373–374; TB, p. 33)
WHEREAS, Recent court decisions and policy pronouncements by federal and state governments threaten the ability of religiously affiliated institutions, such as the Concordia University System (CUS) institutions, to exercise their God-given rights to practice their faith, by threatening to remove tax exempt status, accreditation, and other accommodations of religious liberty. Such threats if implemented could have an immediate, adverse, and material financial impact on the continuing viability of the CUS institutions; and
WHEREAS, These threats and other rapid changes occurring in the higher education environment may require a more timely response than has historically been provided under current Bylaw procedures for the consolidation, relocation, separation, or divestment of colleges and universities, given the increasing operational complexity of these institutions since the time when the current process was established; and
WHEREAS, The process addressing the matter of consolidating, relocating, separating, or divesting a college or university first appeared in the 1969 edition of the LCMS Handbook, and has since been revised six different times, most recently in 2010; and
WHEREAS, The current wording is that “the Board of Directors of CUS shall… have authority, after receiving the consent of the Board of Directors of the LCMS by its two thirds vote and also the consent of either the Council of Presidents by its two-thirds vote or the appropriate board of regents by its two-thirds vote, to consolidate, relocate, separate, or divest a college or university” (2010 Bylaw 3.6.6.5 [k]); and
WHEREAS, The time necessary to bring the current process to completion can be a years-long undertaking at a time when, in the event of catastrophic financial difficulties that may be caused by government action or other causes, millions of dollars could be at stake each term a school is allowed to continue 1 operating under such circumstances; and
WHEREAS, Closing a school according to the United States Department of Education’s guidelines for closure is estimated to result in a multi-million dollar cost; and
WHEREAS, The Board of Directors is responsible for the general management of the business and legal affairs of the Synod (Bylaw 3.4.4.3) and also serves as the custodian of all the property of the Synod as defined in Bylaw 1.2.1 (q), and has the authority and responsibility with respect to the property of the Synod as is generally vested in and imposed upon a board of directors of a corporation. It may and has delegated to the CUS powers and duties with respect to property of the Synod for which such agency of the Synod (CUS) has direct supervisory responsibility. Such delegation shall be in (is) in writing and shall be subject to change at any time … (from Bylaw 3.3.4.7); and
WHEREAS, In each instance where our institutions have experienced catastrophic financial difficulties, the corporate Synod was looked upon to reallocate millions of dollars away from other budgeted ministry activity, which is neither desirable nor sustainable, either through direct emergency funding or by increasing the historic CUS debt; and
WHEREAS, Responsible stewardship requires an updated process to deal with the foregoing risks at the lowest possible cost and with due regard to the fiduciary obligations of the Board of Directors, the CUS institution boards of regents, and the obligations of each CUS institution; therefore, be it
Resolved, That the LCMS Board of Directors with the concurrence of the President of the Synod appoint a task force, to review and, where appropriate, propose changes to the process “to consolidate, relocate, separate, or divest a college or university”, as currently outlined in Bylaw 3.6.6.5 (k); and be it further
Resolved, That the task force also contemplate the possibility of a new bylaw delineating an expedited process for resolution in the event of a ‘catastrophic financial crisis’ at a college or university; and be it further
Resolved, That the task force of nine members be comprised of the following voting members: a CUS national office staff member, the LCMS Chief Financial Officer, a CUS school president, a CUS school Chief Financial Officer, a regent of one of the CUS institutions, a member of the Board of Directors, the chairman of the Council of Presidents, and the President of Synod or his designee. The task force shall also be assisted by the Synod’s general counsel and the Synod’s Chief Administrative Officer, who shall also serve as the chairman of the task force; and be it finally
Resolved, That the final report of the task force, including any recommendations, be delivered to the LCMS Board of Directors and the President of Synod no later than nine months prior to the 2019 convention and that the report be printed in its entirety in the 2019 Convention Workbook.
[The estimated cost to implement this proposed resolution appears in the Report of the Finance Floor Committee – found in Sunday’s issue of Today’s Business.]