Financial Factors

 by:  John McGlothlin

Below are some financial factors to consider with respect to the upcoming Disaffiliation Vote at Bethany United Methodist Church.   

FACTORS: 

1. Required Payment: Should the church vote to disaffiliate, BUMC would be required to pay the Rio Texas Conference an approximate sum of $467,000 to cover apportionments and pension liabilities before the disaffiliation can be finalized. The budget for 2023 is already very tight and does NOT include this payment amount. That’s a big additional expense and the source of funding is not clear.
   
   
2. Property Debt: As of 12/31/22, the total debt owed by BUMC on the property was $4.7M. If the church disaffiliates, the disaffiliated church must assume this debt.
   
   
3. Property Valuation: The BUMC church property was recently appraised for insurance purposes at $27.8M. There are, obviously, many factors involved in determining this value. However, the number “puts us in the ballpark” of the property market value.
   
   
4. Property Ownership: Under the denomination’s “trust clause” which has been in effect since the very early days of Methodism, local United Methodist church property and assets are held “in trust” for the benefit of the entire denomination. If Bethany stays in the UMC, the control of the property remains as it is now.
   
   If BUMC chooses to disaffiliate, the disaffiliated local church would assume the debt described in 2. above, but then the local disaffiliated church gains outright ownership of the entire property without restriction. If the disaffiliated church subsequently decided to sell some or all of the property, the disaffiliated local church would be the sole beneficiary.
   
   

Financial Commentary:

1. In a church crunched for funds, why would we spend an additional $467K to buy our way out of the UMC? Wouldn’t these funds be much more appropriately spent on staff salaries, needed repairs, new programs or mission work?
   
   
2. The church currently has equity of approximately $23,100,000 in our church property ($27,800,000 appraised value less 4,700,00 debt).
   
   If the property were sold today for the appraised value, someone gets $23,100,00 of net proceeds. This equity has been built over our 47-year history by many faithful and generous United Methodists who were contributing to grow a local United Methodist Church. If we continue as a UMC, this bounty created by our faithful forefathers and mothers will be enjoyed by many future generations of United Methodists.
   
   
3. On the other hand, if the church should disaffiliate, all of this equity built over several generations would go without restriction to the fraction of the current congregation that wants to leave the UMC. Put another way, the disaffiliating church would effectively receive a gift of $23M with which to launch the new independent or semi-independent church with a very uncertain future.
   
   We recommend saying “No” to disaffiliation!