United Church of God, an International Association
Council of Elders Meeting Report
Friday, February 25, 2005—San Antonio, Texas

The Council began its current session today, meeting "away from home (office)" for the first time since December 2001. The historic city of San Antonio, Texas, hosts this round of meetings, with the first day's agenda filled by reports from the president and operation managers and detailed analysis of the 2005-06 Strategic Plan, Operation Plan and Budget.

Remember the Alamo!  

Chairman Clyde Kilough welcomed the group to San Antonio, noting that on this date in 1836, the Alamo (located perhaps a 20-minute walk from the meeting venue) was under siege in the early stages of Texas' battle for independence (the mission fell to Mexican General Santa Anna's forces on March 6, 1836).

Turning to the work before the group here, he pointed out that "this annual developing of the Strategic Plan, Operation Plan and Budget provides the singular most comprehensive view of the Church's work."

Mr. Kilough then introduced Church President Roy Holladay to initiate the quarterly operation reports to the Council.

President's Report  

Mr. Holladay greeted the Council and reminisced about the five years he and his wife, Norma, spent here when he was pastor in San Antonio, recalling their wonderful memories of those years.

His report took a three-year view on progress since his installation in May 2002. He organized the presentation around a) the eight mandates given to the president by the Council and b) detailing of accomplishments, projects and events.

The eight mandates are:

• Continue to promote, evaluate and improve the Christ-centered Servant Leadership Program [since renamed "Godly Leadership Program"] throughout the Church. Actions taken include presentations to the home office staff, management discussion on implementation, regular meetings of the Godly Leadership task force, presentations to all three sessions of the Leadership Training Program and Council approval of the task force report and its recommendations.
• Work with the Council, Media/Communications Committee and the Media operation manager on implementation of Internet resolutions, developing broadcast media plans and evaluating media effectiveness. Two employees, Aaron Booth and Clay Thornton, work in this area; media output is regularly reviewed; and numerous projects (most notably funding of a new media center at the home office) have been accomplished or are underway. Bids from architects on the media center project are being solicited, with the intent to see construction finished by this year's Feast of Tabernacles.
• Work with the Council, the Education/Ministerial Services Committee and the Ministerial Services operation manager to develop and execute ministerial policy. DVD and cassette tapes of sermons have been distributed; the Leadership Training Program has been in place for three years; a proposal was submitted to the Eli Lilly Foundation seeking funding for a pastoral excellence program (the request was denied, but internally-funded implementation of portions of its recommendations can proceed); and, a historical first for the United Church of God and its predecessor, the administration developed an employee retirement policy approved by the Council.
• Promote unity within the Church, ministry and home office. This has been emphasized by focusing on humility and other principles of good human relations in regular meetings with staff and the managerial team, "Compass Checks" weekly (taped for Web site distribution) and communication to Church members.
• Build the image of the Church with the general public. Several approaches have been taken here, including various means of proclaiming the gospel message and media training for home office personnel.
• Develop assessment tools for analyzing the effectiveness and efficiency of all Church projects, programs and personnel. Numerous avenues for feedback are in place, including exit surveys for the United Youth Camp program, Feast of Tabernacles and ABC. Annual evaluations for officers, ministers and all employees add to the package.
• Continue a regular presidential letter regarding the accomplishments of UCGIA. Every other week either a president's letter, home office update or letter from the Council chairman is sent out.
• Give a quarterly report and analysis on the state of the Church (to the Council). This has been done regularly.

In addition, Mr. Holladay listed a number of accomplishments or milestones from the last three years. They include:

• Initiation of the Good Works Program.
• First Education Conference for coordinators of major educational programs in UCG.
• Fiscal responsibility and financial reserves policy (the goal of 10 weeks' income operational reserve has been reached).
• Purchase of property adjacent to the home office.
• Substantial increase in number of donors and coworkers (who supply approximately 9 percent of the Church's income).
• Visits to numerous congregations in the United States and six other countries.
• LifeNets connection—developed a pattern to dovetail Church efforts with LifeNets and clear up some misunderstandings about that connection.
• Local church building policy establishment.
• Vertical Thought magazine published (changed from Youth United, which was an online magazine only).
• Establishment of a Festival planning team, comparable to the United Youth Camp team. Doug Horchak has been named coordinator.
• Hymnal supplement was developed to use with earlier hymnal.
• Development of procedures manual for home office employees in progress.
• Employee Web site developed.
• ABC library expanded with donations from two estates.
• Updated job descriptions for all home office employees.
• First Challenger II program (focusing on rock climbing) held in Arizona.

Mr. Holladay added his impression that the Church could be on the verge of a breakthrough in accomplishing God's work. The growth of the Internet is an established fact of our world, and the Church is poised to benefit from it. We currently have seven official public Web sites, in addition to two internal ones (employee and ministerial). Plans are to add up to four more within the next fiscal year. A new section in The Good News magazine, titled "God, Science and the Bible," is designed to give current information dealing with evolution, proof of the Bible and related topics. Ongoing evaluations of current approaches will add to the efforts to reach this world with the message of the Kingdom of God.

Treasurer's Report  

As he began his report, Tom Kirkpatrick wryly noted that "it is the unmet needs that command the most attention." In light of the blessings God has seen fit to send us in recent years, as treasurer he has come to appreciate the more routine nature of his reports to the Council.

Overall current levels of income and expense are within less than one percent variance from budget projections for this fiscal year to date. The contrast to the financial difficulties experienced in the late 1990s is marked. Management of cash reserves has reached the goal of 10 weeks' income. A culture of fiscal restraint has been successfully established in the Church. Proper and balanced support of needs is functioning. Employee remuneration is at reasonable levels, with a new retirement policy in place for the first time ever.

Fixed costs in the Church's budget form a large percentage of our spending, meaning that we are "highly leveraged." In terms of fulfilling the Church's commission, this is a very good development, signifying a greater ability to funnel income into opportunities that arise to proclaim the gospel message.

Two developments are worth noting separately. Health care costs for Church employees have, thankfully, been less than anticipated and budgeted for in the fiscal year to date. This can change rapidly, of course, but is a welcome development from more than one vantage point.

Secondly, the Good Works Program is at this point fully funded, meaning all requested projects are paid for, with a small surplus awaiting assignment. Thanks are due to all who have responded so generously to the needs of their brethren around the world.

Media and Communications Report  

Peter Eddington brought an impressive list of statistics to the Council on the achievements in this fiscal year. They include:

• Good News circulation remains steady at around 412,000 copies. With ongoing renewals coming in at about 25 percent, this still represents about 100,000 new subscribers every year replacing those who decide not to renew their subscriptions.
• The subscriber development area will soon test an approach new for us: sending a letter to some of our past nonrenewed subscribers to see if they would like to receive the magazine once more. This is a common practice for many magazines, but one we have never tried.
• Bible Study Course enrollment stands at just under 5,500, with almost 3,300 graduates enrolled in the 12-month sermon tape program. Another 3,200 audiotape "graduates" have requested either a subscription to World News and Prophecy, regular sermon tapes from the nearest congregation or contact with the nearest UCG pastor or congregation.
• We have passed the 3 million mark in booklets published. The Book of Revelation Unveiled, our 21st booklet, will shortly replace What Is Your Destiny? (our first booklet) as the most requested piece of literature we offer.
• Over 11,300 responses to Good News Radio have been received. We are now on satellite radio—XM 170 on Sundays at 8:30 a.m., immediately following Dr. James Dobson's program.
• The redesigned Internet sites hosted over 330,000 visitors in one recent month (January 2005). The trend is a healthy increase.
• Cable-access TV continues to pull in responses at a favorable cost per response. The Beloit-produced program has recorded its last session, with new programming tapes lasting throughout this year. In Cincinnati, plans are well underway for construction of the new media center, to be located on the second floor above the mail room. A great deal of "in front of the camera" experience by many associated in past years with the Beloit, Wisconsin, and Portland, Oregon, production teams will no doubt prove its worth shortly in the new center in the home office.
• World News and Prophecy circulation has shot to over 30,000, more than a 46 percent increase in the last year.
• Levels of coworkers and donors have reached the highest levels ever in UCG (6,178 donors and 2,689 coworkers), up 17 percent and 16 percent over last year, respectively. About 9 percent of the income of the United Church of God comes from these individuals, who are not Church members.
• Vertical Thought (the new youth magazine) has reached a print run of 17,000 (the initial run was 5,000) in less than one year. Nearly two thirds of those subscribers have no affiliation with the Church.

Ministerial Services Report  

Richard Pinelli expressed his appreciation for the "overall positive trend" in the churches in the United States (his direct area of responsibility). While there will always be challenges when dealing with human beings and human nature, the Church level of stability is good. He brought with him a long list of "strengths of the United Church of God," gleaned from U.S. pastors and regional pastors. These range from appreciation for protection of doctrinal purity and Church governance structure, to levels of accountability at all levels, to openness, to increased service opportunities across the board, to focusing on helping youth "catch the vision" of our beliefs, to honesty in financial planning and projections, to accessibility and willingness of Church leadership to listen.

He noted several updates, among them:

• About 7 or 8 transfers in the U.S. ministry are expected this year.
• Plans are to hire three new ministers this spring.
• Two pastors have requested retirement within the next two years (both will be 70 by then).
• Some changes have occurred in responsibilities overseen by his office. John Cafourek will replace Dennis Luker as coordinator of the Focused Education module. Larry Greider will coordinate Youth Education, succeeding Doug Horchak. Mr. Horchak will head up the new Festival planning team.
• Two new Feast sites will appear in 2005 in North America—Wildwood, New Jersey (replacing Hagerstown, Maryland; to be replaced in 2006 by a Chesapeake Bay site) and Kingston, Ontario. We hope to offer Anchorage, Alaska, as a site again in 2007.
• A new round of three-day ministerial conferences will begin in March 2005. The theme will be "Developing Spiritual Maturity," and the focus will be on developing greater levels of people skills and speaking skills. Approximately 11 to 12 of these conferences will be conducted across the United States within the next 18 months or so. The sessions will be taped for those international areas that would like to have the material.
• One-day "leadership mini-conferences" for local church leaders will be organized in numerous centers across the country in 2006 as finances permit.
• 54 men and their wives have attended the Leadership Training Program in Cincinnati the last three Labor Day weekends.
• Church attendance in the United States dipped nearly 15 percent from its usual long-term average in December and January, reflecting the difficult winter weather much of the country has experienced.
• The trend of "new contacts" of U.S. pastors may be shifting. In the last three months, U.S. church reports show 130 contacts from those with a Sabbatarian background, and 170 from those without one. Of course, those with little or no background in the basics of God's way are often not as committed to following it! As Mr. Pinelli noted, "In some cases, they check to see whether our beliefs agree with theirs!" Still, the trend is encouraging.
• 26 U.S. pastors now help in answering Internet responses and questions, saving perhaps two or three full-time salaries at the home office.

Proposals for 2005-06 Strategic Plan, Operation Plan and Budget  

The final focus of the day turned to hammering out details in the material to be presented to all the elders for consideration at this year's General Conference of Elders, to be held May 14-16 in Cincinnati.

Aaron Dean (chairman of the Council committee on Strategic Planning and Finance) moderated the discussion on the proposed Strategic Plan for 2005-06. He called the Council's attention to the committee's recommendation that a focus be formally added to the plan regarding a sense of urgency in doing God's work. This will take the form of revised wording, an additional value statement and an additional strategic issue.

Les McCullough compared the current sense of immediacy to past levels in the Church, and agreed this step was needed in the Strategic Plan. Richard Thompson concurred, stating that members have spoken to him about their desire to see an overall sense of excitement in fulfilling our commission, "like it used to be."

There was general agreement on the wisdom of including this concept, and attention turned to hammering out details of wording and placement in the document itself (which will be sent to all elders as part of the "Call and Notice" packet for the General Conference). Mr. Dean will return to the Council Sunday with suggested revisions, based on today's input, for the Council's further consideration.

President Holladay led the discussion on the Operation Plan proposal for the next fiscal year. He stressed that there were very few changes from the last Operation Plan. Ministerial Services has budgeted for the above-mentioned three-day conferences, intends to move ahead on plans for a hardbound hymnal and proposes hiring up to three new full-time ministers. Financial operations has no changes of any material consequence in view. Media operations has minor changes—such as replacing audiotapes with MP3 format CDs, and replacing VHS with DVD productions. Circulation increases in World News and Prophecy (to 50,000) and Vertical Thought (to 25,000) are the most noticeable, following the construction of the new Media Center (previously mentioned).

Victor Kubik asked for a clarification on the administration's current thinking on TV production, considering the cessation of the Beloit-based cable-access TV programs, the continuation of the Northwest TV production centered in Portland, and the construction of the Media Center, with its increased capacity for video production on-site in Cincinnati.

Mr. Eddington answered that he hopes to capitalize on the talents and experience of many who have contributed to the Beloit and Portland productions, citing the benefits of their by-now extensive "in front of the camera" experience. Other thoughts include calling in the services of support personnel (such as camera crews, make-up artists, etc.) as needed, without hiring extra staff for these limited purposes. Either volunteer or contracted labor could be used to fill this need. We will also tap into the experience of our own staff in the Northwest (Howard Davis, an employee of the media operation of the Church), particularly in production of commercial-type messages. Mr. Kubik thanked him for his response.

Dr. Kirkpatrick guided discussion of the proposed budget for 2005-06. His suggestion calls for a budget of $20.3 million for the fiscal year, up from $19.5 million for the current year (which ends June 30, 2005). This represents a 4.1 percent increase over the previous budget, but only a 3.3 percent increase over expected income for fiscal 2004-05 (which he anticipates will be $19.65 million, or a surplus of $150,000).

He called the Council's attention to a few items in walking through the budget. For one, health care costs did not "spike" upwards, as anticipated based on the previous year's costs. This is a welcome change, but one inherently unpredictable. His proposal calls for a 2.5 percent cost-of-living adjustment for all employees, to be given as a 5 percent raise for the second half of the fiscal year on January 1, 2006. Increased costs for the Good News, Vertical Thought, World News and Prophecy, Good News Radio and the Internet all reflect the kind of advantage inherent in a highly-leveraged financial position, as he explained earlier. All these are areas in which he suggests we could spend more in publicly proclaiming the gospel message of God's Kingdom.

Dr. Kirkpatrick took the Council through most of the budget suggestions, including some details on international subsidies. However, the budget discussion was not completed by the end of the day and will be resumed Sunday morning, February 27.

Mr. Kilough adjourned the meeting at 3:30 p.m., as several Council members needed to travel to neighboring church areas for Sabbath speaking assignments.

- Doug Johnson

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© 2005 United Church of God, an International Association