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Ambassador University budget slashed,
more layoffs occur

In Transition compiled this article from sources who attended a recent all-employee meeting at Ambassador University.

BIG SANDY, Texas - "This year is a survival year at AU. We must cut everything that is not absolutely necessary."

It was with this sober introduction that Ambassador University's President Russell Duke announced a series of budget cuts and more layoffs for the university during an all-employee meeting on campus Wednesday, July 3.

During the hour-and-a-half meeting at 3 p.m. in the science building, Dr. Duke sketched a grim financial picture for the Worldwide Church of God-sponsored school.

He noted that the WCG's income has steadily declined, from an average of $220,000 per day right after the Feast of Tabernacles last year to $180,000 a day in December, $130,000 to $140,000 in February and about $100,000 per day in June.

He said that, although the WCG went $20 million in the hole last year - "primarily because of the generous retirement and severance packages paid to former employees and ministry who retired or left" - the church stayed afloat by selling off assets such as art and Steuben crystal.

Dr. Duke said AU ranks third in a newly revised list of WCG priorities, behind local churches and headquarters on one hand and its Plain Truth Ministries on the other. He announced $4 million is earmarked this fiscal year for Plain Truth Ministries.

AU faces major shortfall

The university's subsidy from the church, originally projected at $4.6 million, out of which the university was to receive $3.2 million in cash, was revised downward to $1.2 million in cash. He said that, even factoring in the school's present lack of indebtedness and reserves of $6 million, with a $10.7 million budget, the school faces a major shortfall.

"The fact of the matter is, the church can no longer afford the university," Dr. Duke said. "But the question we have to ask is, Is the university ready to fold because the church that founded it is not able to support it?"

He said he wants to set a timetable of two years in which Ambassador could determine how to free the school from the church subsidy.

Immediate layoffs

He spoke of steps Ambassador University can take to try to remain financially viable.

  • Immediate employee "layoffs." Dr. Duke said all departments will be examined and fewer than 10 percent of employees will be terminated, not counting attrition from retirement or other reasons.

The university will offer employees it is terminating two weeks' pay in lieu of notice of termination, as well as one week for every year of employment up to a maximum of 12 weeks' pay, plus accrued vacation.

  • The operation of the university's kitchen will likely be outsourced to a food-service provider, possibly the Marriott Corp.
  • The university will examine the school's bylaws and seek to loosen its ties with the WCG to make possible the receipt of monetary grants from the U.S. government directly to the school. (Students, but not the school itself, are eligible for federal grants.)
  • The university will seriously consider opening the board of regents to representation by non-church members, especially to East Texas residents.

Higher tuition

  • Tuition costs will rise from the present $125 per semester hour to around $200 per semester hour for 1997-98.
  • The university will cease providing meals or parties for departments or the faculty.
  • Both the traditional senior-dinner extravaganza and the speech banquet will be canceled for next year.
  • Faculty personnel and their families living on campus (on "Faculty Row") must begin paying their own utility bills. Previously, faculty members' monthly rent paid to the university included electric service, water and sewer service.
  • The university will not upgrade departmental computers in the near future.
  • In some cases, faculty members will have to pay their own licensing and other credential-maintenance fees including charges for Continuing Education courses.
  • Regional alumni activities, except for one planned for July 27 in Dallas, Texas, have been canceled.
  • The Young Ambassadors music group will no longer perform outside the East Texas area.
  • The university may open up its golf course to the public.
  • The university plans to reduce its motor-vehicle operation, which now includes 100 licensed and unlicensed vehicles.
  • The university will embark on an aggressive advertising campaign for students, including advertising in The Wall Street Journal.

670 students plan to attend

Dr. Duke said the current projected enrollment level for 1996-97 stands at 670 students for the whole student body, compared with the AU's goal last August to enroll 500 freshmen at the beginning of the school year.

Dr. Duke discussed other WCG-related matters. He said the May 11 open letter critical of the church written by former WCG minister David Covington to church leaders (subsequently published on the Internet and in the May 27 issue of In Transition) has resulted in numerous questions from WCG members.

In response to a query on employee pensions, Dr. Duke said, "it was not this administration or the previous one that caused people to be without retirement benefits."

Central planning

Dr. Duke said that some WCG congregations are calling for control over their local funds, but the church will continue to exercise central control of all church funds rather than incur unnecessary expense through duplicate accounting systems.

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