Actions by Baptist State Convention business services leadership minimized financial exposure to the fire sale of Wachovia Bank, Executive Committee members learned during a rare evening session Sept. 29.
Somber conversation about the tough financial news from Congress and Wall Street filtering through on laptops and cell phones prompted Executive Committee member Steve Hardy to ask John Butler, executive leader for business services, about the BSC exposure to the biggest bank news on a day that saw the Dow Jones Industrial Average drop 770 points.
Wachovia, purchased by Citibank for just $2.2 billion, has been the BSC primary banking partner for “decades,” said Butler, who was in the mortgage business in the 1980s before entering the ministry. He said he’d had concerns about Wachovia’s long term portfolio and assets since it was purchased by First Union in 2001 for $13 billion.
Those concerns prompted Butler since the first of the year to move “several million dollars” from Wachovia to financial institutions he deemed more secure. The Wachovia account now is basically used as “an operating account” and the BSC has “very limited exposure,” Butler said.
He credited BSC Comptroller Robert Simons with helping him stay alert to potential dangers in a constantly fluctuating economic situation.
“It is important for us in our fiduciary responsibilities of the board to explain to people in the Convention that the money is being handled well and that we’re making appropriate moves in that regard,” Hardy said.
The BSC Board is holding a three-day meeting to conduct a large volume of business before the BSC annual session Nov. 10-12. Included on the agenda is final recommendations from task forces studying the giving plans; Baptist Aging Ministries; articles and bylaws and a women's ministry. Several board members from western North Carolina did not come, over fear that gasoline would be unavailable.
Butler, who met recently with the business executives of other Baptist State Conventions, told Executive Committee members in the first night of a three-day meeting there are “struggles everywhere,” both in other Baptist conventions and in other denominations. Many are talking of downsizing and cutbacks.
Butler said BSC income, down a million dollars over the same period in 2007 at the end of August, has made up $400,000 in the first three weeks of September, so that income trails year to date by just $600,000, or about 4 percent.
Butler said the BSC still faces challenges to control spending, but is operating in the black.
One avenue of controlling expenses has been to carefully monitor medical insurance, bid the contract for lowest cost and pass on a larger portion of costs to employees.
The BSC pays $1.9 million for insurance for its employees and retirees, a cost that Butler struggles to contain. As medical costs rise annually, “we have to weigh how much we shift to the employees and how much to pay ourselves,” Butler said.
To contain costs for 2009 the policy co-insurance for major medical will change from a 20/80 payment ratio to 30/70, meaning the insured will pay 30 percent of the medical cost after deductibles are met, and before the maximum out of pocket expense is met.
The Executive Committee approved Budget Committee Chairman Steve Hardy’s recommendation for 2009 allocations of North Carolina Missions Offering receipts. The goal is $2.1 million, a $100,000 increase over 2008,with Baptist Men receiving $840,000, or 40 percent; church planting $546,000, or 26 percent; mission camps $315,000 or 15 percent; associational projects $210,000 or 10 percent and missions education and promotion $189,000 or 9 percent.
Dale Duncan, NC Baptist Men’s president, said 125 volunteers are required daily to operate the massive feeding detail in Baytown, Texas following Hurricane Ike. They work for 10 days at a time and one day reached a Baptist Men’s record 53,000 meals served in a single day.
“This convention is being praised around the world for what we’re doing in working and sharing Christ with those people right now,” Duncan said.