Volume 12, Number 1, July-August 2008

PABC Finances

The financing of the Port Austin Bible Campus and the Port Austin Bible Church are a great enigma. To many people, the lack of money available has been proof that God is not blessing the project. To others, especially those who are here, our survival is proof that God is maintaining us. It reminds us of ancient Israel that was preserved without money, but received manna a day or two at a time (Ex 16), quail on occasion (Num 11:32), and blessed with old clothes and shoes that never wore out (Deut 29:5). During the last 3½ years PABC has had just enough money to cover its essential bills and has relied heavily on continuing to use old things that have not quite worn out.

In spite of payments due averaging $7000 per month, the amount of available funds PABC has had, combining our bank balance and petty cash has been smaller than that of a typical household:

          Year    Avg. Checking+Cash Balance

          2005    $3002.71

          2006    $ 794.93

          2007    $ 370.16

          2008    $ 721.35

These figures come directly from our accounting system. We invite anyone who is seriously interested in the project to come and verify these or any of our other statements. These amounts are averages: the balance was much higher on some days when we had received large amounts of money and made big payments, but there were many days when our balance was well less than $100. Looking at it another way, we typically have enough money to cover bills due only for the next few days. It does take a lot of faith to set about each day’s work—or plant each year’s garden—not knowing where the funds to continue will come from.

There are only about a dozen people who repeatedly send us offerings—and most of those are not regular in amount and/or timing. Only three have ever made any kind of promise to send us regular offerings. The amounts received from all of these brethren are not enough to make our major property payments.

If all of the detail of this article seems to be incredibly complicated and messy to you, take heart, it seems complicated and messy to us. We would much rather be concentrating on teaching young people and publishing a newsletter. But we also can think that the apostle Paul might argue that he could have done a better job of preaching the gospel and writing his letters if he had neither his thorn in the flesh (2Cor 12:7) nor his beatings and imprisonment to hassle him (2Cor 11:23-27). But God let it happen as He saw fit. And we, in our lesser endeavors, hope we can accept what He does as well.

This article will summarize our financial past and explain what is necessary for the Port Austin Bible Campus property to be used in the Eternal’s service in the future.

 

Major Property Payments

In September of 2004, after Norman Edwards had separated from the other three men who once worked with him, there was no definite plan nor any promises from anyone as to how the $4300 per month property payments would be made. The following table shows the property payments that were actually made and the source of the funds.

In general, PABC was responsible for paying two land contracts, and then after those contracts were paid, a $420,000 mortgage to ELBI at $5000 per month over 7 years at 0% interest. The first land contract was nearly all paid by August, 2004. The $1677 payment, below, is actually the last payment on that first land contract. The second land contract was to be paid at $4348 per month to the 754th, Inc. the corporation that originally bought the Port Austin Air Base from the government. The 754th, Inc was strictly involved as an investment and would have begun foreclosure proceedings if we had missed 3 monthly payments. Their land contract required that we pay the balance due by March, 2006 (it was done by May). Beginning August 2006, $5000 per month payments were due to ELBI.

 

Date

Amount

Source of Funds

2004

Oct

$1,677

Several offerings combined

 

Oct

$4,348

One offering covered...

 

Nov

$4,348

…these 2 payments

 

Dec

$4,348

Several offerings combined

2005

Jan

$4,348

Many offerings came in to…

 

Feb

$4,348

…help us recover from the fire

 

Mar

$4,348

PABC/Buckman credit card

 

Apr

$4,348

Edwards offering

 

May

$4,348

One offering from a supporter

 

Jun

$4,348

One offering from same supporter

 

July

$4,348

PABC/Buckman credit card

 

Aug/Sep   

$8,696

Radio tower site rental

 

Oct

$4,348

Offerings & PABC/Buckman cc.

 

Nov

 

(no funds available, but Mike…

 

Dec

 

…Zaeske started plan to buy our…

 

 

 

…Unit 14 to pay off the 754th, Inc.)

2006

Jan

$4348

Down payment from selling Unit 14

 

Feb

 

(no funds available)

 

Mar

$4348

Offerings received after request…

 

Apr

$4348

…letters to Servants’ News readers.

 

May

$2564

More from SN reader offerings

 

 

$14,836

Proceeds of sale of our Unit 14 paid off the second land contract

 

Jun

 

(Payments to ELBI did not start…

 

July

 

until August of 2006.)

 

Aug

$5000

Proceeds of sale of Unit 1

 

Sep

$2000

Feast and other Offerings

 

Oct

$8000

Offering from one person

 

Nov

 

(no funds available)

 

Dec

 

(no funds available)                                            

2007

 

 

(no 2007 payments made. Hundreds of hours spent to obtain property tax refunds and sell our ball field)

2008

Jan

$10,000

 Reader loan until tax refund/sale done

 

Feb

$14,000

Tax refund and ball field sale

 

No other payments have been made since the last one, above. As of June 15, we are $76,000 behind to ELBI. They asked us to try to pay $1000 per month for now, but we have not been able to do that. Fortunately, ELBI believes that God has a purpose for this property and they are being very patient, waiting for the payments. They do have things that they want to achieve with their ministry and if we are not able to pay them at all, they would prefer to foreclose on the property and sell it to someone who is able to put it to effective use—but such an undertaking would require them to expend a lot of money before receiving any money. Since they have been so kind to us, we would rather not put them through that, but either use the property effectively ourselves or find someone who will.

Leaving a property like this unused, with nobody paying to heat it through the winter, would likely cause much more rapid deterioration. None of us wants that.

We included all of the property payment detail, above, because even though it is essential for survival, it is not readily apparent on common financial statements: the Balance Sheet and the Receipts/Disbursements Statement (“Income Statement” in for-profit businesses). When we spend $5000 of cash for a property payment, we still have the same $5000 in value—property instead of cash—so it does not show up on the Receipts/Disbursements Statement, or the final totals of the Balance Sheet. However, it will be in a different category on the Balance Sheet.

Since we sold parts of our property to make payments, one can see in the Balance Sheet that the total value of the fixed assets (our property) is declining. Our equity—the amount of value minus our liabilities—is also decreasing. We cannot continue to function only by selling parts of the property to make the payments—eventually there would be no property left. (Another decrease in equity was caused by the addition of a $44,000 mortgage to our long-term liabilities as the settlement of the Williams suit. This is to be paid at $850 per month beginning January 2010, but most of it can be paid with funds from our radio tower site rental contract maturing then.)

We again wish to thank the Servants’ News readers who came through with about $9000 and $5000 respectively when we wrote letters asking for help in early 2006. We would have certainly lost the property if we had not had that help. We have not felt that God wanted us to ask for additional funds as our lawsuit continued to drag on and we did not have a clear obtainable objective for which to ask for help. Now that the lawsuit is settled, and we are in the process of making a clear future plan (see PABC Future), that may change.

Ongoing Expenses

In addition to our $5000 per month in property payments, there are other expenses of running the ministry. PABC operates as a Christian community—as monasteries, convents and other church missions have operated for years. The community provides housing, food and minimal essential supplies to its members who volunteer their labor for the ministry. There are no salaries or luxuries.

Some of the members receive disability or other minor forms of assistance which they expend as they desire—often benefiting the entire community. This does not exceed a few hundred dollars per month. We also receive a few offerings of food, supplies and other assistance which do not enter into these statements in any way.

In any case, it should be obvious that we have a poverty level existence by USA standards. We grow a significant portion of our food in our garden and chicken-house. We grind our own flour and bake a lot of our own bread. The cost of buying grains, beans, oil and other basics is small compared to prepared food.

From 2004 through 2006, PABC had more members—as many as 15 at one time (see Jan/Feb 2006 Servants’ News, p. 15). Offerings and expenses were greater during those years than in 2007-2008 when we had only three or four people here. Graphs of the expenses for 2005-2006 and 2007-2008 appear at right. As you can see, utilities are now over half of our budget.

Much greater detail regarding our expenses can be found on the Receipts/Disbursements Statement (page 1, page 2). The bottom line of the form shows the relative gain or loss of ministry activities. 2004 was a highly positive year because of all of the offerings given to start the project. The losses in the other years resulted in borrowing or the consumption of assets. The $8,000 loss for 2008 is higher than last year because of expenses of the baseball field sale, higher than average utility bills, the end of our pre-paid water and sewer bill credits, and the spending of our property tax refund, which was formerly on the books as an asset.

We have added a line to the end of the statement showing our average monthly expenses for each year. For 2005-2008 they are $4880, $3917, $2358, and $3118 respectively. Because of higher winter and spring utility bills, the $3492 figure for the first six months of this year is probably higher than last year. But $3500 per month is probably a safe estimate at the ongoing cost of 4 people working in this ministry here. That gives us a realistic estimate of what it should cost per month to operate at the present level:

 

          $5000     mortgage payments

          $3500     expenses for four

          $8500     total monthly cost for 4 people

Costs for the Future

Of interest, the mortgage payment and a good deal of the other expenses (much of utilities, interest, grounds maintenance, etc.) are all fixed costs—they will not increase with the addition of more people. Another person here would actually cost only about $250 per month. We have a small 3-bedroom house, a 3-bedroom apartment and numerous 2- and 1-bedroom places available. We could have a ministry with the same goals, fully paying its way and accomplishing much more at these dollar amounts:

 

               People    Monthly Cost

                    4             $8500

                  10          $10,000

                  20          $12,050

                  30          $15,000

 

With many more people, we would be able to accomplish much more ministry work as well as self-funding projects. As it is now, the time of most individuals involved is consumed with taking care of the property and other essential functions. Please see the other articles in this publication about what has been accomplished and future plans.

In addition to the above recurring monthly costs, there is an ongoing need for facilities improvement that could vary greatly with its cost. Also there are short-term debts that need to be repaid:

 

    Amount             Purpose

    $76,000              Currently due on loan to ELBI

    $29,421              Currently due on Credit cards, average rate is 17%

    $1,650 Short time loan from CBTM

    $107,071            Certain short-term liabilities

    $ 6,000               Long-term liabilities that might become short-term

    $113,071            Possible total short-term liabilities

 

The “possible” $6000 is our commitment to pay for improvements made to a house that we will reimburse if the house is sold for less than market value. In the unlikely event that the house had to be sold for less than market value, our long-term liability would change to a current liability—due right away. (Even though this is unlikely, $6000 is too big of a surprise to leave out.)

Options

Whether we continue this ministry at Port Austin, whether others join to share management and responsibility, or whether someone else comes to essentially buy the campus from us to do their ministry, all of these costs are relevant.

If we continue this ministry, we hope that increased offerings or earnings we produce will take care of the monthly costs and begin repayment of the debt. We would very much appreciate someone refinancing PABC’s $29,421 in credit card loans at a reasonable rate that would reduce the approximately $400 in interest we pay every month. We would back it with a third mortgage on the property.

We also hope that others will join the ministry to share in its management, we would hope that they would be able to help fund the ministry with their own assets as Norman Edwards did. At present, there is $99,704 of equity or book value of assets here. A person with about $100,000 could easily become a co-servant with equal decision-making power. (With Mr. Edwards desire to be with his family at Spring Vale Academy for 2 years, they would instantly become the primary manager of the property.) That amount of money would pay most of the outstanding obligations and greatly reduce monthly payments for the foreseeable future. But, other arrangements are also possible.

Finally, an individual or group desiring to purchase or take over management of the property probably does need about $125,000: the $113,071 mentioned above and the rest for our transition and moving expenses for which we do not have the funding. They would also need to assume our existing mortgages.

Please see the PABC Future article explaining how and why we would consider these scenarios. The need for capable people to move here and help is as great as the need for dollars. We hope you will join us in prayer and contact us with your suggestions. We will be glad to answer any questions about the financial statements and provide the underlying documentation to anyone seriously interested in helping this ministry.

We realize that many people will say, “I would never get involved with such a financially shaky ministry. I do not have the money to spare, anyway.” We certainly do not believe that God is leading everyone to help us. On the other had, we can think of several people who had considered helping this ministry but decided not to, but then later, each has lost tens of thousands of dollars to unemployment, illness, injury, divorce, con artists or other troubles. Can we say with certainty that those people would not have had those troubles if they had chosen to help us instead? No! Can we say with certainty that those people need to be willing to give up what they have to God in order to be Christ’s disciple? Yes!

“So likewise, whoever of you does not forsake all that he has cannot be My disciple” (Luke 14:33).

This does not mean that God is requiring anyone to give anything to this ministry. But everyone who calls themselves His disciple needs to think about what they are willing to give up for Him, and how much they are trusting him to satisfy their needs (Phil 4:19).

Those here have already given up virtually everything they have for this ministry. And as long as we, or someone else, is able to successfully serve God from these efforts, we will be happy with that. We hope to decide what we will do here by August, 2008. May your decisions and ours be according to the will of our loving Creator. Amen.            &

 

Contact or Visit Us

PABC, PO Box 474, Port Austin, Michigan 48467; 989-738-7700; PABC@portaustin.net

 

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