This quinquennial report is being written from financial data that is managed by a highly professional and spiritual treasury staff. I would like to, up front, express my sincere appreciation to each one for their commitment to service and tireless efforts in maintaining complex and sophisticated accounting records, all of which make this reporting possible.

In May 2001, an executive committee was elected to serve as the governance board for Lake Union Conference (LUC). This board consists of a highly-committed and actively-engaged group of leaders and lay people. The performance over this past quinquennium is directly attributable to their candid and unabashed review of financial detail, together with their creative input for new ideas. To each member, I express my heart-felt thanks for your dedication and service.

This report is one of three presentations that will be used to communicate to you as a constituent concerning financial performance over the past quinquennium. This report will be the least complex and technical of the three presentations. My goal for this report is simply to share some key high points of our financial performance over the quinquennium. At the session on April 2, a digital media presentation will be made to cover greater technical aspects of our financial performance. Additionally, a full General Conference audited report will be provided to you having the highest level of detail in a technical accounting format that will comprehensively cover our financial performance during the quinquennium.

FINANCIAL HIGHLIGHTS

The first financial highlight I would like to share is total tithe received (see Graph A). Total tithe received at the beginning of the quinquennium (2000) was $56,750,851 versus $65,564,311 at the end of the quinquennium (2005). This represents an increase of $8,813,460 or 15.5 percent over the five-year period. This increase includes 2005 having 53 Sabbaths as compared to 52 Sabbaths for all prior years in the quinquennium. If you equalize the year 2005 by deducting one Sabbath, the overall increase is adjusted to $7,644,042 or 13.5 percent over the five-year period.

Our Lake Union territory experienced significant economical hardship during this quinquennium; nonetheless, the members of our constituency have been faithful. On behalf of this administration, please accept our appreciation to each one of you for your faithfulness. In exchange, we pledge to you to be fiscally responsible in using the resources entrusted to us to hasten the soon and second return of our Lord and Savior, Jesus Christ.

The Lake Union retains nine percent from the total gross tithe received by the five local conferences. During the quinquennium an average of $5 million was retained by the Lake Union and used for local programs and support (see Graph B). Total tithe usage within the Lake Union can also be better understood by reviewing total income and total expense (see Graphs C and D). Total income and total expense includes appropriations from the North American Division (NAD) for programs that directly/indirectly support our local conferences.

Total income for 2002 is higher than 2001 and 2003 due to miscellaneous income of $395,000 received from closure of Great Lakes Adventist Health System. Total income for 2004 is high due to NAD appropriations of $342,000 for Regional Capital reversions and an accounting change for auditing cost that resulted in appropriations to the Union from the NAD to subsidize auditing cost. Total income for 2005 is high due to the 2005 tithe percentage increase and the NAD auditing subsidy.

Total expense for 2002 is higher than 2001 and 2003 due to $400,000 that was expended for evangelism (Hope for Our Day). Total expense for 2004 is high due to $342,000 Regional Capital reversions forwarded to Lake Region Conference (LRC) and actual auditing charges of $456,000. Total expense for 2005 is high due to actual auditing charges of $593,000 and a special audit of LRC costing $110,000.

During this past quinquennium administration has been intentional about controlling cost and thereby annually have drafted budgets based on 95 to 96 percent of the previous year's tithe. This conservative approach to financial management has allowed us to realize operating gains and grow our reserves (see Graphs E and F). The operating loss in 2002 of $42,000 was an intentional spend down of working capital as reserves were used for evangelism (Hope for Our Day). Additionally, our conservative budgeting has allow us to revert back to the local conference a total in excess of $2 million in special appropriations, which is in excess of NAD working policy appropriations.

Our working capital grew from 1.25 percent in 2001 to 1.43 percent in 2005 (see Graph G). Administration is currently working with local conference presidents to determine the appropriate percentage of working capital that should be maintained at the Lake Union. Once this percentage is determined, it would be the intent of administration to revert back to the local conferences all profits in excess of that stated percentage.

Overall, the Lord has truly showered His bountiful blessing upon our Union over this past quinquennium. My sincere prayer is that God will find each one of us faithful as we commit ourselves to Him in service until the end of time, whereby we may each receive the commendation, “Well done, good and faithful servant.”

Glynn C.W. Scott is the Lake Union Conference treasurer.

Association/Revolving Fund

During the past quinquennium the Lake Union Revolving Fund has provided over $22 million to 157 church entities for various building projects. These funds were made available by Lake Union Conference members and church organizations that invested in the Revolving Fund.

Because many individuals and churches invested in the Revolving Fund, the total assets increased by 95.9 percent to $23,131,565 (see Graph A). Liabilities increased by 123 percent to $18,927,834 (see Graph B) with resulting total net asset increase of 26 percent to $4,203,731 (see Graph C).

As a result of investing and lending activities, the Revolving Fund Trust had an overall operating gain for 2001–2005 of $872,818.

Stewardship Department

As a resource center for the conferences in the Lake Union, the stewardship department acts as a liaison between the North American Division and the General Conference stewardship departments to provide training and materials as requested.

Charts D and E show how God has blessed our union with increases in tithes and local offerings over the past ten years.

J. Richard Terrell is the Lake Union Conference associate treasurer and stewardship director.