Clippard: Capitalization of cars, computers could yield dividends for evangelism, missions
By Bob Baysinger
September 9, 2003
JEFFERSON CITY – The Missouri Baptist Convention (MBC) executive board has decided it’s time to spend some money to save some money.
The board has voted to make $556,993 available for use by the MBC executive team to move into capitalization of autos and computers. It is estimated the decision will save money that can be steered toward evangelism, missions and church planting.
"We believe this has the potential to save the convention up to $15,000 a month," said David Clippard, executive director. "This is money we’ll be able to put back into ministry."
The $556,993 is the portion of escrowed funds designated by the MBC at its 2002 annual meeting for use by the executive team, which includes David Clippard and he convention’s four associate executive directors.
The MBC since 2000 has provided automobiles for employees who are required to travel extensively. Previously, and still in some cases, the convention pays employees mileage when they are required to use their own vehicle.
"At the time (2000) we didn’t have capital to purchase autos," said Larry Thomas, associate executive director for support services, "and it didn’t require any money to lease cards. We also anticipated that paying for lease cars would be cheaper than reimbursing employees for the use of their cars."
What wasn’t taken into consideration, however, was the policy change that forced more road miles.
"We made our calculations based on the previous travel of people," Thomas said. "The benchmark that was used was 18,000 miles. But then we put guys out in the regions and required them to come back for meetings. That’s when the miles driven began exceeding the estimate."
According to Jay Hughes, MBC comptroller, the savings will not begin the first month.
"The first expense we will get rid of the monthly lease for the automobiles," Hughes said. "And we’ll have some equity in the vehicle when we trade it in.
"Having the money to capitalize cars and computers is definitely a blessing. But we’ve got to be careful. When we turn a car over, we won’t have the cash to do it again. What we’re planning to do is put money back to cover the next round of purchases."
Hughes said the decision to capitalize is "just practical business."
"When I was a partner in the CPA firm in Louisiana, clients were always asking if they should buy or lease. Our answer was that if you have a cash flow problem, you should lease. But leasing is like renting a house. At the end of the rent period, you don’t have anything."