CURRENT STATUS OF THE CASE
March 14, 2023
Dear Church Family.
On Tuesday, March 14, at 1:00 p.m., Judge Gary Arnold, specially appointed to hear the case of First United Methodist Church, Jonesboro v The Arkansas Annual Conference of the United Methodist Church heard and denied the Conference’s Motion to Dismiss this lawsuit.
The Conference argued that the Court does not have “subject matter jurisdiction” to hear this case. That means, the Conference believes the Court lacked the ability to hear this case and the matter should be dismissed. Through our legal team, we responded with facts that established the Court has “subject matter jurisdiction” to hear and decide the case and must follow well established legal principals at trial. The legal principals include the following well established case law:
1. Jones v. Wolf, 443 U.S. 595, 602; 99 S. Ct. 3020; 61 L. Ed. 2d 775 (1979), the United States Supreme Court held that state courts have subject matter jurisdiction to decide religious property disputes.
2. Arkansas Presbytery of the Cumberland Presbyterian Church v. Hudson, 344 Ark. 332, 399; 40 SW 3d 30, 399 (2001), a case decided by the Arkansas Supreme Court twenty-one years later where the Court held that it, “. . . expressly adopts the neutral principals approach outlined by the United States Supreme Court in Jones, supra, as the appropriate means of resolving church property disputes.”
3. Arkansas Annual Conference of the AME Church, Inc. v. New Direction Praise and Worship Center, 375 Ark. 425; 291 S.W. 2d 562 (2009). In that case, the Arkansas Supreme Court held that “. . . it is clear that civil courts have subject matter jurisdiction to hear cases involving church property disputes,” and “Courts must use neutral principals of law” to settle church property disputes.
The Court agreed with our position and denied the Conference’s motion to dismiss. The next steps in this case include the following:
1. Answer and Counterclaim. The Conference will file an answer to our petition and has filed a counterclaim asserting claims against the Church. We will prepare an answer to the counterclaim and submit affirmative defenses.
2. Discovery will commence. That is, each side will send out interrogatories, request for documents and request for admissions and depositions.
3. Trial. Trial has been set for January 29, 2024. The trial will occur when a courtroom is available in Jonesboro. There will likely be other hearings in the coming weeks and months prior to the final setting next January. We will update you as those arise.
We continue to be hopeful that we can have an amicable resolution to this case but are prepared to litigate this matter in the event that the Conference continues to reject an amicable resolution.
Please keep your Pastors, leaders, and attorneys in your prayers
MEETING OF THE MEMBERS
December 15, 2022
To review what has previously happened, please see the Moving Forward and Original Disaffiliation pages.
December 10, 2022
Where we’ve been and where we are today:
As you know, our church’s leadership faithfully followed the disaffiliation process set forth within the United Methodist Book of Discipline and by the Arkansas Annual Conference to leave the denomination. Our Administrative Council was nearly unanimous (all but one vote) in its recommendation to the congregation to disaffiliate.
We then had a meeting wherein over 1300 members attended. Despite a tremendous push to stop the vote—and a campaign against disaffiliation not seen anywhere in the United States with billboards, newspaper advertisements, social media posts, YouTube videos, and calls and letters to all members—two-thirds of the membership voted to disaffiliate from the Arkansas Annual Conference.
Thereafter, Church leadership was asked to provide a voluminous amount of documents to the Conference, and the Conference required us to pay a non-negotiable exit fee to leave. The Church leaders provided all the requested information and agreed to pay the exit fee. Annual Conference staff then reviewed the disaffiliation documents and affirmed that our Church met all the requirements to leave the denomination. We prayed that by faithfully following the process outlined in the Book of Discipline and the Arkansas Annual Conference that we, like over 2000 churches in Conferences all over the nation, would be released from the denomination.
Unfortunately, the Annual Conference delegates denied our request to disaffiliate. This entire process was lay leader-led. Your administrative council has taken all the steps above under the direction of the congregation and has made all decisions in the best interest of the church. Of the more than 2000 Methodist Churches to file, and receive, disaffiliation releases, only five in the entire country, and three in Arkansas, were denied. And the conference cannot tell us why.
Where do we go from here?
Because the Annual Conference did not vote to approve our disaffiliation—which was approved by the staff and bishop’s office—we are forced into this unfortunate situation not contemplated within the Discipline or the Annual Conference.
Church leadership reached out to the bishop to find out what they proposed as the next steps. We have been told that for the Annual Conference to release Jonesboro, it must negotiate something with those opposing disaffiliation, known as the “stay group,” and if negotiation is successful, the bishop’s office will schedule a zoom meeting for the Annual Conference to vote on approving disaffiliation. It is our understanding, through the office of the bishop, that the stay group wishes to mediate this matter as well.
Therefore, church’s leadership reached out to representatives of the stay group to find out what their demands are and schedule a mediation by a mediator recommended by the Conference as soon as possible. At this moment in time, the stay group has not responded to give demands or schedule a mediation date.
We did receive a message from the Bishop on Friday December 9, 2022 where he wrote:
“I have spent much of the past week trying to facilitate a mediated conversation between members of the two major groups in Jonesboro First United Methodist
Church that might result in a win-win solution. It is apparent to me that there is enough difference in perspective that it is not possible at this time.”
What options do we have?
We have very limited options at this point. They are as follows:
- Do nothing and stay in the UMC
- Resubmit and try again at the next Annual Conference
- Leave the property, start over at a new location
- Connect with the stay group and the Conference to see if they would agree to mediate or do something else to bring this matter to a resolution, or
- Negotiate with the Annual Conference or take any other step up to and including litigation to disaffiliate from the Arkansas Annual Conference
Again, why are we choosing to disaffiliate from the United Methodist Church?
Jonesboro Church is clear on our mission of transforming lives by making disciples of Jesus Christ. We are Christ-centered and community-focused. We are a church that preaches and teaches the Bible. We lift Jesus Christ as Lord and the way of salvation for all people. Our ministries are thriving, and we continue to grow. For many years, our church leadership has been carefully watching the developments in the United Methodist Church (UMC). There is no secret that the UMC is facing conflict. The UMC itself describes its current reality in the Book of Discipline (BOD) as “current deep conflict within the United Methodist Church…” (Paragraph 2553 in the BOD). We do not want to be involved in that conflict and see it as a distraction to our mission and witness. We believe that our best days are ahead and that God is calling us to be independent of the UMC.
We wish the UMC well and hope they can be a faithful witness for Jesus Christ in our broken world. We are not alone in this decision to disaffiliate from the UMC as we are seeing thousands of congregations take a similar path. We believe we will be a healthier church body apart from the UMC.
We already voted to disaffiliate in July 2022. Why are we having to re-vote?
The July 2022 vote was scheduled by the Conference to approve disaffiliation. Over 1300 members attended the meeting and nearly 70% voted to approve disaffiliation. The vote at the upcoming meeting on Dec 15 is a Different Vote. This vote is to help guide our church’s future direction. The membership will be presented with options that will allow the church to move forward and separate from the UMC.
Who can vote at our meeting?
Only members of Jonesboro Church who are physically present at the meeting can vote. Anyone joining the church up through December 10, 2022, will be eligible to vote if they attend the meeting. Please make plans to attend so your vote can be cast.
Do we only need a simple majority to approve the vote? Is there a minimum number of members who must be present to vote?
We will need 50% plus one vote of members attending the meeting to approve the ballot measures under state law. Ark, Code 4-28-617(a)(1). There is no requirement to have a certain percentage of members present at the vote.
What happens if we cannot negotiate a resolution with the stay group, or if we do negotiate a resolution but the Arkansas Annual Conference does not approve Jonesboro’s disaffiliation?
We will move on to other options at that time. We know that in every other Conference in the United States that approved the disaffiliation of UMC churches completing each disaffiliation step that each disaffiliation received a simple majority approval from their annual conference. Arkansas is the only Conference where this did not occur. If we cannot negotiate a resolution with the stay group and obtain a simple majority, Jonesboro leadership will meet to discuss the next steps and communicate promptly to the congregation. Steps could include direct negotiations with the Conference or litigation.
How is Jonesboro going to pay for this?
The Lord has been faithful for many years to Jonesboro, and we believe God has been financially preparing us for such a time as this. We are prepared to pay the full amount without incurring any debt. We are also exploring incurring a small mortgage on the property. We will take the most fiscally responsible path forward. We give thanks for God’s faithful provision in advance that allows us to be in such a healthy financial position.
Why are we being asked to pass bylaws?
Our church is an unincorporated association under Arkansas law. We do not have bylaws to help guide us in making decisions. State law provides that the “members” of an unincorporated association can approve bylaws to help its “managers” govern the entity. Ark. Code § 4-28-616(a)(3) The proposed bylaws are formed to assist our managers to govern the church. They are consistent with Arkansas state law and the Book of Discipline as it provides that state law prevails over the Discipline concerning property and governance. See page 736, Sec. 2506.
We heard that the Church cannot pass the bylaws without the approval and consent of the Conference. Is this true?
We have examined this issue and found that it is not true. Arkansas law provides that members of an unincorporated entity can approve “governing documents,” or “bylaws,” to govern an unincorporated entity. Ark. Code § 4-28-616(a)(3). Further, the Book of Discipline provides that state law prevails over the Discipline. See page 736, Sec. 2506 Therefore, we are comfortable to state that the members can vote and approve the proposed bylaws, and the actions taken by the managers under the bylaws are valid corporate acts. We understand the Conference disagrees with the language of Section 2506 of the Discipline.Can we defer a decision on approving the bylaws? Yes. We can approve them later if needed. Depending on the facts and circumstances on December 15, 2022, we may recommend deferring a decision on the bylaws at that time if some resolution is reached prior to our meeting. If resolution is not reached, it is necessary for the bylaws to be approved for our church to take further steps to to separate from the UMC.
What does the Arkansas Annual Conference of the United Methodist Church require of churches to disaffiliate?
The United Methodist Church Book of Discipline (BOD) allows churches to disaffiliate from the denomination through Paragraph 2553. This paragraph lists the requirements for disaffiliation, including:Local churches pay 24 months of apportionmentsLocal churches pay their share of the “unfunded” pension liability, as determined by the UMC.
What are apportionments?
Apportionments are the annual dues collected to fund the denomination. We believe this is a fair request and have always been willing to pay this amount.
What is the unfunded pension liability?Pension providers calculate pension liability according to two different rates: the funding rate and the market rate. The funding rate is a straightforward calculation considering the liabilities of the pensions and the expected future returns of earnings. The funding rate is what is used to bill the various annual conferences for pension payments. The UMC pension provider, Wespath, has stated that all pensions are more than fully funded according to a funding rate. No pensions are in actual danger because of the disaffiliation of churches. Pension providers can also calculate pension liability on a market rate. The market rate assumes very low returns (2%) and is used if the pensions were sold to a commercial annuity provider. In addition, Wespath has added 5% additional unfunded liability. Using a market rate, the UMC has an unfunded pension liability. The following graph was produced by Wespath and shows the funding status of the pension through the end of 2021.
As you can see, on a funding rate the pensions are overfunded. At a market rate, the pensions are underfunded. ARKUMC is requesting we pay our share of the underfunding of the market rate.Wespath assigns a portion of the total denomination-wide unfunded pension liability (according to the market rate) to each annual conference. The Arkansas Annual Conference (ARKUMC) has decided to use its apportionment formula to allocate that liability to local churches. In the case of Jonesboro, our apportionments are 1.7% of the total annual conference budget, meaning that theannual conference wants us to pay 1.7% of the total unfunded pension liability for the ARKUMC. The pension liability numbers continue to change based on market factors. Recently, pension liability has been decreasing due to rising interest rates. Through August of 2022, the pension liability for the ARKUMC was decreased by nearly 40%. We expect this trend to continue. As the pension liability decreases, our payment will likewise decrease. Our payment will be based ultimately on the unfunded liability as of April 1, 2023. Because of the rising interest rates, we expect our liability to decrease significantly. Rest assured, our pastors will not be losing their pensions and Jonesboro will be taking steps to provide other retirement options once we leave. Other pastors in the ARKUMC are also not at risk of losing their pensions because of disaffiliating churches.
Will this be a one-time fee, or could we possibly incur additional charges in the future?Yes, this is a one-time fee. Once our final and total figure is established, Jonesboro must remit a check at least ten days after the Annual Conference session. At that time, we will be free and clear of the UMC and retain all our property and assets, and there will be no additional fees.
What if I have more questions?
As we move into our future, it’s important to remember that our Church is a healthy growing church. We are clear on our mission of transforming lives by making disciples of Jesus Christ. We are Christ-centered and community-focused. We are a church that preaches and teaches the Bible. We lift Jesus Christ as Lord and the way of salvation for all people. Our ministries are thriving, and we continue to grow. We would love to discuss this decision and process with you if you have more questions. Please contact our church office to set up a meeting with one of our pastors or church leaders.