Mission
AGBU view: During the first 30-40 years of operation, the MEI acted as an orphanage and helped disposed Armenians. The period after the orphanage (till 1970’s) MEI justified its existence because it delivered national (azkayin) leaders and Armenian language teachers.
Since the 1970’s, MEI does not justify its existence and does not fulfill the requirements to justify the mission for which MEI brothers wanted to achieve.

ALUMNI ARGUMENT: The AGBU Central Board has never provided and asked for specific targets from the MEI nor specified the school’s mission.
What is the mission of the more than 20 other AGBU schools. How many of these are producing so-called Armenian leaders, teachers etc.
The US has never seen a war on its soil, but the MEI has come to the rescue of many communities during political upheavals and provided shelter to hundreds of students from these countries. While there may be no more orphans these days, but serving those in war-ravaged countries could easily be classified as serving war-orphans.
If the MEI is not producing Armenian teachers, does this mean the rest of us who have become professionals (doctors, business, finance, trade, commerce) do not deserve an Armenian education. Are many of us not the community and diaspora leaders that the AGBU aspires to create?
Within its own "mission", has the AGBU made ANY effort to train the trainers of tomorrow, such as teachers, councillors, etc.?

Capacity
AGBU view: MEI has a capacity of 400 students but at best has never managed to attract more than 250 students.
ALUMNI ARGUMENT: When the new dormitories were constructed, the capacity was increased to 400, not because of the MEI needs, but to have it in place, just in case another disaster somewhere would require immediate housing of Armenians or students. Could it be that the AGBU built more than required and now that its original expectations did not materialize, it is looking for scapegoats.

Cost per student
AGBU view: On average, each MEI student costs the AGBU $5000 per head, compared to a range of $52 to $500 per student cost in other schools.
ALUMNI ARGUMENT: First and foremost, comparing the cost of a day-school student with the cost of a boarding student, is the silliest of excuses ever used. Furthermore, the cost per student should not be determined by the expense budget, but should incorporate all other available income. See below on the income from the Melkonian commercial centre and the Endowment fund.
And what will happen when the standard of living in countries like Lebanon/Syria/Armenia rises to the current standard of living in Cyprus. Based on the reasoning of cost per head, the AGBU should build schools in Sri Lanka and the African outback in order to shield itself from the risk of seeing rising standard of living increasing its costs.

Cypriot Armenian community
AGBU view: For a community of 3000 people, and with an annual student output of 30-35 students, there is no justification to keep the MEI in Cyprus to cater to the needs of the community.
ALUMNI ARGUMENT: Though the Armenian community in Cyprus is small, it has one big advantage not enjoyed anywhere else, including the US. The Armenian community in Cyprus because of the special situation (rivalry between Greeks/Turks, Turkish invasion of 1974, correct lobbying by the community, EU accession prospects and recognised rights of minorities) has received the unwarranted support of the Cyprus government, which among others provides:

A) Tuition fees for any Cypriot Armenian wishing to enroll at MEI,

B) Grants in the pipeline include CYP 70.000 (USD 140.000) to renovate, equip and upgrade the Computer lab, and to establish fully equipped Language lab and a Design & Technology lab.

C) Through the efforts of Armenian Representative Mr. Bedros Kaladjian and ahead of the accession of Cyprus as a full EU member, there is an effort to secure an annual grant from the government geared toward providing higher Armenian language education to a recognised minority, which may be given to the Melkonian.

D) Thanks to the MEI, the AGBU is one of the most powerful organisations active in Cyprus. More than 90% of its leadership are MEI graduates (so-much for not producing Armenian leaders). Cyprus is the first and one of few Diaspora countries where our own Bedros Kaladjian and before him, his brother Aram Kaladjian, were elected for successive terms as the Armenian Representative in parliament. The local AGBU futsal (mini-football) team, Ararat has for three successive years represented Cyprus in the European UEFA games.

E) Cyprus may look small on the map but considering that its an EU member, where the Armenian community enjoys very strong support and has broad-based influence, it can help in many other ways.
Remember that Spyros Kyprianou (then serving Foreign Minister) was the first foreign diplomat to mention the Genocide at the UN forum in 1965 and Cyprus was one of the first countries in the world recognizing the Genocide.

F) Because of the MEI, the Cyprus Armenian community is one of the few who speak fluent Armenian at home, an achievement not matched by many other Diaspora centres.

Armenian students
AGBU view: Of the total 180-250 students, about 55 students are from Armenia, who after graduation are more likely to emigrate to the US and not return to Armenia. AGBU does not wish to help and facilitate the exodus of Armenians from Armenia.

ALUMNI ARGUMENT: After the earthquake in Armenia, the AGBU leaders visiting the motherland took a sentimental decision to bring Armenians from Armenia to the MEI to provide them with shelter and education. Now that there is a budget squeeze, they are saying the MEI is acting as a bridge for further exodus from Armenia. The MEI has never asked for Armenian students, though it has welcomed them with open arms because its Mission is to protect and provide shelter and education and a better chance in life to Armenians irrespective of their origin. In sponsoring students from Armenia, the AGBU should have ensured their prompt return to their homeland, having first acquired a western-style education in a calm and peaceful environment.
By the way, Armenian citizens wishing to flee the motherland do not need the MEI to act as a bridge, the US Embassy there serves their needs adequately.

Bulgarian students
AGBU view: Students from Bulgaria numbering around 55-60 students, cost the AGBU about $300.000 to $350.000, a cost not justified since the AGBU could spend the same amount in Bulgaria for the whole of the community there and achieve better results.
ALUMNI ARGUMENT: Nobody knows how and under what circumstances students from Bulgaria came to the MEI since the current Board says they were there when they were appointed 8 years ago. But whilst here, they have learned the language and acclaimed high academic, cultural and sports successes. They have, in turn, become the leaders in the Armenian Bulgarian community that the AGBU fears are NOT produced at the Melkonian. What an irony!
As regards the cost, as with a previous argument, no-one knows where costs will skyrocket to from 2007 as Bulgaria too joins the high-cost European Union.

Middle East Countries
AGBU view: Lebanese and Syrian communities do not need the MEI since first they cannot afford to pay the $5000 cost, and second, because graduating students need the Baccalaureate equivalent. Iran is also not seen as a good target since most of the Iranian-Armenians have fled the country to the US. For Iraq, the AGBU does not know what the outcome of the situation will be. Conclusion: MEI does not serve the interests of the Middle East communities.
ALUMNI ARGUMENT: Move up-market. The MEI could easily provide vocational and more specialised training to thousands of Lebanese and Syrian Armenians such as craftsmanship, advanced accounting, marketing, insurance and finance to name a few.
With Cyprus an EU member, the MEI could apply to the various educational, training programs available by the EU which allocate funds when an EU member institution (MEI) provides training to nationals of the Levant.
As for Iran and Iraq, there are still thousands of Armenians living there, most of whom can afford to send their children outside.

Europe/US & Fee scale
AGBU view: In 1986 after the new buildings were built and facilities upgraded, the objective was to attract students from Europe, but this objective has failed.
The MEI has also failed to attract students from the US, Canada, Australia and Africa, with the maximum number never exceeding 10 from these countries.
Most parents use different methods in order to send their children at rock bottom rates, which means even when student numbers increase, there is no corresponding increase in income while at the same time this forces general school expenses higher.

ALUMNI ARGUMENT: The high standard facilities that the Board thinks the MEI offers are not at par with those on offer in Europe and other developed countries.
Students from such affluent countries for example do not approve even the food served to the children, demanding more.
Another major grievance is the discrimination in fee scales. Parents from Greece complain about the difference in fees applied based on the occupation of the parents. Those with "inside connections in the AGBU send their children at a fraction of the fee, while the rest are called to pay the full rate. One rate applies to all, would be much better.
The School Principal and the MEI Board say that they have increased the fees, which means that they must be doing something right and they should be allowed to proceed as the "free-loaders" are slowly phased out.

Broken families
AGBU view: The MEI may end up becoming the dumping yard for broken families, something that is against AGBU principles.
ALUMNI ARGUMENT: Divorce is fast expanding globally and affecting Armenians as well. Its better for a place like the MEI to take them and teach them family values (after all, the Melkonian is a big family), rather than leave them on the streets of NY, London or Beirut and risk seeing them join up the underworld.

Foreign students
AGBU view: MEI has foreign students. The MEI mission is not to accommodate foreigners, but cater only to Armenians.
ALUMNI ARGUMENT: Enough of living in ghettos created by people (so-called Armenian leaders) who cannot appreciate the requirements of a changing world. By attracting a select number of foreign students they can become a much better influence in containing any ultra-nationalist and racist feelings that risk building up in a closed Armenian institution.

Better elsewhere
AGBU view 1: Since the MEI does not serve any purpose, its better to close it down, sell the property and utilize the proceeds in a more productive way.
AGBU view 2: Keep the school open, but phase out the boarding school.

ALUMNI ARGUMENT: First and foremost, the Melkonian property has not been donated/handed over to the AGBU to be sold and used for so-called other purposes. In fact the Melkonian Brothers’ Will specifically makes a mention of what will happen to the school in the event that the AGBU closes (eventually control shifts to Jerusalem/Edjmiatzin), but insists that the school remain open. Selling land gradually will reduce the school’s asset strength, which can be better utilised by methods of lease, long-term investments AND keeping the property at the end of the day.

All options failed
AGBU view: Since the 1970’s, the AGBU has attempted many options to justify the existence of the MEI, yet all have failed.
ALUMNI ARGUMENT: The MEI Board insists that during its 8-year tenure, it has submitted many projects, offers and proposals towards the better utilisation of the school facilities, but all its requests have been turned down by the Central Board. Excluding the dispatch of a US consultant to evaluate the school situation, can the Board say how many times it has undertaken studies, prepared by professionals (and not by Armenian self-declared gurus) about exploring alternative income generating projects.
Was the sale of part of the MEI land and the construction of the Melkonian Commercial Centre based on a professional study, guaranteeing future income and meeting expectations, or was it yet another sentimentally driven project?

Annual budget
Conflicting reports:
AGBU view: During discussions in Beirut, the AGBU President referred to an annual cost of USD 1.5 mln, of which $400.000 is collected from the students as tuition fees, leaving a deficit of $1.1 mln.
AGBU insists the money collected from the rental of the Commercial Centre, estimated at around $400.000 belongs to the AGBU. The proceeds of the Melkonian Brothers Endowment Fund, estimated at $5.5 mln (but for which there is no publicly available information) are also booked by the AGBU as its own income.
ALUMNI ARGUMENT:
1) Budgets: The MEI Board prepares an annual expenditure and revenue budget and after receiving the AGBU Central Board approval proceeds with the day-to-day running of the school.
If the Central Board felt that the expenses were rising without justification or not meeting the stated mission or goals, why were these approved?
How many times has AGBU/NY asked for cost cutting measures and what was the response of the MEI Board.
The fact that NY continued to approve the CYP 1.15 mln or USD 2.3 mln expenditure budget, means it was according to its goals, confirming the view that the plans to close the school and sell the property have nothing to do with the budget gap.

The Alumni estimates that the total annual costs are in fact CYP 1.15 mln or USD 2.3 mln.
Income from tuition fees approaches CYP 500.000 or USD 1 mln.
Income from the Commercial Centre is seen at CYP 200.000 or USD 400.000,
Annual income from the estimated USD 5.5 mln Melkonian Fund is seen (current depressed levels) of at least CYP 100.000 or USD 220.000, leaving an annual budget gap of around USD 600.000 for 2003.

2) Melkonian Commercial Centre: The AGBU is flawed to book the estimated CYP 200.000 or USD 400.000 annual rental income as its own and not book it in the MEI accounts. Furthermore, lack of control and absence of commercial knowhow is depriving the MEI of a higher rent agreement.

3) Endowment Fund: The Central Board has never provided details regarding the origin of the Melkonian Bros. Endowment Fund, where it was invested and how much surplus funds it had accumulated during the initial years. Correct accounting practise stipulates that any income from the fund is booked as income for the MEI and not end up anywhere else.

Benefactors:
One of the principle sources of income for the AGBU is the establishment of endowment funds/trusts by wealthy Armenian individuals who have come to trust the AGBU as the only global Diaspora organization that will properly handle the execution of the will and ensure that the money is used solely for the purpose of the charity for which the donation is made.
If the AGBU Central Board proceeds to sell the MEI and use the proceeds for other purposes, then this will have a major impact on the future fund-raising efforts of the AGBU, and result in loss of credibility and trust, built up over decades through hard work.
Alumni sources report that already one wealthy Armenian benefactor who was considering giving funds to the AGBU is having second thoughts after hearing the reports about the planned school closure. If not addressed immediately, this could have a snow-ball effect and force others to decline giving funds to the AGBU.

Split among the AGBU
The closure of the MEI will cause a major rift among thousands of AGBU members and split the organization at a crucial time when it is called to provide leadership both in the Diaspora and Armenia.

Uncertainty
An indefinite decision at the December Central Board meeting on the fate of the school will have the same damaging impact as will a final decision for sale, which is why the Central Board must come to a decision and make an official declaration regarding its intentions.
Hundreds of parents, both in Cyprus and in the region, having heard the rumours will not send their children to the MEI whilst parents whose children are currently enrolled in lower grades will simply shift their children to other schools.
The uncertainty will not only have a tremendous negative impact on teacher/student/parent morale, but also risks destroying the hard work undertaken by Armenian Representative Mr. Bedros Kaladjian in lobbying for additional funds from the Cyprus government with regards to its commitments made in the EU accession treaty to support the Armenian community.

Boarding school phasing out
During a meeting held in October in Pasadena with the California Alumni, AGBU President Mr. Berge Setrakian is reported to have insisted that there is no issue of closing the school, instead, an idea to phase out the boarding facilities.
Such a decision means another way of saying the school will be closed, since without the boarding facilities, there will be no Melkonian.
Cyprus Alumni members believe that Mr. Setrakian’s about-turn is a direct result of efforts to declare the two main school buildings and the villa, Cyprus National Heritage institutions by the Cyprus government, which would forbid their destruction by a would-be buyer for property development.
The Cyprus Alumni insists that the boarding school phasing out strategy is flawed, and calls on the AGBU to join in efforts to explore new fund raising efforts and cut costs to keep the school open.

Focus on Central Board
A decision to close the school or a "no comment-no decision" risks giving the upper hand to hardliners who may unleash an unnecessary and unpleasant attack against the AGBU Central Board, accusing members of financial mismanagement, inappropriate use of funds and lavish expenditure for other projects opposed by the rank-and-file.
+ Rumours are already flying that the reason why the Central Board wishes to close the school and sell the property is to use the funds to close its own budget gap, or otherwise risk collapse.
+ People are openly questioning why the Central Board spends about USD 2 mln annually for the publication of its English and French language gloss magazine when it can use the funds to "educate thousands of Armenians around the globe" based on the Central Board’s calculation that every student costs it a maximum of $52 to $500 per head.
+ Financially savvy people (graduates of the MEI) ask why the AGBU did not hedge its overseas payments (MEI included) when it was so obvious to everybody that the value of the USD would decline. When US Treasury Secretary Snow was appointed, and based on his background (manufacturing) it was obvious beyond reasonable doubt that the Bush Administration would talk the dollar down. People are asking why the AGBU did not see this coming and hedge itself.
+ Reports that the AGBU has yet to present its 2002 financial accounts have added to fears that the AGBU capital was wiped out after the equity market collapse. The good thing is that since hitting an all-time low, US equity markets have recovered by 40%. Shall we presume that things have improved now?

Paying for mistakes of others
The AGBU Central Board and the MEI Board both have a share of responsibility for allowing the situation to reach this stage.

The fact that AGBU NY never sent warning notes to the school to cut costs and balance its budget, or provide direction is directly related to the lack of an Executive Director who would be responsible for the day-to-day management of all the affairs, including the MEI.

The local board is also at fault for allowing costs to get out of control, on the flawed understanding that since its annual budgets were approved by NY, then it could spend beyond its means.

Prepared by the Cyprus Melkonian Alumni
Nicosia, November 12, 2003