Leaders at Redmond's Overlake Christian Church are consolidating some services while trying to attract new members, in part to address financial...

Leaders at Redmond’s Overlake Christian Church are consolidating some services while trying to attract new members, in part to address financial problems that became more widely known this week with reports that the church had used money donated for disaster relief to cover church expenses.

Church leaders acknowledge that $75,000 donated by congregants after 2004’s Indian Ocean tsunami and 2005’s Hurricane Katrina was used for expenses, including salaries. But they said that because the money was repaid and donated to relief efforts late last year, they had done nothing wrong.

Others have questioned that position. Michael Bisesi, director of Seattle University’s nonprofit leadership program, says that type of action “violates the basic principles of donor intent, which says if a donor gives money, it’s to be used for the purposes the donor intended.”

Because the money ultimately went to relief efforts, it’s less likely the state Attorney General’s Office would look into it, spokeswoman Kristin Alexander said.

Whatever its ethics or legality, the handling of the money highlights Overlake’s bigger financial problems. It opened a $37 million facility a decade ago when attendance was about double what it is now. It has about $9.2 million in mortgage debt. It has lost money in the past several years.

And its leadership is in transition. Senior pastor Rick Kingham announced his resignation earlier this month, and church elders have not decided whether they want another senior pastor or a new type of leadership structure.

“Things like this do not faze the church,” said Overlake executive pastor Dana Erickson. “Scripture tells us the church moves on because it’s built on Jesus. It’s not built on any particular man.”

In part to cut costs, the church plans to cut back the number of Sunday morning services. Currently, it has four services: two with a contemporary worship style, called Celebration, and two with an edgier, hipper style to appeal to younger churchgoers, called Illuminate.

Starting mid-March, there will be one Celebration service and one Illuminate service on Sunday mornings, with Illuminate’s pastor, Mike Howerton, speaking at both. The move was also made because attendance at Celebration has declined to about 1,300 combined, while Illuminate’s services have grown to about 1,400 since Illuminate started two years ago, Erickson said.

The church may also start a capital campaign either in the fall or next winter to help retire the mortgage debt.

Church leaders say in the next several years they hope to reach more young, college-age people and to expand from about 2,000 to 4,000 the number of people who take part in Overlake’s many small groups — for young married couples, singles, or Bible study.

Overlake grew to about 6,500 congregants at one point when the church was headed by its pastor of 28 years, Bob Moorehead. In 1997, the church opened its current facility — which includes a main worship space that seats 5,400.

But a year after, Moorehead became embroiled in a scandal that culminated with several men saying he had inappropriately touched them years ago. Moorehead resigned, maintaining his innocence but saying his credibility had been damaged.

Attendance declined after Moorehead left.

That means fewer people tithing. But that number would be enough to sustain the church if a greater percentage gave, Erickson said. “If we even upped that a little bit … we would have absolutely no financial problems with the current levels that we have.”