Rev. Jeff Hall sent this response to your question.
Thank you for your question concerning the situation at the First United Methodist Church of Alexandria, Indiana. The current teaching of The United Methodist Church, as approved by our General Conference (the highest legislative body in the church) is this:
We affirm that all persons are individuals of sacred worth, created in the image of God. All persons need the ministry of the Church in their struggles for human fulfillment, as well as the spiritual and emotional care of a fellowship that enables reconciling relationships with God, with others, and with self. The United Methodist Church does not condone the practice of homosexuality and considers this practice incompatible with Christian teaching. We affirm that God’s grace is available to all. We will seek to live together in Christian community, welcoming, forgiving, and loving one another, as Christ has loved and accepted us. We implore families and churches not to reject or condemn lesbian and gay members and friends. We commit ourselves to be in ministry for and with all persons. (Book of Discipline, para. 161F)
At present, the denomination prohibits "self-avowed practicing homosexuals" from serving as ordained ministers, but does not exclude them from staff or leadership positions as lay people. All decisions about local church staff positions are to be made by each congregation's pastor- or staff-parish relations committee, whose responsibilities are outlined in paragraph 258 of the Book of Discipline. That committee is made up of lay members of the congregation. It isn't clear whether the staff-parish committee of this particular church was involved in the removal of the choir director, but it sounds like the minister acted unilaterally.