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Are we already stretched by
debt from previous projects so as to jeopardize the organ
and sanctuary restoration project?
Yes, we have some indebtedness.
No, we do not feel jeopardized.
What do the numbers look like?
At present we are carrying
three loans or mortgages. Let's talk about the simplest
one first. On March 1, 2004, we borrowed $250,000 in short-term
money (at one-half percent below prime) to cover yet-to-be-completed
pledges for the CLC. Against that amount, we have already
paid $129,500, leaving a balance of $120,500.
Do we expect to receive those
pledges in a timely manner?
Do we have a second mortgage
on the Christian Life Center?
Yes, in the amount of $738,301
(taken out on March 1 of this year). This amount is also
pegged at one-half percent below prime (3.5% as of this
writing). This is a 15-year agreement with a renegotiation
on the fifth anniversary.
What does this second loan
cost us?
$5,277 per month (or $63,324
per year).
Are we able to handle that?
At present, that is being handled
by the Trustees and is well within their available resources.
But isn't there a third source
of indebtedness?
Yes, we have a mortgage for
$500,000 on the house at 361 Pleasant, which we purchased
largely for the property that became the south parking lot.
What are the terms of this
contract?
This is a five year contract
with a fixed rate of 5.52 percent. The present rate of payment
calls for $4,090 per month.
Are the Trustees able to handle
that as well?
The amount of $4,090 per month
also appears to be manageable, given present Trustee assets
and the ongoing support of Home Fires giving.
What is the long-term projection
for the Pleasant Street parsonage?
It's hard to say. We now own
four houses, three of which are fully paid for. Were we
to ever use the Pleasant Street house for someone other
than a first-time appointee, we would have to confront the
fact that it doesn't fully meet the parsonage standards
of our denomination. In the short run, it has value as a
residence. In the long run, its value may lie in other directions.
If we should fall short of
the $1.6 million in pledges sought for the sanctuary, will
we be able to increase our borrowing?
That's really a two-part question....one
part having to do with our ability to borrow, the other
part with our ability to repay. As concerns our ability
to borrow, we would have no trouble getting additional funding
(even in substantive amounts). The financial health of the
congregation, coupled with the assets presently managed
by the Trustees (not to mention the Endowment Fund), make
First Church extremely attractive to a lender.
But what about the "ability
to repay" part?
Obviously, the higher the monthly
number goes, the greater the stretch. We could probably
go higher without jeopardizing program, mission or maintenance.
Or we could "thrift" the projected renovations,
were it deemed prudent or desirable. Clearly, our hope is
to underwrite the entire $1.6 million with pledges of three
years or less, thus avoiding a significant change in our
debt structure.
Won't we have to have some
short-term borrowing against unpaid pledges?
Quite likely. But borrowing
against short-term pledge repayment has had relatively little
impact on the CLC. That's because an unusually high percentage
of CLC pledges were paid within the first year. Moreover,
work will not even start on the sanctuary project until
January of 2005.
How does our indebtedness
compare with other churches?
When the size of our congregation
is considered, our indebtedness is remarkably small. For
example, it is virtually impossible to build a sanctuary
of any size for less than a million dollars (and if you
add even minimal facilities beyond a sanctuary, you are
quickly talking two or three million). And this is for small
churches of 200 members or less. We have nearly 3200 members.
But those churches tend to
follow three-year building campaigns with a succession of
three-year debt retirement campaigns. Is that what we are
planning?
The Endowment Fund was mentioned
in an earlier question. What is its present value?
As of March 31, its value stood
at $1.475 million. Smaller endowment funds (albeit for very
specific purposes) total an additional $608,749.
Are those funds available
for building-related purposes?
We do not view the Endowment
Fund in that light. There is, however, a formula by which
earnings can be applied to projects and programs, thus ensuring
that ours is a "working endowment" rather than
a fund set aside for a rainy day.
Given that this is the second
building campaign in four years, when should we expect the
next one?
There has been no conversation
by anybody....at any time....at any level of leadership....having
to do with another major building program. Having built
the CLC and refurbished the sanctuary, we see ourselves
"living into our new space" for a considerable
number of years.
But doesn't every church have
to face the problem of major capital repairs?
True, every church does. But
we have handled most of them over the last decade. The roof
is in good shape. The boiler is new. All the air handling
systems will have been upgraded. Almost every classroom
and hallway has been refurbished. Most of the landscaping
plan has been implemented. Parking has been added. Every
window is new. The only "big ticket" item on any
future horizon involves the day when we will have to resurface
the older portions of our parking lot. Fortunately, the
Home Fires Fund looks capable of handling such needs.
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