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Church Council

December 11, 2007

Capital Fund Campaign

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Capital Fund Campaign Background

• Two mortgage loans with Compass Bank, one for $1.5M and one for $900K+– 25 year loans at 6.99% interest for first ten years, then renegotiate– Paying interest only for first year ($15,000/month), start paying P & I

March 2008– P & I on $1.5M = $10,685.16; P & I on $900K+ = $6,796.16; total =

$17,481.32 per month

• Benefits of early payoff:– Action Planning Team report asked leadership to better fund

ministries– Mortgage payment $$ can be better used for missions, ministries,

and necessary capital improvements, not mortgage• Reduces amount spent on interest significantly

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Potential Fund Drive

• $1.7M in pledges for Family Life Center

• TMF indicates debt reduction campaign probably less successful– Could reasonably expect $1M in pledges

• Cost of Campaign:– $42K for outside consultant plus $25K other

expenses (mailings, luncheon, etc.)– Stress on staff and lay volunteers to make

campaign work

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Why Hire a Consultant?

• No known successes without one

• We hire experts for many activities– Lawyers, real estate, surveyors, elevator

inspectors, etc.

• We would probably need to hire some extra office administrative help

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Impact of Early Payoff

• Total payments for 25 year loan:– Principal = $2,409,613– Interest = $2,782,518– Total = $5,192,131

• Impact of $1M in capital fund pledges – Principal = $2,409,613– Interest = $1,058,852– Total = $3,468,465– Savings = $1,723,665– Payoff $900K mortgage in 44 months, $1.5M loan in 13

years versus current 25 year payoff

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Finance Committee Recommendation to Church Council on October 23, 2007

• The Finance Committee recommends we conduct a Capital Fund campaign starting in January 2008 and hire TMF to conduct the campaign

• Recommend the Church Council approve and forward to the Church Conference for approval

Church Council Response

• Approved

• Present to annual Church Conference for approval

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