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Church Council December 11, 2007

Church Council December 11, 2007. Capital Fund Campaign. 1. 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

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Church Council December 11, 2007

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  1. Church Council December 11, 2007 Capital Fund Campaign 1

  2. 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 2

  3. 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

  4. 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

  5. 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

  6. 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

  7. Church Council Response • Approved • Present to annual Church Conference for approval

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