11 Church Council December 11, 2007 Capital Fund Campaign

22 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, 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

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

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