Money Matters 8/1/2024
Capital Campaign Financial Update as of July 15th, 2024
At the 2U Annual Meeting in June, we focused on the annual operating budget and failed to provide a financial update on the capital campaign. Our apologies for the delay – the update follows. We will increase the amount of communication on capital expenditures moving forward.
The goals of the campaign are:
Make our church accessible with an elevator to all levels for the first time and a ramp to guarantee sanctuary access.
Replace the roof. (Completed August 2021)
Replace the original 1906 Sanctuary floor and redesign the Chancel. (Completed in Fall 2023)
Enhance the Loft with new windows and a refinished floor, etc.
Create a $25,000 sewer reserve as the connection to the City main in the street is broken and will need repair in the coming months or years.
Add a fire alarm system with automatic notification to the Chicago Fire Dept. Due to a number of factors, the board added #6 in January 2023.
Building work pushed into the future is masonry restoration, and this will be a significant expense.
Capital Spending
We are now in Phase II of the work focused on the elevator, ramp construction, and related main (east) entry re-configuration. This is the expensive part, and our capital cash of $499,000 as of 6/30/24 will all be expended in the coming months.
Some numbers:
Total Capital Spending as of 6/30/24: $324,662*
Planned Remaining Spending: $612,000
Total Planned Expenditures: $936,662*
Plus $25,000 Sewer Reserve: $961,662
To date, we have paid architects Harboe and Holbert $100,974, Star Roofing $59,450 (summer of 2021), Mirek (general contractor) $100,266 for sanctuary floors, chancel redesign work, electrical and cable work, two new large screen TVs on the chancel, etc., and US Electrical $25,231 for the initial work on the fire alarm system. So far, costs have come in close to expectations.
Spending by fiscal year has been:
July 1, 2021 – June 30, 2022: $129,529
July 1, 2022 – June 30, 2023: $106,545
July 1, 2023 – June 30, 2024: $88,588
We expect to receive an invoice shortly from Mirek for Phase II’s elevator shaft work. Major upcoming trade spending includes $80,400 for the elevator (not including the shaft), $80,000 for concrete, masonry of $65,000, carpentry $29,000, fire alarm system $31,000, management overhead & profit $58,800, electrical $26,300, plumbing $16,500, demolition $20,000, new energy-efficient windows in the Loft $24,000, plus doors & hardware $7,300, drywall $6,000, floor work in the Loft and Palmer Room $9,000, tiling $6,000, millwork and trim $6,400, structural steel $9,000, steel railings $7,000, painting $8,600, radiant heat in the ramp $8,000, plaster repair, garden restoration $6,000, and more. Additional architectural-supervision fees will be approximately $56,000. And there will be interest expense on the construction loan.
We are absorbing two cost increases since Mirek’s March 2023 bid, and these are $30,000 for concrete and $5,000 for the elevator. However, Mirek shaved off $6,000 elsewhere, so the net increase is $29,000. This is within our contingency.
*Note – the Harboe study report cost of $34,500 in 2021 was paid for by funds allocated by the board from prior surpluses.
*Note – the sewer repair cost is several years old, and it is reasonable to assume it will be higher due to inflation.
Construction Loan Needed
In April of 2023, we met with our long-time lender, Devon Bank, to discuss a construction loan. At the time, we requested a loan facility of $250,000, and Devon agreed. (We have an existing mortgage due Nov. 1, 2024, with Devon, and the balance is now under $88,000). To date, we have not had to use the construction loan due to the delay in starting Phase II work. At this time, we still expect to borrow after we use up existing cash this fall. On the bright side, we will need to borrow a smaller amount than expected but probably still in the range of $100,000. The construction loan is meant to be paid off with future capital campaign donations as many members pledged over 3, 4, and 5 years. The goal remains to avoid a permanent increase in the church’s debt.
Capital Donations
The very good news is that we have received capital pledge payments and donations of $835,051! This is 86% of total pledges to the capital campaign! The total pledged was $970,317. Thank you, thank you to all who have donated to help preserve and enhance our church home for many years to come!
Capital donations have come in over the past 3 years as follows:
June 1, 2021 – June 30, 2022: $402,234
July 1, 2022 – June 30, 2023: $216,002
July 1, 2023 – June 30, 2024: $216,815
Capital Pledge Fulfillment:
Paid 100% of Pledge: 47 households
Paid > 25% or more: 28
Paid between 1 – 25%: 3
Late starters ($0 paid): 32
Total # of Pledges: 110 representing 169 members
The total pledged by late starters is $46,478, so whether we succeed in avoiding a permanent increase in debt depends on everyone doing their best to fulfill their commitments. A pledge shortfall would result in a higher mortgage interest expense for our annual operating budget, and we really hope to avoid this.
The donations do include some from non-pledgers and those who have exceeded their pledge. This extra giving totals $7,564.
If your circumstances have changed (we understand life happens) and you are not able to fulfill your capital pledge, please notify the office so we may take this into account.
Conclusion
The good news is we are on track financially, and it is great to see construction taking place weekly. Construction timing is tricky, and we deeply regret the delay. We do hope members who cannot enter the church now will be able to do so by year-end or shortly after. Fingers crossed that we have no unpleasant surprises in construction. We do hope members can catch up on their pledges. Thank you so much for your ongoing patience, financial support, and sharing the vision of a repaired, fully accessible, and enhanced church!
Respectfully submitted,
