Our New Building: More Than We Imagined…
All Saints’ new building has revitalized and energized the life of the parish with new opportunities for expanded programs and administration, a welcoming invitation for newcomers, and a place where the whole parish can gather together. But beyond that, our building has developed into the community center we envisioned, being used daily by a wide variety of groups, and has become the cornerstone of local outreach in downtown Tupelo.
And what an impact our expansion has had not only on our parish, but on Tupelo! Our spacious parish hall is a community gathering place, constantly used for parish, diocesan, ecumenical and civic activities, meetings, and events. Our state-of-the-art kitchen and faithful volunteers—including volunteers from outside All Saints’— feed some 2000 hungry neighbors each month. We have one of the few facilities in the South specifically designed as Catechesis of the Good Shepherd atria where we nurture the budding spirituality of our youngest members, most of whom were not born when we started building. Our music programs continue to thrive in carefully thought-out spaces. Our EYC has its own space, with participation returning to previous peaks. Our building permitted us to sponsor a Boy Scout troop and Cub Scout pack that lost their home. A Montessori school uses our nursery space five days a week. In short, our new facilities are serving the purposes for which they were built—and more.
Where We Stand
Our first capital campaign made payments toward our construction loan and made payments during the early years of our permanent financing. The second permitted us to retire our loan from the diocese early and provided a five-year revenue stream to continue making payments on our remaining debt. We are nine years into our journey to pay for our building expansion, and we have occupied our new facility for six years.
The debt on All Saints’ $4.4 million building currently stands at approximately $2.25 million. The parish makes monthly payments with funds specifically given by parishioners for that purpose. After allowing for planned campaign expenses, All Saints’ has about seven months of payments in reserve, enough to make payments until near the end of 2014. Our loan is with Renasant Bank at an interest rate of 4.7%, and the loan requires payments of $16,900 per month or about $202,800 per year until it matures in August 2019. Over five years this totals a little over $1 million. Assuming normal attrition, and setting aside several months’ payments in reserve, we will need to obtain about $1.2 million in new and renewed pledges just to make our monthly payments for the next five years.
It will be necessary to refinance our loan by August 2019. Raising $1.2 million in pledges from this campaign and making scheduled monthly payments will reduce our debt from its present $2.25 million to about $1.575 million when it is refinanced.
Raising substantially more than $1.2 million, however, especially through commitments that could be paid in full “up front,” should allow us to retire additional principal ahead of schedule, reducing our interest expense and eventually creating the possibility to move debt service into an expanded operating budget. The more that can be paid down over the next five years, the more and better options All Saints’ will have in 2019.
An Opportunity to Reduce Our Loan
Our 4.7% rate is locked until August 2019. Most experts assume that rates will increase— perhaps significantly— by then. In view of that very real possibility, the best way for All Saints’ to take advantage of its current low rate is to retire as much principal as possible as soon as possible so that monthly payments scheduled until 2019 will work to pay down even more principal. Currently, only about half of our monthly payment goes toward principal reduction; the rest to interest.
For each additional $100,000 above $1.2 million we can raise and are able to pay up-front in 2014 will save about $29,000 in interest over the five-year period ending in 2019. Stated another way, each $100,000 paid before the end of the year will reduce our loan balance about $129,000 by the time we are scheduled to refinance.
At some point we hope to include our monthly debt payment in an expanded annual budget and forego the need for future capital campaigns. A strong response to this campaign will provide All Saints’ a better chance to do that in 2019, especially if our loan balance is under $1 million and our monthly payments are significantly less than the current $16,900.
In the previous 2009 campaign our parish responded with nearly $1.4 million in pledges just a year after the 2008 economic downturn. While uncertainty still exists, interest rates have remained low and the capital markets have rebounded significantly. We are also a stronger parish, both in membership and giving.
Exceeding $1.2 million in pledges with a significant portion paid this year is our best opportunity to reduce our debt to a point well beyond what making only our required loan payments would do.
While our debt is significant, it is not beyond our means. We have chosen to address it in five year pieces, a little at a time. Other churches our size have retired similar loans, and we can too.
With the lowest interest rate we’ve ever had on our debt, more of your gift—especially gifts made in 2014—will go towards paying down principal. This gives us the opportunity to pay down our principal balance ahead of schedule if our campaign responses include significant gifts that are paid to All Saints’ before the end of 2014.
Early payments to principal made possible by “up front” pledges could cut our monthly payment obligations in half by 2019. But without such reductions, in a rising interest rate environment our monthly payments could actually increase in 2019 if we do nothing more than meet our minimum goal. Early principal reductions are the key to our success in this campaign.
Underlying the need for generous and sacrificial giving is the continued need for your faith and your prayers. Tackling debt requires that we urge one another to a deeper understanding of stewardship and generosity, as we call on each other to pray and work more devotedly than ever before. Once again your parish needs your wholehearted enthusiasm for and commitment to this important work at hand.
Wayne Slocum, Campaign Chair
Paul Perry, Campaign Co-Chair
Sally & Lloyd Gray, Advance Gifts
Fred Page, Advance Gifts
Joellen & Ken Murphree, Advance Gifts
Cathy Fitzpatrick, Advance Gifts
David Sparks, Advance Gifts
Stephen King, Leadership Gifts
Dinetia Newman, Pacesetter Gifts
Ginger Harbour, Pacesetter Gifts
Lynn Bryan, Parish Teams
Betty Lee Marshall, Parish Teams
Billy Walton, Prayer Support
Les Alvis, Communications
Deanna Alford, Speakers & Testimonials
Amanda Foster, Parish Dinner
Sandra Perkins, Parish Dinner
Yvette Slocum, Parish Dinner
Mike Fitzpatrick, Finance
Pete Poland, At Large
Albert White, At Large
Paul Stephens, Rector
Stanford Adams, Curate
Billy Walton, Deacon