1. Are there other viable alternatives to the Chalice Center?
The Multisite Task Force reviewed four options: (i) Continue as we are; (ii) Split into two separate congregations; (iii) Sell one or both facilities; (iv) Make better use of our Market Street facility.
(i) In our current configuration, we have been drawing on our reserves and to continue down this path is not sustainable. We have been postponing all but essential maintenance on both buildings, which means that we will have substantial expenses in the near future. In order to reduce expenses to avoid drawing on reserves, we have reduced staff. We are now unable to adequately staff both facilities for the long term in a way that would enable us to keep members, attract new members, and realize our potential. There is ongoing discontent amongst members. The Healthy Congregations Task Force has been working in a variety of ways to address this, but we cannot expect that members will be satisfied if we simply continue as we are now.
(ii) The second option, splitting into two congregations, would increase the financial hardship for both. Members would be split between the two congregations, with resulting reduction in income for each congregation. In addition, we would expect there to be an overall loss of members, as the upheaval caused by the split would affect members’ willingness to continue to be a part of either congregation. It is not clear that both congregations could survive, given the necessary costs of sustaining a congregation, or that there would be enough members at each site to build a congregation. The negotiation of the terms of settlement between the two congregations would likely be protracted and difficult, with the responsibility for the mortgage being a major stumbling block.
(iii) The third option, selling one or both campuses, would result in the loss of a spiritual home for some or all of our members. We would lose our mission, our identity and many members. The proceeds of selling Market Street, if it were even possible to sell it, would not be enough to pay off the mortgage on Clover Lane. The sale of Clover Lane or both campuses would not cover the costs of finding and purchasing a new location.
(iv) The fourth option, developing a plan to make better use of our Market Street facility, provides the best chance for us to meet our expenses and to continue as one church, with two thriving locations. If the congregation votes not to proceed with the Chalice Center proposal, the Board will next consider what will be the best course of action in order to maintain financial solvency and retain as many members as possible.
2. What process will we use to vote?
At the Annual Meeting on May 22, the congregation will first vote to amend our current bylaws to permit the designation by the Board and the congregation of certain matters as “high stakes”. An amendment to the bylaws requires a quorum at the meeting (20% of the membership) and two-thirds vote in favor is necessary for the adoption of an amendment.
The congregation will then proceed to vote on whether the Chalice Center proposal is a “high stakes” matter. If the congregation decides that it is, then a majority of the entire membership of the church must approve the motion to authorize the Board to proceed with the concept of a Chalice Center. Voting will occur by anonymous ballot, either while present at the annual meeting, or by absentee ballot. Two weeks will be provided for the return of ballots. Procedures will be in place to assure the integrity of the vote.
If the congregation fails to adopt the bylaw amendment, or votes that the Chalice Center matter is not “high stakes”, then the motion for the Board to proceed with the Chalice Center proposal will pass if approved by a simple majority of those present at the annual meeting. In that event, a quorum (20% of the congregation) must be present at the meeting in order for a vote to be taken.
3. Financial concerns:
a. What is the breakdown for the costs of each building?
Estimated building expenses for 2015-16:
Grounds care: $7,300
(electricity, refuse, sewer, water, telephone and Internet)
Grounds care: $350
Taxes (parking lot): $360
(electricity, gas, water, sewer, security, phone, Internet)
b. How much is the mortgage and is the mortgage on Clover Lane?
Mortgage payments – principal and interest – were $19,940 this year. The money that we borrowed to purchase Market Street and make capital improvements, was secured by a mortgage on the Clover Lane facility. There is approximately $250,000 left on the Clover Lane mortgage.
c. Would we take on additional debt load, such as a second mortgage on Clover Lane, if we need additional funds to cover our operating deficits?
No. Even if this were possible (i.e., a bank would agree to loan us additional funds), this would be an unacceptable risk to the congregation’s financial resources.
d. Clarify what is meant by a $30,000 deficit.
UCH drew upon its reserves this year, in the amount of $30,000, in order to meet its operating expenses. In other words, our expenses exceeded our income.
e. What has been done to reduce costs? Why can’t we just do more cuts?
In the past few years, we have steadily reduced our expenses in order to meet reduced income. In spite of our efforts, we had a significant deficit this year that could only be addressed by drawing upon our reserves. In order to produce a budget for next year that does not include a deficit, a variety of additional cost-saving measures have been implemented, primarily the lay-off of staff. We now have just one staff to meet the needs of both locations. To achieve further reductions, we would need to further reduce ministerial services, the RGL program, and/or the music program.
f. Does UCH have sufficient resources to cover expected operating deficits for 2016-17 and 2017-18 if there is not rental income from the new proposal in 2016-17?
Our proposed budget for 2016-17 is not dependent on new rental income. We currently have rental income from GTS at Market Street, as well as other one-time event rentals at Clover Lane. We will not project additional rental income, until we have agreements in place. The 4/2/2016 handout (the slide presentation) refers to 2015-16 rental income, not next year’s.
g. Are we prepared for the possibility that we will not realize substantial rental income from the Market Street campus in 2016-17?
Yes. Although we believe that UCH cannot continue much longer on its current track, we are prepared to reduce expenses as necessary for the next two years to avoid drawing upon our reserves. We are not in imminent danger of failing, but we have watched our revenues decrease each year since 2012, and so we are now acting prudently to address the situation. Reverend Walker, at the Board’s direction, has adjusted our expenses, primarily by reducing staff, so that we can minimize our annual deficit while we develop and implement a plan that we can all agree to and support.
As we discussed during the presentation at the group sessions, the congregation will need to be prepared to support two campuses, financially and with volunteer efforts, as we develop and implement our plan. If members and friends of the congregation continue to pledge at current rates and continue to fundraise as they have done in the past two years, UCH will have sufficient funds to support both campuses for the next two years, relying upon our reserves, if necessary. It is true that we are in a difficult situation, but we have taken action to reduce the risk to the congregation. Having said that, it is vital that the congregation understand the seriousness of our situation and the necessity for prompt action.
h. Won’t liability insurance increase if we rent to tenants?
It is standard in lease agreements, including our current agreement with GTS, for each party to agree to carry liability insurance that covers the cost of harm caused by that party. This is one of the matters that we would research if the congregation authorizes the Board to further explore the Chalice Center option.
4. Could I have more details about the proposal?
a. Is there a need for rental space in Allison Hill?
Yes. Other organizations have indicated that they could use additional space from which to conduct their activities in Allison Hill.
b. Aren’t adequate services already provided for Allison Hill by other organizations? Joshua Group, GTS, other churches?
Many organizations provide services in Allison Hill. Our facility would enable them to expand their outreach.
c. What do you mean by self-sustaining?
Self-sustaining means that the income from the Market Street site will contribute, if not fully, then substantially, to the costs of maintaining the site.
d. Is the site suitable for rentals?
i. Handicap accessibility – has anyone checked on accessibility requirements, in particular for potential government agencies or recipients of government funding? The building itself is exempt from accessibility regulations because it is owned by a church. However, further research into this issue will be conducted, if the congregation decides is to proceed to develop the Chalice Center proposal. In general, accessibility rules usually require only what is “readily achievable”, defined as “easily accomplished and able to be carried out without much difficulty or expense.”
ii. Lack of parking – The need for and the development of additional parking options would be further researched, if the congregation authorizes the Board to move forward with the Chalice Center option.
iii. How much could we charge for rent, and will those rents be affordable for the entities providing services in Allison Hill? This would be researched if the congregation authorizes the Board to proceed.
iv. Is the building in good enough repair? Does it comply with fire codes or other requirements? The Market Street facility is compliant with fire codes and we are not aware of any other deficiencies with respect to government codes. Although some repairs and other maintenance has been postponed, nothing has been postponed at either facility that relates to safety or legal requirements. Some repairs and a facelift (e.g., painting) may be advisable to enhance the attractiveness of the site.
5. How will we know if plan is succeeding?
We will implement the plan one step at a time, without prejudging the outcome. As long as we are making progress and finding viable tenants, we will consider the plan to be working. We will monitor our progress and report to the congregation at regular intervals.
6. Will milestones be established?
Establishing milestones will be part of the business plan that we will develop if the congregation decides to authorize the Board to proceed with the proposal.
7. How do we assure that our tenants are aligned with our values/principles?
The Board will develop guidelines to assure compatibility. Our current arrangement with GTS outlines the congruence of our mutual goals and values.
8. This isn’t a new idea – it’s been proposed before – how is this proposal different?
This proposal is different because, if the congregation decides to authorize the Board to proceed, it will be an intentional commitment to devote the time and energy necessary to make it work.
9. Who will develop the business plan?
The Board will bear the responsibility for assuring the development of a business plan.
10. Who will find rentals and manage the building?
The Board in conjunction with staff will bear the responsibility for determining by whom and how the building and rentals will be managed.
11. What will happen to worship at Market Street?
Worship as provided at Market Street is the spiritual center of UCH’s commitment to the Allison Hill neighborhood. It is a need and a desire of a significant number of members of UCH. Options for the times of worship, the content of the worship services, and other matters relating to worship that would make it more relevant to the needs of the members and residents who attend Market Street, would be considered, developed and implemented through our worship team.
12. How are we dealing with healing past conflicts?
The charge of the Healthy Congregations Task Force is to address the conflicts present in the church today, and to work to develop better ways of handling conflict in the future. The HCTF has worked in a variety of ways, conducting listening sessions, offering workshops and programs, and offering conflict resolution for individual members who desire that service. They will continue to do this important work for the congregation. The Multisite Task Force has relied upon the HCTF for assistance, as it has pursued its charge to look at ways we can better use our two locations.