Maintaining A Healthy Church Background & current financial status of NCUMC How NUCMC, Summerhill and Lake Deaton finances will be managed Evaluate the risk of building a facility at Lake Deaton

Current Financial Status Ten Objectives Giving vs budget Maximum debt Operating reserve Debt payment ratios Salaries vs giving Mortgage reserve Maintenance reserve Loans vs total property value Eliminate Summerhill debt by 2025

Summerhill Debt Elimination 2014 Debt Elimination Campaign $3,600,000 in pledges $340,000 non pledges (collected) $20,000 estate gift (collected) $3,940,000 Total

Lake Deaton Pre-build Campaign $462,000 in pledges $60,000 non pledges (collected) $522,000 total

Since Debt Elimination Campaign Summerhill Paid off $1.6 million 20 year loan 16 years early Helping Hands paid off $300,000 loan for Bargains & Blessings building 17 months ahead of schedule on payment of $6.07 million 20 year loan Receive $40 - $50K per month additional principal payment Lake Deaton Has approved $175,000 to pay for pre-construction design and permitting costs Collected $121,878 in pre-build funds as of Jul 2016 Averages over $8500 in pre-build donations in 2016

Background Our first capital campaign in 2003 to build our first Summerhill facility had 300 pledges of $957,102 We borrowed $4,825,000 NCUMC current property value is over $11,000,000 with a loan balance of $5.29 million

How Will NCUMC, Summerhill & Lake Deaton Finances will be managed?

One Church Two Locations NCUMC Strategic Planning, Management and Oversight Shared Administration, Accounting, Technology, and Equipment & Facilities Management Summerhill Lake Deaton Ministries Worship Facilities

Lake Deaton Finance Management Lake Deaton will be given financial goals and objectives that adhere to those established by SALT for Summerhill and NCUMC

Strategic Guideline Loans should not exceed 60% of total property value: Currently $11.3 million with loan balance of $5.4 million = 48% of property value Estimated value of Lake Deaton facilities: $5.5 million if constructed Estimated LD loan $4.75M (Aug 2019); Total estimated NCUMC property value: $16.3 million with $7.75 million in loans = 47.5% of property value

Strategic Guideline Maximum Debt not over 2.5 x Annual Giving Estimated final loan in August 2019 for Lake Deaton $4.75 million Estimated loan balance for Summerhill in August 2019 $3.0 million Estimated annual giving in August 2019 for Lake Deaton = $1.4 million*; Summerhill = $3.8 million Total giving 2019 = $5.2 million x 2.5 = $13 million max debt ceiling on loans of $7.75 million *includes annual capital campaign funds

Evaluating the Risk Since 2004 NCUMC has met all of its financial obligations, With the construction of the CLC in 2013, it was determined that a strategic financial approach for NCUMC was needed. Strategic objectives have been implemented to build and maintain a financially healthy church. NCUMC has met of exceeded target objectives for seven of the ten financial goals and is making steady progress in the other three.

Evaluating the Risk Lake Deaton has more than doubled attendance in the past year to 360 per week. They are expecting to add another Sunday service in 2017 and move attendance to the 500+ level. With completion of a Lake Deaton facility and the continued growth south of 466A, they anticipate attendance in 2018 of 750 to 1000 per week. Summerhill’s debt should be eliminated by 2025 or before.

Evaluating the Risk The construction and new loan for a Lake Deaton facility is within the strategic financial and growth objectives of NCUMC. Lake Deaton has established a five year budget plan for income and expenses that is realistic and obtainable to sustain a new facility and grow the church. Within two years of construction completion at Lake Deaton, they will establish a debt elimination plan to pay off their loan within 10 years.

Evaluating the Risk The senior loan officer at the Florida Methodist Foundation, after reviewing our financials, the Lake Deaton five year budget plan (2017 – 2021), and our current Summerhill loan status; supports a loan for the Lake Deaton construction up to $5 million.

Final Analysis Borrowing a maximum of $5 million for construction of a new NCUMC facility at Lake Deaton, should not have a negative impact on the current healthy financial status of NCUMC.