1. Capital Needs Committee Townhall Leaside United Church 6 May 2012

2.  What we have done  Results to date  What is next  Discussion Agenda

3.  To survey the building and grounds to ascertain those elements needing capital improvement and future development  to explore alternative solutions to ensure LUC’s viability  to develop a strategic plan of major projects to address the needs over the coming decade, including priorities, timing, scale, fund-raising and implementation  to oversee the execution of the plan once approved by the congregation Mandate (2009)

4.  To extend our ministry in this community  Our obligation to ensure the future  To honour the legacy we have been given  To build on the foundation of 84 years of ministry in Leaside  To lead from a position of strength Objective for LUC

5.  Pattern of deficits in operating budget  Declining membership  Building dating from 1941 in need of major maintenance  Gym floor, organ, kitchen, roof leaks  Energy inefficiencies  About 30 UCC congregations within 5 miles Why now?

6.  The building needs to be retained and maintained  The basic footprint of the sanctuary should be retained  Financial sustainability of the congregation needs additional revenue sources  Fits with our mission  Doing nothing is not an option Assumptions

7.  12 May 2010 – Fabric study report  31 October 2010– Overview of alternatives  27 February 2011 – MacSween Feasibility Study  27 March 2011 – 3 Re-development partnering options  1 May 2011 – Amalgamation/merger  12 June 2011– Congregational report and survey  6 May 2012 – Update and report Townhall Discussions

8.  Survey of the condition of the building and its mechanical systems by BB&R architects – delivered in Jan 2010  Building is generally in good condition, but needs maintenance attention in a number of areas  Total costs in the range of $1 million over 10 years Building Fabric Survey 2010

9.  Partner, merge, or amalgamate with other congregations  Develop or enlist new tenants; redevelop space as required  Day care or similar  Senior housing (not feasible on existing foot print)  Centre for community not-for-profit organizations (wrong area to attract these tenants) Alternative models for future sustainability

10. 1.Maintain our present building 2.Redevelopment on present footprint 3.Redevelopment with new footprint 4.Amalgamation 4 Options to Consider

11.  Proper maintenance of our current building  Pros  Cheapest ($750k-1000k), good profile in community  Cons  Doubtful finances under current situation; substantial fund-raising required  Limited improvements to accessibility, environmental aspects, building code Option 1

12.  Redevelopment on present footprint for daycare  Pros  Revenue generation; timelines achievable  Achieve needed accessibility, environmental and code improvements  Eventual revenue of $300k annually available for ministry  Cons  Much higher costs ($3-5m); more fund-raising  Business model risks  Potential short term impact with existing tenants Option 2

13.  Request for proposal issued; 3 architectural firms responded  Montgomery Sisam chosen; 2 month schedule of consultation  Feasibility confirmed using north side of building  Costs refined by cost consultant Turner & Townsend  Redevelopment costs of about $3.4 million  Major maintenance still required about $600k Refinement of Option 2

14.  Turner & Townsend estimated the daycare building renovation to be $3.4 Million.  It is estimated that the remaining part of our building would require an additional $600,000 for maintenance as outlined in the BB&R report.  Research indicates that net rent from potential tenants is approximately $300,000/annum with escalating rent over a long term lease (e.g. 10 yrs). Financial Analysis

15. LUC Congregation Fundraising $1,000,000 Additional LUC Fundraising $ 250,000 Tenant Capital Contribution$ 250,000 Loan / Debentures$2,500,000 Total Funding$4,000,000 Funding Scenario

16.  Payback on a $2.5 Million loan would be roughly 12 years.  With a 12 Year Payback period LUC would have an Operating Revenue contribution of $25,000/annum and a Capital Expenditure Fund contribution of $15,000/annum.  After the 12 year period it is projected that LUC would receive a $300,000+ contribution to Operating Revenue.  In a 15 year Payback scenario, LUC would have an Operating Revenue contribution of $70,000/annum with the Capital Expenditure Fund contribution of $15,000/annum. Financial Analysis

17.  Daycare option is fully feasible  Space is available; partner is available  Very limited impact on neighbours  Not for profit tenant; no impact on our charitable status  Simple governance models  However, the financing is quite challenging, and we would lose access to a substantial portion of our building  We are not prepared to recommend implementation at this time Committee analysis

18.  Amalgamation  Pros  New members; new givings; new energy  Possible financial assets brought with new partner  Positioning LUC for success; parallel process  Always an option in conjunction with other options  Cons  Loss of old members; potential loss in givings  Need for new governance  Timelines appear to be long  No immediately willing partner Option 4

19.  Continue major maintenance work as required  Plan for major fund raising to respond to the full maintenance program  Are we fixing a building we cannot afford?  Explore options for cooperation with Manor Road  Explore regional amalgamation interests, including Northlea, Thorncliffe and Presbytery How to Proceed Now?

20.  Open discussion here or on your own time  Engage the committee What do you think?

21.  Fraser Holman, Ken Kim, John Mills, Graham Lute, Jim Miller, Karen Whitewood, Doug Mackenzie, Rev John, John Coyne, George Heintzman, Don Forsey, Tim Burkholder, John Parker, Margaret Casey, George Hurst, Bill Pashby Speak to any member of the committee

22. Discussion