Addendum Report of the Executive Director, February 14, 2009
United Methodist Union of Greater Detroit Report of the Executive Director
To the Executive Committee February 14, 2009 – Addendum
Young Leaders Initiative Request for Summer 2009 Usage of 18035 Wildemere- This usage worked very well last summer. The 12 residents made many friends in the neighborhood and treated the house kindly. While Young Leaders Initiative paid no rent, the program did cover the utilities. Doing this again (this year, 8-9 occupants) would appear to be a no-brainer. Unless, that is, we receive an acceptable offer to sell the property. Even then, we could likely delay occupancy until September 1, 2009.
Young Leaders Initiative Continued Funding for 2010-2001- Our original commitment will end May 31, 2009. We have budgeted to continue through December 31, 2009. This program has produced fruits, but has not developed the financial wings to fly. The request (enclosed in your materials) is hardly insignificant. This deserves careful consideration by both the Youth & Young Adult Committee and the Finance Committee. A positive response will grant continuance to a work well begun, but will also command major budget resources in what will be a period of financial challenge. To cut off all funding will kill the initiative. To grant everything requested will make YLI our “top priority” ministry.
Exousia (former) building 12819 E. 7 Mile Road- We have received an offer to purchase the former Exousia building (12819 E. 7 Mile Road) from Pastor Kern of the Rising Saints in God…don’t you just love that name. While their offer is not out of the ballpark ($250,000.00), the terms are ridiculous. They are offering a $1,000.00 deposit, a $10,000.00 down payment, a 5% interest rate on a $250,000.00 purchase price. Their suggested amortization schedule would be 36 years with a monthly payment of $1,200.00. This is scarcely more than rent with an option to buy — hardly a Land Contract. But to keep the conversation alive, Bill Skubik has countered with a more realistic set of numbers (”favorable” would be a stretch). So stay tuned, without holding your breath.
Detroit Annual Conference Camper Scholarships – Enclosed within your packet, find a letter from Jan Thomas requesting camper scholarship support for youth from Detroit East and West District churches for the 2009 camping season. In recent years, our response has been to provide $5,000.00. In 2006, an attempt was made to cut this allocation to $2,700.00. This resulted in a reaction that led to a second allocation of $2,300.00 (thus restoring the $5,000.00). My suggestion would be to refer this to the Youth & Young Adult Committee for study and recommendation in March.
Birmingham: First United Methodist Church loan request- Between the years 2001-2005, Birmingham: First UMC completed two major capital projects in the amount of 10 million dollars. All that remains of their indebtedness is $700,000.00. This amount must be refinanced, owing to a pair of five-year balloon payments that come due on March 1, 2009. They can renegotiate with Comerica or Chase, but prefer to do business with us. We could offer a most competitive rate of 5 1/4 percent for the duration they seek of five years. At the five year mark, the agreement could be renegotiated, extended, or fulfilled.
The church requested three things.
A. A competitive rate
B. A five year fixed rate
C. A consistent payment schedule of $8,300.00 per month
The church would be willing to split the loan if absolutely necessary, but would rather deal with the United Methodist Union for the entire amount.
Enclosed find a pair of schedules, with the preferred schedule reflecting a consistent monthly payment of $8,300. At the end of that schedule, we will have realized $139,536.00 in interest and the church will have reduced the principal by $358,463.00.
Two other pieces of information
- We would require full payment of United Methodist Union apportionments during that five year period
- We appear to have sufficient non-equity assets to complete the agreement
Arguements for entering into this agreement
- It addresses the drain on our corpus due to the current financial crisis (a loss in equity of over 30% in 2008)
- It recognizes a church that has been given hundreds of thousands in United Methodist Union apportionment dollars and Detroit-area mission dollars across the years
- It entails virtually no risk, given a First Church endowment fund equal to 2.5 times the loan value, along with land and property holdings valued in excess of 20 million dollars
- It is not likely that we will have major building projects launched on either District within the period covered by this agreement.
- It assumes that the recession recovery timetable will be longer than originally expected
Respectfully submitted,
Rev. Dr. William A. Ritter, Executive Director.