I want to, at the outset, apologise to you all for the delay in getting the financial details of the Organ Project. We did have the details ready to go in the time frame I identified, however, the financial situation has been changing, in a positive way, so rapidly, it made all that hard work outdated. I have had a long conversation with Denis Wood this day, and I believe we are now in a position to give you some specific details of the finance arrangements of the Organ. I want to place on record my thanks to Denis and to Bill Killinger for their excellent work in this. While the details are general, they are up to date as of 5 March 2018. I am also able to let you know that in the mind of those who have been crunching the numbers the project is almost fully funded, and the project is financially viable. The reality that it is fully funded is critical, for it means there will be minimal impact on our financial position, and the parish will not go bankrupt should we decide to proceed.
There have been a lot of numbers floating around, I have given some of them, these are the numbers as of 5 arch 2018, and are subject to change.
The Organ Project Cost is made up of the following
Organ 878K
Engineering Works 176K
Contingency 70K
Interest 117K
Total Project Cost 1.241M
A few notes
- The Organ cost is the cost to get the organ into St. Johns from New Zealand. It includes everything you could possibly think of to get you there.
- The Interest is the loan repayments, more on the loan in a moment.
Sources of Funding Model 1 Model 2
Foundation Trust 200K 276K
Music Association 205K 205K
Pledges 633K 633K
Total 1.038M 1.114M
Shortfall 203K 127K
There is a plan to borrow 500K from the diocese. This loan is only to provide a cash flow for the project as the pledges come online. This is why there is a cost in the project of 117K. Obviously, the faster we pay off the loan, the less interest we will have.
With the time line of 10 years for the financing, this shortfall amounts to between $250 and $500 per week to the budget, if we do not get any more donations. I think we will, and I am of the belief that others when they see and or hear the organ in place they will contribute.
Foundation Trust
One of the contentious issues was the use of the Foundation Trust. The reality is that with only 331K in the Foundation Trust after 20 odd years, actually all but 35K raised since I became Rector, the question needs to be asked of the use of the Foundation Trust. If there were 5M or 10M in it, then that is a different matter, but at the current rate of interest we can only get, at best 6K a year, and alot of money is tied up in it.
So there are two proposals as indicated above, Model 1 and Model 2. The First Model is pretty straight forward, the engineering works plus contingency are drawn down from the Foundation Trust when the engineering works are completed.
The second model does the same, but then each year for 10 years 10K is drawn down to pay down the debt, giving a total use of 276K
Parishioners need to seriously consider whether the organ project is of such significance that these models should be considered and supported. I am comfortable with either one, I know that people will have a preference, and some will simply not want to use the Foundation Trust at all. Please understand that the Trust is always there for people to give bequests to, and so it is not like there is going to be no more money going into it at all. I am simply asking you to consider is this not what the Foundation Trust was meant for? We are investing in the capital works of the church, it is not being fritted away.
Time Line
We need to appreciate that the time line has an impact on the call of funds. The Music Association will be accessed first, then the Foundation Trust, and then the loan is anticipated to be used in the second year. This means that all pledges after the second year will be used to pay down the debt.
I do hope that this gives you enough information to help you in your deliberations. I know that some people have asked for spreadsheets, these will be provided in the next few days. I have arranged for them to be emailed to you directly, they will not be posted on the web. If you would like one, please contact me. Other charts and other information will be forthcoming once the spreadsheets are completed.
Some Pledge Stats
Number of Donors 40
Largest Pledge 360K
Smallest 40
Mean Average 9K (Because of the discrepancy between the highest and lowest these two were removed and an average worked out. Note all figures to the nearest 1K)
