Board Meeting
Wednesday, August 28, 2019
Members present: Steve Blehm, Dan Hill, Steve Hudspeth, Laura Morett (via conference call), Reid Saunders, Mike Smith (via conference call), Doug Terpening, call), Rich Valette, Brian White.
Staff present: Lisa Fordyce
Building Task Force Recommendation
Dan reported that the Building Task Force recommends that we move forward with a Letter of Intent to purchase the land on Aumsville Highway. He pointed out that a letter of intent is not binding; it is an agreement made in good faith.
Doug informed the Board further that the positives are the location near Corban and a good price for that piece of property. The negative is that the cost will be higher to build on a slope. The unknown is the cost of street improvements.
Aumsville Highway Property Information/Update
Dan reviewed the Estimated Building Costs handout, stating that these are reasonable estimates considering the fact that there are so many variables currently unknown.
Discussion
Doug stated on behalf of Craig Holt (who was unavailable for the meeting) that he felt it was a good deal for a good location. Brian stated that God has brought us this opportunity, and that everyone should be in agreement to move forward. Dan and Steve Blehm agreed that one way of lowering the costs would be to complete the building in phases. Mike asked about how the cost per square foot was calculated; thinking it should be lower. Rich stated that he thinks $270 per square foot is a good estimate for building right now. Mike asked for clarification on what was included in the $2.955 million estimated construction cost. Lisa reported that it is the total of square footage construction costs, architects, insurance, and contingency fund.
Dan reviewed the Income Estimates handout, and asked Reid about the probability of the fundraising.
Discussion
Reid stated that he feels confident we can raise the necessary funds. Steve Blehm asked if we have enough money in the bank to purchase the land. Reid responded that we have about $500,000 currently. Steve also asked if it was possible to know the opinions of the donors. Reid stated that he prefers to have a financial goal to reach rather than build in phases; that donors understand the process and will not have an issue with an increase in the cost for the facility. Brian asked if the Task Force had considered the effect on general funds; that during the public phase people may give to the Campaign rather than the general fund. Reid responded that this has been taken into account. Steve Blehm asked if there would be any income generated from a connection with Corban. Reid responded that there is not an income stream, but there is a relationship between the Acts Center and Corban. Doug reported that most major asks will be completed by December which would allow the Board to have a better income projection by the time the partitioning of the land is completed for the sale.
Dan presented the Building Task Force proposal on purchase of the property in the form of the following motion:
The RSA Board of Directors, based upon the recommendation of the Building Task Force, approves proceeding with a letter of intent to purchase 1.15 acres on the Aumsville Highway from Modern Building Systems/Cascade Legacy Properties. The Building Task Force further has the authority of the Board to negotiate specific terms of the letter of intent to purchase.
Dan asked if there was any further discussion. Brian moved to accept the recommendation. Rich seconded the motion. The Board members present voted unanimously in favor of the motion.
Building Expense Cap
Dan presented the Building Task Force proposal on capping the campaign budget at $3 million in the form of the following motion.
The RSA Board of Directors, based upon the recommendation of the Building Task Force, establishes a budget of $3,000,000 for all cost and expenses related to the construction of a new office building.
Discussion
Mike asked about the effect of this proposal in moving forward with the building. Dan stated that the cap would bind the RSA staff to stay within the $3 million budget. Mike pointed out that we are exceeding expected revenue. Steve Blehm agreed that there is the possibility of growth to meet the stated budget, and that we are making decisions based on high numbers. Brian brought forward an option presented by Craig Holt: that we could add a buy-back option in order to be open to God’s leading. Brian stated that as a governing Board, we should trust in the Lord and in the staff; that we should be involved in governance rather than involved in operating decisions. Doug stated that in 90 days we will know what is available, before beginning the building process. Brian stated that he feels it would put Reid in a tough position if we cap the budget at $2.5 million and then he needs to go back with another ask because the need is $3 million. Mike clarified the use of the $3 million cap, and it was confirmed that the $3 million number will be used both for fundraising purposes and as a budget estimate. Reid stated that he prefers we raise the money before we begin to build. Mike clarified that this is a budget number that can be changed and adjusted.
Dan re-read the proposal. Brian moved to accept the recommendation. Steve Hudspeth seconded the motion. The Board members present voted unanimously in favor of the motion.
Next Meeting: Monday, October 7, 4:00-6:00 pm
Adjourn: Reid closed the meeting in prayer