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St. Mary Cathedral - Previous & Future Debt

 

BULLETIN ARTICLE, August 9, 2015
Mari Anna Wahr, Business Manager
mwahr@stmarycathedral.org

Thank you for your faithful stewardship of St. Mary Cathedral!


WHAT WAS OUR PREVIOUS DEBT? 
Our previous debt obligation was incurred in 2004-2005 with major capital improvements to the parish and school. Totaling almost $3 million, the Diocesan loan was retired and paid in full on May 11, 2015. This loan was paid with a combination of Beginning Anew pledge payments from faithful parishioners, and bequests from those who remembered the Cathedral in their wills and trusts through planned giving. We celebrated the debt retirement at a parish picnic on June 28.

WHAT IS OUR FUTURE DEBT?
Two critical maintenance projects are in process that we are unable to fully fund through normal operations and offertory revenue. These necessary capital projects will cost over $625,000 and have been approved by the Parish Pastoral and Finance Councils.  Any payments received for pledges made on the previous debt are being applied to these two projects.  Loans from the Diocese of Gaylord to fund these two projects will total $535,820 with an interest rate of 4%. Amortized over four years, the interest on our future loan debt will be almost $50,000, bringing the total amount needed to service these loans to $585,820.

  • Cathedral Roof - The new roof covers the main body of the Cathedral building up to the part of the building that covers the gathering space. The total cost for this capital project is $282,670. We have received a loan from the Diocese of Gaylord for $242,670 that will be added as a liability to our balance sheet once the roof project is completed in August.
  • School Heating and Cooling - The scope of the project includes twenty roof-top heating and air-conditioning units, programmable thermostats that will individually control temperatures in classrooms, new ductwork, roof flashing and repairs, electrical, any asbestos abatement,        mechanical, engineering and electrical engineering services, and all permits. This project will eliminate the need for the old school boiler and its deteriorating infrastructure, and will allow for better air handling and more efficient climate control throughout the school. The total cost for this capital project is $343,150, and work will begin shortly. We are completing a loan from the Diocese of Gaylord for $293,150.

HOW WILL WE PAY DOWN OUR FUTURE DEBT?
While we were able to defer both of these significant maintenance projects until our previous debt was retired, it is also necessary to be good stewards of our parish structures and systems. We can no longer postpone these needed repairs. It is our goal to develop a future budgeting strategy that will allow us to fund significant projects from within our  operating budget and interest revenue from endowment funds.  In the meantime, here is the proposed parish fiscal plan to address and eliminate our future debt:

1. Current funds in hand from debt reduction payments: $   96,771
2. Continued receipt of debt reduction pledges through 12/16:     89,049
3. New and renewed 3-year pledges:   400,000
Total Anticipated Debt Service Requirements: $ 585,820

 

In the coming weeks, all parishioner and school families will receive a mailing from the parish office with an invitation to prayerfully make a pledge to give the funds we need to pay for these capital projects, and limit the debt carrying costs. Thank you again for your faithful and generous stewardship of treasure as an expression of gratitude for the many blessings God has given us all.