Click on the questions below for answers. If you have a question that is not answered here, please feel free to ask any member of the Capital Campaign Committee.
Q1: How does the Geothermal HVAC and energy savings program promote the mission of the Church? How does it improve God's kingdom?
An improved, year round venue for mission, fellowship and membership are directly in line with strengthening the mission of the church. The improved environmental stewardship will enhance God's Kingdom in the literal sense over time. We envision being able to use the enhanced space to better serve our congregation and community and to deliver additional ministry and mission programs. In addition, the substantially reduced operating costs will add greater financial stability to the budget which supports all of our programming.
There is no way at present for us to measure the impact of this being, truly, a "legacy change," but we believe that impact will be positive and reach beyond our current membership, having a positive evangelism outcome. Many people are searching, even yearning for a faith community which "practices what it preaches" about environmental stewardship; they are seeking a church that faithfully but tangibly enacts Jesus' teachings about the wisest use of our material possessions.
Our current HVAC system is nearing the end of its useful life and needs replacement. HMC currently operates with a heating system that typically burns over 23,000 gallons of heating oil per year to operate a single boiler system to generate steam. Steam heat is distributed throughout the building via 80 to 90 year old pipes that are past their useful life and prone to rupture resulting in expensive replacement. The facility's heating zone controls are inoperable and the existing four zones are not laid out in a way to efficiently or economically heat the building and only two areas are provided with central air conditioning.
Over the past three years, we have lost both boilers and replaced one. Expensive repairs to steam pipes that fail are becoming more frequent. Our aging HVAC system is seriously broken and some form of major replacement is an inescapable, urgent reality. There are no inexpensive band-aid solutions that withstand basic scrutiny.
Geothermal technology has been in use in our country for several decades and is considered a proven technology for heating and cooling buildings. Our due diligence involved a visit to the General Theological Seminary (GTS) which led the way a few years ago by deploying the first geothermal HVAC system in Manhattan. At the time of our visit about two years ago, about 70,000 square feet of their 210,000 square foot campus had been converted to their new geothermal system. The savings have been validated by GTS. Like our case, they found that they recovered comfortable use of major spaces thought to be too hot for use much of the year.
The total project is estimated to cost $2.1 million, based upon the final architectural and engineering design study and the related bid process. As a result of the thorough design and bid process, we now have substantially higher confidence in the function of the design, the anticipated energy efficiencies, the resulting project cost estimate and a firm bid for the work.
Over the life of the system, the substantial energy cost savings are projected to greatly exceed the initial construction costs, achieving full "payback" in about 17 years. Overall, we expect to
create year-round comfortable use of the entire building, efficiently controlled on a room-by-room basis
reduce our annual expenditure for heating and cooling the church buildings by more than 50% (estimated savings in 2013 of approximately $95,000)
dramatically reduce the ongoing maintenance costs and eliminate the potential for a catastrophically expensive failure of the EXISTING distribution system
improve our environmental stewardship
eliminate the use of 23,000 gallons heating oil each year
This building project is a rarity for a major capital improvement project as the energy savings revert directly back to HMC from the start of operation and future energy savings are projected to far exceed the initial costs to install and maintain the system. This is a huge "win/win" for both today and tomorrow. This decision is a cornerstone to building a fundamentally more Sustainable Huguenot Church.
During the first year of planning, we evaluated five options, including making minimal repairs to the current system. We concluded that the energy savings potential from a completely new system with technically advanced heat pumps coupled with a geothermal energy source would maximize the long term financial benefits for the Congregation. In mid 2011, Session considered the recommendations of the Property Use Task Force and Buildings & Grounds and authorized the formal design phase focused on a geothermal ground source for heating and cooling energy generation coupled with a high efficiency heat pump system.
The price and projected growth rate for natural gas has improved over the past two to three years. However, based upon a major annual study and long range forecast produced by the U.S. Energy Information Administration, the cost of electricity is expected to increase even more slowly than natural gas. Natural gas would also only provide another fuel for heating and would require a completely new, and not inexpensive, piped hot water system. The geothermal design utilizes only electricity to distribute heating and cooling as well as to operate the well field pumps and heat pumps. We believe that the combined geothermal/electric approach will provide the greatest long term financial and environmental advantages.
Our geographic location, building size, relative costs and other factors preclude solar from playing a major role in the project. That said, we have specified as an alternate and optional additional cost, to install a limited amount of solar capability to heat domestic hot water for the building. Thus, we will employ solar technology where we think it can add positive value to the project, and it can be done at any future time if sufficient funds are not available initially.
We have expended significant due diligence in researching and estimating future energy costs and calculating the expected energy usage both at full load and at normal operational load. The design phase has firmed up expected energy usage efficiencies. The U. S. Energy Information Administration's annual report and forecast was one source of information regarding future prices. Our research found this study to the most comprehensive we could find. The long term energy forecasts included in the report extend to 2035. With the assistance of our mechanical engineers, we also developed a mathematical forecast model based upon the church's actual energy cost history over a number of prior years as compared to the expected use of energy going forward with the new system. Over all, we believe the projected energy savings will be realized by the new system, reducing the cost to heat and air condition the church by more than 50% compared to our current system while at the same time providing more air conditioned space overall.
We have made a contingency allowance in the plan for unknown conditions found as the work progresses. We also have the ability to defer some components until we are clear that the base project costs are tracking favorably in relation to our project plan. We have hired Parish Property Management, our current provider of building services, to serve as a project management specialist and Owner's Representative throughout the duration of the project. We believe that these moves represent reasonable precautions against the project risks we have identified.
In light of the substantial legacy change this project creates, the Session believes that committing a substantial portion of the Endowment, $635,000, to the project is appropriate. This level of project support will leave a balance of approximately $500,000 in the Endowment, providing a significant financial reserve for contingencies above and beyond this project.
The fragile and dysfunctional state of our current HVAC system suggests that a major upgrade of our heating and cooling system is urgent and cannot wait. In addition, we want to start realizing the energy savings as soon as possible. Our Initial Financing of $800,000 allows us to move ahead with construction while we await collection of the outstanding Capital Campaign pledge receivables of approximately $470,000. The pledge receivables and future fundraising efforts will repay the debt over time. The Ongoing Financing requirements (e.g. amount left after all fundraising completed) are projected to range between zero and $360,000 depending upon our success in raising additional pledges.
Q11: Is the amount being financed as a percentage of the project appropriate for a not-for-profit church of our size?
We view the amount of financing as a percentage of the project as reasonable in context of our fundraising achieved to date and additional fundraising expected in the future. We have requested $800,000 to finance construction while at the same time we have existing pledge receivables of $470,000 that are expected to be collected during 2012 – 2014. The residual balance of $330,000 is expected to be offset by additional fundraising but if even if those efforts bore no fruit only about one third of the estimated energy cost savings would be required to carry the debt service. In our judgment this is a very acceptable set of financial risks. We also have ultimate backing of $500,000 that we are maintaining in our Endowment Fund.
Q12: Can we continue to use the building while construction is underway? What's the plan? How are the safety risks to users of the space being addressed during the construction?
Generally, the church has been divided into two zones for the period of construction, the North End and the South Side, with the work split into three phases. The first phase will run from May1 – May 29 in the North End of the building including the main mechanical rooms, the work below the Sanctuary, a portion of the Chapel, in the Vestry, Library, Music Room and the small Kitchen. The second phase will continue in the North End from June 9 – 29 to complete the work below the Chapel, in the bell and flower rooms and the Youth room. When work in these areas is completed, phase 3 will begin in the South Side of the building involving the school, administrative offices and the gymnasium and run until September 4th. We are now working with all significant users of the space to understand their needs and develop a plan for successful execution in the short summer window of time when school is out of session.
By dividing the building as noted above, those portions not under construction, will continue to operate as usual. There will be limited access for non-construction personnel to those spaces under construction, and the hall way leading to them will be sealed off. On or around May 21st, the well drilling is expected to start, closing a portion of the parking lot, and there will be temporary traffic flow established for the parking lot which will be staffed as needed to maintain a safe site. We have had several testing companies review the existing surfaces for asbestos and lead. The instances of positive results (e.g. asbestos or lead were detected) have thus far been few and of minimal impact on the areas to be disturbed by construction; however, the contractor is required to follow all health and safety guidelines should hazardous materials be encountered.
The contractors will all be required to follow a sign-in protocol and wear photo a ID when on site. Bob Scully of PPM will be a frequent presence on site should you have any concerns. The work will also be monitored by Buildings & Grounds and you should free to reach out to us if you have any questions.
Donors often ask for benchmarks for giving levels – the final project costs are approximately four times our annual stewardship campaign. You will hear more from our Capital Campaign team over the next few weeks. You can help see this project to completion while reducing our borrowing costs in several ways:
Consider paying your 2012 pledge installment right away
Accelerate 2013 and 2014 installments where possible
Increase your existing pledge by the most generous amount you can
Make an initial pledge now if you have not done so already -- this is an ideal time to join your fellow members in supporting this legacy change.