1) What are the ballot proposals to be voted on by church members on September 10?
- I vote to approve the recommendation of Calvary’s Board of Elders to approve a construction project to replace 30+ year-old Worship Center Air Handlers, Heating Boiler, Building Control System, and related Roofing areas affected by the construction not to exceed $1.6 million.
- I vote to approve the recommendation of Calvary’s Board of Elders to expand and utilize our current line of credit and banknote to add up to $1.6 million to accomplish the Air Conditioning construction project mentioned in Proposal 1 above.
2) Why do we need a congregational vote?
The bylaws of Calvary Church state that our congregation has to approve construction projects that cost more than 10% of our general contributions budget which is approximately $400,000. The purpose of this is to provide checks and balances to Elder Board decisions. If they wanted to build a skyscraper or water park, it would first require input and buy-in from the church family. This is the same reason we can’t go into debt without approval as well.
3) Haven’t we recently spent a lot of money on air conditioning in the Worship Center?
We did buy a new Central Chiller for around $350,000 a few years ago, but there are many other pieces to the Worship Center system that we didn’t fix which are addressed in this project.
4) Are there more a.C. things we will need to do in the future that aren’t in this project?
Yes, we have a few more pieces we haven’t touched in the Worship Center including the cooling tower, some office and lobby air handlers, and fan coil units. However, their condition is not as critical and we should be able to replace them over time using funds from our annual maintenance budget as needed.
5) Why does air conditioning cost so much more for the church than my house?
Calvary has a 67,000 sq. ft. Worship Center which has significantly more volume to cool than the average house. In addition, commercial-grade equipment has higher costs due to demands of use and there has been some high inflation on equipment costs in the past few years. We have to find equipment that can be structurally supported within the space we have in our roof pits and mechanical rooms that are approved by the city of Santa Ana for efficiency standards, so that narrows our selection of suitable air conditioning systems.
There are a few components to this project:
New HVAC Equipment & Installation: $750,000
New Electrical Panels/Equipment: $150,000
Structural modifications: $200,000
New Building Control system and valves: $300,000
Roofing Repairs: $125,000
6) How many bids did you get for this project?
We solicited bids from 8 companies. Five of them opted to bid on this project. All the bidders were experienced commercial HVAC and Controls contractors that came highly recommended by others in the industry.
7) Why do you have to do it now?
We have been spending more on repair costs with each year on our aging 33-year-old system and multiple HVAC professionals have said the equipment is failing and is way past its useful life of 15 to 20 years. Parts for this project take 6 months to arrive after they are ordered, so if we wait until the equipment dies, we then could be without air conditioning for 6 months or more and that could potentially be very uncomfortable in the Worship Center. Also, we had an engineer submit plans for the project to the city to know what they would require before getting final bids. There is one year allowed from when permits are pulled to start work on the project, so we have to start by May of 2024 unless we want to start the permit process over again, incur additional costs, and have to upgrade to whatever the energy code is during the next permit process. The ideal time to do an HVAC upgrade project is in the cooler months of Winter or Spring, meaning we need to commit to the project before October 2023 so we can order the parts and they arrive in 6 months.
8) How do you know the current system is dying, WASn't it cool last Sunday?
Certain parts of the system do still work and we keep getting the parts that are breaking down repaired. However, the system is horribly inefficient and could shutdown any time. There have been times where something does fail right before a worship service making it warm, humid, and uncomfortable. Upgrading our control system will help us utilize the system better, be more energy efficient, and save on utilitiy expenses. We haven’t been able to take full advantage of our new chiller’s energy-efficient features because the rest of the system doesn’t have the capacity, but our new system will.
9) What has the process been like to get us to the point of voting to begin this project?
Almost 2 years ago we engaged OES, an engineering firm we worked with on the Chiller project to design an upgrade for most of the rest of the Worship Center HVAC system beyond the chiller project we did a few years ago. We need a new Control System, need to replace the roofing in the 2 Mechanical Wells on top of the Worship Center, need a new heating Boiler Unit, need to replace two main Air Handler units for the auditorium, replace 37 Control Valves for all other Fan Coils and Air Handlers in the Worship Center, and need to replace the other 4 Air Handlers that are on the roofs. We had 5 bids come back that were reviewed by two General Contractors from our church family, along with an HVAC Controls Professional and a Roofing Contractor. They helped our Executive Pastor go back and forth refining the bids for the past 6 months. When we first started the bidding process in January and bid out the original design, the total cost of the Air Handlers, Boiler, Control System and Roofing was $2.26 million. We pushed for some value engineering and found a different brand of Air Handler units and that brought the cost down about $400k. The final round of bids ranged from $1.6 to $1.9 million. The Trustees and Elders also discussed the process and bids and were comfortable with the $1.6 million proposal and voted at their respective July meetings to recommend that the congregation affirm moving forward with this project.
10) How do we pay for it?
Our current Building Fund has $250,000, which means we do not have the $1.6 million needed for this project. When we last refinanced our loan on the Heritage Building, we were approved to borrow more than we needed and also given a line of credit. We have the ability to borrow the entire $1.6 million needed for the project with our current bank loan/line of credit without getting an appraisal and paying closing costs on a new loan. Our goal is to borrow the minimum needed to complete the project and pay it off as soon as possible. The Elders have initiated a prayer process to see what additional projects we might raise funds for during a campaign in 2024 which would include paying off any debt we incur for the HVAC project. We are making the need known now and any contributions that go to our Building Fund now will be used to help us borrow less.
11) Can we do this project without borrowing and wait until we have Funds before we start?
We might be able to do it without borrowing if God provides the funds in advance and that would be amazing. We also have a timeline described in a previous answer that we need to get this project done and most HVAC professionals don’t think our system will last much longer. If it dies before we have a new one ready, we would be without HVAC for the Auditorium and Offices for 6 months or more. Also, the costs of the equipment have risen more than 25% in the last two years. Prices are increasing faster than borrowing costs, so it will save us more money in the long run to incur some short-term borrowing costs now.