•If there is a shortfall in money available from The Seminary Fund, the Diocese should use commercial financing, rather than deplete other assets, which are used to finance or fund mission and ministry.

The terms of borrowing are:

• Interest only at 6.75% for 5 years. (This has an operating budget impact of about $5,000/month.)

•After 5 years, or to the extent not paid back by the 2006 Capital Campaign, commence a 20-year amortization at the then current market rate of interest for similar type commercial lending.

Construction on the new Diocesan Center is proceeding under the watchful eye of site manager Stuart Cope. Cope brings a background in the construction industry to his work as the on-site eyes and ears of the diocese. Scott Baesler is the contractor for the project. Architect Andrew Piaskowy is on site weekly, and, with the committee, meets monthly with Bishop Sauls. Committee member Andy Sigmon of St. Thomas’, Beattyville, and The Cathedral Domain says, “I have spent my life in the construction business, and am amazed at the speed and degree of professionalism of the work.” Bishop Sauls says, “The good news is that at this point into the project there have been no significant surprises — and any bad surprises would have surfaced (by this time.) Everyone involved continues to be impressed with the structural soundness of the building.”

The Finance Committee members expressed concern that the principal being loaned by The Seminary Fund not be eroded, or “forgiven” once that money becomes free of restriction in 2010. It was thought that some plan of repayment be incorporated , and suggested a model similar to that used by the Diocesan Loan Fund, where there is an interest-only loan for a period of time, then an interest rate adjustment to reflect the current market rates in an amortization. This plan revisits the interest rate on a regular interval.

The building for the Diocesan Center was purchased during the first quarter of 2002. General cost estimates were presented to the Executive Council in January. With an actual bid in hand, in February, $350,000 was borrowed from The Seminary Fund to acquire the building and begin what was referred to as “stabilizing” the building. The loan is an alternative investment for The Seminary Fund, and the Diocese is paying interest only at the prime interest rate (4.75%.) Through September, about $308,000 was used to purchase and complete some those planned expenses.

At the October 23 meeting of the Finance Committee, Bishop Sauls announced his intention to raise the money necessary to purchase the building. He stated that as the sole trustee of The Seminary Fund, he was amenable to an alternate investment in the real estate of the diocese. He also stated that it is his intention to have a major capital campaign in 2006, which could include this amount and pay back The Seminary Fund.

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