Archdiocese of Atlanta

1. Archdiocese of Atlanta Large Capital Process Step 5: Secure Financing Step 6: Finalize Design Step 7: Request Final Approval

2. Step 5 – Secure Financing Step 5 • Launch capital campaign • Discuss loan requirements with Finance First, launch the capital campaign planned during Step 3 Click for a helpful guide to running a Capital Campaign. Contact Steve Siler, Executive Director of Stewardship for assistance with your campaign. • Most major capital projects will require a capital campaign to raise the money needed to fund the project. These campaigns typically involve the following : • What you need to begin: •  Case Statement Worthy of Support •  Defined Group of Constituents •  Solid Leadership •  Plan of Action What you need to proceed: Phase I: Planning or Feasibility Study Organization Communications Phase II: Advanced Gifts Solicitation Worker Recruitment Phase III: The Campaign General Phase Phase IV: Follow-up Execution Phase What you need to succeed: A commitment to follow through on a plan.

3. Step 5 – Secure Financing Step 5 • Launch capital campaign • Discuss loan requirements with Finance Second, discuss loan requirements with Finance • Overview: • In the best case, the parish or school raises the funds required to complete the project prior to construction. In other cases, not all the funds required for the project have been raised prior to construction, and a loan is needed. The loan approval process is in place to evaluate the risk a parish or school will struggle to repay the loan. In evaluating the ability of the parish or school to repay a loan, we consider the sources of funds pledged for repayment. Generally, the two sources of funds used for repayment of loans are those funds generated from: • 1. Annual Cash Flow - offertory/tuition is greater than expenses • 2. Capital Campaigns • Loans based on Cash Flow: • Parishes (and schools) which have positive annual operating cash flow can use those funds as collateral for a loan. For instance, if a parish has a history of, and is projected to have, positive cash flow of $100,000 per year for the next 5 years, then having a $500,000 loan approved is not difficult. Likewise, a parish that has a history of breaking even would not be a candidate for a loan based on future cash flows from operations. • Loans based on Capital Campaign: • Parishes (and schools) can qualify for a loan based on funds anticipated from a Capital Campaign. The unpaid pledges act as the collateral for the loan. For instance, if a parish has a Capital Campaign which has unpaid pledges of $1,000,000, it can request a loan of roughly $900,000. We do discount the unpaid pledges based on overall history and sometimes specific history of pledge fulfillment. • Term of Loans • The term of the loan should be short as to not interfere with the financial needs of the parish or school in the future. • The term for a loan based on cash flow should be 10 year or less. The term can be extended up to 15 years if a school is adjacent to the parish. The term of a loan based on a Capital Campaign should coincide with the length of the Capital Campaign, generally 3 years.

4. Step 5 – Secure Financing Step 5 • Launch capital campaign • Discuss loan requirements with Finance Second, discuss loan requirements with Finance Minimum Cash Requirement: At a minimum, one-third of the total cost of the project must be in cash prior to the start of the project. While this implies that two-thirds of a project can be financed, the wise pastor or school principal will use caution when borrowing funds. Financial Application The Financial Application is required for all capital projects. This document is used to capture the recent financial history of the parish or school and to forecast the financial results into the future. The forecast is used to determine the financial risk of a project. Multi-Phase Projects: A Master Plan may have multiple projects spread over many years. The establishment of a new parish is a good example of a multi-phase project. For example, the new parish would need to acquire land, then build a worship space, and later build classrooms, build or purchase a rectory, etc. Multi-phase projects require additional financial diligence to minimize risks. For instance, we may require a financial application that extends 10 or 15 years to ensure that all parties have a common understanding of the timetable for full completion. Final Approval The Project Review Committee of the Finance Council recommends loans for approval to the Archbishop of the Archdiocese of Atlanta. All loans are approved by the Archbishop or by the Administrator

5. Step 6 – Final Design Step 6 • Develop construction drawings • Select contractor (if needed) • Obtain final cost First, develop the detailed engineering and construction drawings needed to finalize the design and cost of the project • Depending upon the level of success of the capital campaign, the Project design may remain unchanged, reduce in scope, be enhanced in scope or abandoned. • If the project moves forward, the next major step is the development of the detailed engineering and construction drawings needed to finalize the design and cost of the project. These services are included in the second phase of the contract signed by the architect or design/build entity during Step 3 of the Large Capital Project process. • For the DESIGN-BUILD Approach: • The Design/Build Entity will finalize the design • Go to Slide 7- Obtain final cost • For the DESIGN-BID-BUILD Approach: • The Architect will begin developing the detailed engineering and construction drawings needed • The Architect will prepare to work with the selected contractor to finalize the design • Go to Slide 6- Select contractor (if needed)

6. Step 6 – Final Design Step 6 • Develop construction drawings • Select contractor (if needed) • Obtain final cost Second, select the Construction entity – if needed (for Design-Bid-Build approach) • If the model of construction requires separate design and construction teams (i.e. in the Design – Bid – Build model), the Building Committee will need to select Constructions Professionals using a similar process for selecting Design Professionals. CCSI will help the parish identify and qualify 3-4 Construction entities and create RFPs. The Building Committee will then receive bids under the guidance of CCSI and choose their team: • The Building Committee (BC) should have a list of at least 3 qualified contractors they wish to solicit proposals from • The contractor must be capable of acquiring a Payment & Performance Bond to qualify • CCSI can supply a list of construction firms with references from other parishes that used these firms • CCSI will issue an established customized Request for Proposal (RFP) to the short list of construction firms.  This RFP will include a complete breakdown of the construction costs for the Project prepared by CCSI for this particular Project.  • The contractor responses to the RFP will provide the Building Committee with a “free look” from independent sources of what the hard construction budget should be in the current “market place” and provide a check on the preliminary hard construction budget provided by CCSI. • CCSI will summarize the RFP responses from the candidates in a spreadsheet for ease of reference.  • It is important to remember that the competing contractor candidates are competing on the basis of incomplete plans.  However certain portions of the proposals will be fixed. • Based on BC feedback, CCSI will arrange to have all or some of the architectural firms or design/build entities make oral presentations so that the BC may choose a contractor. • Upon selection of the Contractor by the Parish, the Owner and the Contractor will execute a Letter of Intent (LOI).  • Warning – If this Contractor or other separate contractors fail to perform there may be legal costs associated with enforcing the Contract terms.  These costs are at the parish’s expense. A) Identify potential Contractors B) Issue the Request for Proposal (RFP) for project contractors to bid on C) Select the contractor

7. Step 6 – Final Design Step 6 • Develop construction drawings • Select contractor (if needed) • Obtain final cost Third, using the final design, finalize the cost of the project • For the DESIGN-BUILD Approach: • The Design/Build Entity will finalize and present the cost of the project • For the DESIGN-BID-BUILD Approach: • The Contractor will work within the terms of the LOI through the remaining design phase providing the construction cost data until the design is completed and within budget.  • The Architect and the Contractor will work together to agree on the final cost of the project

8. Step 7 – Request Final Approval to Begin Construction Step 7 • Cover letter from pastor • Financial application form The seventh step is a formal request to the Archbishop for approval to begin construction • Final Approval Cover Letter • Key points to include: • Formal request for permission to begin construction • Updated cost estimate and planned start date • Overview of financing plan • The final action to be taken prior to commencing construction is to request permission from the Archbishop to begin construction. Prior to this request, all of the actions required under steps 1 through 6 should be completed. • The pastor will request final approval to begin construction by sending a letter to the Archbishop requesting his permission to begin construction. The letter should contain the following information: • The nature and total cost of the project • Date construction is to begin • The funding sources for the project • In addition, the letter should also contain an updated copy of the Financial Application. This form summarizes the financial impact of the project and is presented to the Project Review Committee of the Archdiocesan Finance Council for its review and recommendation to the Archbishop for final approval of any loan requested for the project.

9. Overview of Large Capital Project Process Step 2 Step 1 • Review letter and forms • Grant initial conceptual approval to engage design professionals and/or a capital campaign consultant Request First Approval: InitialConceptual Approval Define and Review Project Step 3 Step 4 • CCSI to present Preliminary Drawings to the Archbishop • Review letter and forms • Grant approval to: • Kick-off capital campaign • Obtain detailed drawings and cost estimate Develop Preliminary Design Request Second Approval: Approval for Capital Campaign and Detailed Drawings Step 5 Step 7 Secure Financing • Review letter and forms • Grant approval to begin construction Request Final Approval: Build Approval Step 6 Finalize Design Step 8 Construction Management Step 9 Acceptance and Dedication

10. Who Do You Call? • Peter Faletti, Director of Planning and Facilities • Work phone • (680): 404-885-7279 • (Lake Park): 404-920-7855 • Cell phone: 404-915-3785 • Email: pfaletti@archatl.com • Jenny Scheb, Planning Analyst • Work phone: • (680): 404-885-7410 • (Lake Park): 404-920-7852 • Email: jscheb@archatl.com • http://www.archatl.com/offices/construction/