Minutes
Board of Trustees
First Unitarian Society
Madison, Wisconsin
June 10, 2007
2:15
p.m.
Beacon Street West Conference Room
Present:
Officers:
Laurie Joiner, President-Elect
Pat Anderson, President
Tom Detmer, Secretary
Council Trustees:
Kathy Luker
John Mathis
Nancy Kosseff
Jim Christensen
Chris Glueck
Barb Avery
Ministers:
Michael Schuler, Minister
Scott Prinster, Associate Minister
Staff:
Susan Koenig, Church Administrator
Dave Weber, Facilities Owners Representative
Dan Broner, Music Director
Observers:
Lisa Munro, Trustee-Elect
Richard Miller, Trustee-Elect
Brian Hellmer, Trustee-Elect
Sandy Eskrich, Trustee-Elect
Visitors:
Sam Lawrence, Facilities Planning Committee
Doug Mitchell, Facilities Planning Committee
CALL TO ORDER
Laurie Joiner
called the meeting to order at time 2:15 p.m. and reviewed the agenda.
FACILITIES PROJECT STATUS
The purpose of the meeting is to understand the current situation with the facilities and related financial implications. Our desired outcome is to have a good idea of the main issues, how and what we need to do, and who will take the lead.
The current facilities bids are a guess overall and they are coming in higher than we had been led to believe they might. We are going to engage in value engineering to bring the costs down to within our budget. We also need to talk about possible financial strategies and communication of the issues to the congregation.
Questions
Kathy wants to know what date we have to make decisions. This relates to a timeline. Are we moving forward or are we putting things on hold pending decisions. How do we get a solution to move forward? What is our decision point?
Richard asked about how many dollars could be saved by value engineering and what recommendations are they?
Nancy wants to know the dollar amount of the gap.
Brian wants to know if we are going to raise more money, who is in charge?
Nancy asked about what accounts for the differences in the estimates and the bids?
Chris asked if we are opening the project all over again.
Richard asked what is the decision process to make design changes if needed.
Tom asked if we need to go to the congregation or not for a decision on what to do.
Some Answers
Sam reviewed some basic information on behalf of Findorff Construction. We have bids on about 80% of the project so far. We will be finishing up with the bids this week. On average, the bids are coming in about 25% over budget. Overall, we are about $1.1 million over budget for the construction. It is important to understand that Bentley would have had this problem. This is not a Findorff problem and it did not happen because Findorff showed up.
There were errors in the assumptions early in the project by Bentley. We also need to realize it is a complicated project and Bentley and Kabala Washatko should have had conversations that led to the discovery of this problem. Miscommunications are at least part of the reason why the differences in amounts reported in the bids occurred. Also the loss of the project manager seems like a significant contributing factor. At this point the problems jump out at us. The construction firm and architects should have discovered them earlier.
Our project manager with Findorff is working hard to uncover the discrepancies and vagaries of the project. Various questions were discussed on specific items on the bids analysis. There will be on-going discussions with the subcontractors over the next two to three weeks to see what can be done to save costs. The total cost of the new construction is not determined yet even though we are getting closer to knowing the figure and to understanding the project costs.
The bid numbers that we have received are good for sixty days.
We are still figuring on twelve months to build the facility and at this time we have not adjusted our timeframe because we do not have a new completion time we can use. Our goal in any event is to be operational by Labor Day 2008 for the Meeting House nursery school (the “B” wing) and the renovations being done on the historic Meeting House (the “A” wing). We are committed to this site. It is too late to re-visit moving to a different site or even whether to not build. The “C” wing is being de-constructed and we are not going to rebuild it.
At this point we know our cost is likely to be $1.1 million higher than expected if no changes are made and we will not know the total differential for two to three weeks yet.
That is the “hard news” for all of us in the Society. It is important to stress that it is not fair to blame Findorff Construction Company for this news.
There are three ways we can get more money or reduce the differential. These are the use of value engineering to reduce costs, have an additional capital campaign and take on additional debt.
It is observed that we need to improve our planned giving efforts. This is true but it is long range in its result and it will not solve this immediate capital problem.
An ad hoc financial planning group of Brian Hellmer, Dick Goldberg, Sam Lawrence, Susan Koenig and Jim Christensen will work on ways of addressing these financial issues. Brian will update his financial model tool that will help us decide how much debt we can take on. At this point due to an erroneous assumption made earlier (concerning the period for the construction loan), we think we can assume higher debt. This group will review their assumptions and how to read this tool.
Supplemental fundraising is a subject that we have discussed before. Now it is more important than previously. We need to have everyone on the board and the staff brainstorm to come up with additional ways to raise some funds. We should consider fundraising opportunities other than a straight forward “ask.” Chris Glueck offered to work on this subject.
Communication is extremely important to present this issue to the congregation and to avoid making sound like a major problem. It is clearly an issue but it is not unmanageable. We need to be up front about the issue and let people but we do not want to panic anyone because there is no reason to panic or worry. Transparency has been successful in our process so far and we should continue that method of operating. Sandy said we should avoid an alarmist message. Dave will provide an update to the congregation and get the message across without creating panic or undue concern.
It is important in all of our processes that we are not disrespectful of the congregation. Do not pretend that there are options if there are none. We think there are options at this point.
We are reconstituting the Facilities Coordinating Committee to address design change issues. This committee will make decisions unless they think the magnitude of the change or the amount of dollars requires them to come to the board. This committee will be made up of the Facilities Committee members (Sam Lawrence, Kurt Stege, Paul Stephan, March Schweitzer, Doug Mitchell), the Coordinating Committee members (Michael Schuler, Susan Koenig, David Weber, Jen Korz, Laurie Joiner), the Preservation representative (Michael May), and the Financial Task Force members (Dick Goldberg, Jim Christensen).
The board has the obligation to come up with recommendations on how to proceed. We may have to go to the parish if the best recommendation requires an action that amounts to a “major unexpected occurrence” in the language of the October 1, 2006 parish resolution but it is too early to determine that yet until we know what our options are. The board will take another look at these issues at its next meeting on June 27, 2007.
Where do we go from here? The following action items result from this meeting.
Action Items
- We must get all the facilities figures together, and review them carefully for accuracy, and make sure that any future documents have consistent figures. This includes:
- the Feb Parish Meeting estimates,
- the results of the Findorff bidding process when completed,
- all the other costs and contingencies (both Findorff’s and the Society’s),
- Findorff’s construction percentage, the cost of furnishings,
etc.
- preservation budget – most current and accurate
- how much we’ve spent already, including Historic Structures
Report, etc.
2. Then we should update the financial model—so we can do “what-ifs” about
debt, our goal for an additional capital campaign and other fund raising.
- Complete this so it can be used at the June 27 board
meeting.
- Brian
Hellmer, Dick Goldberg, Susan Koenig, Sam Lawrence, Jim
Christensen will
undertake this task including the data gathering in step one.
- We should start doing the planning for raising additional money through a capital campaign, or other supplemental fundraising methods. A meeting is planned for Wednesday, June 13, 2007, on this subject. Jen Korz and Susan are taking the lead on setting it up. Chris Glueck can’t come on June 13, 2007, but is willing to brainstorm ideas and help.
- We should get the “new” coordinating committee up and running so they can review the bids, review the value engineering ideas, and so forth, and make recommendations to the board on June 27, 2007. Laurie will coordinate this effort.
- The next Board Meeting will be Wednesday, June 27, 2007 at 7:30 – 9:30 PM at the Meeting House (Beacon Street West). Please keep the July 18, 2007 board meeting on your calendars. Tom will reserve the room for this board meeting.
- We will take steps to communicate the current situation with the congregation. Dave Weber will draft an article for the newsletter. We will publish it in both the Hard Hat Update and the Red Floors. Laurie will coordinate this effort.
Meeting was adjourned at 9:00 p.m.
Minutes by, Tom Detmer, First Unitarian Society Board Secretary
