Hello Harvest Family,
We wanted to share an update with you on the business operations aspects of our church.
First, as we remain under the Stay at Home order, we want to reassure you that our church has and will continue to observe government guidelines for quarantine and isolation and that we continue to pray for our government, especially in these difficult times.
Second, we would like to update you on the church’s financial wellness.
Giving from January 1 to April 30, 2020, was $4.175 million which was 88% of the planned give of $4.733 million. As of now, halfway through May, the monthly giving was $587,000, which is tracking 111% of the planned give for the first two weeks of May.
Despite the extended Stay at Home order, if giving stays consistent, “the Lord willing” we anticipate ending 2020 in a similar cash position to that which we began. We praise Him for His grace and mercy.
In April, we benefited from the Coronavirus Aid, Relief and Economic Security (CARES) Act, and in particular a $2.55 million loan through the Small Business Administration (SBA) Paycheck Protection Program (PPP). Based on current guidance provided by the SBA, the majority of this loan should be forgiven, and any amount not forgiven is due for repayment over the next two years and incurs interest at a rate of only 1%. True blessings from God.
Operational Expenses and Debt
Operational spending for the first quarter of 2020 is $4.256 million, compared to a budget of $4.375 million, a savings of 3% of our Q1 budget. Compensation and benefits represent approximately 43% of our total general fund spending, which is far below our benchmarked target of less than 55%.
Facilities spending is currently 24% under budget, in large part due to reduced usage of the facilities in this season and the Lord’s grace in protecting us from any big facilities expenses in Q1.
Mortgage and rent represent approximately 23% of our total general fund spending. This is higher than our benchmarked target of keeping this under 15%. This is primarily due to historical long-term loans.
In February 2020, we sold our Niles Campus to CityLine Bible Church for approximately $5 million. Upon completion of the sale, we paid off the mortgage balance due on this property of $1.7 million.
In March 2020, we purchased all of the outstanding shares of NSLLC (North Shore LLC), our Deerfield Road Campus, for $3.5 million, which was the original cost invested by those LLC members. We are now the sole member of NSLLC, which was from the beginning the strategic plan of this LLC agreement. The combination of the two above actions resulted in a $5.2 million reduction of our long-term property obligations.
The Elders, the Finance Committee, and the Operations Team have debt reduction and refinancing with more competitive interest rates as a high priority to help get this spending in line with our strategic best practices target. We are thinking and praying through every option.
Deerfield Road Property Tax
In March 2020, HBC was notified that Lake County denied its appeal for property tax exemption for the Deerfield Road property for 2019 and that the taxing authorities are assessing back taxes on this property for 2016–2019, which would equate to approximately $500,000. We are in the process of appealing the ruling that this property was classified as nonexempt from property taxes in Lake County.
Thanks Be to God
Although recovering from the financial challenges we shared with you in 2019 will be a long journey, the issues we face together will not be resolved in six months, a year, or two years. But thanks be to God, our financial condition continues to improve through your faithfulness and generosity and the current staff’s excellent stewardship. Together, we are making progress and can continue to support HBC’s mission through our combined stewardship of time, talents, treasures, and testimony.
Thank you for your faithfulness in making this journey together. We know it will take perseverance, patience, wise stewardship, generosity, and the Lord’s hand upon us to succeed. Relying on the Lord, we believe our Harvest family is up to the challenge.
Lead Operations Director