Financial updates

We continue to negotiate with our insurance company over the roof claims at both campuses as we work with the contractors to plan the repair work. We hope we can come to an agreement and perform work at the SAP campus before the end of this year. For the Roseville campus, an important milestone this summer was the completion of an engineering study to evaluate the impact of the additional damage discovered on the sanctuary roof during the November 2023 re-shingling project. This study determined:

• The multi-layer tongue-and-groove boards (ceiling on one side/structural roof support on the other) need to be replaced in a large portion of the north side due to water damage from leaks in the roof. 
• Building code changes require reinforcement of repaired areas to meet current ice and snow load requirements. 
• The steeple and cross structure on the roof shift due to wind and temperature changes, and this is a primary cause of the water leaks in the roof. 

These issues are being addressed with the repair plan. To guarantee the future integrity of the roof we need to permanently remove the steeple and cross structure from the roof. This is a difficult decision. We recognize that many people have an attachment to the steeple and cross as part of Centennial’s identity for many years. We are considering how we might reuse part of this structure to honor that history while still positioning the CUMC Roseville building for long-term soundness. soundness. A task force will be created to gather and explore ideas from the congregation. If you’re interested in serving on this task force, please contact Todd Ballen.

The steeple and cross structure will be removed from the roof on Monday, August 19. A temporary roof will be applied over the damaged area on the north side of the sanctuary roof. This will seal the roof over the winter while the custom roof boards are built – with final repair to occur in Spring 2025.

In April 2024, Church Mutual notified Centennial that they would not renew our property insurance when the current policy expired in July. When attempting to locate new insurance, we discovered that the two open roof claims meant that we could not get conventional insurance. Instead, we were forced to buy insurance on the secondary market with a dramatic increase in cost. The total insurance costs increased from approximately $51,000 (2023-2024 policy year) to $260,000 (2024-2025 policy year). This obviously has a huge impact on Centennial’s budget – particularly because the insurance premiums are heavily front-loaded by significant down payments. The impact is $165,000 over what was budgeted for insurance for 2024. This new insurance increase will also impact our 2025 budget.  (Note: once the roof claims are closed, then we can return to the conventional insurance market with more reasonable premiums.) 

Due to your generous contributions and careful control of expenses, Centennial’s budget was generally in good shape prior to the insurance cost increase. Both Expenses and Revenue have been generally in line with their year-to-date portion of the budget through mid-year. Leadership Board actions earlier in the year successfully reduced staff costs to meet budget objectives. The ongoing Fill-the-Gap campaign has raised pledges and contributions of approximately $42,000 to date – which goes a long way toward meeting the needs of the planned 2024 budget. (Further contributions to the Fill-the-Gap campaign will be gratefully received to help offset these significant increases in insurance costs!)  In addition, the lease by another faith community of the SAP building will generate an additional $27,000 of annual revenue starting this August.

The Finance team has been working hard to develop a plan to pay these increased insurance premiums. We will likely not pay our apportionments for 2024 aside from giving that is specifically designated for that purpose. A line of credit for $100,000 from the bank has been secured – but not used yet – to provide a cash flow cushion as needed. This line of credit is a new debt obligation that also impacts the budget going forward when it is repaid. Other ways to address this expense are being pursued. Your continued financial gifts and prayers are important and appreciated as we navigate through this new insurance impact on our operating budget!

Please contact Todd Ballen (taballen@comcast.net), Steve torgimson (sltorgrimson@gmail.com), Bob Milligan (milligandanes@gmail.com)