FINDING A WAY FORWARD: SECURING A FUTURE FOR CAMP HENRY AND LAKE LOGAN. This Power Point represents the work of the Lake Logan Board of Directors

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1 FINDING A WAY FORWARD: SECURING A FUTURE FOR CAMP HENRY AND LAKE LOGAN This Power Point represents the work of the Lake Logan Board of Directors

2 Key Points: What will be covered Background Original intent Financial commitment Financial projections Options 1, 2, 3, 4, 5, 6 and 7

3 Background From Resolution 1 at the 78 th Diocesan Convention (1999): Be it resolved. 1). that Camp Henry be moved to a new site that allows for additional growth in size, recreational facilities and a more complete camping program. 2) Sell In-the-Oaks, in its entirety, as soon as is feasible. There is no mention in the resolution of operating a new conference center.

Background In the Oaks was the former home of Camp Henry Sale of In the Oaks in 2000 High maintenance costs Facilities Obsolescence Need to increase capacity Proceeds: $2,350,000

4 Background In the Oaks was the former home of Camp Henry Sale of In the Oaks in 2000 High maintenance costs Facilities Obsolescence Need to increase capacity Proceeds: $2,350,000 Selling Costs (152,714) Net 2,197,286 Up fit Centre Park (300,647) Valle Crucis (400,000) Net Remaining $1,497,639 Photo courtesy of City Development, City of Asheville, North Carolina

5 Original Intent The Diocese of Western North Carolina bought Lake Logan to secure a new home for Camp Henry. From Report and Proposal of Camp and Conference Steering Committee, 12/16/99

6 Original Financial Projections From Report and Proposal of Camp and Conference Steering Committee, 12/16/99 Expected Results of Operating Camp Henry at Lake Logan Camp Henry Campers per week Eco Camp Campers per week Program Income $268,525 $448,892 $610,075 Contributions and Other $15,000 53,500 74,167 82,700 Total Income 15, , , ,775 Expense 120, , , ,030 Operating Income (Loss) ($105,000) ($90,279) $61,537 $139,745

7 Original Projections Assumed growth in Camp Henry Campers Which would require addition of new cabins Assumed addition of Eco Camp Total capacity of 250/week campers by 2003 Current Camp Henry capacity is 90/week Assumed no income from Conference Center operations

8 How Have we Paid for Lake Logan? ( ) Sale of In the Oaks Diocesan support Capital campaigns Lake Logan fund raising Episcopal Foundation grant Sale of LL land parcels (net) Bank loan Total $1.5 million (net) $1.7 million $7.4 million $4 million $1 million $.3 million $.9 million $16.8 million

9 Let s Examine our Source of Funds: Capital Campaigns Journey of Faith Campaign: $5,323,693 (2000) 333 Campaign: $332,104 (2005) Gooch Campaign: $455,203 (2008) Freed for Ministry Campaign: $1,529,850 total pledges; total paid $1,261,717 (2013) Total: $7.4 million

10 Let s Examine our Source of Funds: Diocesan Support Diocesan Operating Budget Annual Support $508,872 Diocesan Operating Budget Interest Expense 707,323 Additional Diocesan Support ,000 Sale of Mt. Holly 150,000 Sale of Trinity Kings Mountain 150,000 Total: $1.7 million

11 Let s Examine our Source of Funds: Diocesan Support Total Diocesan support from : $1.7 million In addition, $210,000 of the diocesan endowment was used in 2014 to repurchase 1 of the 4 properties sold on the East side of the lake. To put this in perspective: Annual Diocesan operating budget in 2014 is $1.7 million While the diocesan endowment is over $9 million in total, less than $1 million is unrestricted. The trustees of the diocese have established a policy that limits the draw to 4% per year.

12 Lake Logan Financials Program Revenue $1,008,946 $1,052,612 $856,066 $828,796 Program Costs 1,239,468 1,279,655 1,173,591 1,096,962 Net Program $(230,522) $(227,043) $(317,525) $(268,164) Diocesan Support 40,000 35,000 35, ,000 Donor Support /Other Inc &Exp 211, , , ,564 Net Income $21,135 $(38,470) ($15,651) $125,399 Note that before Donor and Diocesan support, Net Program has been consistently in the red. The Donor Support is related to the Conference Center The Diocesan Support includes the Camp Henry subsidy

13 Camp Henry Stand Alone Financials 2014 Projections Revenue: Registrations $151,263 Donations/Scholarships 96,885 Diocesan Support 55,000 Total Revenue $303,148 Operating Expense $218,588 Net Profit $84,560 Total Campers 460 Maximum campers per week Note that original projections were for 140 Camp Henry Campers and 110 Eco Camp Campers 90 Note: Expenses do not include costs to run facilities outside of the summer months or other facilities costs.

14 Remaining Debt with Wells Fargo as of July, 2014 Name Current principal Term Loan* $120,000 Interest Payments Rate $40,000 each year 3.95% Line of Credit $92,733 Revolving 3.95% Diocesan Note $725,612 Total $938,345 $125,000 every 6 months 3.95% * Term loan was created in 2005 to pay off previous Line of Credit at Lake Logan

15 Diocesan Note $250,000 per year on loan Bishop Taylor has worked hard to retire this debt and many people have been very generous. However, if all pledges are paid for the Freed For Ministry campaign, the Diocese will still owe $367,000.

16 Lake Logan Financial Projections for 2014 Lake Logan needs at least $150,000 of donor support by the end of 2014 Lake Logan needs another $200,000 of donor support in 2015 This is in addition to the $55,000 of budgeted support from the diocese Lake Logan must borrow $40,000 from the Line of Credit to make the annual payment on the Term Loan.

17 2015 Projections In 2015, out of 32 Conference Center reservations, 3 are Diocesan sponsored 9.4% While members of the Diocese may attend these other events, the majority of events currently scheduled are not Diocesan related. So, the donor support that is given helps support non- Diocesan events and individuals.

18 Tackling the Problem: Reformation of the Lake Logan Board A Blue Ribbon Committee formed in 2013 discerned a need for better communication between the diocese and the Lake Logan Board and recommended that the Board be reconstituted. With approval of Executive Council, the Standing Committee and the Trustees, a new Lake Logan Board was formed representing Lake Logan, Executive Council and Fiscal Ministries.

19 Tackling the Problem: The New Board of Directors Representatives 3 members from Fiscal Ministries 3 members from Executive Council 5 initial members from former Lake Logan Board Incumbent Bishop Extensive meetings and research Looked at all options and continue to be open to solutions Narrowed options down to 4

20 The New Board Considered the Mission and Purpose of the Diocese and Lake Logan as well as the Priorities Identified in the Freed for Ministry Campaign Spanish Speaking Ministry Campus Chaplains Camp Henry (in line with the original diocesan objective at Lake Logan to secure a new home for Camp Henry ) Justice & Outreach

21 Options Considered by the Board: Path to Securing Financial Future? Continue status quo of current programs and activities? Continue Camp Henry & develop a Learning Center? Full liquidation of properties & relocation of Camp Henry? Sell west side and keep Camp Henry on east side

22 Option 1 Status Quo Continue Camp Henry and Hosting Center Requires major donor support of ~ $5 million Pay off existing debt of $1,000,000 Address deferred maintenance of $1,000,000 Establish endowment for future

23 Option 1 Questions Continue Camp Henry and full Conference Center 1. Is it reasonable to think we can raise $5 million in light of all our previous fundraising efforts? 2. Even if we raised $5 million, the income on the endowment would be around $120,000 (4% draw). Annual fundraising of over $130,000 would still be needed to offset operational losses. Is this sustainable? 3. Are the programs and degree of support in line with the original Diocesan objective to have a permanent home for Camp Henry?

24 Option 2 Camp Henry + New Learning Center Continue Camp Henry and develop a new Learning Center, e.g., central focus where programs are generated for wider audience Examples: Outdoor/Wilderness Center Contemplative Center Environmental Center

25 Option 2 Cost Estimates Camp Henry and new Learning Center Raise start up funds of $750,000. Pay off debt of $1,000,000. Address deferred maintenance of $1,000,000. Establish endowment of $2,000,000. Need strong leadership and director.

26 Option 2 - Questions 1) Can we find the right director? 2) Can we reasonably expect to raise the funds ($4,750,000)? 3) What is the likelihood of success given the location and competition from multiple other conference centers? 4) Can we find a focus that will generate participants? 5) Can the two generate enough income to support operating expenses? 6) Are the programs and degree of support in line with the original Diocesan objective to have a permanent home for Camp Henry?

27 Option 3 - Full liquidation of property Full Liquidation with relocation of Camp Henry to another site Requires sale of 260 acres at approximate appraisal of $5 million Relocation of Camp Henry to another site with rental of space on annual summer basis or purchase of new site

28 Option 3 - Questions 1) How long will it take to find a buyer? 2) How easily can a new suitable location for Camp Henry be found? (Note that our consultant tells us that while there are locations available, they may not be desirable.) 3) How will this affect our supporters? 4) Is this in line with the original Diocesan objective to have a permanent home for Camp Henry?

29 Option 4 Sell Lake Side and keep Dining Hall Side 1. Retain Camp Henry (East Side) Expand and strengthen Camp Henry capacity Retain beach, boathouse and Director s house Modify conference operations (33 beds) 2. Partial liquidation of property (West Side) Sale of remainder of west side of lake only

30 Map of Available Land Gray area outlined in blue is for sale

31 Option 4 Use of Funds 1) Appraised value of west side of $1,760,000 2) Use funds received to: a. Pay down debt b. Apply to deferred maintenance on east side c. Establish endowment for Camp Henry and needed facilities 3) Additional fundraising will be needed to fully fund Camp Henry endowment 4) If Camp Henry grows, the operations will be sustainable.

32 Option 4 Builds Capacity for Camp Henry Combine the Camp Henry Director position with the Diocesan Missioner for Youth and Young Adults Build more/new cabins Build a large work space for inclement weather Develop more programs and equipment, rope courses Develop a robust alumni association Expand CHOS Improve waterfront area and boating resources Establish a $1 million endowment for long term sustainability and financial security

33 The Camp Henry Dream Reach more children. Increase Camp Henry user days. Increase marketing and presence, e.g., Camp Expos. Enroll more than one age group per week. More marketing to other Dioceses in the Southeast.

34 Option 4 Questions 1) How long will it take to find a purchaser or purchasers for the west side? 2) How can we ensure that the purchaser is in line with our mission? 3) What will the remaining conference center activity look like and how will it be cost effective? 4) Will we be able to raise additional funds to fully fund the Camp Henry endowment? 5) Is this in line with the original Diocesan objective to have a permanent home for Camp Henry?

35 Option 5 (From Board of Ambassadors) - Sell Sit n Whittle Compound 1) Sell Sit n Whittle Compound along with Maple Cottage and 35 acres on West Side for $1,200,000 plus 20 acres on West Fork of Pigeon River for $200,000 2) Buyer would acquire a total of 8 Buildings including 14 bedrooms and 50 acres plus 20 acres on river with right to build a 2200 sq. ft. home with lake access 3) Proceeds will be used to pay down debt ($600,000), fund deferred maintenance ($600,000) and set up a cash reserve ($200,000)

36 Option 5 Questions 1) How long will it take to find a purchaser or purchasers for just this portion of the west side? 2) How can we ensure that the purchasers are in line with our mission? 3) What will the remaining conference center activity look like and how will it be cost effective? 4) Will we be able to raise additional funds to fully fund the Camp Henry endowment? 5) Is this in line with the original Diocesan objective to have a permanent home for Camp Henry?

37 Option 6 (from Board of Ambassadors) Sell Portion of Riverside Property Sell portion of riverside property for approximately $200,000 In advance of the sale one or more of the Ambassadors will loan up to $200,000 to Lake Logan to help cover operating expenses, with the loan to be repaid from the land sale proceeds

38 Option 6 Questions 1) This is not intended to be a permanent fix to Lake Logan s financial needs. Therefore, is selling the riverside land to cover operating costs the best use of our assets? 2) Is trading an asset to cover operating expenses an acceptable strategy for a sound financial future? 3) How will Lake Logan operate during this period? As a conference center or primarily a hosting facility? 4) What happens if there is no new solution at the end of the period? 5) Is this in line with the original Diocesan objective to have a permanent home for Camp Henry?

39 Option 7 For now, retain ownership of all of the Lake Logan property Revise the governance structure to separate Camp Henry and the Conference Center Reach out to the advocates for these programs to serve on the governing committees Have each committee develop and implement strategic plans Look to the supporters to fund and/or find funds to sustain operations and grow the programs Develop benchmarks against which results can be measured

40 Option 7 Questions 1) Is the donor support reasonable and sustainable on an annual basis? 2) Is this in line with the original Diocesan objective to have a permanent home for Camp Henry?

41 Next Steps Discussions Around the Diocese June 25: Good Shepherd: Cashiers July 2: All Saints, Gastonia July 9: Trinity, Asheville July 16: St. Mary of the Hills, Blowing Rock July 23: St. James, Hendersonville

44 To see a great video about Camp Henry, please go to this link: UFVxRVU/edit?pli=1

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