Update from the Trustees

By Karl Hoffman, president

Tasked with oversight of the property and assets of the church, the Trustees have a busy 2021 ahead of us.

The Trustees want to communicate with the congregation the numerous activities the Board is engaged in now and throughout 2021. To start, the new corporate officers of the church are: President, Karl Hoffman; Vice President, Aryn Myers; Treasurer, Doug House; Secretary, Tom Dunlap. The other Trustees are Craig Berry, Hal Hiemstra, Karin Lohman, Edie Snyder, and Richard Snyder.

HVAC Update
As the congregation knows, we have finally started on the major renovation of our 70-year-old Heating Ventilation Air Conditioning (HVAC) system. This process started almost eight years ago. At the time, the project seemed daunting with a price tag of several million dollars. The 2015 capital campaign started the financial ball rolling, raising funds to pay for the Variable Refrigerant Flow (VRF) system installed on the fifth floor, benefiting both the congregation and our tenant, McClendon Center. In 2018, as part of our agreement with the DowntownDC Business Improvement District (BID), we paid for the installation of a VRF system in the Park Level (basement) using our Line of Credit. Per the agreement, the BID is paying back the cost of the HVAC over 180 months (15 years), the total length of the lease agreement we signed. This installation was completed in early 2019.

All of this work still left floors 1 – 4, including the Sanctuary, reliant on our old and failing system. Built with four compressors, each has failed at one point or another, each has been refurbished/rebuilt, and now two are permanently offline. The coolant our system uses is no longer made and our mechanical contractor must call around the country to find supplies. Other components are in various stages of failure. Even with the repairs, the system cannot adequately cool and heat the building. This has led to several instances of mold growing throughout the building, most seriously in the organ pipes. Remediation over the last several years has cost almost $300k. Starting in late 2019, a path forward was identified. With a few twists and turns along the way, and with a tremendous boost from the employment of John O’Brien as Interim Facility Manager, our new system has been designed and is now being installed.

What are the specs you ask? Floors 1 – 4, not including the Sanctuary, will utilize a VRF system, like the Park Level and the 5th floor. The Sanctuary system will be supported by one Air Handler Unit (AHU) using an air-cooled chiller and electric heat. The Sanctuary air will pass through a MERV 13 filter, and, at maximum, the air can be replaced 6 times per hour.

What is the impact on the building? The basement work area will see a number of changes. Work will remove significant amounts of asbestos piping and ductwork. An old boiler will be removed. The removal of old equipment will allow for the creation of a new room out of space freed up in the mechanical room in the Park Level. The electrical closet in the Park Level, along the H Street side where the nursery used to be, is undergoing some reworking so that the church’s electrical service can be upgraded to 2000 amps from a current 1200 amps. The roof above the elevators will see some significant construction to install cooling units and decorative screens to conceal the equipment.

What about the cost? The project will come in at $3.5 million. As intimidating as that number is, it is not a cost we could really avoid. The consumption of staff and volunteer time as well as almost $100k per year in triage and mold remediation demanded new action. The new HVAC system will also make our space more welcoming for potential tenants, building users, and members. In the short-term, we are paying for the new system primarily through borrowing from our Line of Credit. Anything above $3.2 million will be paid out of current church assets. In the longer term, the debt will be paid off via capital campaigns, bequests, and other giving. We would be remiss if we did not lift up two generous contributions made in late 2019/early 2020 given specifically for capital expenses: $100k from Tom and Karen Dunlap and $150k from Nancy Dickinson.

Many are no doubt wondering how much we will save on our electric bill. The answer: not sure. Our mechanical engineers have been reticent to provide a number. We do know by moving to an air-cooled system we will be saving on our water bill. We also know our new system will be more energy efficient. However, as noted above, in recent years we could only use our system at half power, and we may want to use our new system more vigorously to ensure comfortable temperatures. So actual savings, if any, remain to be seen.

When does the installation begin and when does it end? It has begun. Asbestos abatement, preparation work, and other breakdown activities started at the end of March. The end date is still up in the air, but we are hopeful by mid-July. The primary schedule driver is the one we can least control: equipment delivery. Our general contractor, ABM, is putting together the full schedule as we write this, and we have asked them to provide a simplified schedule that we will use to keep you abreast of the work’s progress.

Other projects this year include:

  • adding additional solar panels to our roof, once HVAC roof work is completed. This will provide additional utility savings,
  • installing a protective glass around the front desk to be completed in the next few weeks,
  • finalizing, contracting, and installing security improvements as outlined in our $100k security grant award,
  • overhauling our fire alarm system, a recently identified deficiency,
  • preparing the sanctuary for our return,
  • renovating the bathrooms of the church. Upon completion of the HVAC installation, the Trustees will turn their attention to this large project. The Trustees invite anyone who believes they can bring the necessary energy and insight to the project to reach out to Karl Hoffman, and
  • developing a Building Operations Manual. Our variety of systems, including our new security system require a manual that allows our staff and leadership to understand how things work in the building. Along with the church’s Facilities Manager and custodians, we need a few volunteers who have the time and talent to participate in this effort including writing and editing the document. If you feel called to assist, please let Karl know.

Tenant Updates
The past year was a challenging one for our tenants. Several have asked for rent abatements to which we have agreed. However, overall, many have paid at least something, and our rent collections remained strong for the year. The BID asked for use of the Radcliffe Room as a warming center during the winter which provided additional rental income.

And then recently, the BID asked to use the Radcliffe Room and their Park Level space as an overnight shelter. We agreed to terms regarding use of their space, but the HVAC project means no cooling for the Radcliffe Room, an untenable situation for overnight guests as we move through spring and summer. Currently, the BID is waiting on the city to provide some additional guidance before they can open the program.

Financial Oversight
With regards to the Trustees’ financial oversight responsibilities, we have moved to a new membership software system called Breeze, leaving our ACS system of many years. This new system more easily facilitates pledging, online giving, and membership management, and you will be hearing more about it soon. Already, the Treasurer reports hours of time saved processing weekly contributions.

Later this year we plan to transition our accounting software from the QuickBooks desktop version to the online version. This change will allow select individuals to access the books to review transactions and alleviate demands on our Finance Manager’s time. Finally, we are employing a new audit firm this year. While our previous auditors were excellent, we thought it was time to bid out our work. Our new auditors, Wegner CPAs, are both less expensive and specialists in auditing churches. We are excited to see what insights they can provide into our financial operations as they validate the excellent work of our financial team.

We will focus on some organizing actions in the second half of the year. As noted above, we will begin creating a Building Operations Manual which will be a complement to our Financial Manual created several years ago. Having lived with our Financial Manual for the past three years, our Treasurer will lead us in a substantial review to see how we can make it work better. Over the past several years, the church leadership has been using online shared drives, first, Dropbox, and now Google Drive. The Trustees will turn our attention to reorganizing our multitude of documents. The Trustees welcome assistance from any member who enjoys creating organization out of disorder.

We conclude with several thank yous:

  • John O’Brien (Interim Facilities Manager – Retired, Member) – his service over the last year has been invaluable in moving forward the HVAC project and giving insight into the day to day operations of our building. We thank him for getting us to firmer ground.
  • Elias Bazezew (Facilities Manager) – even within the few months he has been with us, we are already benefiting from his work ethic and experience in upgrading our facilities. We look forward to his leadership through the HVAC project and all the challenges, known and unknown, that our facilities will provide in the year ahead.
  • Lance Jameson (Finance Manager) – his steadfast work throughout the pandemic, meeting the challenges of our ever evolving financial system, and picking up new duties while the church has been closed, provides the Trustees great confidence in our books and our operations.
  • Doug House (Treasurer, Member) – almost two years ago, Doug offered to jump in and tease out some financial data to help Session make better sense of our situation. Little did he realize what that task entailed. Doug has spent countless hours in the weeds of the church’s books, bringing synchronicity between the Financial Manual and actual day-to-day activities, coherence between our audited numbers and our books, and clarity and humor when explaining it all. Be sure to thank him when you can. You can always buy a bottle of delicious wine from his store. If you don’t live in Arlington, be sure to ask him about his drone delivery service!

We expect to provide additional updates through AVENEWS as the year progresses. Please don’t hesitate to reach out to any of the board members with your questions. Several members will be rotating off this year. If you feel called to share your talents, especially as they relate to investment experience and building repair/maintenance/contracting, please let us or the Nominating Committee know.

And again, we are seeking volunteers to assist with developing a Building Operations Manual, renovating our bathrooms, and organizing important church documents on our shared electronic drive. We would be glad to have your help.

Stewarding Our Gifts: How We’ll Use Our 2020 Grants

In 2020, NYAPC received several grants, totaling $140,000, to help us in “expressing God’s love, engaging in God’s justice:” They will support Radcliffe Room guests and the Orphan and Vulnerable Children program in Kenya, make worship services more accessible online when we return to in person worship, and improve our building’s security for staff, members and guests. These grants also help us begin to fulfill a strategic plan goal to diversify our revenue sources. In addition to these grants, we received a forgivable loan through the Paycheck Protection Program, a generous undesignated bequest of $400,000 from the estate of Amy Gillespie, and many smaller gifts in 2020. Thanks be to God.

Security Grant
The Homeland Security Administration granted us $100,000 for improving building security. Facility Manager Elias Bazezew is currently getting pricing for a variety of technologies to promote better security for staff, members, and guests during daily church operations and worship, including: closed circuit monitor cameras; exterior lighting; internal alarms and motion detectors; and electronically controlled door locks. Then, a committee of the Trustees will determine the configuration of these devices to get the best value for the $100,000. There will also be training for staff and the congregation on our responses to the most likely security risk situations. – from John O’Brien, Trustees

Radcliffe Room
After an employee of one of our office building neighbors, the Phillip Morris Foundation, observed our lunch service in Triangle Park, the foundation provided $25,000 for ministries to our neighbors without homes. Over the next several months, the Radcliffe Room team plans to spend its grant on:

• renovation of the sink in the first floor kitchen (contractor still needed!)
• materials for service, including tables and tents
• six months’ worth of food (meat and sandwich supplies)
• lots of winter coats, thermals, jeans, and hoodies!

– from Phil Telfeyan, Radcliffe Room Team

Sanctuary Technology Upgrades
The worship and music committee applied for and received an $11,000 grant from the National Capital Presbytery’s Church Development Committee “tech team.” The grant will cover half of the committee’s estimated cost of outfitting the sanctuary to enable hybrid in-person and online worship, including the sound system upgrades planned before the pandemic (microphones that comply with new FCC rules and a new soundboard). The worship and music committee’s goal is to provide a fulfilling way for people to participate in worship from home even as we return to in person services. The committee envisions, for example, monitors in the sanctuary that would allow Zoom worshippers to see and be seen, and better cameras and sound than our previous livestream set up. – from Meg Neill, Worship and Music Committee

Kenya Orphan and Vulnerable Children Program
We also received a $5000 grant from the National Capital Presbytery’s Global Mission Program for the Orphan and Vulnerable Children program of the Presbyterian Church of East Africa in Kenya. The grant has been sent directly to that program in Kenya so that they can purchase computers and books for their new library. – from Beth Braxton, Board of Deacons

Trustees Q&A: New HVAC Project to Begin Soon

At the first of two Q&A sessions, members of the Board of Trustees reported on current and coming improvements to our church building: security enhancements, Covid-related projects, and a $2 million HVAC project, slated to begin in January. Trustees Jim Spearman, Hal Hiemstra and Aryn Myers summarized the projects, and Karl Hoffman provided information on financing. Elder David Gillies also answered questions, especially related to a possible 2021 Capital Campaign.

All these building projects  provide significant improvements, and symbolize our continued commitment to the future of NYAPC, Hal Hiemstra said in introducing the session.

Security Improvements
Our elevator and stairways now have a security and keycard system, an improvement made necessary by having the Downtown Day Services Center, serving 150-200 clients per day in non-Covid times, in our basement. This will ensure that the clients don’t enter our office space or other tenants’ spaces, such as the McClendon Center on the fifth floor. These systems are programmable, meaning that they can be adjusted on a Sunday morning, for example, to give the congregation freer access to the building.

Covid-Related Updates
With the pandemic’s arrival, the Trustees realized how difficult it is to come into our building and not touch multiple surfaces. So, we now have touchless faucets and touchless soap and hand-towel dispensers in all bathrooms. In addition, the Trustees installed floor, wall and elevator Covid signage, and will soon install plexiglass at the front desk to minimize direct air exchange.

HVAC Replacement
This work would replace the HVAC on the first through fourth floors, completing what has been a years-long multi-phase effort to upgrade our building’s HVAC system. The first phase replaced the HVAC system on the fifth floor in 2015. A second phase replaced the Park level HVAC system in 2018 with the renovation of the basement for the Day Services Center.  This final phase should begin in January and end in May, perhaps coinciding with our congregation and tenants’ possible return to the building.

Historically low interest rates and a largely vacant building due to the pandemic have combined for a unique opportunity to do the whole job for what is a lower cost than the previously planned stage by stage plan. Workers won’t need to plan their work around building occupants, e.g. working at night, and the low interest rates mean that the line of credit payments  can be managed in our annual operating budget. 

Benefits of the Replacement. The Trustees noted that the current HVAC situation is unsustainable. Repair costs and remediation of mold caused by the malfunction of the system have cost an average of $70,000 a year. In addition, the new system will reduce effort of staff and volunteers and lower utility costs, especially water consumption, as the new system will no longer use a cooling tower. More definite estimates of energy savings will be part of the final project proposal, coming in December. Finally, stabilized temperatures and humidity control should eliminate the warm weather mold problem and air filtration will improve air quality.

Financing. This new line of credit is a continuation of how we have been paying for building improvements since 2014, when urgent exterior repairs needed to be made. We have mostly paid off debt from that project, along with other capital priorities such as the fifth floor HVAC, due to a previous capital campaign and several special gifts and bequests.

Currently, the church has a fixed interest term loan for $700,000, the cost of the basement HVAC system, which the Business Improvement District is paying off over time as part of their lease for the Downtown Day Services Center. In addition, approximately $200 – $300 thousand remains from the previous capital projects. The $700,000 term loan will remain separate, and a new $2.6 million line of credit will combine the rest of our existing debt with the cost of the new HVAC. It is collateralized by our current investments.

A New Capital Campaign
A small team is looking at the contours of a new capital campaign to pay for this new system, in addition to other capital needs. The new line of credit is a variable rate loan. Current rates are extraordinarily low, but could rise in the next few years; a capital campaign would help us to pay it down in a timely manner.

The Trustees will hold another Q&A after worship on Dec. 13.