Policies & Procedures for New Construction, Renovation and Capital Maintenance Projects
Financial Policies Overview
The following policies apply to all projects except Category II. Any Parish expecting to borrow funds for the construction or substantial expansion or renovation of any Parish facility must have the prior approval of the Archbishop. This approval will be determined during the Needs Analysis Study, described at Preliminary Analysis and Planning.
The Department of Management Services (DMS) must confirm that, unless exceptional circumstances exist, the following seven requirements have been satisfied before project approval can be given:
- To plan for operating contingencies, the Parish/School must have at least four months of operating cash available or in the Interparish Loan Fund (IPLF). This is in addition to the amounts that a Parish is allowed to hold.
- The Parish or School is required to have cash of at least 50 percent of the required Total Project Cost (TPC) on-hand (or previously expended on the project) prior to bid solicitation, and have completed a budget or financial plan to complete the project. An additional 15 percent must be collected prior to project completion.
- The level of financing for any Parish/School construction/renovation project shall not exceed 35 percent of the TPC. TPC includes, but is not limited to, construction costs and fund-raising costs, architect/engineering fees, furnishings, escalation estimates and appropriate project contingency reserves per the Project Cost Data Form.
- The term on any loan required for construction or renovation shall not exceed ten years. The Archdiocesan Loan Committee in consultation with the Parish will make actual determination of the loan term and amount.
- All projects costing over $2.0 million or with expected debt of $1.0 million or more must be approved by the College of Priest Consultors and the Board of Financial Administration (BOFA).
The limit for direct debt or for contingent liabilities of the AOB will be determined by a formula approved by the BOFA.
- Project increases in TPC of more than 5 percent must be approved by the DMS.
- The BOFA, with staff assistance, shall review the contingent liability level on an annual basis at its Fall Meeting. Due to the need to preserve the credit rating of the AOB, this latter requirement will not be waived. Priorities for authorization under this requirement will be assigned by the Executive Director of the DMS in consultation with the appropriate Divisions of the Department.
Please click on the following links for other essential financial policies.