As soon as a congregation begins to consider a project which may require approval of indebtedness by the Standing Committee, the congregation is expected to contact the President of the Standing Committee, asking him/her to appoint a person to serve as liaison/consultant to the congregation through the process of seeking approval and repaying the debt. A parish must have a master plan in place at least six months before breaking ground.

As outlined in the Constitution and Canons of the Episcopal Church (2003) Title 1, Canon 7, Section 3 and the Constitution and Canons of the Diocese of Virginia (2003) Canon 14, “Creation of Church Debt,” the Standing Committee must give its approval to the creation of any major indebtedness (as defined in the diocesan canon noted above). The Standing Committee requires the following as tangible evidence of a congregation’s readiness to incur such debt, before its approval can be given:

1. Request Standing Committee President to appoint liaison / consultant to the congregation.

2. A concise statement of the purpose of the project for which debt will be incurred (the
“mission statement”) and the place of this project in the total ministry of the parish, region, and Diocese.

3. A description of the project and how it meets the requirements of the “mission statement.”

4. A description of the approval process for this project within the parish. Please include a statement as to whom holds title to the property in trust for The Diocese of Virginia. For example: “Property is held in trust for The Diocese of Virginia in the name of the

a. Trustees of applicant church, being (insert all current Trustee names)
b. Bishop of The Diocese of Virginia, being Peter James Lee
c. Trustees of The Diocese of Virginia, being (insert all current Trustee names)

5. Architectural plans, if planning to build or renovate. Please note all consideration and list of governmental approvals necessary for the project. If the parish is an historic building, in an historic area, or adjacent to either, an interview with local government and / or historical society is especially necessary to judge extraneous or hidden costs of the project.

6. History and projected growth rate of parish membership and area population.

a. Calculate membership and area population at +/- 10% to show possible range
b. What does the range mean to parish’s ability to bear debt load?
c. Census data obtained from county / city.
d. Are any new churches nearby or planned for the area?
e. Over the last five years, what has been the average attendance?
f. Why are the growth numbers justified?

7. A stewardship history, including history and projected growth rate of pledges to operating budget and any prior special appeals. The pledge to the diocesan operating budget must be at least the minimum of that which is expected of the particular church according to current diocesan policy at the time of the request. Include the following data for the prior five years:

a. Number and amount of pledges made
b. Number of pledges honored
c. Amount actually received on pledges
d. Percentage not received
e. Average pledge
f. History of pledging to the Diocese for the past five years including an indication of percentage of unrestricted and total income and total amount paid in each year.

8. Operating budgets for the three-year period immediately preceding application.

9. A complete copy of the most recent annual parish audit, as well as current income statement and balance sheets.

10. Report of fund-raising efforts and results.

a. When is the money coming in?
b. Pledge assumptions should be discounted two percent for pledges to be received within 12 months, five percent for those to be received in a period 12-24 months out, and at least 10% for all pledges payable beyond 24 months.

11. A proposed borrowing plan for the project, including a clear statement of the total
amount of debt to be incurred from all sources and a schedule for repayment of loans.

a. When is the borrowed money coming in to church accounts?
b. Where is loan to come from and what are the terms? A copy of the actual loan documents, or pre-qualification documentation is to be included.
c. The Standing Committee will not allow debt amortization of more than 20 years in accordance with the Diocesan Missionary Society financing guidelines.
d. Interest assumptions should tend higher than at time of application (i.e.: +.50%). Judgment should be based on current market conditions.
e. If using a variable rate, look into buying a “cap” as insurance against economic catastrophe.

12. If the Diocesan Missionary Society has been contacted for assistance and has agreed to make the loan, please send the Standing Committee a copy of the letter of approval. If DMS has not agreed to assist the project, please state why not.

13. If the loan is not made by the Diocesan Missionary Society, a financial review by the Diocese's Financial Review Committee, chaired by Michael Kerr, Treasurer of the Diocese of Virginia, is required. A statement of the Committee's findings must be submitted to the Standing Committee two weeks before its scheduled meeting in order for an application to be considered.

14. If the requesting Church is a Mission and/or Church under the supervision of the Bishop, an architectural and finance committee of the Commission on Congregational Missions must review the proposal. A letter of approval from the Chair of the Commission on Congregational Missions, or its successor entity, to the Standing Committee is required for approval. In the case of a simple refinancing of previously approved debt, these steps are not required.

15. A proposed spending plan for the project phases and costs of each phase, including allowance for cost overruns.

16. Projected financial pro forma statements for the parish for the first five years after the commencement of the repayment of the debt.

17. If approved, the Standing Committee will notify the Treasurer of The Diocese of Virginia
and a letter stating such approval will be delivered to the Senior Warden of the requesting church. This letter may be required by the lender to make certain denominational approval has been received by the church.

Formal application to the Standing Committee is to be made in person by a delegation from the congregation, including the Rector or Vicar, the Wardens and others (the Treasurer, Chair of the Building Committee or Building Finance Committee, etc.)

The congregation is to call the President of the Standing Committee to schedule such a meeting. All written materials for review must be delivered to each member of the Standing Committee not less than two weeks prior to the meeting at which application will be made. If the Standing Committee does not receive the materials two weeks prior to its meeting, the application will not be considered at that time.

An annual reporting form must be submitted to the Standing Committee by way of the assigned liaison. This report is to be submitted no later than March 31st of each year. This report is required to be submitted each year until the total outstanding debt of the church is less than 80% of a three-year average of the church’s unrestricted income. If a church reaches that level, they should ask their assigned liaison for the current process to request official termination of the need to file an annual report.

The Standing Committee will maintain a record of all applications. This record will include all subsequent related documents such as the annual debt status reports, or addenda to the application.