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Mortgage Free in 2023

Rob Neppel, a long-time parishioner, joined the St. Francis staff as Director of Finance and Planning in August 2014. The Parish had just established a 5-year financial plan for the Church, The Franciscan School, St. Francis Pre-School, and the Columbarium, which now became his responsibility to administer. Rob recalls, “During my first week on the job, I met with Dr. Russ Elmayan, the Diocese Chief Financial Officer/Chief Administrative Officer. Russ shared that St. Francis represented 6.6% of the Diocese’s income and 18.6% of the Diocese’s debt.  While there was no way to respond to that statement, it made debt elimination a priority.” So began an effort to eliminate the mortgages that St. Francis of Assisi had accumulated during their significant growth.

Rob mentioned that, at the time, the collective Parish income was about $10.2M.  “We had four outstanding mortgages, of $8.7M, with an annual payment obligation totaling $1.1M.” These mortgages included:

  • The land loan was to purchase the two houses along Leesville Road, which provided the land to build the Community Center and Chapel. 
  • Phase V Construction of the Community Center, Chapel, and extension to Elizabeth Hall (Pre-School).  
  • Funds necessary to complete the building of the Siena Center for Life-Long Learning and the home of the TFS Middle School in 2011.
  • The purchase of the Bethany Hill Baptist Church (BHBC) property, now the Our Lady of La Vang Parish, in 2013. 

“In addition, there were additional payments due to the Bethany Hill Baptist Church community for the purchase of their property, including a balloon payment of $750K,” recalls Rob.

Having purchased the BHBC property, the intent was to mount a Capital Campaign to raise funds to renovate the buildings and pay off the outstanding mortgage. A Campaign Committee headed by Richard Derrenbacher and Jules Weber was charged with pulling together the compelling justification for a capital campaign. They spent six months interviewing various ministry teams with recommendations for how they would like to use the property and facilities. Ultimately, the committee did not find that justification. However, the Vietnamese community had previously approached us about renting space to meet and celebrate mass on our campus. Their community had been meeting and celebrating Mass at St. Joseph’s in southeast Raleigh. We received a call from Binh Nguyen of the Vietnamese community, and we met to discuss the possible use of the BHBC facilities. Rob recalls, “Binh called me a few weeks later and said, ‘We raised half the money,’ to which I responded, ‘Money for what?’”  Binh replied, “Money to buy BHBC!” Rob immediately shared this development with Fr. Steve Patti, O.F.M., the pastor at the time, and the Finance Council. One thing led to another, and by June 2015, St. Francis transferred ownership of the BHBC property to the new Our Lady of La Vang Parish. That resulted in the mortgage being retired, with St. Francis recouping all the principal we had invested in the property. 

With the support of the Pastor and Finance Council, all the funds that would have gone towards payments on the BHBC mortgage went to the outstanding land loan. The term Rob kept using with this redirection was “Double Down,” with the effect of retiring that mortgage in July 2016. The parish had eliminated two of the four mortgages, leaving only the Phase V and Siena mortgages to address.

When COVID hit, we could continue in-person classes at the preschool and TFS and build up savings and reserves. As a result, Msgr. Clay, who became pastor in September of 2020, approved a recommendation by the Finance Council to use some reserve savings to retire the Phase V loan in June 2021, which left us with the Siena mortgage as the only outstanding debt. As Monsignor Clay states, “I’m a fiscal conservative and have an allergic reaction to long-term loans unless they’re necessary. We were blessed at St. Francis to have some extra money to expedite repayment of the two remaining loans when I arrived.” Msgr. Clay continued, “When asked how to allocate those funds, I recommended that, as much as possible, it go towards paying off our loans. Rob and the Parish Finance Council have been nothing short of excellent in helping us reach the goal we achieved last February and keeping us focused on what we need to invest financially into keeping what we have in excellent condition.” 

Monsignor Clay, with the support of the Finance Council, directed that we double down to accelerate the payoff of the remaining Siena loan. The funds that would have gone toward the Phase V loan, and the Mortgage Sunday contributions toward the same Phase V mortgage, could now go toward the Siena mortgage. The Siena mortgage’s principal and interest payments of $400,000 a year, and the additional monies paid yearly by TFS towards the Phase V mortgage, were borne by the school’s budget for a decade. Now St. Francis could pay off the Siena mortgage by March of 2023, which would free up funds in the school and church budgets because of the relief from the mortgage obligations. We made our final mortgage payment on February 7, 2023.

The dedication to paying off these debts allows the previously committed mortgage funds in the school and church budgets to be used for other priorities. In the case of the school, we are using the freed-up mortgage funds of almost half a million dollars per year to accelerate “fair and just wage” goals with teacher and staff salaries.  On the church side, the freed-up monies contribute additional funds to the maintenance reserve for the entire campus, estimated to be $18M over the next 20 years.    

Father Mark Reamer, the pastor before Father Steve Patti, who used these mortgages to address the parish’s growth, adds, “St. Francis has always been a stewardship parish, and the mortgage burning ceremony [on March 26th] was an opportunity to highlight this dedication. As I said in my homily that day, The Catholic Community of St. Francis of Assisi is an excellent example of stewardship. You remain a community that receives God’s gifts gratefully, cherishes and tends to them responsibly, shares them in justice and love with others, and returns them with an increase to the Lord. You are stewards inspired by your patron, Francis of Assisi, who responded to the voice of God through the voice of Jesus, ‘Francis, go and rebuild my house which you see is falling into ruin.’”  

The payment of these debts is a great accomplishment for St. Francis and, says Msgr. Clay, “Our faith community is in good fiscal hands with Rob Neppel, his staff, and our parish Finance Council.” Congratulations on St. Francis becoming debt-free!