The River Conference of the Free Methodist Church

Step By Step Process of a Building Project


This is the process to begin a project

The following steps are to be completed before any action takes place on a non-emergency capital project’s incurring debt over $10,000.

  • Pastor to meet with local church board to get support on need to look into capital improvements, purchase of property, or purchase of building.
  • Pastor is to meet with District Leader or Superintendent and review the need to move forward on project.
  • District Leader or Superintendent to supply the Pastor with the phase 1 process instructions.
  • Local church board to vote to open a designated fund account for project.
    1. Define reason for to designated fund, capital improvement, purchase of property, or purchase of building.
    2. Define the goal for the fund raising, 25% down payment, or a target amount.
    3. Define a target date to achieve the fund-raising goal.
  • Pastor to notify the Superintendent and District Leader of the local church board action and goals.
  • Pastor to have local church board vote one of its member to be the project representative along with the Pastor.
    1. Local church board representative and Pastor to be included on all correspondence and meetings. They will keep the local church board and informed on the project progress, once the project has been announced this will include the entire church body, (see step 2-h)
  • Property Team Manager and Finance Team Leader will review with the Pastor the project plan and review all remaining process instructions, including Free Methodist Foundation and TRC documents to be filled out. The following is a list of the requirements to be filled out and returned to the Property and Finance Teams.
    1. FMC’s Application to purchase Property, signed by Pastor in charge and Secretary of church society. This application will be signed by the Superintendent if the BOA approves the purchase and the need for a loan, and will be forwarded to the Free Methodist Foundation, see step 3 item 1.
    2. Year-to-date profit and loss statement and balance sheet.
    3. Prior year’s profit and loss statement and balance sheet.
    4. Current year’s budget.
    5. Attendance records, current year to date and two previous years. If available both adults and children.
    6. Articles of incorporation.
    7. Minutes of the Local society authorizing the financial obligation of the Building, Property, or capital improvement.
    8. Copy of your current Insurance policy.
    9. Articles of Incorporation
    10. Property deed

Step 2

The following actions are the approval process.

  • Pastor to notify the Property Team Manager of the step 1 completion.
  • Pastor to contact Free Methodist Foundation to determine what loan amount they would qualify for. This is not a loan approval just an estimate to continue project planning.
  • With the loan amount the planning for the size and scope of the project can begin.
    1. If the project is building purchase then loan amount will help search listings.
    2. If the project is land purchase then loan amount will help determine size of property.
    3. If the project in capital improvement the loan amount will help define scope.
    4. The Pastor and church board to plan vision cast/ vote/ pledge. This plan should have a target for yes votes and the pledge ask. This plan should include the debt plan, how much will be carried and the planned pay off date. This is the fund raising campaign planning step that is carried out in 3-h and 3-i.
    5. Property Team and Financial Team to review project quickly once all documents are returned and they have been updated on the plan. They will then make a recommendation to the conference BOA
    6. If the BOA approves the project (this also needs to happen quickly) the Pastor will be informed to move forward on the project
    7. The Pastor to hold a meeting with the church board and influential members and/ or top givers. The group challenged to consider making a pledge prior to the public presentation.
    8. This is the point when the project is first announced to the entire church body and the vision cast and pledge ask will be held for all that consider this their church. The yes/no vote is taken on that day, but the pledge period should have at least a month to be submitted.
    9. When the pledge period has completed then the pastor will announce to the church the yes/no vote totals and the pledge amount (this may require a review of scope).

Step 3

The project is now starting

  1. With BOA approval the Pastor can now begin the process of securing a loan from the Free Methodist Foundation or other lending organization.
    1. For building purchase this is when the Pastor contracts with and agent to look for a building that will comply with the Local church needs.
    2. For a property purchase to build on in the future this is when the Pastor contracts with and agent to look for the appropriate property.
    3. For a Capital improvement this is when the Pastor contracts with an architect and or a general contractor and begins design.
  1. With the approval to secure a loan, the applicable documents from the list below are required.
    • Minutes of the Local Society
    • Authorizing the Loan
    • Copy of Conference BOA Authorizing the Loan
    • Release to Encumber
    • Appraisal
    • Copy of Purchase Agreement, if applicable
    • Copy of Construction Agreement with General Contractor
    • Promissory Note
    • First Mortgage or Deed of Trust
    • Title Insurance Policy
    • Certificate of Fire and Extended Coverage Insurance
  1. The Trust Clause (Book of Discipline section 6400-6410) MUST be included in the Title of all Property and should state:
    1. The property is held in irrevocable trust for the Free Methodist Church – USA (incorporated as “The Free Methodist Church of North America”) and is subject to all provisions of its Book of Discipline. “Property” includes all houses of worship existing now or later constructed on the property. The following additional provisions apply to the trust:
    2. All seats shall be forever free;
    3. All trustees and their successors, any society or congregation, and all entities or persons with any interest in the property shall permit a minister to hold religious services on the property if the minister is authorized under the Book of Discipline and holds services in accordance with it.
    4. The property may be sold and the proceeds disposed of only in accordance with the Book of Discipline.
  1. All loans, leases, titles, deeds, letter of intent, etc. Must be signed by the Superintendent.
  1. For the purchase of a building.
    1. Review potential building purchase with property Team, if possible arrange review or visit by property manager.
    2. Don’t sign letters of intent unless directed by email from the Superintendent.
    3. Always require a building inspection and appraisal.
    4. If the building requires modification before occupancy the cost and time line must be defined during due diligence period, or offer must be rescinded.

  1. For the purchase of land to build on.

    1. Review potential land purchase with property Team, if possible arrange review or visit by property manager.
    2. Don’t sign letters of intent unless directed by email from the Superintendent.
    3. Always require property corners to be marked by survey.
    4. Always have a flood zone review completed and documented.
    5. Always review and document all easements, mineral rights, well rights and water rights.
    6. Always review zoning, building codes and restrictions, vehicle entry and exit requirements.
  1. For capital improvements on and existing building or property.
    1. Property Team may assist Pastor to develop building plan, select architect, and general contractor.
    2. Always require multiple bids for sub contracts to find best price and or quality.
    3. Always require general contractor and or subcontractors to add the local church as additionally insured to their policy.
    4. Always require detailed drawings on major projects, with as built drawings on completion.
    5. Always review and follow ALL zoning, inspection, building codes and restrictions, vehicle entry and exit requirements.
    6. Never approve final payment till ALL work is complete and inspected.