Project Budget

One of the most important task of the finance committee and ultimately the building committee is to establish how much the building expansion is going to cost and how much money can the church afford to spend. You will be asking yourself, "How much is it going to cost" or "How much can the church afford to spend without hurting the other ministries". Your architect will help you establish how much the building will cost, but the finance committee and the building committee will need to establish the many other cost involved with a building program. When you add these costs with the building construction cost, this amount is called the "PROJECT BUDGET". The building itself is only one item in the overall expense. The finance committee must work to determine if the church can afford this expense. If not, then your architect must offer ways to phase the construction to defer a portion of the construction or modify the design to lower the cost. The building committee may also cut some expenses projected in its other costs projected to be incurred during the duration of the project.

The following are major areas that make up the total " PROJECT BUDGET". Also included at the end of this page is a check list of possible items for your finance committee to consider in their budget preparations.

Your first large expense may be the purchase of new property. Include all costs associated with the land purchase such as the sale price for the land, financing costs, taxes and any realtor expense. If you own the land already or you do not need additional land, then this is one item you can leave out of your budget. Check with your architect to verify if additional land is required. The master plan study will determine your present and future needs for additional land.

This is the most difficult cost to estimate, but with your architect's help, it is possible to make early projections that will be close to the final cost. This cost should be determined early in the design process. Trying to make these cost determinations without the assistance of an architect can be the worst mistake that the building committee can make. For example, depending on the type of construction and complexity of a project, the building construction cost may vary from as little as $75 per square foot to $120 per square foot. In addition to this expense, the cost for the development of the property must considered. The property development cost can not be quantized within these square foot figures due to the varying conditions that exist with the different conditions that exist within the property. With this great potential variation of the building square foot cost and this inability to generalize the cost for the property development, your architect will become an invaluable help to determine these costs.

The method of establishing the architect's fees is typically based upon a percentage of the construction cost or a lump sum basis. When hiring your architect, you should select the firm based on their experience and abilities they offer the church. Your selection should not be based upon the fee only. Many times you get what you pay for. This can be true for hiring an architect. Many services that are standard to one architect may be additional services for another. See the link for "SERVICES" for additional comments on this issue. For preliminary planning purposes, the architect's fees will run anywhere from 6% to 8% for project costs of 1 million and lower. For larger multi-million dollar construction costs, the fees may range as low as 4% to 5% of the construction cost. Additional professional fees that may be incurred will be the cost of a civil engineer for the designing and engineering of site storm drainage, grading, roadways, landscaping and parking lots. Ask your architect if the civil engineer's fee is included in his fee. In addition to these fees, other services that you may ask of your architect will incur additional expenses. These services may include models, special travel expenses, printing and other reimbursable expenses.

These expenses are in the same category as professional fees except that they are usually separate from the architect's fee and are paid directly by the Owner of the property. Before your architect can provide a master plan, he will need a boundary and topography survey. This will give the architect information about your property that is invaluable during the design process and will eliminate many cost and design problems during the construction process later. The cost of these surveys will depend on the size of the property and the severity of the slope present on the property. The cost could range from $800 to $1500 per acre. The subsurface investigations are often recommended by the architect or his structural engineer to determine the qualities of the soil, bearing capacity (which determines how large the footings need to be) and to determine if large rock will interfere with the construction of the building. The cost for this investigation is dependent on how many boring tests are made. The cost for five to eight borings might range from $ 1500 to $4000.

There are several types of environmental investigations that might be imposed on your property by local governing agencies or possibly by your lending institution. Site environmental investigations, also called a "Phase 1 Investigation", looks for hazardous materials which may be buried on your property. Existing buildings requiring renovation can contain hazardous materials such as asbestos and lead paint which require testing to verify their presence. All of these situations require specially trained environmental engineers to investigate for the presence of these hazardous substances and will recommend a method of removal. If hazardous materials are found, it can turn into a major expense and add additional time to the construction.

Often forgotten is the expense for the chairs, tables, pews, kitchen equipment, sound system, security alarm, and many other items in order for the facility to function properly. This list of items can be very lengthy depending on the type of facility to be constructed. A list of possible items are contained in the "Church Budget Checklist" at the end of this page for your inclusion to your project budget. Items included in this category are items not generally part of the construction cost because they are not apart of the building. We always give the example of building a new house. When you move in, the house has carpet, painted walls and even cabinets in the bath and kitchen, but no furniture, nothing hanging on the walls, and no appliances or equipment that you would bring with you when you move in. There in no reason to include these types of items in the general contractor’s bids and pay him a markup on these items when the church can purchase and install these items directly. Rely on your architect and his interior designer when budgeting for items in this category.

One part of the construction process that can NOT be avoided is making changes. There are always situations that will require a change in the drawings. These items may be changes that the church wants, or they may be changes required by the fire marshal (even though he has already approved your plans). If poor soil or rock is encountered while digging the footings, additional money will be required of the church to pay the contractor for the additional work required. The contingency fund is there to pay for these essential changes to the work without wrecking havoc to your "PROJECT BUDGET". If during the shop drawing review, the structural engineer discovers a structural member that needs to be heavier, it has to be changed. Do not use this contingency fund for upgrades such as better carpet or nicer light fixtures. Find additional money for these types of changes. The contingency fund should also not be used if the bids come in over budget. It is there for "unanticipated or unavoidable" changes. The contingency fund is usually established as a percentage of the construction cost. The contingency for new construction should be approximately 3 to 5%, however, 8 to 12% should be allowed for additions and remodeling work.

The cost of financing your building should be calculated into the overall long term cost of the job. After all, it may take 5 to 15 years to pay off a loan, and the interest alone can exceed the principal. Today, most churches try to keep long term borrowing to a minimum, but even then, there will be some expenses associated with short term loans. Talk to several lenders for help in calculating financing and interest cost. Ask about closing costs and fees. Most churches need the expert assistance of a fund raiser. These specialists usually more than pay for their expense by significantly increasing the amount of money that members pledge to the building fund. Consult with several professional fund raisers to obtain estimates of their fees and expenses.

The total cost of the project can be 15% to 20% more than the construction cost alone. Use the following checklist to get started establishing your total project budget.

Land purchase
Site conditions survey - Topo & boundary survey
Subsurface soil investigations
Environmental & hazardous material survey
Architect's and Engineer's fees and reimbursable expenses
Civil engineer's fees
Interior designer's fees
Sound and audio consultant's fees and acoustical consultant's fees
Special lighting and drama lighting consultant's fees
Models and computer animations
Building construction cost
Church sign and directional signage
Development impact fees
Plan review fees
Building inspection fees
Development and building permit fees
Rezoning fees and expenses
Builder's risk insurance
Liability insurance
Legal fees
Contingency fund for essential changes during construction
Pews and chancel furnishings
Miscellaneous furniture, fixtures and equipment
Stained glass windows
Sound and audio system
Kitchen equipment
Chairs and tables for fellowship hall and classroom use
Library shelving and equipment
Gymnasium equipment and other recreational activities equipment
Office furniture
Nursery cribs and preschool play equipment
Choir robes
Hymn books and pew Bibles
Financing cost including interest, closing costs, fees for construction loan
Fund raising expenses for brochures, mailings, banquets and fund raiser

Rardin & Carroll Architects - the "church designers"

6105 Preservation Drive - Chattanooga, TN 37416 Phone: 423-894-3242 mail@churchdesigners.com