Monday, September 19, 2011

Has TOTT Worked?

Many members and ex-members of Calvary Church, KL have been asking this question :-
“Has TOTT (Turn Off The Tap) worked?”.
The answer is a resounding “Yes”.

CT has tabulated the figures below from the Annual Reports of the Church from 2007 to 2010. The total income has dropped since 2007 with the highest drop registered in 2010 of 19% from the previous year. With the expenditure remaining high, the surplus has also dropped since 2007 with the highest drop recorded in 2010 of 30% from the previous year. Similarly, the Faith Promise has also suffered the same fall in income since 2007.

This is clear evidence that when Church members are unhappy, they will “speak out” with their wallets. This should also serve as a warning to all the pastors out there that they ought to conduct themselves and their Church affairs with integrity, transparency and accountability lest they suffer the same consequences as Calvary Church.

TOTT has been giving Pastor Prince Guneratnam (PG) nightmares and scrambling for Bank loans, which he had hoped, to avoid. Despite his constant dose of prosperity gospel, continuous reminders to the members to bring their Tithes and Offerings to the storehouse (Church) and the oft-repeated remark that they should not eat in McDonalds and pay in KFC, the giving by members continue to dip.

The original plan was to borrow only RM35 million to help fund the construction of the Calvary Convention Centre (CCC), however later, the loan amount became RM43 million instead.

Now, with the cost of CCC escalating to RM200 million for just Phase 1 alone and the drop in Church Income , the Church has to borrow an additional RM75 million, making a total eventual borrowing of a massive RM118 million.

The total estimated cost of the CCC is now at RM300 million, an increase of RM150 million from the original approved budget of RM150 million in 2005.

TO RECAP : Click on the links below to read the following previous articles on the CCC :-

Article # 1 : CCC : The Alarming Facts posted on June 20, 2011

Article #2 : CCC: Calvary Convention Catastrophe? posted on June 21, 2011

Article # 3 : CCC Cost Continues to SOAR posted on June 2, 2011

The latest question on everyone’s lips is:-
“Will PG be able to complete CCC?”
The simple answer is “Yes”.

So long as the Church is able to give sufficient collateral to the Banks, the Banks will lend the necessary funds to the Church. Well, the Church does have sufficient landed properties accumulated over the last 50 years to secure the Bank loans.

However, the more important question to be asked should be:-
“If the CCC is completed with the Bank loans, will the Church be able to repay the loans?”
The obvious answer is “No”.

Based on current interest rate of say, 8% for such Commercial loans, the Interest Payable on a loan of RM118 million amounts to RM786,000 per month while the Principal Installment payable over a 10-year repayment tenure amounts to RM983,000.

The total monthly payment of RM1.769 million is way beyond the means of the Church, considering that their surplus per month for 2010 is only RM508,000.

If the loan is stretched to 15 years, the total interest and principal repayment will still be a massive RM1.44 million per month.

This is even before taking into account the cost of maintaining the CCC which is not likely to be cheap.

Based on the present congregation size and income, Calvary Church is surely headed for financial catastrophe. Calvary Church may lose all the properties charged to the Banks and the CCC itself. If this happens, Calvary Church may even go into bankruptcy.

That was what happened to the Crystal Cathedral mega church in USA when it could not service their US$36 million mortgage.

Click on Title below to read the article from Berita Calvary
US Church files for Bankrupcy

Coming back to our present topic, It is always easy to borrow money but the repayment is seldom as easy. With a world-wide recession looming ahead, times will get tougher. Members’ ability to maintain their giving will, invariably, be affected.

PG may have planned to sell off some or all of the Church properties to reduce the Bank borrowing but with the anticipated slowdown in the property sector, the properties will not likely fetch as much value as he had estimated.

This is actually the time to exercise wisdom and refrain from excessive spending and borrowing. The Bible warns against getting into financial slavery and urges the believer to always prepare for bad times. And bad times will come, that’s for sure.

Here's another article posted in Berita Calvary which is worth taking note of : Borrow to Build