Board Minutes of 10/27/2014

MASONIC TEMPLE OF WINSTON-SALEM, INC. 4 5 3 7 COUNTRY CLUB ROAD

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W IN STON - SAL EM , NORTH C AROL INA 2 7 1 1 4 - 5 6 2 3

WWW . 3 4M I L LER . COM AND WWW .MCW IN STON .ORG

Minutes of Board of Directors’ Monthly Meeting Monday, October 27, 2014

New Philadelphia Moravian Church

Winston Lodge No. 167 Present George Beroth 2012-2014 Yes Fred S. Hutchins 2013-2015 No Vernice V. Beroth, Jr. 2014-2016 No Salem Lodge No. 289 Bobby Perdue 2012-2014 No David Simmons 2013-2015 Yes Cliff Pranke 2014-2016 Yes Piedmont-Pioneer Lodge No. 685 Frank L. Collins 2012-2014 Yes Jamie Keltner 2013-2015 Yes Billy A. Baker 2014-2016 Yes

Winston-Salem Scottish Rite Bodies Present George G. Kalamaras 2012-2014 Yes C. Truett Chadwick 2013-2015 No Kirby Matthews 2014-2016 No Winston-Salem York Rite Bodies Joseph K. Transou 2014-2014 Yes Stanley Peeples 2013-2015 No Jason Anderson 2014-2016 Yes Others Present Gerald Wood, Joel Black, Ray Ashby

The meeting was called to order by George Kalamaras, President at 7:05 p.m. Frank Collins provided the invocation. A quorum was present. Motion: It was moved, seconded and unanimously approved to accept the minutes as written for the following meetings: Board of Directors – October 13, 2014 After Ill. Bro. Dr. Brunk, 33°, SGIG, Scottish Rite, received the minutes of October 13, 2014, he had concern the size of the building was too large. On Tuesday, October 21, 2014, a meeting held at Derek Frosh, UBS office at 380 Knollwood. Below are the notes from that meeting:

Those in attendance at today’s [October 21, 2014] meeting were: Dr. Brunk, George Kalamaras, Ray Ashby, Joel Black, Graham Pervier, Derek Frosh, and Joey Transou. We reviewed the current project approved by the board for the 16,800 sq ft building (three meeting rooms) with various financial models. As a reminder, we shared in round numbers the temple board has $5.3M cash/investments on hand from the sale of the building. The replacement property has been purchased. The bids for the current 16,800 square foot building came in at $4,000,000 leaving $1,300,000 available for savings. Conditioned by the Scottish Rite Supreme Council for the Winston-Salem Valley to remain a part of the temple corporation and continue meeting there the temple corporation was required to place $2.54M in savings. Derek Frosh of UBS and Salem Lodge did an excellent job presenting the various financial models for this. These models included borrowing $700,000 to fully fund the $400,000 budget over run on the construction costs and to add $300,000 to the savings account taking the endowment to $2,000,000. Derek ran models showing only a $400,000 loan to cover the over budget overruns but keep the current savings at $1,700,000. He also

PAGE 2 OF 3 OCTOBER 27, 2014

ran a model with no loan and $1,700,000 showing its growth. All these probabilities of success were over 70% with the $400,000 loan only varying the probability of success outcomes by 1 percentage point. As the SGIG to the Scottish Rite Supreme Council, Dr. Brunk indicated that he could probably obtain sign off from the leaders of the Supreme Council if the temple corporation eliminated the multi-purpose room and placed $1,700,000 into savings. This new savings figure is a significant compromise from the original requirement of $2,540,000. Otherwise, his recommendation would be for the Scottish Rite Valley pull out of the temple corporation and request their share from proceeds of the sale of Miller Street. Attached are the two plans one for the full size 16,800 square foot building and the smaller 12,450 square foot building without the multiple purpose room. Eight masonic entities using the temple with have to schedule their stated communications, practices, and degree work using the blue lodge room and dining room using the reduced configuration. George Kalamaras will be calling a board meeting to review this new development. Stay tuned for the time and day.

George Kalamaras shared with the board additional conversations with Dr. Brunk held since the 10/21/14 meeting. Dr. Brunk’s proposal is for a smaller building, approximately 12,500 square feet which removes the multi-purpose room, $1,700,000 for savings to endow the future capital costs, and no loan. After review with the architect and contractor, the prospective savings to the project of removing the multi-purpose room is approximately $223,194. See the attached schedule of savings per line item and incremental costs for redesign. Based on the this analysis the following motion was adopted: Motion: After reviewing Dr. Brunk’s proposal for a smaller building of approximately 12,500 square feet which removes the multi-purpose room placing $1,700,000 in savings and the analysis from our architect and contractor in that projected savings from removing the multi-purpose room would be $223,194 the board respectfully, declines Dr. Brunk’s proposal. Unanimous vote. After discussion and recognizing that Dr. Brunk was willing to support $1,700,000 for the endowment fund, the following substitute motion was adopted in lieu of the motion at the October 13, 2014 meeting. Motion: Build the current building (16,800 square feet) as designed with the current price of $3,983,406 using the $400,000 line of credit option @ 2.50 percent as reported from the finance committee resulting in $1,700,000 in endowment fund and further direct the officers to file the appropriate application with the Lodge Service Commission for approval of the $400,000 loan using the $1,700,000 portfolio as security for the line of credit. Unanimous vote.

Self-Financing Option From Finance Committee

Total Funds on hand from

Sale $ 5,302,325


Total Project Costs

9/17/2014 bids $ 3,983,406

Balance available for

Savings $ 1,318,920

Reserve Acct Goal Loan required

Reserve Acct goal $ 1,700,000

Additional funds needed for

goal $ 381,080



goal $ 681,080



goal $ 1,221,080

The meeting adjourned at 7:40 p.m. Respectfully submitted, Joseph K. Transou, Secretary


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Minutes of Board of Directors’ Monthly Meeting Monday, October 13, 2014, 2014

Clemmons Masonic Lodge No. 755

Winston Lodge No. 167 Present George Beroth 2012-2014 Yes Fred S. Hutchins 2013-2015 No Vernice V. Beroth, Jr. 2014-2016 No Salem Lodge No. 289 Bobby Perdue 2012-2014 Yes David Simmons 2013-2015 No Cliff Pranke 2014-2016 Yes Piedmont-Pioneer Lodge No. 685 Frank L. Collins 2012-2014 Yes Jamie Keltner 2013-2015 Yes Billy A. Baker 2014-2016 Yes

Winston-Salem Scottish Rite Bodies Present George G. Kalamaras 2012-2014 Yes C. Truett Chadwick 2013-2015 No Kirby Matthews 2014-2016 Yes Winston-Salem York Rite Bodies Joseph K. Transou 2014-2014 Yes Stanley Peeples 2013-2015 Yes Jason Anderson 2014-2016 No Others Present Winfield Beroth, Graham Pervier

The meeting was called to order by George Kalamaras, President at 7:00 p.m. Frank Collins provided the invocation and remembered Fred Hutchins who is in the hospital, and Mrs. Vernice Beroth who is in the hospital and scheduled for surgery 10/14. A quorum was present. Motion: It was moved, seconded and unanimously approved to accept the minutes as written for the following meetings: Board of Directors – September 29, 2014 The president was notified on October 8, 2014 by Salem Lodge No. 289 that Gerald Wood, their temple board director resigned his position at their stated communication on October 7, 2014. At that same stated communication Bobby Perdue was duly elected to fill Gerald Wood’s unexpired term which ends 2014 representing Salem Lodge. By reference a copy of the letter is made a part of these minutes. The president welcomed Bobby Perdue. George Kalamaras, president, announced that this meeting had been called for the purpose of considering a motion to rescind the motion adopted at the September 29, 2014 to rebid the project with multiple general contractors. Specifically the previously adopted motion was: Motion: Rebid the project with at least four general contractors with same set of specifications as previously bid. Motion unanimously passed. Prior to taking up the motion, George Kalamaras introduced a guest, Mr. Darren Sell who is a building contractor and consulting contractor for financial institutions. Mr. Sell shared his opinion on the current state of building recovery in the Triad, and the current bid package along with Karl Stimpson’s general contractors fixed price contract. Mr. Sell has previously been provided the Masonic Center specifications, plans, and bids. He stated that Karl Stimpon’s fixed price for general contractor fee of $200,000 was extremely generous. That other contractors for profit, overhears, and expenses would


generally include 17% of the subcontractors bid price which on this project would represent about $600,000. He stated that to rebid the project with multiple general contractors would require a $400,000 savings on the subs and that would be highly unlikely. He further stated that he is seeing constant price increases and to delay further for rebidding by GCs, would only increase the total cost of the project. After questions and answers, Darren was excused. Motion: To rescind the motion adopted on 9/29/2014: Rebid the project with at least four general contractors with same set of specifications as previously bid. For: 4; Against: 0. During the discussion George Beroth of Winston Lodge left the directors meeting to open as tyler Winston Lodge’s stated meeting and was not present to vote on this motion. George Kalamaras, president, announced that as per the bylaws section 5-b in the case of a tie vote, the president is permitted to cast a second vote to break a tie, however due to Piedmont-Pioneer’s absence at the last meeting on 9/24 for the vote, he did not break the tie under the rules afforded the president in the bylaws. He also announced that based on Piedmont-Pioneer’s appeal to the chair that be allowed to cast a vote on this important decision, the previously tied motion was brought to the floor for further discussion and consideration. Motion: Build the current building as designed with the current price as reported using the $700,000 self-financing option as reported from the finance committee resulting in $2,000,000 in savings (reference Masonic Center Division Cost Estimate totaling $3,407,661.00). George Beroth of Winston Lodge returned to the directors meeting to vote on this motion. For: 4; Against: 1. Voting for the motion: Salem Lodge: Bobby Perdue, Cliff Pranke; Piedmont-Pioneer: Frank Collins, Jamie Keltner, Billy Baker; Scottish Rite: George Kalamaras, Kirby Matthews; York Rite: Stanley Peebles, Joseph Transou. Voting against the motion: Winston Lodge: George Beroth. Finance Committee Report Previous report from 9/29/2014 was brought forward and incorporated in these minutes. Received report dated 9/22/2014 regarding the loan proposal in the amount of $700,000 to cover the additional contribution to savings rounding up to $2,000,000 and balance needed to cover the bids on the construction project. See the two handouts titled: “Investment Cashflow” and “UBS Investment Strategy Proposal.”



Sale $ 5,302,325

Total Project Costs

9/17/2014 bids $ 3,983,406


Savings $ 1,318,920





goal $ 181,080



goal $ 681,080



goal $ 1,221,080

The meeting adjourned at 7:45 p.m. Respectfully submitted, Joseph K. Transou, Secretary


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Review of Proposal of from Ill. Bro. Dr. William B. Brunk, 33°, SGIG, Orient of North Carolina

For Masonic Center Size Reduction to approximately 12,500 square feet

October 27, 2014

After Ill. Bro. Dr. Brunk, 33°, SGIG, Scottish Rite, received the minutes of October 13, 2014, he had concern the size of the building was too large. On Tuesday, October 21, 2014, a meeting was held at Derek Frosh’s UBS office at 380 Knollwood Rd, Winston-Salem, NC. Below are the notes from that meeting having been previously distributed to the board:

Those in attendance at today’s [October 21, 2014] meeting were: Dr. Brunk, George Kalamaras, Ray Ashby, Joel Black, Graham Pervier, Derek Frosh, and Joey Transou. We reviewed the current project approved by the board for the 16,800 sq ft building (three meeting rooms) with various financial models. As a reminder, we shared in round numbers the temple board has $5.3M cash/investments on hand from the sale of the building. The replacement property has been purchased. The bids for the current 16,800 square foot building came in at $4,000,000 leaving $1,300,000 available for savings. Conditioned by the Scottish Rite Supreme Council for the Winston-Salem Valley to remain a part of the temple corporation and continue meeting there the temple corporation was required to place $2.54M in savings. Derek Frosh of UBS and Salem Lodge did an excellent job presenting the various financial models for this. These models included borrowing $700,000 to fully fund the $400,000 budget over run on the construction costs and to add $300,000 to the savings account taking the endowment to $2,000,000. Derek ran models showing only a $400,000 loan to cover the over budget overruns but keep the current savings at $1,700,000. He also ran a model with no loan and $1,700,000 showing its growth. All these probabilities of success were over 70% with the $400,000 loan only varying the probability of success outcomes by 1 percentage point. As the SGIG to the Scottish Rite Supreme Council, Dr. Brunk indicated that he could probably obtain sign off from the leaders of the Supreme Council if the temple corporation eliminated the multi-purpose room and placed $1,700,000 into savings. This new savings figure is a significant compromise from the original requirement of $2,540,000. Otherwise, his recommendation would be for the Scottish Rite Valley pull out of the temple corporation and request their share from proceeds of the sale of Miller Street. Attached are the two plans one for the full size 16,800 square foot building and the smaller 12,450 square foot building without the multiple purpose room. Eight masonic entities using the temple with have to schedule their stated communications, practices, and degree work using the blue lodge room and dining room using the reduced configuration. George Kalamaras will be calling a board meeting to review this new development. Stay tuned for the time and day.


When the Building Committee previously considered reducing the building size by 4,350 square feet the architect had estimated a net savings of approximately $300,000 when factoring in the incremental cost of creating new construction drawings with architect seal and new engineering drawings. This was based on a building out cost savings of an estimated $90 per square foot savings. To quantify and substantiate that figure, George Kalamaras, Cliff Pranke, and Joey Transou met with Perry Peterson (architect) and Karl Stimpson (contractor) to understand why the cost savings is not a proportional square footage savings using the whole project. Perry and Karl explained that the multi-purpose room does not have the high dollar finishes, plumbing, restrooms, few doors, kitchen, the floor finishes are LVT, not porcelain tile as in the hallways and Blue Lodge room. To further educate us on the savings they walked us through all the line items for the current bid showing us where the cost savings do and do not occur. That spreadsheet is attached. In summary the savings from the multi-purpose room is approximately $391,861. However the incremental fees for generating a new set of bid documents include: $45,000 Architect and engineering fees $9,500 Architect fee for rebidding $15,000 Contractor fee for rebidding a 3rd time $69,500 Total incremental costs to downsizing Subtracting $69,500 from for estimated savings yields adjusted savings of $322,361. Perry and Karl pointed out that they have already received notice from subcontractors of price increases to their bids and others have indicated they expect materials increases after January 1, 2015. Perry and Karl suggested we factor into the model a 3% overall price increase since this project since downsizing the building will take 3-4 months and require going before the planning board and public hearing for a sight plan amendment. The 3% inflation adjustment is $99,167 for an adjusted project savings of $223,194 to remove the multi-purpose room. Next Steps: Board to evaluate this analysis.



Sale $ 5,302,325

Total Project Costs

9/17/2014 bids $ 3,983,406


Savings $ 1,318,920




goal $ 381,080

1 MASONIC CENTER DIVISION COST ESTIMATES 1

2 Bids October 2014 - (second round) Revision 1.1 - 10/27/2014 2

3 Price Company Division Total

Savings for

small building

Percentage

Savings 3

4 4

5 Divison One Temporary Services 5

6 Mobile Office Trailer 5,700 Williams Scotsman 6

7 Fence and Gate 2,800

National Construction

Rentals 7

8 Staking Site, Bldg , Layoff 15,000 GC 2,000$ 13% 8

9 ECS Testing & Inspection Report 24,400 ECS Carolinas 2,000$ 8% 9

10 Water & Meter 1,800 GC 10

11 Piedmont Rent A Jon & Office Tank 1,000 Piedmont Rent A Jon 11

12 Saw Service & Power 3,200 GC 12

13 Heat Bldg 3,000 GC 13

14 Permits & Fees 6,000 City by GC 14

15 Fire & Zoning Fees 5,000 City by GC 15

16 Insurance,Bldrs Risk,Liability, Workers Comp 30,000 GC 16

17 Paper Work 4,200 GC 17

18 Total 102,100 102,100 18

19 19

20 Division Two Site Work (Part One) 20

21 Clearing and Stumping 12,720 Singleton Grading 21

22 Construction Entrance & Erosion Control 10,275 Singleton Grading 22

23 3500 Topsoil Removal 22,750 Singleton Grading 23

24 31,500 Barrow Fill Dirt 24

25 3.00 oer Yard Dirt Only 315,000 Singleton Grading 25

26 Underground Storage 47,635 26

27 Filter Baxin 27

28 Finished Control Pond 11,466 28

29 Storm Drain Including Inlets 28,879 29

30 Curb Backfilling & Fine Grading 19,000 Singleton Grading 30

31 Sodding Bank at Filter/Level Spreader 3,000 31

32 Estimated Testing & Engineering, Surveying Fee 20,000 32

33 33

34 Piping, Grading Site Work Total 490,725 34

35 35

36 Division Two Site Work (Part Two) 36

37 Utilities 115,513

Lakey's Backhoe Service

for Singleton Grading 37

38 Paving, Curb & Gutter 141,655 38

39 Walls (Stack) 51,472 39

40 Landscaping Estimated 55,275 40

41 Additional Site Work 363,915 41

42 42

43 Division Two Site Work Grand Total 854,640 854,640 43

44 44

45 45

46 Division Three Concrete Work 46

47 Concrete Work/Termite Control 158,000 McCuiston Concrete Co 47

48 Rebar 24,000 Guaranteed Supply Co. 48

49 49

50 Total 182,000 182,000 29,137$ 16.0% 50

51 51

52 52




Savings for

small building

Percentage

Savings 3

4 4

53 Division Four Masonry, Foam, Etc 53

54 Materials and Labor 405,790 Johnson Concrete Co. 52,225 Advance Architectural 54

55 Faye Block Materials 55

56 Total 405,790 405,790 53,856$ 13% 56

57 57

58 58

59 Division Five Metals 59

60 Structual Steel and Erections 242,850 Lyndon Steel Co. 55,800 Duggins Welding 60

61 61

62 Total 242,850 62

63 242,850 38,856$ 16% 63

64 Division Six Carpentry 64

65 Materials & Labor 166,695

Stimpson Builders - Carter

Lumber 23,395.34 65

66 Fence Builders - 3,100 66

67

W. Robel Woodworking -

24,736 67

68 Prestige Millwork - 24,055 68

69 Total 166,695 166,695 6,539$ 4% 69

70 70

71 Division Seven Roof/Gutter & Foam 71

72 Roof/Gutters 110,800 AAR 169,300 Eastern Corp 22,160$ 20% 72

73 Insulations 18,769 Granite City Insulation 16,675 Prime Energy Group 3,671$ 20% 73

74 74

75 Total 129,569 129,569 75

76 76

77 77

78 Division Eight Doors, Finish Hardward Etc 78

79 Doors, Finish Hardward, Hollow Metal 76,326 Cook Boardman 99,539 HKS Hardware 79

80 Glass 56,000 Quality Glass 80

81 81

82 Total 132,326 132,326 7,444$ 6% 82

83 83

84 84

85 Division Nine Drywalls, Ceilings, Floors 85

86 Carpet,Tile, Painting 195,000 Chavez 99,602 Bonitz Flooring 86

87 223,900 Sharp Interiors 49,740 Bill Hege Carpet 87

88 34,960 Paul Painting 58,867 Triad Floratine 88

89 31,570 Doomey 89

90 Total 335,487 335,487 50,323$ 15% 90

91 91

92 92

93 Division Ten Toilets/Signs 93

94 Signs 8,978 Image Innovation 94

95 Toilets 8,876 Hugh Strickland 95

96 96

97 17,854 17,854 -$ 0% 97

98 98

99 99




Savings for

small building

Percentage

Savings 3

4 4

100 Division Eleven 100

101 Equipment 4,331 Marvin's Garage Doors 4,331 -$ 0% 101

102 102

103 103

104 104

105 Division Twelve Blinds Etc 105

106 Seating 21,650 Learning Enviroments 22,100 McDonald Ent. 106

107 Blinds 6,277 Carolina Shutter & Blinds 28,079 Stancil 107

108 108

109 Total 27,927 27,927 109

110 110

111 111

112 112

113 Division Fifteen Plumbing/Fire 113

114 Plumbing 106,500 K Ham 118,717 Bodenhammer -$ 114

115 Sprinklers 56,525 Sunland 12,375$ 22% 115

116 Fire Alarms 12,212 Sunland 1,500$ 116

117 Heating and Air 295,755 Associated 323,294 Piedmont Sheet Metal 75,000$ 25% 117

118 118

119 Total 470,992 470,992 119

120 120

121 121

122 122

123 Division Sixteen Electrial/Lighting 123

124 Electrical/Lighting 335,100 Morton's Carolina Central 335,100 87,000$ 26% 124

125 383,870 Johnson's Modern 125

126 461,100 Sammy Phillips Electric 126

127 Total General Contractor Price 3,407,661 391,861$ 11% 127

128 128

129 Kitchen 120,000 129

130 Fix, Furniture, Equipment. AV 150,000 130

131 Contingency 75,000 131

132 Architectural & Engineering Fees 213,000 132

133 Contractor Fees - Fixed/ not percentage 225,000 133134 Credit for pre-payment against Fees & Project Costs to date (207,256) 134

135 Total Project Costs 3,983,405 135

136 136

137 Incremental Costs to Redesign with 4 month delay 137

138 138

139 Estimate % Price Increase after January 1, 2015 (102,230)$ 3% 139

140 Architect & Engineer Fees for new sealed drawings (45,000)$ 140

141 Architect Fee for rebidding (9,500)$ 141

142 Contractor Fee for rebidding a 3rd time (15,000)$ 142

143 143

144 Estimated Net Savings by removing the multi-purpose room and robing room - 4,350 square feet 220,131$ 5.5% 144

Documents

Board Minutes of 10/27/2014