Columbia expects $1.7 million profit

December 17, 1992|By Mark Guidera | Mark Guidera,Staff Writer

The Columbia Association, which manages Columbia's recreation facilities and cultural programs, projects a year-end profit of about $1.7 million, according to the association's second-quarter financial report released yesterday.

That profit would be very similar to last year's, said Robert Krawczak, vice president of administrative services for the Columbia Association. The profits are used to help pay for capital projects in the unincorporated city.

The association is "experiencing one of the best years ever operationally," said association President Padraic Kennedy in the report.

The nine-member Columbia Council, which oversees the association, is scheduled to review the mid-year report at its quarterly board of directors meeting tonight.

The association's $31.6 million operating budget will end up with about $324,000 less in profit than is projected for the 1992-1993 fiscal year, which began May 1.

The shortfall is expected because property assessments have been about 1.4 percent lower than the association projected and because of interest payments paid on bonds sold after this year's budget was set, the report states.

The lower assessments should result in a $271,000 shortfall from the budget projection, the report states. Included in that figure is a $100,000 drop in assessment revenue caused by a decline in new construction during the second quarter, Mr. Krawczak said.

The budget had projected $16.7 million in assessment revenue, but the amount is now estimated to be $16.5 million.

A May 15 bond sale of $5 million, carrying an 8.8 percent interest rate, resulted in $440,000 in interest payments not included in this year's budget, the report states.

The money was borrowed to meet cash needs.

"We hadn't planned to borrow, but when interest rates dropped so low, we decided it would be prudent. It will cost us money now, but will save us money in the long term," said Mr. Krawczak.

The combined $711,000 shortfall is expected to be partly offset by higher than expected revenue from operating income.

Income from memberships and fees at Columbia pools, health clubs and other facilities will bring in $387,000 more than expected, the report states.

Mr. Kennedy notes in the report that a "moderate pricing policy" and "quality of service" have helped boost membership sales this year.

Membership sales should generate $453,000, or 6.5 percent, more than projected in this year's budget, says the report. Membership sales and fees are currently running 4.2 percent higher than projected in this year's budget, the report states.

Membership sales have given the association a big revenue boost so far, almost 9 percent more than projected in this year's budget.

"Membership sales have been just very, very strong," said Mr. Krawczak. "We know they won't continue -- at some point they'll drop off."

The biggest drop in operating income has been in the area of sales at pro shops, which are down by about 7 percent from budget projections, the report shows.

Meanwhile, operating expenses should run almost 1 percent higher than projected in the budget, according to the report.

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