Columbia recreation revenue ahead of forecast

December 19, 1993|By Adam Sachs | Adam Sachs,Staff Writer

Revenue from Columbia Association's recreational facilities continues to exceed expectations, but a "sluggish economy" will cause a shortfall in property assessment revenues for the third straight year, the association reports in its midyear budget analysis.

The nonprofit association is on pace to exceed its projected $7.7 million revenue from recreational facility memberships by $663,000, or 8.6 percent, in fiscal 1994. Last year, the facilities generated $735,000 more than projected.

But this year's gains will be partially offset by shortfalls in the annual property charge, interest income and one-time expenses for a new bond repurchasing program, according to the report released last week.

Through a combination of increases in income and lower-than-anticipated expenses, the association expects to finish the year $130,000 under its $30.6 million spending plan.

The budget, which runs through April 30, projects $32.6 million in income and targets the $2 million surplus toward reducing the association's $20.4 million accumulated operating deficit.

The additional $130,000 in projected savings also will be applied to the deficit.

The association plans to spend $400,000 on a recently instituted bond repurchasing program. The association incurs a one-time cost to buy back portions of its debt from investors as part of a long-term plan to restructure debt at lower interest rates.

"This is one expense CA would like to incur because of the long-term savings it would generate," association President Padraic Kennedy wrote to the Columbia Council, which sets the budget as the association's board of directors.

The association manages the unincorporated city's recreational facilities, community programs and open space.

The deficit, which peaked at $28.9 million in 1985, has been reduced each year since. The association aims to eliminate the deficit by 2000.

Deficit reduction is crucial to the association and Columbia residents, said Pam Mack, association community relations director. It strengthens the organization's financial position, which could translate to a higher credit rating, lower interest rates, decreased borrowing and reduced interest expenses, she said.

Reducing interest expenses would give the association "greater flexibility" to offer expanded services and programs, reduced facility rates or decreased annual property charges, she said.

The deficit accumulated during the 28-year-old association's earlier years when expenses to run facilities and services exceeded income. The association borrowed money to plug budget gaps.

The association projects revenue from property assessments will be $164,000 short of the $16.8 million originally anticipated, a reduction attributed to a slumping economy affecting property values and new construction rates.

Property assessment income fell $413,000 short of projections last year, and $204,000 short in 1992.

The association's Community Services Division anticipates finishing the year $42,000 under budget because of high enrollments in summer camps and the before- and after-school care program.

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