Status quo will reign for at least another year at the Columbia Association -- after CA officials used a weekend retreat to shoot down sweeping proposals on everything from assessment cuts to stricter approval procedures for multimillion-dollar spending projects.
The officials -- essentially the majority of the association's 10-member governing body called the Columbia Council -- said the changes made little sense financially.
They pointed out that the proposed cuts in property assessments, known in the planned city as the "CPRA lien," could push the association to default on part of its $90 million debt by virtue of a formula that links its allowable debt costs to its lien income.
The positive trade-off -- a relatively modest savings of $27 a year in the current $657 annual lien on a $180,000 house -- is not worth the risk, according to the council majority.
"It doesn't make much sense for us to skate on thin ice," said council member Roy Lyons of Long Reach village.
CA's debt of $90 million is by far the largest of any homeowners association in the nation, according to interviews with officials of other large association across the nation.
Still, the council member who proposed the assessment cuts vowed to keep pushing and said he can find a way to protect the association's finances.
"I am trying to make living in Columbia more affordable," said Alex Hekimian, a newly elected member from Oakland Mills village. "I know I reflect the viewpoints of a lot of residents."
The $5,000 annual retreat, held at the Turf Valley Hotel & Conference Center just west of Ellicott City, was a mixture of pre-budget discussions and sessions designed for the council members to learn more about each other.
At times, tensions were evident between the majority and minority, but in the end both sides said they were pleased with how everyone got along.
"I thought the tenor and the tone was just fine," said Mike Rethman, the Columbia Council chairman from Hickory Ridge village.
The 10-member volunteer council is made up of one member elected from each of the nine Columbia villages and one elected from Town Center. They serve as the board of directors of CA, which has an annual budget of $38 million and is one of the largest homeowners associations in the nation.
For more than five hours Friday night and early Saturday, the council debated a series of measures that would have taken effect at the start of the next fiscal year, May 1. The council members took nonbinding straw votes on whether to continue debating the measures or put them off indefinitely.
Among the proposals endorsed, the council will move ahead with plans to hire either a full-time employee or a consultant to analyze Howard County crime data. The police track crimes by districts that do not correspond to Columbia village boundaries.
Rethman said the council needs to send a message to potential homebuyers that Columbia officials are serious about addressing crime concerns.
The first step in doing so, he said, is to understand the extent of crime in Columbia.
Three council members opposed the measure, arguing that the county should fund such endeavors. They were Hekimian, George Pangburn of Kings Contrivance village and Norma Rose of Wilde Lake village.
But the proposal faces problems. In an interview yesterday, Sgt. Steven Keller, a county police spokesman, said the department cannot simply push a button and transfer raw crime data to the association.
The police would have to filter what they consider confidential information, such as identities of rape victims and juvenile victims. And that would cost money.
"I'm not sure how it would be done," Keller said. "There would have to be a lot of cleaning up of [the data]. We can't just say, 'Here it comes.' "
At the retreat, the council also approved a plan to increase public interest in CA by televising up to six budget discussions early next year on a local cable access channel. The cost: as much as $1,600 per program.
"We're turning into a visual society," said Wanda Hurt of Owen Brown village.
As for the association's annual assessment, Hekimian wanted to cut by 3 cents the current rate of 73 cents per $100 of assessed value. When it was clear Friday night that his effort was failing, he tried for a 1-cent cut in the rate. That too failed, with only Hekimian and newly elected Joe Merke of Town Center voting for it.
Here is how such assessment cuts could lead to default on part of the association's debt: CA secures its bonds with the promise that it will collect 50 percent more each year in assessments annually than it pays each year to service its debt.
CA now pays $11.6 million a year to service its debt and takes in $18.7 million in lien income -- or about 61 percent more than its debt service.
A 3-cent reduction would cut total assessment revenue by $800,000, according to CA staff estimates -- to a level that would be 54 percent more than its debt service.
As Columbia Association President Padraic M. Kennedy warned: "If the assessable base dropped even slightly from projections, this could lead to default."
While such defaults might be essentially forgiven by the bond holders, Columbia Council members said, they could hurt CA's financial reputation and make it more difficult to borrow money in the future.
As for changing the approval procedures for large projects, council member Rose proposed that a two-thirds majority be required for any project costing more than $2 million. But only Rose and Hekimian voted in favor of the proposal.
Hekimian also proposed that the association increase rates for non-Columbians who use CA recreation facilities. But the majority of the council feared that would cause them to quit using the facilities entirely -- and in the end bring in less money.
As Ken Puckett of Dorsey's Search proclaimed loudly, "Council policy is to extract as much money from nonrate-payers as possible."
Pub Date: 10/22/96
