Increasing assessments promise fiscal boost

Windfall expected, thanks to rising home values


October 27, 2002|By Laura Cadiz | Laura Cadiz,SUN STAFF

The Columbia Association appears likely to gain a significant windfall next year from the state's reassessment of east Columbia's fast-rising residential property values.

Based on preliminary numbers, residential property values in southeastern Howard County appear to have increased 20 percent to 25 percent since the last reassessment three years ago, said Howard Levenson, the state's supervisor of assessments for Howard County.

That means the homeowners association's annual assessment - 73 cents per $100 of valuation on 50 percent of the fair market value - could bring in millions in additional revenue.

A homeowner of a single-family home previously valued at $180,000, for example, could pay a 25 percent assessment increase from $657 to $821. An owner of a townhouse valued at $160,000 three years ago could see his or her annual payment to the association rising from $584 to $730.

The Columbia Association will mail its assessment bills in July. Unlike the county, the association imposes the new assessed value on the property immediately, instead of phasing it in over three years.

The state reassesses different parts of the county every three years and is not finished with the current district, which includes about 13,159 residential, commercial and industrial properties in east Columbia. The reassessment information is scheduled to be sent to the homeowners association by the end of December.

Levenson said it is clear that the assessed value of residential property will "really go up" in the county, especially in Columbia. The area of Columbia being reassessed, east of U.S. 29, is almost all built out, with mostly resales occurring, he said.

`Sales haven't slowed'

"Sales haven't slowed down at all in this county," Levenson said.

Raymond S. Wacks, Howard County's budget director, agreed that most property values surely will surge. "All you have to do is look at the real estate pages - prices have been rising in the county," he said. "That's not a surprise to anybody."

The nonprofit homeowners association is on track to end its current fiscal year with a $4.4 million surplus, based on first-quarter earnings. That's a much better financial standing than the county, which dodged a projected $18 million shortfall with spending cuts, or the state, which is facing a $1.7 billion budget deficit.

Columbia Association President Maggie J. Brown said the homeowners association has not estimated how much it will gain from the reassessed property values because the state's numbers have not been released.

"You don't know what the state is going to do," Brown said. "You can't project something you have no control over."

Rafia Siddiqui, the association's vice president for administrative services, said the state's assessment information will be factored into the association's fiscal year 2004 budget, which must be approved by the association's board of directors in February.

The fiscal 2004 capital budget model includes the assessment - which is not tax-deductible - remaining at 73 cents per $100 of assessed value. The board is working on a fiscal 2004 capital budget tentatively set at about $8 million.

The board has agreed that association staff members should move forward with a plan to shut down Hobbit's Glen Golf Club for a year to repair 16 greens, at a cost of $679,000 in construction and $529,000 in lost business.

The board also voted to spend $1 million on dredging Lake Kittamaqundi and returning the Little Patuxent River to its original configuration to prevent large amounts of sediment from flowing into the lake. The project is contingent on receiving an additional $1 million from other agencies.

However, the two candidates for county executive - County Executive James N. Robey, a Democrat, and Republican challenger Steven H. Adler - have not responded favorably to helping the Columbia Association. Robey has said the project has "zero" chance of receiving county financial aid, while Adler has noted that the association appears to have more money than the county.

The assessment fees make up about half of the income used by the association to provide amenities such as pools, health clubs and running paths for the town of 95,000. West Columbia's next reassessment should show up in homeowners' bills in July 2004.

Projecting income

For the 2003 operating budget, the board set residential assessment income at 34.5 percent and business assessment income at 14.1 percent of the $47.7 million of total income.

However, in the first-quarter 2003 budget report, assessment revenue exceeded the projected budget by $663,000 - bringing in $23.7 million - partially because of new construction in Town Center and at the Gateway Industrial Park.

That increase is helping to push the Columbia Association toward a $4.4 million surplus, which is $1.4 million higher than projected.

Siddiqui said that $663,000 difference is a "reasonable variance."

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