CA expects $2.2 million more in lien payments

Higher property values bring 25 percent increase

use of surplus considered

Columbia

January 05, 2003|By Laura Cadiz | Laura Cadiz,SUN STAFF

The Columbia Association is expecting to gain about $2.2 million in the coming fiscal year from increased lien payments by homeowners and businesses in east Columbia. The increases are fueled by sharply rising property values.

The owner of a east Columbia single-family home previously valued at $200,000 with a typical 25 percent increase in value can expect to pay $182 more in lien fees - $912, up from $730 - in the 2004 fiscal year beginning in May.

"I got my assessment notice and went, `Whoa,'" said CA board member Barbara Russell of Oakland Mills. "The good news is that my house is increasing in value rather nicely. The bad news is I'm going to be paying a lot more taxes."

Cumulatively, the increased lien fees account for about half of the organization's projected surplus for the coming fiscal year.

The boom in assessment fee income - which has been building in recent years from increases in residential property values - is prompting some CA board members to ponder how to spend the money, including thoughts of cutting the lien rate.

Board Chairman Miles Coffman said trimming the annual lien - 73 cents per $100 of valuation on 50 percent of the fair market value - probably isn't feasible for the 2004 budget. The homeowners association has major capital projects to fund, including the $679,000 plan to renovate damaged greens at Hobbit's Glen Golf Club, he said.

However, Coffman predicted that within three or four years, the association could accumulate an extra $5 million or $6 million a year just from property reassessments, and then it would be time to consider dropping the lien rate by at least 3 cents.

"I think we're going to need to look at giving some of that back," he said. "Our job is not to spend it all."

One of Columbia's largest districts, east Columbia comprises about 13,159 residential, commercial and industrial properties. The state reassesses different parts of the county every three years and reassessed east Columbia for this year's billing cycle, sending notices to property owners at the end of last month.

The additional $2.2 million from the reassessments stems from a projected average value increase of 25 percent for residential properties and 10 percent for commercial ones.

CA assessment bills will be mailed in July and the association imposes the new assessed value on the property immediately, instead of phasing it in over three years as the county does.

Greater values

With the reassessment, properties in east Columbia are estimated to have a full cash value of $3.3 billion, compared with $2.7 billion the previous year.

For the association's 2004 budget - which the board will approve next month - the properties east of U.S. 29 are projected to bring in the largest amount of assessment income, 45.8 percent. The suburb's other major district, west Columbia, is expected to contribute 40 percent of assessment income.

Paul Papagjika, association treasurer, said the staff allowed for room in its assessment projection, in case homeowners appeal their high assessments or new construction happens more slowly or quickly than anticipated.

"It's possible that assessments are greater than what we projected," he said.

Revenue from resident and business assessments makes up just over half of the association's $50 million annual income. For the 2004 year, the association is estimating $25.9 million from assessment fees, 51.6 percent of the budgeted income.

Throughout the years, the association's lien income has steadily grown - $19 million in 1999; $19.6 million in 2000; $21.5 million in 2001; and $22.9 million in 2002.

For the current fiscal year, the association estimates it will end up with $23.8 million in assessment revenue and a $4.5 million surplus.

Although CA has a rising flood of income from property liens, it still borrows money for capital projects and is working on paying down its long-term debt.

CA's debt, projected to be $78.2 million at the start of the 2004 fiscal year, was primarily accrued during Columbia's 35-year history of building and renovating its numerous facilities and open space. (The association doesn't expect to add any more debt for the 2004 budget because cash flows are so strong.)

With that looming debt, board member Joshua Feldmark of Wilde Lake said he's hesitant to push for a lien fee cut based on projections.

"We're projecting this surplus for forever, but we're in this huge debt," he said. "I'd hate two years down the road to have the world turn around on us."

`A lot on our plate'

CA President Maggie J. Brown said decreasing the lien payments is up to the board, but "there are a lot of things on our plate we have to consider," such as money for capital projects, refurbishing facilities or any projects that come out of the board's strategic planning process addressing Columbia's needs - such as better serving older adults or a diverse population.

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