Association considering two-year budgets

Reston, Va., officials visit to offer details on biennial cycle

April 16, 2003|By Laura Cadiz | Laura Cadiz,SUN STAFF

Now that the Columbia Association is essentially in a "maintenance mode" with no new major facilities planned in the near future, the association president is hoping the organization will replace its annual budgeting with a two-year budgeting cycle.

"I wholeheartedly support it," said President Maggie J. Brown. "I hope it's something the [association] board would adopt."

The association now works on an annual budget cycle, with the process beginning in October and ending in February, when the association's board of directors approves the budget.

In February, the association's budget advisory committee recommended that the association change to a biennial budget to decrease the board's and staff's workload.

"The process we go through right now is time-consuming not only for our staff, but our board members also," Brown said. "We're basically working on the same things each year."

Brown said that if the association adopted a multiyear budget, the public would still have ample time to testify before the budget was approved or if changes were made later.

To show the association's board an example of an organization that uses a multiyear budget, Brown recently invited representatives from the Reston Association, a nearly 60,000- member homeowners association in Reston, Va., to give the board details about its two-year budget cycle.

In 1994, the Reston Association, which has nine board members who serve three-year terms, adopted a biennial budget and has been happy with its process. A one-year budget cycle "takes a huge chunk of the resources of the organization," said Raymond W. Leonhard, the association's deputy chief of staff and chief financial officer.

"I don't think we'd ever go back to a single-year budget," Leonhard said.

But while Leonhard made a two-year budgeting cycle sound promising, board members are not sure it would be appropriate for the Columbia Association.

Board member Barbara Russell of Oakland Mills said she is "really opposed" to changing to a multiyear budgeting process. Part of her concern is that she, along with the Wilde Lake and Hickory Ridge representatives, has a one-year term.

"That would mean we would not, in some years, have any major input into the budget," she said.

Russell acknowledged the budget process takes a significant amount of time, "but it's important."

"Your budget determines your policy decisions and your future, and it's the most important thing that organizations do," she said. "To just say you want to save time and not do it every year, I think it's extremely wrong. If Congress and the state of Maryland and the county ... can all do annual budgets, I don't see any reason for CA not to do one."

Board member Donna L. Rice of Town Center said there are significant differences between the Columbia Association and the Reston Association, and thus their financial situations are not interchangeable.

The Reston Association has no debt, while the Columbia Association's long-term debt is projected to be $78.2 million at the beginning of next fiscal year. Reston's operating budget is $10 million and its capital budget is $1.9 million for this year, compared with the Columbia Association's $45.9 million operating budget and $7.8 million capital budget for fiscal year 2004.

Reston also has fewer facilities - 15 pools and 49 tennis courts, but no gyms or golf courses - than Columbia, which has 23 outdoor pools, three gyms and two golf courses.

"I think we have to take a deeper look at the whole budget and budget process that [Reston] has and make a realistic comparison," Rice said. "Ours is much more complicated."

Board Chairman Miles Coff- man said he has questions about how a multiyear budget would work, such as what the process would be to change the budget in the second year.

He said the board has just started looking at the possibility of a two-year budget cycle and he is not sure when a change, if approved, would happen.

"I can't believe it'll happen next year," Coffman said. "It could, but we'll have to do a lot of work."

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