Lower CA fees would raise debt, panel told

Council studies choices about assessment rate

October 12, 2003|By Laura Cadiz | Laura Cadiz,SUN STAFF

If the Columbia Association assessment rate were lowered by 20 cents - in an attempt to financially help homeowners with skyrocketing property values - the homeowners association would have a debt of $92 million by 2013, according to association staff.

But if the annual charge, which is based on property values, is kept at its present rate - 73 cents per $100 of valuation assessed on 50 percent of the fair market value - the association would have a debt of $12.9 million, association staff told the Columbia Council on Thursday night.

The council and staff have been studying a number of alternatives to the current assessment rate after an outcry from homeowners in east Columbia, where homes increased in value an average of 33.4 percent after the state reassessed property there last year. Next year, homeowners in west Columbia will receive bills with reassessed property values.

The council will further discuss the assessment rate at its 2005 budget work session Saturday and Oct. 19.

Council Chairman Miles Coffman pointed out that many residents have lobbied the council for a multitude of requests, including making the association debt-free, dredging the association's lakes and lowering the assessment rate.

"This group is going to have to make a decision," he said. "We have more requests than we do money."

The analysis that association staff members presented to the council assumed a change in property values reflective of east Columbia's increase through 2006 and a 3.5 percent increase thereafter.

But Councilwoman Barbara Russell of Oakland Mills said, "I disagree with that assumption. I think it's going to be much more than 3.5 percent."

She explained that Columbia is essentially built out and that demand for homes will only increase.

The Alliance for a Better Columbia, a residents watchdog group, presented information to the council that showed that Howard County homes increased in value an average of 5.9 percent from 1994 to 2003.

The reassessments from east Columbia are expected to bring in about $2.7 million in additional revenue, helping to fuel expectations of a $5.3 million surplus for 2004.

Last month, the association staff told the council that if the assessment rate were lowered to 71 cents, the association likely would be debt-free by 2015. The association has a long-term debt of $78.2 million.

The association's staff has also studied phasing in the increased assessment or imposing a 5 percent limit.

According to the association's attorneys, phasing in the assessment or putting a cap on the change would violate the association's covenants.

The association's covenants require that the assessment charge be based on the highest property value. The association board is allowed to lower the rate, which has a maximum of 75 cents.

On Thursday night, residents continued to lobby the council to help ease homeowners' financial burdens brought on by rising home values.

Cecilia Januszkiewicz, a resident of Long Reach and a former council member, accused the council of moving at a "glacier's pace" to come up with a solution to the increasing assessment bills, an approach that she called "nothing short of pathetic."

Resident Lillian Shapiro of Wilde Lake told the council that residents' opposition to the rising assessment charges also stem from distrust of the association staff's ability to use the money appropriately.

"CA staff is more interested in spending our money in ways that massage their egos, add to their bank accounts and enlarge their empires," she said.

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