Columbia residents disagreee on need for legislative action

How to cap assessments discussed in Annapolis

March 05, 2004|By Laura Cadiz | Laura Cadiz,SUN STAFF

Columbia residents presented mixed views to a House of Delegates committee in Annapolis yesterday on a bill that would limit the impact of skyrocketing state property tax assessments on the annual charge imposed on homeowners in the planned community by the Columbia Association.

Nearly two dozen people urged approval of the legislation proposed by Del. Shane E. Pendergrass (HB 566) that, among other changes, would impose a 10 percent cap on the impact of rising assessments in the calculation of the annual charge imposed on homeowners by the association.

Pendergrass introduced her bill after assessments in east Columbia increased by an average 33.4 percent last year. West Columbia homes were also recently reassessed, jumping in value by an average 47.4 percent.

But opponents wanted the homeowners association to be able to govern itself without state interference, and have the ability in the law to voluntarily address the problem in setting its fees.

In objecting to the bill, association board Chairman Miles Coffman told the House Environmental Matters Committee that the board has reduced its annual charge rate as part of the fiscal 2005 budget and included a 10 percent cap on rising home assessments.

The association's covenants require the association to base its homeowners fee on the highest valuation placed on property, and Coffman asked the committee to change the legislation so it would allow - not require - the association to put a ceiling on the revenue collected.

But board Vice Chairman Joshua Feldmark - one of 22 testifying in support of the bill - told the committee that if the board agrees it wants to use a cap on assessment revenue, it shouldn't matter how the cap is attained.

Some residents said a mandatory cap was needed because they didn't trust the board to voluntarily approve one each year.

Pendergrass' bill would phase-in the change in assessment over three years, and is retroactive to cover east Columbia's increase.

Her bill also gives the association an escape clause - so it would not have to impose the 10 percent ceiling if the association determines that annual assessment-based revenue is too low to pay interest on its debts. The association has about $78 million in long-term debt.

Last month, the 10-member association board approved a fiscal 2005 budget, which included reducing the annual charge rate by a nickel, to 68 cents per $100 of assessed value on 50 percent of a home's worth.

While the budget includes a 10 percent cap, the board disagrees over whether it is contingent on Pendergrass' legislation. Some board members maintain that the association will implement a cap, regardless of the success of the legislation. Others feel the association needs state legislation to dictate a cap because the association's covenants require the association to collect on a property's highest valuation.

The covenants can be amended only by unanimous approval of property owners. Pendergrass has also submitted legislation that would allow the association's operating rules to be changed through a referendum brought by at least 10 percent of the property owners. A simple majority would have to participate to make the vote valid, and 33 percent of Columbia's property owners would then have to affirm the change.

Yesterday, the residents supporting Pendergrass' assessment cap legislation also told the committee that Columbians needed an easier way to change the covenants.

Feldmark suggested an amendment to delay the effect of the covenant bill until June 2005. But other residents worried about the ramifications of the bill and don't welcome the state's interference.

"This is a local issue," said Joan Lancos, a Hickory Ridge resident and former board member. "This should be dealt with on a local level."

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