Proposed cap on CA charge sparks debate

Plan's 10% limit on levy should be voluntary, county GOP senators say

`Do this as a friendly bill'

Columbia board remains evenly divided over issue

April 04, 2004|By Laura Cadiz | Laura Cadiz,SUN STAFF

Howard County's two Republican state senators want a bill that would impose a mandatory 10 percent ceiling on rising property assessments in Columbia to be voluntary instead.

Sens. Sandra B. Schrader and Robert H. Kittleman believe the state should not dictate the Columbia Association's affairs. The senators are not planning to offer an amendment to the bill, they said. They are waiting to see what happens to it in the Senate Judicial Proceedings Committee, which heard the bill Wednesday and has not scheduled a vote on it.

"I'd hate to start running the Columbia Association from the state legislature," Kittleman said.

Half of the Columbia Association board of directors share that sentiment, maintaining that the state should allow the association to use an assessment cap and not enforce one. The association now collects an annual charge based on a property's highest valuation, a requirement set by the association's covenants.

Board Chairman Miles Coffman said that if the legislation were voluntary it would allow the Columbia Association to "function as an independent group."

He said allowing the association to decide whether to use an assessment cap would ensure that the 10 board members are held accountable. If the board voted to not limit assessment income - and residents disagreed with the decision - directors could be voted out of office at the end of their one- or two-year term, he said.

"I think the people of Columbia have the ability to in fact respond much faster than if someone from the House or Senate runs astray," Coffman said.

Drafted by Del. Shane E. Pendergrass, HB 566 would limit the impact of sharply rising state property tax assessments on the annual charge the assocition imposes on its property owners. The bill, which was unanimously approved by the House of Delegates, would also phase in assessment charges over three years.

Pendergrass, a Howard County Democrat, submitted the legislation in response to skyrocketing home assessments in east Columbia, where homes increased in value by an average 33.4 percent last year. West Columbia homes were also recently reassessed, jumping in value by an average 47.4 percent.

Pendergrass said the state makes laws for homeowners associations, and her legislation - which would apply only to the Columbia Association - is not setting a precedent. She said the bill should remain mandatory because it gives residents and the association predictability.

"If it's not mandatory, then in some years it might not happen," she said. "And I think that's a problem because I think a 10 percent increase in a given year is very, very reasonable."

Pendergrass also pointed out that the bill has an escape clause, allowing the association to not impose the 10 percent cap if it determines that annual assessment-based revenue is too low to pay interest on its debts. The association's long-term debt is $72.4 million.

The other half of the Columbia Association board wants Pendergrass' legislation to remain as it is, to guarantee that an assessment cap would be imposed each year.

"I'm convinced there would be great pressure each and every year after this year not to have a cap and phase in," said board member Barbara Russell, who represents Oakland Mills.

Sen. Edward J. Kasemeyer, a Democrat who represents parts of western Baltimore and eastern Howard counties, agrees the assessment cap should be mandatory, pointing out that the board's membership continually changes.

"When you're dealing with people's money ... you can't take chances," he said. "And you never know what's going to happen."

Schrader said she doesn't like to "usurp someone's authority," and believes that future legislation could be proposed if it's needed to make sure the association uses an assessment cap.

"The idea is that the Columbia Association could do this as a friendly bill," Schrader said. "And then if they don't, then we could come back and change it to stronger language."

Del. Neil F. Quinter, a Howard County Democrat who is a co-sponsor of the bill, said, "I'm surprised that Republicans are opposing the equivalent of a tax cap."

The board has lowered the assessment rate a nickel for fiscal year 2005 - to 68 cents per $100 of assessed value on 50 percent of a property's worth. The budget also included a 10 percent limit on assessment increases and a system that phases in the change of assessment.

However, the board is divided over whether the assessment cap and phase-in is contingent on Pendergrass' legislation. Assistant Attorney General Robert A. Zarnoch has determined that without unanimous approval of property owners or enactment of state legislation, CA cannot impose an assessment cap.

Schrader said she hopes that the association can soon "get through this and move on."

"I feel terrible that there's been so much bickering within the last eight months or so," Schrader said. "And I hope that regardless of how this goes, the board will come back together and work for the common good of Columbia."

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