Board cuts assessment cap

Vote disregards suggestions in OK of maximum increase of 2.5%

May 04, 2008|By June Arney | June Arney,Sun reporter

Disregarding the recommendations of its budget advisory committee and chief financial officer, the Columbia Association board voted to reduce the assessment increase cap from 3 percent to 2.5 percent.

The decision was made by the previous board during its April 24 meeting. A new board took over Thursday with two newly elected members joining.

Former board Chairwoman Barbara Russell, who retired from the board last week and voted for the reduction, said the vote was a compromise because some members wanted to keep the rate at 3 percent while she and others advocated for 2 percent.

"I have seen through my years on the board that we have been able to put the cap rate in place and reduce it incrementally, and at the same time we have enough money to spend," Russell, who represented Oakland Mills, said in an interview. "We have to be more careful about how we spend money and stop the wastefulness. It forces us to streamline."

But others found the decision troubling.

"I am really concerned that we had two independent resources come in and say we shouldn't do it, and we have done this, because it looks good to the residents," Pearl Atkinson-Stewart, a board member from Owen Brown, said during the meeting. "It's unbelievable."

There were no supporting data to argue for the reduction, she said in an interview later.

"They did it just on personal feeling," Atkinson-Stewart said. "We should never, as a corporation, act like that."

She speculated that it was a campaign strategy by some who wanted to be able to say they'd reduced the rate.

Evan Coren, board member from Kings Contrivance, agreed.

"I think most governments that limit their spending this way run into deficits," Coren said. "I fear that CA is running into that."

The association's budget committee had recommended that the rate remain in place and that the topic be revisited if substantial increases to the assessment base materialized as a result of development or redevelopment in Columbia.

Reducing the cap "would put CA's operating budget into deficit by fiscal year 2013," according to the budget advisory committee recommendations contained in association documents. That might increase Columbia's debt and jeopardize the association's current favorable bond rating, the committee said in its recommendation.

The assessment is a major source of revenue for the association, and the maximum assessment rate that the association is allowed to charge is 75 cents per $100 of assessed valuation. Its assessment is 50 percent of the Maryland Department of Assessments and Taxation's assessed phased-in value for real estate tax purposes on all taxable residential, commercial and industrial property subject to the association lien.

For fiscal year 2008, the assessment rate was 68 cents per $100 of assessed valuation. The board reduced the cap from 10 percent to 4 percent for fiscal year 2007 and to 3 percent for fiscal year 2008.

In other action, the board approved a bonus of $26,821.35 for President Maggie J. Brown on top of her $190,000 salary, a decision that also generated disagreement.

Russell said she has long believed that the way the association handles bonuses should be changed, a sentiment that she concedes is not shared by a majority on the board.

"People are always upset about the large bonus she gets on top of her salary," Russell said of feedback from the community. "Her bonuses are determined by how well she meets goals, but I think those goals are things she should do in her role as president anyway. I don't know if we even should have bonuses, because I think our salaries for the president, vice president and others are high."

Russell said she hopes that the new board will rethink its policy, which grants sole discretion for bonuses for the vice presidents to the president.

"I think the board, which has the power to hire and fire, should be more involved in evaluating not only the president but the vice presidents," Russell said.

june.arney@baltsun.com

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