Last month, there was another letter of complaint from Alex Hekimian, this time about what he calls excessive recreational -- fees and overpriced facilities.
Again, he misrepresents the facts by not giving all the information on the rates actually proposed for Columbia residents in the proposed budget.
What are the facts? First of all, most resident rates change very little or not at all. For example:
* Outdoor Pools: 1 1/2 percent increase.
* The Five Pool Plan: No increase (and one pool added).
* Columbia Swim Center: No increase.
* The Athletic Club: New member, 1 percent increase; Renewing, no increase.
* The Supreme Sports Club: New member, 1 percent increase; Renewing, no increase.
* Nautilus: No increase.
* The Women's Gym: No increase.
The budget also proposes introducing a Package Plan with golf and a Package Plan without golf in order to shift a greater portion of golfing costs to actual users. Nongolfers will be able to select a less expensive plan. So, renewing members who choose Package Plan without golf will pay 75 cents a month more -- or $9 a year. That 2 to 2 1/2 percent increase would have been substantially higher if only one Package Plan option were being offered.
Package Plan with golf will cost only $25 a year more because all renewing members will receive a $50 Fairway Hills Golf Club introductory discount this year. That represents less than a 5 percent increase.
The Columbia Association's Package Plan facilities are a great value. I would challenge Mr. Hekimian to call any comparable health and fitness facilities in the Baltimore/Washington area. He'll find that CA's Package Plan is considerably more affordable than comparable recreation offerings.
And for Columbians who are restricted by income, special income-qualified memberships are available. Eligible residents can purchase, or earn through CA's Earn-a-Membership program, outdoor pool memberships with a 75 percent discount or any other membership at a 50 percent discount. More than 1,000 Columbia memberships are currently taking advantage of this opportunity.
The budget also proposes important innovation both to improve Package Plan and to offer choices to members. For example, this year the Columbia Association will be adding three major new Package Plan facilities: the Kendall Ridge neighborhood pool, the River Hill pool and the Fairway Hills Golf Club.
In addition, the budget proposes reinvesting more than $1 million to make Package Plan facilities even better. Columbians have been joining the recreation facilities in record numbers. More than 41 percent of all Columbia households and more than 35,000 Columbians are facility members. And they are certainly enjoying the facilities. There were nearly 2 million member uses last year. That's nearly 2 1/2 times as many as five years ago. And the number continues to grow.
Rob Goldman
Columbia
The writer is vice president, director of membership services, for the Columbia Association.
We must thank Adam Sachs for trying to enlighten the residents of Columbia on the man, President Padraic Kennedy, and the part he plays in the operation of the Columbia Association (Feb. 5). But there are many important areas that were glossed over, not touched on or were contrary to the facts.
I can't believe that a dialogue of this length was conducted on the operation of CA and no mention of the covenants entered the conversation.
The covenant is the hallmark of all the planning and operation of CA. The Rouse Co. created the association by writing these covenants and having them placed on the real estate by the courts. They are entered into the land records of each lot.
The lien is charged against each lot and is, in fact, a mortgage on the property. The covenants also spell out how the revenue from the lien is used.
First, for the payment of all debt service due. Second, for the maintenance of open space and the construction and operation of recreation facilities. Articles IV and V of the covenants state over and over that these facilities will be constructed and operated for the pleasure of property owners and residents of Columbia.
It's understandable that the president wouldn't bring up the subject of covenants because he completely ignores them. Every time CA sells a time of participation on any of CA's facilities to a nonresident, thereby denying a resident or property owner that privilege, it is a violation of the covenants and to the courts, a violation of law.
Mr. Kennedy is correct that all policy originates with the council. He makes sure it passes a resolution on everything before any action is taken. But that is no problem for the council rubber-stamps almost every proposal offered by the staff.
If there is a case where the council refuses a proposal, Mr. Kennedy will keep bringing it back until he gets the votes to pass it. In the case of the golf course, it took six or seven years.
Speaking of possible ties between the president and the Rouse Co., he doesn't have to communicate on a daily basis. He understands that the most desirable thing to do is that which paints a picture that is conducive to real-estate sales.
In that respect, he has a problem for the public is learning the truth. The $90 million debt is no problem to him but the public is learning that under the covenants the property owner must eventually pay this debt. Drive around town and see the number of properties for sale, many of them for a year or more. Property in Columbia has depreciated about 10 percent the past two years and there is nothing on the horizon to indicate the problem will turn around.
Is CA financially healthy? Oh, very healthy now. Mr. Kennedy is misleading in discussing the financial picture. To him the $90 million debt is no problem because he will soon have the asset figure inflated enough to match the debt figure. The book value of CA is about one-third of the asset value. If CA continues to roll over the principal amount of debt service each year, it will just continue to grow.
He advertises that debt service is only 25 percent of revenue. He doesn't include the principal amount in that figure. He never mentions the fact that debt service, both principal and interest, is paid from lien revenue. The money goes directly to the trustee and CA never sees it. The total, interest and principal, is around $13 million out of total revenue from the lien of $17 million. That is about 76 percent and leaves $4 million to operate CA.
CA does some weird bookkeeping to make things look healthy. Note the fact that the principal amount of debt service goes directly to the trustee. CA takes the same figure and enters it into the operating budget as a cash receipt. Also they enter millions of maintenance and repair cost in the capital budget instead of the operating budget.
The results? It creates a profit in the operating budget and inflates the value of assets at the end of the year.
The one thing that has reflected on the credibility of Mr. Kennedy and CA more than any other took place back in 1987. CA was borrowing large amounts and the trustee requested CA agree to a change in the trustee agreement, restricting CA from the right of recall of any bonds prematurely for the purpose of refinancing.
In the summer of 1993, interest rates dropped and if CA had not agreed to the recall restriction, it could have refinanced its debt, reducing the interest cost from an annual cost of close to $9 million to close to $6 million. This would have amounted to a savings of $3 million.
CA was planning to build a golf course that would take two years and cost more than $5 million. If they were permitted to refinance, they could have built the golf course cash on the barrel head. Mr. Kennedy was correct in stating that proponents of change should offer something to the people in the way of improving on what they presently have.
Charles W. Ahalt
Columbia