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Columbia Council pledges better oversight


The Columbia Council has vowed to take a more aggressive approach this year toward ensuring that the Columbia Association spends residents' money wisely.

Admitting that it has lacked detailed knowledge of many of the nonprofit association's operations, the elected council adopted a policy Thursday night to evaluate the efficiency and benefit to the community of every CA facility and program.

The council also reviewed the CA's financial report for the fiscal year that ended April 30, which showed the organization's largest operating surplus ever and big gains in recreational membership revenue, but sluggish growth in income from annual property levies.

Criticized as rubber stamp

Some residents -- and even council members -- have criticized the 10-member board as a rubber stamp for budgets prepared by association staff. Most council members deny that, but the board has struggled in the past two years to cut spending from the CA's operating budget -- $33.1 million this fiscal year.

"It's clear the council simply doesn't have enough information to know whether a program should be expanded or cut back," said Council Vice Chairman David W. Berson of River Hill village. The reviews would give the council that information before deliberations begin on CA's proposed fiscal 1997 budget, he said.

Beyond the bottom line

But Councilwoman Suzanne S. Waller of Town Center reminded her colleagues that they direct a not-for-profit corporation for which the bottom line isn't the only objective.

"There will be segments of our programs that aren't necessarily profitable but do serve the community in various capacities," she said.

The association imposes an annual levy on Columbia property owners to help pay for recreational facilities, community programs and parkland maintenance.

The fiscal 1995 financial summary showed that the CA finished last year with a $2.7 million surplus, which will go toward reducing the association's accumulated operating deficit to $15.6 million, the lowest level in 20 years. The CA plans to eliminate that deficit by 2000, a key factor for financial institutions whose ratings help determine the interest rate the association must pay on borrowed funds.

The association ran up operating deficits -- peaking at $28.9 million in 1986 -- by building facilities and offering programs before the new town's population was large enough to support them. The CA borrowed money not only to build facilities but to plug the operating deficits, increasing its debt.

In essence, the deficit-reduction program lessens the CA's need to borrow money for capital projects, because the surplus is aimed at the capital budget. The CA's total long-term debt is $87.1 million and has increased by about $1 million per year since 1991.

Association officials attributed last fiscal year's record-high operating surplus largely to an increase of $722,000 -- or 6.7 percent -- over fiscal 1994 in income from recreational memberships and program fees.

But income from the CA's annual property levy increased by just 2.2 percent over the previous year, which association officials attributed to a "still soft real estate market in Columbia." The 2.2 percent increase -- the CA's second-lowest rate of growth -- is a marked change from the late 1980s and early 1990s, when Columbia's growth and rapidly appreciating property values produced assessment revenue increases of 15 percent or more a year.

Association officials predict similarly sluggish residential and commercial real estate markets for the next two fiscal years.

Nevertheless, CA financial director Robert R. Krawczak said the association has fared well -- largely through its successful recreational facilities -- during the recession that has strained local governments in the 1990s.

"We helped ourselves," Mr. Krawczak said. "We demonstrated to the investment community that we aren't one-dimensional."

The report also touted the CA's new services last year, such as the West Side Teen Center and an expanded discount program for low-income youths attending summer camps.

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