CA board lowers property charge

Reacting to sharply increasing Columbia home reassessments, the Columbia Association board of directors dropped the annual property charge rate a nickel as part of the homeowners association's fiscal 2005 operating budget.

The board voted 9-0 to set the rate at 68 cents per $100 of valuation assessed on 50 percent of the home's value Thursday night, with one member abstaining. It is the second time the board has reduced the rate in the planned community's 36 years. The new rate is half the rate reduction the board discussed earlier.


"We're giving the residents a break," board Chairman Miles Coffman said. " ... But we're not mortgaging the future" of the organization.

Sentiment for a 10-cent rate reduction was made before Del. Shane E. Pendergrass submitted legislation in the General Assembly that would impose a 10 percent ceiling on rising property assessments in Columbia.


If her bill is enacted, the annual charge on a home valued at $280,000 would be $55 to $66 a year lower under the 68-cent rate.

Under the new rate, that home's owner would pay $748, $822 and $905, over three years, according to Columbia Association officials.

Using the current 73-cent rate, the charges would be $803, $883 and $971 over the same time.

If Pendergrass' bill fails, the same homeowner would pay $952 for each of the three years.

Coffman said the new rate would enable the Columbia Association to keep paying down its long-term debt, which is about $78 million.

"Remember, dropping [the rate] is easy," he told the board. "Moving it back up is a big thing."

Board Vice Chairman Joshua Feldmark agreed with Coffman that 68 cents per $100 of valuation assessed on 50 percent of the home's value is an appropriate rate.

"I think that makes a lot of sense," he said.


Under the new rate, the association estimates that the 2005 budget will have a surplus of $4.3 million.

The rate reduction comes after sharp increases in Columbia's home values over the past two years produced big increases in residential property charges. East Columbians' assessments jumped an average of 33.4 percent last year, which brought an extra $2.7 million in revenue for the homeowners association's 2004 budget. West Columbia home values recently increased an average of 47.4 percent.

If Pendergrass' legislation passes, the 10 percent limit would be retroactive, covering the east Columbia's assessment increase.

The board had dropped the property charge rate 2 cents in 1992.

In a statement, the Alliance for a Better Columbia, a citizens group, wrote that it is "pleased" that the board took into account a 10 percent limit when setting the annual charge, but it is troubled that the association plans to pay for capital projects with cash.

"It is unfair to require today's homeowners to pay cash for the entire cost of certain capital projects that should more appropriately be paid for over their useful lives by future residents who will benefit from those projects," the group wrote.


In a pilot program, the board worked on the 2005 and 2006 budgets this year. On Thursday, the board conditionally approved the 2006 operating budget, which includes the annual charge of 68 cents per $100 of valuation assessed on 50 percent of a home's value. After a public hearing and a review of the 2006 budget, the board will approve that budget in February next year.

Columbia Association President Maggie J. Brown said she was satisfied with the new process.

"Having two budgets really makes you consider what you're doing in one year and the effects it will have in the next year," she said.

The board voted not to change rates residents pay for outdoor pools and for all of the Package Plan memberships to Columbia Association facilities for 2005. The board did increase the rate for the recreational-vehicle park by 10 percent, and it voted to reduce the family resident membership price for the limited outdoor pool package - which allows admission to the association's five lesser-used pools - from $175 to $100.

The association had not determined Friday what financial impact those rate changes would have on its income. Before those rate adjustments, the income was estimated to be at $48.6 million for next year and $51.4 million for 2006.

The board also approved a $7 million capital budget for next year and conditionally approved a $9.1 million capital budget for 2006.

For the record

Because of an editing error, a story in Sunday's Howard County edition of The Sun about the Columbia Association board setting a new annual charge rate did not provide all the information to calculate payments on a house valued at $280,000. The example should have stated that the house was previously valued at $200,000, and its value increased 40 percent, to $280,000. That value was phased-in over three years and the annual increase capped at 10 percent. The Sun regrets the error.