Under RA guidelines, the assessment, $642 in 2015, could have jumped as high as $706 for 2016. It will now likely be $657, a $15 (2 percent) increase. The board will vote on the final budget and assessment amount in November. A public hearing on the budget will be held at RA Headquarters on Nov. 2.
At Thursday’s regular monthly board meeting, the board was was presented with three budget-related options for slowing the annual assessment fee.
The options all involve using about half of the association’s operating cash reserves for reducing the expected increase in the annual fee.
The second draft of the budget, presented to the board Thursday night, uses between $900,000 to $1.1 million of accumulated operating cash to pay down next year’s annual assessment.
- Option 1: $652 assessment ($1.1 million towards assessment reduction)
- Option 2: $657 assessment ($1 million towards assessment reduction)
- Option 3: $662 assessment ($900,000 towards assessment reduction)
The association’s Fiscal Committee recommended the board allocate $1 million (option 2) of anticipated 2015 cash surplus to the Repair, Replacement and Reserve Fund to be used toward the proposed 2016 capital projects.
Reston Association CEO Cate Fulkerson said the operating cash reserves have the surplus because of about $1 million in RA expenses in 2015 that likely won’t happen in 2016. Among them:
- $490,200 in salary adjustments, including wages due to employee promotions as well as a 12-percent rise in benefit costs, some of which has been passed on to employees, Fulkerson said.
- $148,000 in curb maintenance
- $147,500 in land use legal fees
- $105,000 in maintenance supplies and tools
- $84,000 in IT costs
- $27,000 for a new part-time volunteer assistant
- $1,400 in miscellaneous costs
Fulkerson said the Tetra purchase will not impact assessments until 2018.
Board members and RA staff said on Thursday they believe the reserve and capital accounts are adequately funded, which would allow the association to put a portion of the surplus money towards lowering assessment fees next year while also maintaining enough cash for future emergencies.
The money-saving idea was first presented to the board by North Point Director Dannielle LaRosa, the board treasurer, earlier this month.
“At the end of the year, I really would like the association to report back and say cash-wise, how much were we ahead,” LaRosa said on Thursday. “Some years it goes up and some years it goes down. I would like that to be built into something the CFO reports back to us.”
Annual assessment fees help pay for RA’s pools, tennis courts, lakes and 55 miles of pathways.
Limitations on how much assessments can go up each year are determined by the Reston Deed. The cap for Reston Association in 2016 is $718, well above what the association would set under any of the 2016/17 budget scenarios presented thus far.
At-Large Director Ray Wedell said the board should not “pat ourselves on the back for staying under the cap.” Assessments have risen annually and maintenance has been deferred on some assets.
“There are major infrastructure investments that have been delayed or deferred,” he said. “We’ve been growing these reserves for 10 years. We sit on them as if it is our money — it is really the people’s money, and they have been paying assessments that are adding to the reserves.”
“We use an index [on the assessment cap] that is somewhat obsolete,” he said. “We need to keep this place looking good, feeling good and being the No. 1 community. If we need to spend [to maintain] then we need to spend, even if it means digging into reserves — which have been building up for 10 years.”
At-Large Director Jeff Thomas also said the board should have conversations with Fairfax County, who should in the future be paying for some costs as Reston is poised to experience huge growth in the next 10-20 years.
“As we transform our community, there are going to be additional investments they [the county] need to make,” he said. “Right now we are paying for that, but we need to have some more frank discussions with the county. These are changes that are happening in out community not solely by our discretion.”