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RA Board Finds Reserves to Quell Rise in 2016 Assessments

by Karen Goff — October 23, 2015 at 9:30 am 11 Comments

RA meetingReston Association’s Board of Directors is planning to move cash from its operating fund reserves in order to offset a large increase in member assessments for 2016.

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.”

  • RestonResident

    I would love for RA to provide more information on the legal expenses they are constantly coughing up.

    • cRAzy

      RA’s 2014 Form 990 tax return says Chadwick received $430,683 and Odin, Feldman, & Pittleman (John McBride et al) received $139,721.

      • John Higgins

        Caution: objects in this mirror appear larger than they actually are.
        The Chadwick firm is also the RA’s bill collector. Payments to them include fees for chasing delinquent accounts, court fees for liens, etc.

        • cRAzy

          EXACTLY the kind of work a staff attorney ought to be able handle in his/her sleep–at half the cost.

  • Sally Forth

    RA should employ an in-house counsel and do away with Chadwick’s bill. That should save several hundred’s of thousands of dollars.

    • Karen Goff

      Actually, the land use issues are handled by John McBride from Odin Feldman Pittleman. Separate bill than Chadwick.

      • cRAzy

        OK, dump both of them!

  • John Higgins

    This is good news. A few minor corrections: The surplus cash is the result of a number of years of assessments being greater than the cost of running RA. Starting in 2014, RA allocated most of the surplus to build up its reserve for future capital costs. Even after that, there was a surplus of cash, and most of that surplus is being used to pay 2016 costs.
    Coincidentally (perhaps) the RA identified about an equal amount of new spending in 2016..the list shown in the story. Note, these are not all one-time expenses. More than half of that list becomes part of the base budget for future years.

  • Lindsay

    How does a part-time volunteer assistant require $27k? What the hell kind of a volunteer is that?

    • Karen Goff

      They mean someone who helps coordinate volunteers as a part time job. They themselves are not volunteers.

  • vachamp

    The RA board will meet Mon Nov 2 at 6 pm & on Thu Nov 19 at 6 pm to discuss the 2016-17 budget. Currently, plans are for the assessment to $657 for 2016 & as high as $714 for 2017. The only reason the 2016 assessment is being held down is that the RA board is planning to use $1 million dollars excess from 2015 to keep the assessment lower. For 2017 though, the assessment spike of $714 is unwise & unnecessary. Over a 2 month budget process, the RA board only approved savings of less than $2.80 while adding approx $7.17 for curb appeal items of additional mowing, edging & landscaping medians throughout Reston. (this is over & above what VA VDOT & Fairfax Co would normally perform.) Additionally, no cost savings were utilized for the quarterly glossy Reston magazine which does not generate enough ad revenue to pay for itself & costs RA approx $100,000.00 annually. Furthermore, RA plans to renovate the RA Central services facility at the approx cost of more than $1 million for 2016, more than $640,000.00 for 2017 & more than another $770,000.00 for 2018. The RA board needs to do a much determine job of setting budget priorities, finding budget savings & holding down RA assessment increases. I hope more of my fellow Restonians will speak up at the RA board meetings & convince the RA board members to be more frugal & efficient when spending RA funds.

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