As Reston Association gets ready to hire a firm to conduct an independent audit of how the Lake House project incurred a $430,000 cost overrun, advocacy group Reston 2020 has an eight-point plan it wants the RA Board of Directors to keep in mind.
The purchase of the former Reston Visitors Center and office space for Tetra Partners commercial real estate was approved by voter referendum in May of 2015. RA told members renovation costs for the 33-year-old building would be about $259,000. That number quickly grew to more than $600,000 as RA made improvements to turn the office space into flexible community space.
While RA’s Board of Directors has moved money from its operating fund to cover the deficit, it has also voted to discover exactly what went wrong — but that independent investigation may cost an additional six figures (depending on the length of the audit and the fees charged by a professional firm).
Meanwhile, the Lake House is now open for business. Renovations are complete and RA is charging rental fees for community events, as well as getting ready for an after-school care program this fall. All of those things will earn revenue for the project, RA projections show.
But Reston 2020 says that is too little too late.
“The issues begin with disclosing the details of discussions that led to the secret deal with Tetra Properties to the near tripling of the property’s renovation costs in 2016,” Reston 2020 officials said in a statement.
Reston 2020 says the capital cost overruns associated with the purchase (at about twice the building’s assessed value) and renovations (if more than the $1 million in grounds improvements are implemented) will put RA in the hole for about $2.9 million.
That will result in a cost of about $130 per RA household, according to 2020’s analysis. RA CEO Cate Fulkerson has said that members will not see an impact in their assessment due to the Tetra/Lake House project until 2018. Even then, RA estimates the impact for members will be less than $5 annually in 2018-2020.
Reston 2020 officials say they are concerned that RA spent more than $650,000 on renovations without passing a budget for them.
“Our list of key issues is based on RA documents available to the public as well as critical gaps in the availability of information essential to understanding RA’s decision making,” said Terry Maynard, Reston 20/20 Co-Chairman. “Without understanding the reasoning behind the decisions leading to the production of these documents and the hiding of others, we will be unable to prevent the waste of RA member assessment fees in the future.”
RA’s Board Governance Committee will meet Tuesday night for more discussion on on the independent contractor for the review. RA is currently seeking members with expertise in construction management, auditing and other areas to serve on the committee to hire the auditing firm.
See Reston 2020’s full report on its website.