68°Clear

Potential $678 Assessment Floated in First RA Operations Budget Work Session

by Dave Emke — August 15, 2017 at 2:45 pm 12 Comments

The search for savings by Reston Association staff has resulted in a $678 proposed assessment rate for 2018.

The figure was discussed during a budget workshop session with the RA Board of Directors on Monday (video/PowerPoint presentation). That number would be a decrease of $42 (5.83 percent) from the 2017 assessment level of $720, which was reduced to $692 using surplus cash.

One of the major factors that influenced the budget development, allowing for the decrease in the proposed rate, is the additional assessment revenue that will be provided by 429 new units at the Sunrise Square and VY developments.

That assessment rate will likely change, though, before the Board finalizes the 2018 operations budget, projected at $14.3 million. The Board has been asked to consider numerous staff and member suggestions which could affect the budget.

One big way it could change depends upon whether the Board decides to pay off the loan on the Lake House. If it does so — at a cost of $182,797 — there will be a reduction of $8.66 in the 2018 assessment rate as a result of no longer making payments.

“Essentially, we’ll be using up our cash to pay off the loan,” Sridhar. “In the corporate world, you give it back to the shareholders, which in this case is the members.”

The 2018 budget currently on the table has the Lake House being maintained on the status quo, through programming and rentals while making payments on the loan. That would result in a net loss of more than $190,000, according to the projection. Other options on the table include continuing status quo for six months and then moving to only rentals, or to use the facility for rentals only. With those latter options, along with paying off the loan, the Lake House is projected to represent a net profit in the 2018 budget.

CEO Cate Fulkerson said staff “highly recommends” the Board pay off the loan at the end of this year.

“I am looking forward to that conversation, because I think that there is a lot of area where the Board can make a positive impact on the community, both financially and through programming,” said Sherri Hebert, Board president.

In addition to bringing in in-house legal support, the cost of which Fulkerson said would be canceled out by the savings from reducing outside legal services, the Board is also being asked to consider other staffing additions.

Anna Varone, director of covenants administration, asked the Board to consider adding a post-DRB project approval inspector. This position is estimated to add $55,885 (salary and benefits) to the budget, with a $2.65 impact on the assessment.

“We’ve been challenged by having projects that have been approved by the DRB and not having someone that’s been able to go and inspect after the member has installed the project,” Varone said. “We’ve not had the resources to go out and ensure that the member has installed the project correctly.”

Mike McNamara, deputy director of maintenance, said the Board should consider adding two seasonal workers to address litter control. This would cost about $40,000 (salary and supplies), with an impact of $1.93 on the assessment.

At a meeting last week, the Board was presented a potential $2.82 million Capital Projects budget.

A community meeting on the budget development process is scheduled for 7 p.m. Thursday, Sept. 14. The Board will then hold further budget work sessions, along with a joint meeting with Fairfax County Supervisor Cathy Hudgins, on Monday, Sept. 18.

The final drafts of the capital projects and operations budgets are to be presented Sept. 28, with public hearings in October and the approval in November.

  • cRAzy

    Great start reducing the assessment. Don’t stop.

    In fact, I have a proposal for next year: Rather than building the budget from the bottom, lay out an assessment fee that is reasonable (ie–does not involve significant increases and may allow decreases as development occurs) and let the staff bring proposals that will fit within that bottom line. This focuses on controlling spending, not building spending up.

    • Greg

      My thoughts exactly. Keep going and don’t stop now.

  • EliteinReston

    Imagine the fallout if the board, having floated this tantalizing proposal, reneges on it later. In a community weary of year after year of assessment increases on top of county tax hikes, you cannot now vote to raise the assessment.

  • LeftPolitico

    According to the link in the article about the 2015 loan, “Reston Association assumed a $2,650,000 term loan issued by Access National Bank secured by the assessment revenues collected by RA.” Could someone explain how, according to the fifty paragraph above, RA can now “pay off the loan on the Lake House … .at a cost of $182,797.”

    • John Higgins

      This sounds like a “pre-payment” penalty. The balance due on the loan could come from excess revenue generated by the 2017 assessments (most curious to hear if that is the case), from excess amounts sitting in reserves (here, too, I think we all would like to hear how that came about) or other sources. Waiting to turn the page to hear the rest of this story.

    • Eric Carr

      That is the annual cost of the loan, so it’s reflecting what we would save each budget year.

      • LeftPolitico

        Thanks Eric. Simple division would show that the loan should be paid off in about 15 years. Would that be about right?

        • Eric Carr

          We have a balloon payment for e balance due in 9 years, so we will have to pay that balloon (about $1.5M or thereabouts) or refinance by then. That factors into part of our thinking on paying it off early. Save all those interest payments and dodge the balloon payment.

  • Greendayer

    With services and pool hours being cut, there should be a reduction in assessments.

    • 30yearsinreston

      There aren’t cuts in management perks or salaries

  • 30yearsinreston

    RA is a disgrace
    This profligate use of assessments must be reduced
    They seem incapable of setting a budget which does not include pet projects,staff augmentation and other boondogles which cover up staff ineptness mismanagement and outright laziness
    The budget should be Immediately cut by at least 50% by demoting supervisors and firing 75% of them. Start at the top
    I’m sure the only ones who notice will be the ‘executives’ who will be first out the door
    Ever notice how no one at RA answers rhe phone or calls back

    • Greg

      Yes, I have. In fact, I’ve called Anna Varone several times — never so much as a return call. For shame.

×

Subscribe to our mailing list