Special Assessment For Burke Centre?

Special Assessment For Burke Centre?

With a $710,226 operating fund deficit component in the 2004 budget, Burke Centre residents are facing a possible special assessment to their community fees to make up for the shortfall.

In a budget document dated Feb. 2, 2004, Burke Centre Conservancy's executive director Tom Wade attributed the shortfall to the 2003 snowstorms and cleanup after Hurricane Isabel last fall. This resulted in increased overtime pay that the Conservancy hadn't anticipated. Increased insurance costs and fewer pool memberships than expected added to the dilemma. A special assessment is just one possible solution to make up the difference, but Wade isn't going to propose that this year.

"It's not my recommendation to do that for 2004," Wade said. "I think we can manage it without increasing the assessments for 2004. There will have to be some increases, probably next year."

Those increases for 2005 will be voted on in November 2004. Cuts in current projects are being considered, according to Wade. He wouldn't be specific but called it "nothing draconian."

"There won't be any elimination of programs," Wade said.

AT THE END of 2003, the Conservancy budget had a deficit of approximately $300,000. The current deficit of $710,226 more than doubles that amount. According to the Conservancy finance administrator Karen Frank, part of that was due to $650,000 in operational costs when the Conservancy had originally budgeted $395,000. The higher operational costs were due to the storms, overtime pay, a decrease in pool memberships and capital acquisitions, Frank said.

As news of the budget deficit circulated through the Burke Centre community, meetings were called. At a Monday, Feb. 9, meeting, a committee was formed to specifically look into the deficit. Kieran Boylan, a certified public accountant by trade, is one the five who started the committee. Luanne Smith, a Board of Trustees representative for the Oaks community, was at that meeting as well. She also attended a Feb. 4 at Oaks Community Center. Increased community involvement was a positive outcome of the two meetings.

"They're taking back the community, which I think is wonderful," Smith said. "The budget finance committee will really look at this [budget] with a fine-toothed comb."

Marc Flaster, a Commons neighborhood candidate in the March Board of Trustees election, was also at the Feb. 9 meeting. So far, the Conservancy has got the deficit down to approximately $300,000, Flaster said, which is close to where it was last year.

"We've made a huge number of cuts," said Flaster, who was not specific about where the budget cuts were made.

SOME RESIDENTS of Burke Centre are looking for the answers of how and why the budget deficit came about.

Those attending the Feb. 9 meeting weren't interested in blaming the unpaid volunteers. It was the paid members of the Conservancy they were after. There are 18 administrative staff members at the Burke Centre Conservancy.

"We shouldn't be paying someone to make these mistakes," said Oaks resident Joseph Berner.

"This is what we pay an executive director for?" another person asked.

"Don't we have a paid staff that is supposed to deal with this?" someone else asked.

The executive director, the Conservancy's finance staff and the Board of Trustees are required to have a rough draft of the coming year's budget by the previous November.

The 5,000 homes in Burke Centre pay $75 on a quarterly basis to cover maintenance of the common grounds and snow removal. That doesn't include pool privileges or trash pickup.

"Compared to other communities in the area, we are paying far less," Smith said.

"Twenty-five years of Burke Centre, we've never had a budget shortage," said Craig Musick, a former member of the board at the Oaks meeting. "It's unprecedented. It's mind-boggling what's going on here. That's mortgaging Burke Centre's future."

Wade confirmed that in the three years he's been executive director, the Conservancy has operated with a deficit, but it didn't have a cash-flow shortage.

At the Feb. 4 community meeting, two handouts were available for those in attendance. One was from Wade, and another was from Swart, Lalande & Associates P.C., a certified public accountant firm in Fairfax hired to audit the budget. The firm's memo was from Chip Lex, a certified public accountant with Swart. The report explained the budget shortage source was "attributed to the fact that the Conservancy had experienced a number of unexpected, as well as unfavorable, income and expense budget variances during 2003 which resulted in larger than anticipated loss."

The firm's recommendations include the movement of several expenses to a "capital reserve or capital improvement fund balance, ... making cuts wherever reasonable and appropriate," and considering "a mid-year increase in assessments as another measure to close any remaining budget shortfall for 2004."

Flaster said a midyear special assessment was not allowed in the homeowners association rules, but Smith said a special assessment was allowed in accordance with the Virginia Property Owners Association Act.

"Any time of the year, it's not the same thing as a general assessment," Smith said.

Lex referred all budget inquiries back to the Conservancy.

WADE INDICATED one possible way that the deficit could have occurred was with the estimating of 2004 services based on the previous year's numbers. Electricity was one example he used. The electric bills in 2003 were higher than in 2002.

One expense that was questioned at the Oaks meeting was the upcoming renovation of the Woods Community Center. The design alone was $100,000, Smith said. The total price tag is $1.5 million and the budget has only $1.8 million in reserves.

"There's other community centers that are going to need these funds," Smith said.

Wade's contract ends in September, but the renewal process is scheduled to begin next month, according to Smith. No decision has been made on Wade's contract yet.

"It will be the next board that will decide that," Smith said.

One member of the Oaks audience wanted to prioritize the spending for areas of community.

"You can't do everything," one woman said. "If you've got an erosion problem, that's a health issue, compared to building a new Woods center."

"When I was on the board, we had an adviser work with us," Musick said.

Smith and Flaster had different impressions of the Feb. 9 meeting.

"Basically, we had a very volatile meeting," Smith said.

"There were one or two people that were not convinced that was the way to go," said Flaster, of the budget decisions.

A Board of Trustees election is also on the horizon. Art Steffen was an at-large trustee in 2003 but is not running for office this year. He's been on the board before and knows how difficult the budget process is.

"I know the assessments will go up," he said. "It will all balance out. Comparable associations are paying $120 or $130 [quarterly]. We kept it as balanced as we could."

The ballots for the Board of Trustees election will be mailed to residents within the next two weeks, and the actual vote will be March 6.