Residents of the Burke Centre community have had to get used to shelling out $100 a quarter for their general assessment since April.
Now, they’ll have to get used to it again.
The Conservancy Board of Trustees will meet on Nov. 10 to take action on the 2005 budget and the general assessment, which is currently proposed to be $100 per quarter next year.
Not to worry, though, said members of the Conservancy’s finance department.
"Essentially, we’re bringing the assessment up to current-day dollars," said Leon Rose, head of the Budget and Finance Committee.
According to Rose, the assessment hasn’t been an honest reflection over the past five years of how much it actually cost to run the Burke Centre community. A Board of Trustees governs the community of 5,862 homes, while an on-site staff oversees the community's general maintenance.
"The $75 wasn’t enough to start with," said Rose, of the previous quarterly assessment rate. "When they bumped it up to $100 for three quarters, that was better. Now, we’re saying $100 for four quarters, and we should be OK this year."
The assessment, which in 2004 was $75 per quarter, is paid by all homeowners and covers trash collection and community maintenance and management of park space, as well as amenities like tennis, hiking, fishing and swimming pool maintenance. In March 2004, however, the Board of Trustees voted to invoke a $25 special assessment for the final three quarters of 2004, as a result of an expected budget shortfall for the remainder of the year.
"Basically, the $100 brings us to a break-even point. It gets us to a place where we should have been, to go forward with the expenses we have," said Greg Smith, president of the Board of Trustees.
The Conservancy hosted a town hearing on the budget on Wednesday, Oct. 27, and according to Jeannie Winslow, administration and communication director for the Conservancy, about 25 residents were in attendance.
"It was a good discussion," said Winslow. "Everybody had a say, and that was good."
Karen Frank, administrator of the Conservancy’s Finance Department, said it helped to explain to residents that the special assessment levied earlier this year may have been an emergency fix, but it was also a more realistic reflection of costs.
"I think people … appreciated once we gave them some of the history, that assessments in the past haven’t kept up with inflation," she said.
That history, according to Rose, meant that for the better part of the past decade, the Conservancy staff had been rolling over its allotted 3 percent of the year-end operating expenses, or "emergency fund," from year to year. In the late 1990s, the staff began using that money, nearly $730,000, to pay off expenses, allowing the budget to balance each year.
"They used that money to offset necessary increases in the assessment," he said.
The absence of that money, combined with a powerful winter and the destruction wrought by Hurricane Isabel, meant extra money was needed to help the Conservancy make ends meet in 2004.
"Suddenly, we had a hurricane, and several huge snowstorms which required overtime, and there wasn’t enough money to make it to the end of the year," said Rose.
ACCORDING TO Rose, the emergency fund cash shouldn’t have been that large in the first place. According to the Conservancy bylaws, the maximum allowed to remain in the emergency fund at any one time is only 3 percent of the operating costs, which today would be somewhere between $100,000 and $150,000. So once that number is reached, no more is allowed to be collected.
Based largely on the presence of that emergency fund, the assessment remained steady at $73.21 quarterly from 2001 to 2003, said Rose, which is not a reflection of the rising costs of services included in the assessment.
"We can’t get services any cheaper than what people are charging for them," said Frank.
The decision that the Board of Trustees will make is how much to set aside, through the general assessment for the reserve fund.
"We have to decide if we're going to keep everything up, and if we are, we're going to be paying a little more than we did in the past," said Smith.
Each board member got the chance to hear from his community at yesterday's neighborhood council meetings. Based on that feedback, and the feedback from the Oct. 27 meeting, the Board will make its decision.
"Some people would like to see us send the reserve up to its maximum. Others want to see it kind of where it is right now. I personally think that we'll be somewhere between these two," said Smith.
Under Conservancy bylaws, the Board is restricted to imposing a maximum of $129 for the general assessment. Whatever the Board adopts, it must be decided by Nov. 10. According to Conservancy bylaws, all residents must receive a letter in the mail by Dec. 1 informing them of the general assessment, and the assessment will go into effect on Jan. 1, 2005.
To formulate this year’s budget, Frank and the members of the Budget and Finance Committee (BFC) went line by line and interviewed heads of every department to determine which expenses were absolutely necessary.
"We were very rigid this year when we approached the budget," said Frank. "[It] was very rigidly examined before it even got to the Board of Trustees."
The result, said Rose, is that the $100 general assessment will pay for $280,000 in repair work, a "bare-bones" approach. Along with that proposal, the BFC will set before the Board a recommendation to make the general assessment at least $105, which would yield approximately $400,000 in the reserve fund for repairs.
"We’ve got a lot of work to be done around here that needs to be done that we felt like has not been done," he said. "You pay now or you pay later, and it’s more expensive to pay later."
According to Frank, $12 of the proposed $100 would cover general repairs to community centers, pools, tennis courts and the like. The remaining $88 would be put toward operating expenses, tree removal and trash.