RA Restores Assessment Cap

RA Restores Assessment Cap

RA board adjusts to feedback.

Back in April, Reston Association Director Robert Poppe warned his colleagues not to eliminate the assessment cap.

“This can be a killer for the referendum,” he said.

After long discussion during that meeting, the board decided differently and voted 5-3 to eliminate the cap from the proposed governing documents.

Now, five months later, the board has reconsidered.

After hearing from a steady stream of community members who said they were against the elimination of the cap in recent community meetings this past month, the board decided to restore the cap, voting 5-2 Thursday, Sept. 8, at a special board meeting. The board also reviewed several other policy decisions that have elicited consistent community feedback.

Because the board still agrees that the existing cap will soon be financially unstable, the board voted 6-1 to modify the existing cap. The board agreed to increase the current cap by an initial $69 from $445 to $514, and then adjust it in future years by the lesser of 4 percent or the Employment Cost Index, which has averaged 3.9 percent since 1984. The $69 increase represents a decision in 1991 that rolled the recreation pass fee, which was about $50, into the assessment. The roll-in instantly reduced the cap margin by $50, which accounting for inflation equals about $69 today.

In April, the board had agreed to an alternative cap as a backup in the case they determined later that their decision to eliminate the cap jeopardized the passage of the governing documents. The alternative they agreed to Thursday was different than the one they had voted for last April, which proposed raising the existing maximum assessment by $69 from $445 to $514, but thereafter increasing it by the greater of 5 percent or the ECI.

“I think 5 percent is too high, and the people I’m hearing from say it’s too high,” said RA Director Rick Beyer at Thursday’s meeting. “I think we need to agree to something that is more palatable to our members.”

FOR TWO YEARS, the RA board has struggled through a process of revising the governing documents, which were last updated in 1984. A year ago, the Association hired Bob Diamond, an attorney with Reed Smith LLC, to help the board make revisions.

Over the last several months, the board has labored over tough policy decisions, like the elimination of the cap, periodically coming up with revised drafts.

At Thursday’s meeting, besides restoring the cap, the board, has realized that too many changes or changes too large in any direction could have been more than the community was willing to swallow.

To mitigate community backlash, the board reviewed other contentious policy decisions — including commercial owner representation, the resale fee, the Design Review Board application fees, the DRB appeal, the elimination of the percentage cap (see sidebar) and the single new capital assessment — in hopes of finding a “yes-able” referendum.

From Oct. 31 to Dec. 16, RA members will vote on the revised documents by referendum. To pass, the referendum requires 40 percent voter turnout and two-thirds approval from voters. RA will spend roughly $70,000 to help convince members to support the referendum and generate the required 40 percent voter turnout.

The first issue debated Thursday by the board was whether or not to maintain a referendum schedule that moved some meetings back a few weeks, but one that finished the process before next year (see box).

“If we don’t move forward on this schedule, then it will be a moving target forever,” said Robin Smyers, director of Tall Oaks/Lake Anne district. After brief discussion, the board unanimously agreed to the updated schedule.

ANOTHER ISSUE the community sounded off on recently was the resale fee, or the capital contribution fee, which is a $250 fee to people buying a home in Reston.

“This may be the second hottest thing on the ticket,” said RA President Jennifer Blackwell, who added that there has been a lot of concern about charging the fee to people who move from one home in Reston to another. “Some people think it’s nickel and diming our members.”

However, according to RA Chief Financial Officer Ray Leonhard, it would be impossible administratively to limit the fee to new Reston home buyers and exclude members who were moving within Reston.

Based on projections of previous years by Leonhard, the fee could raise an additional $360,000 a year.

While discussion to eliminate the fee from the documents was not brought up, the board spent a lot of time discussing how that money would be used.

Beyer suggested that the fee be earmarked to offset membership assessment. “For instance, you could take the money you made [from the fee] in 2005 and reduce the assessment in 2006,” said Beyer. Director Joe Leighton agreed that offsetting assessments would be popular.

However, others on the board, like Blackwell, thought that restricting the use of the new revenue could “handcuff” the board’s ability to provide services in the future.

The board agreed, in a 6-1 vote, to maintain the fee and use the revenue on any RA expenses except for capital improvements and new capital assets.

OVER THE SUMMER, when the board introduced language in the proposed governing documents to allow voluntary commercial membership, many members were leery. Members said they didn’t know why commercial membership was needed. The provision also allows commercial owner representation on the board if only one commercial owner joins the Association. Many members thought that threshold was too low.

At the meeting, the board revisited this issue. Beyer was the biggest opponent of the idea altogether. “I think it dilutes the membership and I think it might have unintended consequences that are negative,” he said.

Director Bill O’Keefe thought the provision caused more problems than it was worth. “In a sense, it’s probably a lost cause to make the attempt [of getting commercial owners] as I read it,” he said, suggesting that commercial owners have little incentive to voluntarily pay dues and join the Association.

A majority of the board thought the provision was a good idea, but just needed to be fine-tuned.

“This is supposed to be the documents for the future,” said Smyers. “By not providing it in the documents now, it’s just something a future board will have to deal with down the road. It’s a good revenue stream that may not happen.”

A motion to eliminate commercial owner representation failed, but the board did agree to give commercial owners representation on the board if 25 commercial lots or more joined the association.

In addition to these decisions, the board clarified that Design Review Board application fees would be maintained but restricted to non-members.

The board also entertained the idea of giving the board a role in the DRB appeal process, but then decided not to. “I feel very strongly [DRB decisions] should not come in front of the board,” said Smyers, who sat on the DRB board for two years.