Wednesday, August 26, 2020

It is Not.

 The Columbia Association (CA) budgeting process will begin in September and continue through February 2021. The budget is a community instrument that weighs policy priorities against resident resources. The Board of Directors will establish assessment rates to be paid by residents, set spending limitations for programs and services, and provide opportunity for public input to the Board.

The CA budget has been generally composed of an operating budget, which shows expenditures for the period, and a capital budget, which details the financial plans for capital improvements, facilities, and equipment. The two budgets may be consolidated to determine the amount of total estimated revenues available for expenses and the amount of new debt to be incurred for projects in the capital budget. 

Some would say that CA is experiencing a financial crisis; I would argue residents are frustrated from a misalignment of values and vision within the organization. This can have an impact on the success of the organization. I have been told, "think of this as a business." It is not. And, "all of the money goes into one pot." In other words, assessment dollars from residents fund the losses in the Sports and Fitness Division and other programs. While each of us could spend time discussing each of the various business components of the Association, it is my intention to focus on value and potential, that is what differentiates us from other communities. 

My personal values will serve as broad guidelines in my votes on the budget. The budget process must be open to the public. Board meetings and work sessions, as well as Audit Committee meetings, should be live-streamed and available at a subsequent time for review by video. A variety of opportunities should be available for public comment; resident speak out, zoom meetings, joint village/CA discussions, etc. Closed meetings, or meetings deemed "open" but not available for public viewing, are not a place for budget discussions or financial statement review. Minutes of closed meetings involving the budget and financial statements should be made available to the public.

Communication is integral to the successful fusion of our values and vision into the budget of the Association. As your Columbia Council Representative, I will address this issue by holding Zoom meetings available to each of you at 7 PM on Wednesday, September 9th to discuss FY 2020 and Wednesday, September 23 to discuss the first quarter of FY 2021. Zoom invitations will be made available closer to the meeting dates. Additional Zoom meetings will be announced for October, November, and December.  

Should you have any budget questions or concerns prior to this time, feel free to contact me at 443-686-0702.  

Tuesday, August 11, 2020

How Does CA Spend My Annual Charge Money?

My annual charge bill was accompanied by a brochure explaining the FY April 30, 2021 Operating Budget approved by the Board of Directors in a closed meeting on June 4, 2021. I will be using this document along with budget information disclosed in public meetings and on Columbia Association's (CA) website to help you understand where your annual charge dollars are being spent. According to the FY 2021 Operating Budget, the annual charge (both residential and commercial) represents approximately 71.5% of the total sources of revenue for CA or $40 million.  According to the CA Declaration, funds should be used to fund open space of $16.6 million (in the FY 2021 Operating Budget), Village Community Associations of $4.9 million (FY 2021), and Administrative Services of approximately $3.7 million (FY 2021). (Note: Included in this amount is payroll taxes and other legal obligations.)  In FY 2021, the remaining $14.8 million can be spent at the discretion of the Board of Directors. 

The Senior Leadership Team and a majority of the members of the Board of Directors approved a Sports and Fitness budget, with 22.9% of total revenue or $12.8 million and  $25.9 million in expenses for a loss of $13.1 million which is supported by the residential and commercial annual charge payments. When looking at the CA Operating Budget approved in early 2020, one can see that the Sports and Fitness Division has struggled for years, the loss for FY 2016 through FY 2019 totaled approximately $ 22.7 million. Including the losses in the financial statements for the year ending April 30, 2020  of $7.6 million, the combined losses for the five year period ending April 30, 2020 is estimated to total $30.3 million.

During a June Board of Directors' meeting, with the guidance of the Senior Leadership Team, a majority of the members of the Board of Directors voted to close the outdoor community pools and open the indoor pools located in the fitness facilities and the Swim Center. The CA Senior Staff hopes to meet its Operating Budget projection of a $13.1 million loss but will not disclose to the Board members essential information such as membership numbers and revenue, monthly budget projections versus actual figures, and financial data for each facility. Further complicating this lack of information is the Senior Leadership Team's refusal to meet with the Board to discuss the financial situation of CA, except in closed meetings.

Transparency is a powerful thing. The need for transparency is at an all-time high. When leaders are transparent, communities can solve problems faster. The Board of Directors and the Senior Leadership Team could design a strategy to improve performance rather than cutting programs. An efficient problem-solving strategy, together with the development of an authentic relationship with the stakeholders, would avoid the misunderstandings and rumors that fuel the current unnecessary tensions in the community. When leaders are transparent, especially in the worst of times, they actually strengthen their leadership and gain the respect of team members and residents.      

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