CA Budget Breakdown: Phase 1 of FY2022 Budget Talks

November 3, 2020

Budget Breakdown: Phase 1 of FY2022 Budget Talks

CA BOD meeting header

We know budgets are important, but they’re also complicated. The dollars and cents behind Columbia Association’s (CA) budget is no exception. 

 

We want people to understand the meaning behind the numbers and the impact on our organization, impacts that will trickle down to everyone living in, working in and visiting Columbia.

 

Budget Basics

The CA budget process for FY2022 begins in late October 2020 and ends in late February 2021. FY 2022  officially begins on May 1, 2021. 

 

Columbia Association budget timeline FY2022

The first stage of the budget process has to do with the capital budget and new operating initiatives, which is scheduled to be finalized and approved by mid-November. 

 

You can think of this part of the process as building the frame around the budget picture. These initial votes set some necessary limits for the Board to work within for the entire budget conversation.

 

These discussions and decisions essentially encompass five areas:

 

  1. Annual charge
  2. Membership fees
  3. Operating budget parameters
  4. Reserve fund parameters
  5. Capital budget

 

Annual charge

The annual charge refers to the amount property owners on CA-assessed land are charged every year to fund the amenities that CA provides to the community.. That includes homeowners, apartment complex owners and business owners. As you can imagine, COVID-19 has had significant impacts on other revenue streams, like fitness and golf memberships and School Age Services program enrollment. That means we’re relying on these annual charge funds now more than ever.

 

Still, CA staff recommended, and the Board agreed to keep the annual charge rate ($0.68) and cap (3.5%) the same for FY2022, particularly in light of the hardships we know our neighbors are facing. 

 

Membership fees

Membership fees refer to the price of any given CA membership for people living on CA-assessed land (i.e. – those who pay the annual charge) and those who live outside of CA-assessed property. The Board has already voted to allow staff to raise memberships up to 3% for residents and up to a market-competitive increase for non-residents. This doesn’t mean all membership fees are going to change. It does give CA staff the ability to go in and fix inconsistencies within the pricing structure and/or match those charges with others in the market.

 

Operating budget parameters 

This consideration ensures the Board comes out with a balanced budget at the end of this process. When any organization budgets for upcoming years, staff makes their best estimate on how much money will come in and what it will cost to generate that income. Then, other spending is based on those estimates. Every year, the Board approves what parameters they think are appropriate. This year, the approved  amount is $35,000. That means CA staff will plan to achieve an increase in net assets of $35,000. It is important for CA to increase net assets (for income to exceed expenses) rather than operate at a loss. In particular, that can affect CA’s ability to borrow money if needed.

 

In other words, CA’s financial staff is confident that even if there was another mandatory shutdown, the organization would be able to respond, reduce expenses and come out with at least $35,000 more in income than expenses.

 

Reserve fund parameters

Particularly in light of the financial uncertainty of recent times, CA staff is recommending the Board approve a $2 million reserve fund for FY2022. This would be the start of a more robust reserve fund that the Board would allocate money to in years to come. The intent is for the Board to develop a complete “rainy day” fund timeline with directions for withdrawing from and replenishing it in the future. 

 

Capital budget

The Board has already approved CA’s FY2022 capital budget for a total of $8 million. Prior to the pandemic, that amount was around $15 million. This is a direct result of the financial strains of the pandemic and the need to be more selective with our large scale investments.

 

CA’s staff has laid out a series of capital projects for FY2022 that total $8 million. All but two of those requests come from the Open Space department and include:

  • Energy retrofits
  • Going Green projects (part of a multi-year program)
  • Water quality improvements (necessary for county and state compliance)
  • Watershed improvement projects
  • Pathway, boardwalk and pedestrian bridge renovations and replacements

 

The recommendations also include:

  • Capital maintenance of Sports & Fitness facilities
  • Owen Brown Community Center roof replacement

 

Want to get involved?

If you’re looking for detailed financial documents, including prior budgets, you can find that on our financials page.

You can watch any Board meeting live on our YouTube page.

If you’re interested in speaking during a meeting and voicing your opinion, participate in Resident Speakout.

You can also read through past meeting agendas, packets and minutes on the CA Board of Directors page.

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