RA Board Approves New Budgeting Plan
With three-pool approach, Reston Association Board of Directors can get funds organized for repair and replacement and new capital projects.
The Reston Association Board of Directors approved on Thursday a new method of budgeting funds to pay for improvements on existing facilities and organize capital for new projects.
Under the previous plan, assessment revenue and investment income are placed into the operating fund. Meanwhile, only investment income funds the reserve and replacement (R & R) pool.
The new plan was proposed by RA Vice President Andy Sigle and presented to the board earlier in July. Under it, all income will go to three pools — an R & R fund, an operating fund and a new capital projects fund. A set amount would be moved to the R & R Fund annually based on a 10-year forecast; the R & R fund would also have a set minimum balance, and the board would vote on discretionary allocation to the new projects fund.
Sigle projects the annual amount put into the R & R fund should be $2.1 million a year, but also says the number can change each two-year budget cycle based on the association's anticipated needs and existing capital assets.
RA's budget for 2012-13 is $14,374,012. Of that money, $1,137,934 is set to go into the operating fund and $1,666,650 will go into the capital improvement fund. About $269,000 from assessments and interest income will go towards R & R.
"During the 2012-13 cycle, several directors said they had the desire to see a longer-term view," said Sigle at a meeting earlier in July. "This way asks, 'How does two years fit into a longer time frame?' It also better ties together and explains operating expenses separate from capital funding or repair and replacement."
Sigle said the new plan "emphasizes repair and replacement funding in the biannual budget process, utilizes R & R funding for capital project expenses and carries forward from one year to the next so we are not bleeding into the operating fund."
The board will also form a Special Committee on New Capital Projects List to make recommendations on new capital projects.