Going into debt is never anyone’s first choice, whether for personal or business reasons. However, often a loan is either the only choice or the one that makes the most sense, both in the short and long term. As you know, from following the FY2014/2015 budget discussions, Reston Association is contemplating securing a loan of between $2.0 and $2.5 million to offset expenses and provide a lower assessment increase for 2014 and 2015. Our objective is to minimize impact to assessments while focusing on big project items like potential dam expenditures.
The three budget options are as follows:
Budget Option 1 – Reflects the operating revenues and expenses, along with the capital expenditures required for the upkeep of existing capital assets. As well, this option funds the Repair and Replacement Reserve, at approximately $2.4 million in 2014 and 2015 as recommended by the Fiscal Committee. The projected Annual Assessment levels would be $646 in 2014 and $647 in 2015. This option provides no extra dollars for any new budget initiatives.
Budget Option 2 – Assumes all of the operating revenues and expenses, along with the capital expenditures required for the upkeep of existing capital assets as presented in Option 1. However, this option does include a loan of $2.0 million to offset expenses, provide lower annual assessment levels of $615 in 2014 and $635 in 2015, thereby providing $1,045,843 in additional funds for new budget initiatives.
Budget Option 3 – Assumes all of the operating revenues and expenses, along with the capital expenditures required for the upkeep of existing capital assets as presented in Option 1. However, this option does include a loan of $2.5 million to offset expenses, provide lower annual assessment levels of $615 in 2014 and $635 in 2015 thereby providing $1,534,593 in additional funds for new budget initiatives.
Obviously, there are pros and cons with each scenario and the board will be discussing these at length over the next month before adopting a final budget in November. As I have mentioned in previous articles, we can’t afford to postpone investing in Reston’s infrastructure and need to take the necessary steps to improve and maintain our current assets, as well as investing in steps for our future. The loan scenarios provide an opportunity to do both, while also keeping assessment increases at a manageable threshold.
We anticipate this as a short-term objective as we will focus our attention on new membership and proffers via development as well as redevelopment in 2015 and the years beyond. Of course, none of this has been voted on yet as the Reston Association Board of Directors represents you, our members, and we want to hear your thoughts and ideas regarding these budget scenarios. Please feel free to email me firstname.lastname@example.org, comment on this post or attend one of our next few board meetings (including a special budget focused meeting), dates listed below. We appreciate your participation and thank you for entrusting us with the task of providing a game plan for Reston’s future.
All meetings held at Reston Association Conference Center, 12001 Sunrise Valley Drive.
- Sept. 17, 6 p.m. – Budget Development Special Board meeting.
- Sept. 23, 6 p.m. – Budget Development Special Board meeting.
- Sept. 26, 6 p.m. – Board of Directors meeting.