by Mike Conroy
Following a joint meeting with the Montgomery Village Foundation (MVF) Board of Directors and Audit Committee on August 25, the MVF Board approved the 2017 Proposed Budget for publication (see pages 29 to 36). A 30-day comment period is now open for questions or comments on the draft budget.
Executive Vice President (EVP) Dave Humpton began the meeting, noting the work staff had done to prepare the draft budget. He said the focus for 2017 was minimizing assessment increases; funding capital projects strategic plan initiatives, capital projects, reserve requirements and staffing for programs and services. The 2017 draft budget calls for increases in both the MVF and Designated User (DU) assessments that are in line with the current 5-Year Financial Plan.
Humpton noted a number of factors leading to 2016’s proving to be a successful financial year so far. He said revenues are trending higher than expected, expenses are trending lower than expected and MVF is seeing a continued decline in the delinquency rate; for the second quarter of 2016, the delinquency rate was 7.5%—the lowest it has been since 2007!
EVP Humpton presented the proposed budget summary, noting that there would be increases in both the MVF and DU funds, totaling $2.25 per unit, per month. He said the MVF Fund increase is $.85/unit/month, and he hoped that by the time the budget is ready for approval, that an even lower amount could be approved; the DU Fund increase is set at $1.40/unit/month.
In his budget summary, Humpton noted that proposed assessment increases for 2017 are necessary to keep in line with the 5-Year Plan. The MVF assessment is projected to increase $.85/month, but based on 2016 trends, may potentially be lowered before the budget is approved, and the DU assessment is project to increase $1.40/month. The MVF Fund increase is in conjunction with spending almost $260,000 from Undesignated Reserves. Over the next five years, the proposed increase in both the MVF and DU funds is approximately 3 to 4 percent per year, with it declining in the latter years.
Increases in the DU fund will cover pools, programs and facility operations. The main use in 2017 will be to cover costs of renovating the Apple Ridge Pool, according to the previously produced Pool Study. The design for this pool will turn it into a leisure-type pool with a current channel and other resort-style features. Construction will begin this fall and the pool will open for the 2017 swim season. Humpton noted that as new housing units from the proposed development on the former golf course property and at the Village Center come on line, it will help keep the DU Fund steadier in the future.
In addition to the Apple Ridge Pool renovation, a new concrete pad under the picnic tables will be installed at Watkins Mill Pool and an umbrella structure will be added over the wading pool at Whetstone Pool; however, no new Capital Projects are requested for 2017. The Capital Contribution Fee is projected to raise an additional $120,000 in 2017, bringing the remaining fund total to approximately $265,000.
To adequately compensate employees, Personnel Costs include general merit and benefit assumptions for staff. The budget proposes a 2 percent merit increase pool and a continued 6 percent 401k match for staff. Due to increases in healthcare, a $20 per pay increase in flex benefit dollars is also proposed. The Repairs and Maintenance Specialist position will be turned into a full-time position. Other personnel increases are related to increased minimum wage requirements by Montgomery County.
Humpton reported that other proposed decreased expenses for 2017 include: business expenses; occupancy (utilities); security; bad debt; capital expenses; and use of Undesignated Reserves. Increased expenses were expected for the Water Quality Protection Fee and legal costs.
Contributions to Reserves (CTR) increase slightly from 2016 to be in line with the Reserve Study, totaling $1,089,959 for the year. The MVF Fund will receive $323,007 and the DU Fund will receive $766,952, with contributions made monthly. The budget assumes a CTR on funding 75 percent of replacement costs over a 30-year period.
Reserve Expenses for 2017 include: the Apple Ridge tot lot replacement; MVF Office technology; community center repairs and maintenance; ADA upgrades; other general pool repairs; and tennis court maintenance. This amounts to a necessary $313,746 and another potential $172,154 in reserve spending.
The MVF 2017 Proposed Budget and budget presentation can be viewed in their entirety and are available for download online at www.montgomeryvillage.com. A full copy of the budget may also be viewed at the MVF Office, 10120 Apple Ridge Road, during regular business hours. Residents are encouraged to review the budget.
For the next 30 days, comments or questions can be directed to CFO Greg Snellings via e-mail at email@example.com or in writing to Montgomery Village Foundation, Inc., ATTN: 2017 Proposed Budget, 10120 Apple Ridge Road, Montgomery Village, MD 20886.