MVF Budget Season Off to a Busy Start

My Patch Blog

The Patch profile for the states: "My postings on  Montgomery Village Patch will make observations on the public and private governments and institutions in Montgomery Village, Montgomery County and the state of Maryland which have the most significant impact on our daily lives. It is my intention to provide information and a perspective not found elsewhere that would create a productive public dialog. Included for special attention will be ongoing blog postings about the Montgomery Village Foundation, the County Government, the County delegation to Annapolis, the Maryland Public Service Commission, Pepco and any organization that likes to dig up our streets, sidewalks and lawns such as WSSC, Washington Gas, Comcast and Verizon."

In regard to the Montgomery Village Foundation, my intent is post a series of entries under these topic headings:

1. The Story of Lake Whetstone and Park - The Crown Jewel of Montgomery Village
2. Trees, Turf & Shrubs and the Village Green Environment
3. MVF Financial Reporting & Condition - Fact or Fiction
4. The Village Capital Infrastructure - Maintaining, Preserving, Enhancing or Declining

Not necessarily compelling subjects but in Montgomery Village these are the emotional catch phrases for community divides. Like General Sherman I have spent the last two months preparing for battle before my inaugural posting. The release of MVF's proposed 2012 budget sounded the bell for round one.

Budget Season Off to a Busy Start

On Aug. 8, with a series of letters, e-mails and deliveries to members of the MVF Board of Directors and Audit Committee, representative and alternates from the various Village communities and selected Homes Corporation board presidents, Dave Humpton set in motion the 90-day countdown to approval of the 2012 MVF budget. 

This year, however, the proposed budget was bundled with and contingent on:

1. The passage of an amendment to the MVF By-Laws authorizing the imposition of a Capital Contribution Fee (CCF) on residential home sales
2. The approval and immediate implementation of a $1 million, five-year Capital Improvement Plan
3. The surprise announcement that effective Jan. 1, MVF will outsource to a private vendor its landscape, lawn, tree and snow-removal requirements and will longer offer landscaping and snow-removal contracts to Village homes corporations, creating substantially savings and improved service in the years to come.
4. A pledge that homeowner assessment fees will not change through fiscal year 2013
5. An announcement that representatives from the Village's communities have been summoned to a meeting on Sept. 19 to consider raising the assessment ceiling

These somewhat confusing, conflicting announcements are accompanied by an intense full-court press public relations campaign by the MVF Communications Division in the MV News to promote, sell and advocate blind acceptance of all aspects of each program as expressed and incorporated in the 2012 budget.

MVF’s 2012 budget approval process has many of same elements as Washington’s recent budget debt ceiling standoff.  Passage of the By-Law amendment to authorized the CCF as a precondition of the budget mirrors the passage of a Balanced Budget Amendment of the Constitution before approval of the raising of the debt ceiling. The inclusion CCF and five-year capital plan as a component of the 2012 MVF budget is similar to attaching a National Health Care Bill as a Rider to the Home Land Protection budget authorization. 

The most significant parallel is the collective energy and focus the Montgomery Village community over next 60 days will put on the vote to amend the By-Laws to authorize a CCF and the approval and immediate implementation of the five-year plan rather than consider the merits of proposed operating budget and the significant ramifications of outsourcing the Foundation’s landscape, lawn, tree and snow removal requirements. 

As the vote on the debt ceiling approached the Legislative and Executive branches of government did not consider whether the 2012 Federal Budget adequately, cost-effectively funded the requirements and obligations of the government, let alone consider any long-term fundamental budget, tax and/or fiscal reforms.

Let’s Take a Moment to Reconsider

Consideration of a CCF and approval and implementation of the five-year capital improvement plan should be postponed until 2012. Regardless of the outcome, the 2012 MVF, Designated Users and Reserve Contribution Assessments will not change. An approval of a CCF and/or the five-year plan plus the near-term implementation of landscaping outsourcing will significantly affect the Village’s future. These are not routine matters normally incorporated into the annual budget approval process and are best dealt with independently. In doing so it would be wise for the Foundation to obtain an opinion from each of the Homes Corporationson and a firm other than the Foundation’s regular legal counsel on the advisability of attempting to pass a CCF based on a percentage (one-tenth of 1 percent) of the selling price and whether the community representatives can approve an amendment to the MVF By Laws. Condominiums and rental apartment communities should also consult their lawyers.

This is the first of a series of postings over the next several weeks on the MVF Budget approval activities. Look soon for Montgomery Village Capital Contribution Fee on Residential Homes Sales - Dead on Arrival.