by Mike Conroy
During the August 27 Montgomery Village Foundation (MVF) Board of Directors meeting, the MVF Board approved the 2021 Proposed Budget for publication. A 30-day comment period is now open for questions or comments on the draft budget.
MVF Board President Pete Webb began the meeting, noting the work staff had done to prepare the draft budget. The focus for 2021 was zero assessment increase and other cost saving measures to combat any long-term impacts of the COVID-19 health emergency. During budget preparation each year, MVF makes every effort to look at and be sensitive to increases in taxes, HOA/COA fees and general cost of living increases, while balancing services and rising operational costs.
CFO Daniel Salazar presented the draft budget summary, noting that there are no proposed increases in either the MVF or DU funds for 2021, saying lasting and unpredictable impacts of COVID-19 are the main driver for this budget. He presented a budget that includes cost-saving measures wherever applicable to maintain a flat assessment rate. The MVF Fund remains at $21.52/unit/month, and the DU Fund remains at $38.42/unit/month.
Salazar noted that some Operating Expenses would be increased for 2021, including financial/legal expenses (for bad debt); a prescribed 401k audit; and other minor costs such as service contracts and utility costs.
Revenue is expected to drop for 2021, given the potential to not continue offerings as in the past due to COVID-19. Camps, classes and special events, as well as private rentals and pool memberships, are expected to drop. As a result, program supplies and other related expenses are also expected to decrease. Additionally, Village News revenue and sponsorship expectations are proposed to decrease; the Village News is proposed to be printed on a quarterly basis with the Recreation Guide inserts, and other publications would be offered only in a digital format. This change also produces savings in printing and delivery costs. The Capital Contribution Fee (CCF) is expected to draw $150,000 in 2021.
Since its inception, CCF has generated over $1.2 million, which has funded projects like the South Valley Park restrooms and concession stand, Lake Whetstone Dock replacement, Theatre Pond fountain, all-abilities playground at Apple Ridge, South Valley Park field renovation and more. MVF expects a projected revenue of $150,000 from the CCF in 2021, and anticipates using $200,000 for the repurposing of the Watkins Mill Pool site.
Personnel costs will remain flat, with no general merit increase or increase in benefit flex dollars for staff; the budget maintains a 6% 401k match for staff. Increased personnel costs include an increase in temporary wages due to the increase in the county minimum wage and expected personnel needed for the soon-to-be-renovated North Creek Pool.
Contributions to Reserves (CTR) have slightly decreased from 2020 to be in line with the updated Reserve Study, totaling $1,296,362 for the year. The MVF Fund will receive $287,718 and the DU Fund will receive $1,008,644 (95%of recommended CTR), with contributions made monthly. The CTR should fund 75 percent of replacement costs over a 30-year period.
Major Reserve Expenses for 2021 include: the doors, siding, AC units and roof for the MVF Office and maintenance buildings (MVF, $175k) and resurfacing of Whetstone Pool and demolition of Watkins Mill Pool (DU, $260k). Along with other expenses, this amounts to a necessary $722,532 and another potential $540,038 for a total of $1,262,571 in Reserve spending.
Salazar said in the 5-Year Plan, Assessment Revenue from new housing units on both the former golf course property and the Village Center were expected to hit the budget from 2022 to 2025. Other 5-year assumptions include increases for full-time and temporary wages, service contracts and operating expenses. The additional units will help keep projected assessment rate increases lower, extending the current MVF Assessment Ceiling. At the same time, the DU fund will continue to see increases as we build up the Undesignated Reserve balance to the 10% target.
The MVF 2021 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 online.
For the next 30 days, comments or questions can be directed to CFO Daniel Salazar via e-mail at firstname.lastname@example.org or in writing to Montgomery Village Foundation, Inc., ATTN: 2021 Proposed Budget, 10120 Apple Ridge Road, Montgomery Village, MD 20886.