There was an informational article on Special Community Benefit Districts in The Conciliator a few months back. (You can still read that information on the community website at The London Towne Property Owners’ Association was designated a Special Community Benefit District by the Maryland General Assembly in 1965 at our (i.e. the property owners) request.
The property owners in 1965 wanted to become a special taxing district and levy a special tax assessment against themselves to pay for maintenance of and improvements to community assets. They opted to levy this special assessment on a per lotbasis. (Prior to this, community assets were maintained through Association annual dues.)
The County allows each Special Community Benefit District to choose between one of three assessment options:
- Per tax account;
- Per lot;
- Per taxable base of a property.
Again, the property owners in 1965 chose the per lot method. This method has worked well for LTPOA until the past few years. It has become problematic for twomain reasons:
- Property owners’ may choose to consolidate their multiple lots into one lot. In fact, the County now requires consolidation of lots when issuing building permits. Example: if LTPOA was getting $50 per lot for five (5) lots (or $250), after consolidation, LTPOA would get $50per lot for one (1) lot (or $50). This obviously greatly reduces our financial resources over time.
- Many residents have voiced their concern that property owners with multiple lots are paying more toward the maintenance and improvements of community assets than neighbors with only one (1) or (2) lots. They question the fairness of this approach.
The LTPOA Board of Directors would like to change our assessment method to maintain the current level of financial resources (this would not be an overall assessment increase) and to make the assessment method more equitable.
The Board would like to change to a per tax account method.
Here’s how this would work:
LTPOA currently encompasses 6,254 lots. Our assessment for the current fiscal year is $50 per lot. That means that we will have financial resources from assessments of $312,700. (You can see what you contribute to community financing by looking at your property tax bill from the County. It specifies the number of lots you own and shows the $50 per lot assessment value).
LTPOA currently encompasses 1,999 tax accounts. Generally speaking, one property equals one tax account, irregardless of how many lots make up the property. (You know how many tax accounts you have by counting the number of property tax bills you get each year.)
In order to generate the same $312,700 in financial resources, we would need to assess each of the 1,999 tax accounts $156.43.
The community gets the same total dollars either way.
Again, this would be a change to the method of assessment, not an overall assessment increase.
Out of 62 Special Community Benefit Districts, we are one of only four (4) who assess on a per lot basis. The other three are: Hillsmere Estates, Severndale and ShorehamBeach.
Let’s look at some examples of this change could affect you:
Example One:
You currently have one property tax account, one (1) property, and five (5) lots.
On a per lot basis, you would contribute $50 times 5 lots = $250 to the community financing.
On a per tax account basis, you would contribute $156.43 times 1 = $156.43 to the community financing.
You would contribute less to the community financing under the new method.
Example Two:
You currently have one (1) property tax account, one property, and one (1) lot.
On a per lot basis, you would contribute $50 times 1 lot = $50 to the community financing.
On a per tax account basis, you would contribute $156.43 times 1 =$156.43 to the community financing.
You would contribute more to the community financing under the new method.
Example Three:
You currently have two (2) property tax accounts, two (2) properties – one (1) property has five (5) lots and one property has two (2) lots for a total of seven (7) lots.
On a per lot basis, you would contribute $50 times 7 = $350 to the community financing.
On a per tax account basis, you would contribute $156.43 times 2 = $312.86 to the community financing.
You would contribute less to the community financing under the new method.
In order to change the assessment method, the County requires a petitioning process. Every property owner in our Special Community Benefit District will be given an opportunity to sign a petition and vote for the change or against the change. Only petitions with current property owners’ signatures and all owners of record (name on the deed) signing will be counted. Each property counts as one vote. “Property” is defined as that which is included in a property tax account.
The Count counts votes as follows:
Husband and Wife Ownership – 2 signatures required; one vote per property;
Partnership – 2 signatures required, one vote per property;
Individual, Corporation, Trustee – Legal Representative signature; one vote
per property;
Multiple Owners – Legal Representative signature; one vote per property;*
*In cases of multiple ownership, all owners must sign the petition ifthere isno document designating a Legal Representative.
To determine the percentage of votes in favor of the change in assessment method, the number of County certified petitions is divided by the number of property tax accounts.
As mentioned earlier, we have 1999 property tax accounts in our Special Community Benefit District. We would need at least 1000 “yes” petitions in order to make this change.
As residents continue to consolidate their lots, we will need to dramatically increase the per lot levy each year to maintain even our current funding. Since we do the budgeting before people pay their property taxes, it will be very difficult to estimate the number of lots we expect to generate funding. (How will we know how many property owners will consolidate their lots during the year?)
Property tax accounts, on the other hand, stay constant.
The dramatic increases in the per lot levywill put the burden of community funding more on the shoulders of people who own multiple lots but haven’t consolidated them. They will feel the pressure to consolidate to reduce their growing assessment, until every property owner has one lot per property tax account - the method we asking our residents to change to now.