Ask CA: What is the purpose of the annual charge?
If you live in Columbia, chances are you pay the annual charge. Like so many elements of this planned community, the annual charge was created with intention: It has been part of the CA financial structure from the very beginning. Your annual charge ensures that Columbia is a community of choice now and well into the future 💚💙.
Origins of the annual charge
To better understand the annual charge, it’s helpful to first zoom out to Columbia’s earliest days. When Columbia’s founder, James Rouse, was developing Columbia as a planned community in the early 1960s, he was guided by four basic goals.
“Mr. Rouse wanted to build a complete city that meets all the needs of the people, including housing and jobs; to respect the land; to provide for the growth of the people; and to make a profit,” shares Erin Berry, Archivist of the Columbia MD Archives (the primary resource on the history of Columbia). “In order to get the zoning rights approved to build Columbia, Mr. Rouse had to provide solutions so that the new town would not burden the residents who already lived in Howard County with an additional tax.”
An annual charge would help achieve these goals and allow Columbia to become the self-sustaining city that Rouse envisioned. Plus, it would allow residents to actively invest in the things that make Columbia such a great place to live, from open space to year-round community programming. The annual charge was established alongside Columbia and CA, and nearly 60 years later, it’s what allows CA to continue enhancing and enriching lives in our community.
This includes managing and maintaining nearly 3,600 acres of open space, 95 miles of pathways, 23 outdoor pools and more, not to mention wellness programming, multicultural events and free entertainment like the Lakefront Live series throughout the year.
Essentially, the annual charge is what enables the high quality of life that has seen Columbia frequently ranked among the top places to live in America. Each year, CA releases an annual report to show how the annual charge makes a difference in the community (you can view CA’s Annual Reports here).
How the annual charge is assessed
Now that we’ve covered some history, let’s get into the nitty gritty. CA’s annual charge has two components:
- A property assessment provided by the State Department of Assessments and Taxation
- A rate set by the CA Board of Directors
If you live on property protected by CA covenants, your deed requires you to pay an annual charge. The rate has remained unchanged since 2004, at 68 cents for every $100 of 50% of your state-assessed property valuation. That is almost 10 percent less than the allowable maximum of 75 cents per $100 of valuation. What that means is that if your home is assessed by the state at $400,000, CA’s annual charge would be incurred on $200,000 in assessed value for a total of $1,360.
CA’s annual charge is based on values provided to us by the State Department of Assessments and Taxation. Several factors are involved, including the size of the home and the timing of its purchase. In the first year following a purchase, your fee is based on the state’s phase-in value.
Just like the state of Maryland, CA has an annual charge cap in place to protect residents from rapid rises in property values (which in turn affect state property tax bills and CA annual charge).
The annual charge cap has remained at 3.5% (which is approximately one-third of the amount allowed by law) since 2016. CA applies the same methodology used by Howard County with respect to their cap on property taxes, and the County doesn’t apply those caps in calculating taxes due on a property in the year following the purchase.
Membership fees vs. the annual charge
Residents contribute approximately 66% of the annual charge revenue, and the business community contributes 34%. While the income provided by the annual charge is significant, it covers only slightly more than half of the cost of the services provided by CA.
This infographic shows where the money in CA’s budget comes from and where it was projected to be used in FY24.
This is why some of the most popular activities, such as pool and fitness club memberships, require the payment of dues and fees. Since CA resident members pay both membership dues and the annual charge, their dues are significantly lower than those paid by non-residents. For example, CA resident families normally pay approximately 30-50% less for a CA Fit & Play or Play membership (both provide all 23 outdoor pools) than non-resident members.
This approach creates a strong community balance. Those who use CA facilities and programs support the greatest portion of those costs, while the expense of maintaining and operating universal amenities like community centers, pathways, tot lots and lakes are shared by all residents.
A word on CA’s budget process
Some of the most important decisions about how CA will raise and spend money — including setting limits for the annual charge and membership rates — are made during the budget process. This is when CA’s Board of Directors determines investments in CA’s programs and services and allocates funds for capital projects.
Approving CA’s budget is one of the key tasks and biggest responsibilities the Board undertakes every year. Before the budget is approved, public hearings are held so that village boards, advisory committees, community groups and individual residents can comment on the budget and present recommendations to the CA Board. The final budget is approved annually in February for implementation on May 1, the start of our fiscal year. For example, that means Fiscal Year 2025 (FY 2025) began on May 1, 2024.
We encourage everyone in the community to visit ColumbiaAssociation.org/Budget to learn more about the budget process.
Learn more about your annual charge
Wondering how much to pay and when? You can find all of that information on your CA bill.
Many lenders (but not all) will escrow and pay your annual charge the same way they pay your property taxes and insurance. Check your escrow account details to determine whether your lender is paying your annual charge on your behalf. You can also pay your annual charge online or in the form of a check or money order via the mail.
If you have questions, email AnnualCharge@ColumbiaAssociation.org or call the Annual Charge general voicemail line at 410-715-3137.
What do YOU want to ask CA?
We want to hear your questions about CA! Email us at communications@columbiaassociation.org. To stay updated on all things CA, follow us on Facebook and Instagram.
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