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Pros & Cons of Incorporating Linganore

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June 26th, 2014 No Comments
(Released April 2014)

There has been a lot of discussion about the pros and cons of incorporating the LLA community.

What are the Pros?

1) We stand to gain direct spending control over $1.1 million that we cannot get as an HOA. This is money LLA residents already pay in State and County taxes that would come back directly to us if we were a town so we could decide how to use it. Currently, the State and County decide if and where to spend it in our community. A local government would be more accountable to the residents of the “town” and more likely to expend these funds for the good of the community.

Note: The Reserve Study recently completed for the LLA shows that the LLA is not sufficiently funding its reserve account to maintain our amenities over the long term. The LLA currently puts approximately $750,000 into reserves each year, but the 20 year projection in the Reserve Study shows we need to double that to $1.5 million per year in order to maintain our amenities over that 20 year period. The majority of this money would be required for road refurbishment and replacement. To accomplish this as an HOA, using LLA dues, it would require an immediate 24% increase in every owner’s yearly dues! However, since the majority of this increase is related to roads, which would be owned by the new municipality, as a town we could use some of the $1.1 million noted above to satisfy this road replacement need. As a result we could minimize or even eliminate the need to raise LLA dues.

2) We would gain the ability to control our own Planning and Zoning. Right now, we rely on the County for Planning and Zoning work, and they have minimal staff to do oversight in this area. With our own Planning and Zoning Coordinator we would have much better control of what gets built and also have better oversight to ensure plans are followed exactly as they were approved.

3) We would gain access to many financial sources (including State and Federal funds like FEMA) that are not available to HOAs and also have the ability to sell Municipal Bonds. This capability would have made the CDA for our recent new roads MUCH easier.

4) We would gain tax revenue from any businesses that are established in the Town Center planned for the area off Rt 144 near the traffic circle at Oakdale High School. As an HOA, we are not eligible for this revenue.

What are the Cons?

The MIOC identified two sets of Cons. The committee found that there is a set of cons that are “resolvable” and a set of cons that are “still exist.”

Cons, Part 1

Several cons presented work-arounds or other means of resolution. These ‘resolvable cons’ are explained in the following Question &
Answer format to best explain specific details of interest:

1) Will our amenities be open to the public if we
incorporate? Answer: No. Legal opinions on this matter have verified that the LLA HOA can continue to exist within the exact same boundaries as the town and since the amenities will remain under the purview of the HOA, they will remain private.

2) Can all of the LLA Villages be included within in the new town limits? Answer: Yes. Even though some LLA villages do not appear contiguous with the rest of the LLA villages when looking at a map, legal opinion and incorporation precedent show that they can be included by virtue of their historical inclusion in the original Planned Unit Development (PUD) of Lake Linganore at Eaglehead and also through road, sewer, water and other utility connections.

3) Will we have to pay both town taxes and HOA dues?
Answer: Yes, but… A thorough financial analysis, conducted by an outside financial consultant, confirmed the initial MIOC findings. By dividing what we currently pay in LLA dues, with ½ still going to the HOA as dues and the other ½ going to the town as municipal taxes, both budgets work and the overall out-of-pocket costs for LLA residents, will not change.

Cons, Part 2

The MIOC found that the following cons ‘still exist.’ The following cons are presented in a Question & Answer format to best explain specific details of interest:

a) Is this just another layer of government that can raise our taxes and cost us more? Answer: Yes this is a risk. However, the amount and way in which any tax increase is made must be spelled out in the Town Charter and written in such a way as to put tight restrictions requiring a referendum vote of the residents on any significant increase. The definition of “significant” will need to be discussed as the Charter is being written, which takes place after the petition for incorporation (see below).

b) Will there be enough people interested in running for the town government positions? Answer: ??? This is difficult to say in advance, but with about 8000 residents currently within the LLA boundaries and the likelihood that this will increase in the future, the town of Lake Linganore at Eaglehead would be far larger than any other Frederick County town except the City of Frederick. These smaller towns seem to be able to fill their municipal positions so it is likely that we could too. Also, many towns rely on citizen volunteers for some functions, and there is no reason why that could not also happen here.

c) Won’t the town government just grow larger over time and end up costing us more? Answer: This is a potential risk. It must be controlled by language in the Charter and by citizen oversight and election of responsible people to run the town government. The same can be said of the LLA Board of Directors and LLA Finance Committee that set the dues level for the HOA each year.

Note: The town would be responsible mostly for roads, snow removal and trash removal. These are outside contracts….not done by LLA Staff, so little in-house town administrative or other staff would be necessary except for oversight of contracts and Planning and Zoning. Legal and Financial needs would likely also be done through contracts.

The members of the Municipal Incorporation Organizing Committee have been looking at Pros and Cons collectively for over 3 years. While many of its members were initially very skeptical that incorporation would turn out to be a good idea for the Lake Linganore community, as a group we have come to believe that the Pros outweigh the Cons…..if we didn’t, we would not still be working on collecting information with the goal of getting this information out to the members of the community so they can make an informed choice about whether to support and sign the petition to allow a Charter to be written. The petition does NOT create the town, it is simply a required step in the process of bringing the issue to a final vote by all registered voters within the proposed town limits as to whether they actually want to incorporate or not.

Lastly, the MIOC needs and encourages questions and input from the community. Please send your comments and questions to llaincorporation@yahoo.com


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