THE 2010 FINANCIAL ADVISORY COMMITTEE REPORT ON

REVIEW OF THE COLUMBIA ASSOCIATION'S FISCAL TARGETS

COMMITTEE MEMBERSChair:James P. Howard, II, Long ReachVice-Chair:Alan Romack, Owen BrownEd Coleman, Long ReachRoger Hultgren, Harper's ChoiceRyan McCarthy, Wilde LakeDan Woodruff, Dorsey's SearchCOLUMBIA, MARYLANDFEBRUARY 22, 2010

The 2010 Financial Advisory CommitteeCynthia CoyleChair, Planning and Strategy CommitteeColumbia Association, Inc.10221 Wincopin CircleColumbia, Maryland 21044February 22, 2010Dear Ms. Coyle:Please accept the attached report from the 2010 Financial Advisory Committee on “Review of the Columbia Association's Fiscal Targets.”As always, members of the Financial Advisory Committee are available for future consultationregarding this report or other matters the Board of Directors or the Planning and StrategyCommittee require. The other committee members and I sincerely appreciate the opportunity tohave served the Columbia Association and residents as members of the Financial AdvisoryCommittee and on their behalf, I remain,Respectfully,James P. Howard, IIChair, Financial Advisory Committee

Review of the Columbia Association's Fiscal Targets1

Charge

To develop a successor to the current Financial Management Program. The current FinancialManagement Program is a ratio-based tool that is intended to analyze fiscal health. It has beenused for the past 5 years and is up for review. The PSC is asking that the FAC benchmark best practices to create a successor program which may include these ratios, but which will not belimited to them.

Recommendation

The Financial Advisory Committee recommends the Columbia Association adopt the Low Rangeas specified as targets for financial health for the coming decade. These targets have been metmostly under the current financial management plan and could be completely attainable with ameasure of fiscal discipline. Meeting these targets will help satisfy investor concern over thelong-term viability of CA's debt and encourage bond ratings agencies to continue classifying CAdebt at the upper range of investment grade.