February early march 2014 progress by Ocean Pines Progress

410-641-6029

February - Early March 2014

Vol. 9, No. 11

www.issuu.com/oceanpinesprogress GM announces interior design team for Yacht Club With construction well under way at the Ocean Pines Association’s new Yacht Club, General Manager Bob Thompson is turning his attention to interior design elements of the building. During the Board of Directors’ Feb. 5 meeting, Thompson said he has established a decor team to help with some of the more creative aspects of the building’s interior. ~ Page 6

Knepper sworn in to repalce Stachurski on OPA board Jeff Knepper, who has attended most meetings of the board of directors since moving to Ocean Pines in 2006 as a rank-and-file Ocean Pines Association member, has gained a seat at the head table by virtue of his appointment to the Board of Directors as a replacement for Dan Stachurski, who resigned in mid-January. Knepper was appointed to complete Stachurski’s term in a special meeting of the board Jan. 16. He was formally sworn in by Ocean Pines Association General Counsel Joe Moore Feb. 5, at the board’s twice-postponed regular meeting for January. ~ Page 7

THE OCEAN PINES JOURNAL OF NEWS & COMMENTARY COVER STORY

OPA board informally agrees to avoid assessment increase; decrease likely Mandatory $10 coupon idea rejected, as directors call for break-even operations at new Yacht Club By TOM STAUSS Publisher he proposed $15 increase in the base lot assessment proposed as part of General Manager Bob Thompson’s draft budget for the 2015 fiscal year that begins May 1 won’t be approved when the Board of Directors votes on the budget Feb. 22. After two days of budget review on Feb. 3 and 4, the board had trimmed the budgetary need for an assessment increase by about $20, with another $1.30

or so saved by action taken at a regular board meeting Feb. 5 by voting to pay off the Sports Core pool enclosure loan.

Budget update ... Board ready to increase some amenity fees/22 Budget and Finance Advisory Committee recommends no assessment increase/22 Directors OK with most of GM’s proposed capital projects/24 OPA reserve balance could drop precipitously if all approved projects get under way/25 Board ponders new homeowner entry fee/28

That action saves roughly $11,000 in interest expense because the bank loan is being replaced by an in-house funding mechanism that carries an interest rate of about 1 percent. If the $21.30 net decrease from Thompson’s proposed assessment level survives any further budget tinkering before the scheduled board vote Feb. 22, the current assessment of $914 would decrease to $907.70. In any event, it appears almost inconceivable at this stage of the budget process that the originally proposed $15 increase will survive. The real question is whether the board will actually decrease the assessment year-over-year, action that would To Page 19

Former director calls for franchising golf , Yacht Club Within days of resigning from the Ocean Pines Association Board of Directors, closing out about eight and half years as a director, including two as OPA president, Dan Stachurski found his voice, as if no longer serving as an OPA decision-maker liberated him to say publicly what’s he’s been thinking for some time. In a telephone interview from his home in Port St. Lucie, Fla., Stachurski, who remains an Ocean Pines homeowner, offered some advice to his former colleagues while recapping what he considered his chief accomplishments as a director. ~ Page 10

Taking shape

Joe Reynolds photo

While some white weather affected the pace of exterior construction at the new Yacht Club site in January, work continued in the interior. OPA General Manager Bob Thompson expects Harkins Construction crews to stay on schedule. For a progress report on the Yacht Club project, see story on Page 6.

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The Ocean Pines Aquatics Department held a doggie swim at the Mumford’s Land11th at the Ocean Pines Community Center. Home of the Brave is a holiday away-from-home for combat ing Pool Saturday on Sept. 7 before closing the pool for the season. Fifty-seven veterans and their families. The facility, founded by Tina Pearson, derives its income from donations and is dogs participated and the entry donations were collected and presented to the open to combat veterans -- and their families -- who have deployed within the last 18 months in a combat Worcester County Humane Society. Pictured left to right are Facility Coordinasetting or those currently receiving medical care for injuries sustained while in combat. Pictured on the tor Barbara Mazzei, Lifeguard Chris Sterner and Facility Coordinator Lynn Gabeler, left are Peggy Rumberg, Tina Pearson, and Anna Foultz; standing behind Anna is Sandy McAbee, Barbara who is presenting a $245 check to the Worcester County Humane Society Caregiver Mazzei, Paul Mazzei, and Lee Tilghman. Star Charities volunteers not present were Irmgard Heinecke, Lily Abby Morells. This is the third year OP Aquatics held this event to benefit the local Tunis, and Joan Gentile. humane society.

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February - Early March 2014 Ocean Pines PROGRESS

OCEAN PINES BRIEFS

Terry admits he signed easement without board OK “I did not see to it that the proprieties were taken care of,” Moore said. When queried further about the issue by property owner Joe Reynolds during the public comments section of the meeting agenda, Moore said he did inquire as to whether or not the county would have paid for the easement. He said County Attorney Sonny Bloxom said the county would not have purchased the easement from the OPA for a variety of reasons. Moore said under county zoning regulations there are side, front and rear yard setbacks and the subject easement would have met the county’s definition of a side yard setback. If Ocean pines would have refused to grant the easement and the county had entered into an eminent domain proceeding to acquire the land, there would not have been any value to the land because it is not buildable area under the zoning code, Moore said. Further, Moore said that forcing Worcester County into an eminent domain situation would not have benefited the OPA’s relations with the commissioners.

Additionally, he said there is a benefit to Ocean Pines to having the properties in the area of Pines Plaza with septic systems connect to the county’s water and wastewater system. “I believe that the safe environmental use of properties that are service areas to the community is an important benefit to the community,” he said.

No danger of propane shortage

Bob Thompson during his Feb. 5 general manager’s report said there is unlikely to be a propane shortage for residents of Ocean Pines this winter. He said some residents had expressed concern about the continued availability of propane given the nature of the winter weather. Thompson said he contacted Chesapeake Utilities regarding the issue and was told that the company has no concerns about meeting the demand for propane based on local customer’s usage even with the extended winter. He said the company has propoane

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Developer Palmer Gillis has apparently opted to reroute the utilities for the medical office complex he plans to construct adjacent to the North Gate, OPA general manager Bob Thompson said during the Feb. 5 Board of Directors meeting. Thompson said Gillis had approached the OPA about the possibility of extending the water and wastewater utility lines for his project behind the North Gate pond, around the Ocean Parkway pond and over to a nearby pumping station. He said he met with Gillis to discuss the proposal and the developer elected “not to take that path across our property.” Thompson said he believes the de-

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resident Tom Terry during the Feb. 5 meeting of the Board of Directors admitted that he made a mistake when he signed over an easement on Ocean Pines Association-owned land to Worcester County without first getting the approval of the board. Terry signed the paperwork giving the county a 10-foot wide easement on the OPA’s Sports Core property adjacent to Taylor Bank in order to accommodate water and wastewater infrastructure that is being extended from Ocean Pines to businesses across Route 589. “I should have talked to the board before I signed that document,” Terry said. He said he had all of the necessary information on the issue but “the reality is I made a mistake and will try real hard not to do it again.” OPA Attorney Joe Moore said he was partially to blame as well because after he reviewed the easement documents he passed them along to OPA General Manager Bob Thompson, telling him that they needed to be signed by the OPA president and then sent to the com missioners.

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Thompson announces interior design team for new Yacht Club Members will review colors, window treatment options, seat cushions and items considered for display

By ROTA L. KNOTT Contributing Writer

OCEAN PINES

February - Early March 2014

ith construction well under way at the Ocean Pines Association’s new Yacht Club, General Manager Bob Thompson is turning his attention to interior design elements of the building. During the Board of Directors’ Feb. 5 meeting, Thompson said he has established a decor team to help with some of the more creative aspects of the building’s interior. The committee, which includes members Dee Dee Rouse, Doug Slingerland, Marion Bickerstaff and Gary Miller, is reviewing items like the interior color scheme, options for window treatments, seat cushions choices, and what items

will be placed on display in the new Yacht Club and how they will be displayed. Thompson said the OPA has a plethora of items that have been donated to it over the years that could be placed in the Yacht Club. Instead of just “throwing” those items into the building, he said the committee is helping to formulate a plan for which items to display and where to put them. One of the major display pieces is an approximately 9-foot long model of a ship that was recently restored by resident Mark Hordeman. “It’s really stunning to look at,” Thompson said, “We’re going to make sure it’s put back in the new Yacht Club.” Hordeman retrieved the model ship,

which was originally given to the OPA by early Ocean Pines developer Boise Cascade, from the trash heap when the old Yacht Club was razed and began restoring it. “He took the ship in and just started restoring it without any hopes or questions about being paid for it,” Thompson said. Since then the board has agreed to reimburse Hordeman for the restoration costs. Thompson said the model ship will be a nice addition and will “really accentuate the club.” Meanwhile, he is also busy trying to fill key staff positions at the new facility. “These are some critical positions that we recognize need to be taken care of shortly,” he said. He has already hired a new dock master, Ron Fisher, who in recent years has served as chairman of the OPA’s Communications Advisory Committee. The general manager is currently finalizing the review of applicants for a banquet and event coordinator. Additionally he is in the process of conducting interviews for the Yacht Club chef ’s position, having received more than 60 applications for the job. “We have folks applying from all over the country,” he said. Thompson said the actual construc-

tion of the Yacht Club building is “moving along pretty well” for the interior work. Exterior work, such as masonry and paving, was slowed because of unfavorable weather conditions during the last few weeks. “That can be accelerated as the weather changes,” he said. The front building tower is fully framed and all tower trusses have been set. The entire building exterior has been wrapped allowing for heaters to operate inside so that interior work can move forward. “A lot of work has been going on inside the structure,” Thompson said, adding, “It’s a big structure with a lot of moving parts right now.” He said the waterside view, which is largely windowed, is particularly beautiful. He said the view is unimpeded by the columns that existed in the old building. “It’s really gonna be a neat space,” he said. Thompson said the only construction related cost that has not yet been finalized is that for the phone system that will be installed in the new Yacht Club. Additionally, the $16,000 estimated cost of landscaping will be withdrawn from the contingency fund, now at about $96,000, he said.

OCEAN PINES BRIEFS veloper will run the utility lines down Route 589 instead.

sory Committee chairman; Bernie Flax, Communications Committee chairman; John Wetzelberger, Aquatics Advisory Committee member; and Doug Slingerland, member of the By-laws and Resolutions Committee.

Members appointed to OPA committees

Boggs town meeting set for Feb. 22

From page 5

The board of directors during a Feb. 5 meeting appointed members to several of the Ocean Pines Association’s advisory committees. Members of the Search Committee for candidates for this year’s board of directors election include Chairman Les Purcell and members Martin Baer, Jim Biesler, Mickey Loeb, Ellen Spataro and Gary Miller. Other appointments approved were Pat Supik, as Budget and Finance Advi-

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County Commissioner Judy Boggs will host a town meeting Saturday, Feb. 22 at 10 a.m. at the Ocean Pines library. Special guests include Angela Baldwin, the new manager of Assateague State Park, and Mimi Dean of the Worcester County Health Department, who will interpret blood tests routinely ordered by doctors and what each means in terms of general health. Boggs will provide updates on a variety of issues in and around Ocean Pines.

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February - Early March 2014 Ocean Pines PROGRESS 7

OCEAN PINES

Knepper sworn in to replace Stachurski on OPA Board

New director expresses support for reducing lot assessment Knepper was appointed to complete Stachurski’s term in a special meeting of the board Jan. 16. He was formally sworn in by Ocean Pines Association General Counsel Joe Moore Feb. 5, at the board’s twice-postponed regular meeting for January. Snow storms had arrived in Ocean Pines on two consecutive Tuesdays, providing a pretext for

meeting postponements. Knepper, a former Intel Corporation executive, has already indicated his intentions to seek a three-year term on the board this summer. Stachurski, who has moved full-time to Florida but continues to own a home in Ocean Pines, had indicted previously that he was not intending to run for reelection.

By TOM STAUSS Publisher eff Knepper, who has attended most meetings of the board of directors since moving to Ocean Pines in 2006 as a rank-and-file Ocean Pines Association member, has gained a seat at the head table by virtue of his appointment to the Board of Directors as a replacement for Dan Stachurski, who resigned in mid-January.

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8 Ocean Pines PROGRESS

OCEAN PINES

February - Early March 2014

Knepper joins board

Garden Club installation

From Page 7 Knepper, no stranger to those who regularly attend board meetings, was sought out by OPA President Tom Terry as a replacement to Stachurski, who had informed Terry that he was willing to serve out the remaining few months of his three year board term, even if requiring a commute from his home in Florida. At the same time, Stachurski made it clear he was willing to step down if Terry was able to find a qualified successor who would also be willing to run for the board this summer. Stachurski had tried unsuccessfully to persuade Terry and his board colleagues to finance his trips back and forth between Ocean Pines and Florida, but found no takers willing to do so, partly on grounds that there is no formal or informal travel policy in place for directors who don’t live in Ocean Pines year round. Terry invited Stachurski to draft such a policy, but he declined to do so, opting instead to take early retirement. Stachurski said that on his long boat trip down the Inter-coastal Waterway from Maryland to Florida he launched in December, he began to lose any interest he might have had in undertaking that project. Stachurski said that a lack of such a policy, which might provide compensation for travel expenses associated with long commutes to Ocean Pines, means that non-resident property owners will continue to be unrepresented on the board of directors. The last non-resident director to serve dates back to the 1980s, Jean Bonde, the OPA’s first female president. In the earliest days of Ocean Pines, board members were frequently non-resident owners, and board meetings were sometimes held nearer their homes in the Baltimore and Washington, D.C. area. Stachurski’s replacement by Knepper might give the new director a name recognition advantage when he runs for the board this summer. The record of incumbents seeking reelection has been mixed in recent years, with Terry the exception to the rule in his successful bid for a second three year term last summer. If anyone thought that Knepper

The Ocean Pines Garden Club recently held a candle lighting ceremony to install 2014 club officers. The luncheon meeting was held at the Ocean Pines Country Club Jan. 9. General meetings of the OPGC are held the second Thursday of each month at 10 a.m. at the Ocean Pines Community Center unless otherwise announced. New members are welcome. Pictured are the new officers, from left to right: Gail Jankowski, president; Barbara Ferger, vice-president; Sharon Puser, corresponding secretary; and Carolyn Henglein, treasurer. Recording Secretary Sharon Cooper was unable to attend. might require a bit of time to acclimate himself to serving on the board, would require a lot of education on the board’s policies, practices and issues, or would be reluctant to express himself, it certainly didn’t seem that way at his first official board meeting, a Feb. 3 work session on the draft Fiscal Year 2014 budget. Knepper was quick out of the box to express his views on a series of budget related recommendations presented to the board by the Budget and Finance Advisory Committee. The committee’s lead recommendation called for a budget next year with no increase or reduction in the current base lot assessment of $914. General Manager Bob Thompson’s draft budget included a proposed $15 increase, which would raise the assessment to $929. Knepper told his colleagues that he thought the assessment should be reduced in the new budget and that the board had an opportunity to accomplish that, but that any such reduction would not be “dramatic.” He said he wouldn’t support an increase and was “not sure” he’d vote to keep it the same. Following the meeting, however, he told Terry that he would be willing to consider a status quo assessment rate of $914 that would include a “give back” to the OPA of what otherwise would be

a reduced assessment for property owners. The give back could be credited to one of the OPA reserve funds that is currently in deficit, such as the Future Projects Reserve that last saw activity as the funding source for the skateboard bowl located behind the Administration Building. Later in the meeting, Knepper had strong words for why Ocean Pines Parks

and Recreation Department has such a large structural deficit and no funding support from Worcester County, despite the fact that roughly 40 percent of those taking classes or participating in programs sponsored by the Recreation Department are non-residents. “They (the county) have found a sucker to pay for what it should be providing,” he said. No one among his colleagues took exception to that opinion.

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Stachurski calls for ‘franchising’ OPA Yacht Club, golf operations Former OPA director is still pushing for referendum on proposed ten-year capital improvement plan By TOM STAUSS Publisher ithin days of resigning from the Ocean Pines Association Board of Directors, closing out about eight and half years as a director, including two as OPA president, Dan Stachurski found his voice, as if no longer serving as an OPA decision-maker liberated him to say publicly what’s he’s been thinking for some time. In a telephone interview from his home in Port St. Lucie, Fla., Stachurski, who remains an Ocean Pines homeowner, offered some advice to his former colleagues while recapping what he considered his chief accomplishments as a director. Among the most noteworthy of his parting remarks, Stachurski urged the board of directors to change the way the OPA manages the food and beverage operations at the Ocean Pines Yacht Club and 18-hole golf course and Country Club, in both cases recommending that the OPA “franchise” them to outside firms as a way of relieving property owners of costs, both operating and capital, associated with them. Stachurski made it clear he was not speaking of hiring an outside management firm to run these amenities, for an annual management fee, as is occurring now at the golf course. By using the term franchise, he was proposing that the OPA divest itself of direct management control over these amenities. He did not disagree with characterizing his idea as privatization; nor did he shy from the notion that franchising may be closely aligned to the concept of leasing. The point, he said, is that over many years the OPA has demonstrated that

Dan Stachurski it really doesn’t know how to manage these amenities effectively. “The OPA needs to get out of businesses that they’re not good at running,” he said. “We don’t need to be in the golf and restaurant business if we can’t at least break even” when doing so. At the Yacht Club, Stachurski suggested structuring a lease or franchise agreement that would involve little or no rental fees for the first year, with the OPA sharing in the profits to some extent in later years if the privately run operation takes off as he believes it can with the right management. He said he would structure the golf course and Country Club food and beverage operation similarly, turning these operations over to a private entity instead of paying some firm to run it for the OPA. “Whoever would take it over would have skin in the game,” he said. “We let them keep any profits that they can generate. The OPA would be out of the golf course business,” with the OPA’s role limited to “making sure” the new operator provides a basic level of service to

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From Page 10 local golfers. “But we won’t be able to tell them what to do or how to do it,” he said. “Getting out of the golf business means just that.” It would mean that the OPA would no longer subsidize operational losses or invest in golf course improvements, he said. Stachurski said he believes that OPA President Tom Terry is “very receptive” to the franchise concept and that OPA General Manager Bob Thompson is “beginning to” see some merit in that approach. He described Thompson as someone who’s unwilling to recommend something to the board until he’s “really done his homework” on what he’s proposing. The former director said his greatest regret in resigning is that the process that he hopes will conclude in a referendum on a ten-year capital improvement plan for Ocean Pines (CIP) is incomplete. He said he is hopeful that Terry will move the process along, including convening a task force of property owners to review the draft plan submitted to the board late last year by Thompson. Stachurski said that once the board has accepted a so-called rack and stack of capital items in the CIP, it should be submitted to property owners in a referendum for approval, since it will commit the association to a spending program over a ten-year period. He said individual projects should still require separate referendum approval if their costs exceed the threshold levels spelled out in the OPA bylaws. He said the amount of money that the OPA collects from property owners each year in funded depreciation and so-called “five-year funding plan” should be synchronized to the extent possible to cover projected spending for capital improvements that are funded out of the OPA’s Major Maintenance and Replacement Reserve. He said it’s very possible that the OPA is overfunding the replacement reserve over the long term by a substantial amount. Under current policy, the OPA is collecting $2.75 million per year for the replacement reserve, consisting of $1.1 million allocated to the five-year funding revenue stream and $1.65 million in funded depreciation. Over the next ten years, absent any change in policy, the OPA will be collecting from annual lot assessments $27.5 million in replacement reserves. The draft CIP presented by Thompson last year projected $16.8 million in capital expenditures over that same ten years, but Stachurski said he believes some of the items that make up Thompson’s rack-and-stack are too grandiose for Ocean Pines and too expensive. “I think Bob to some extent wants to remake Ocean Pines” into something it doesn’t “need or want to be,” Stachurski said. “Going forward, we need to renovate some facilities to get another 30 or 40 years out of them.” Exhibit A for what Stachurski said is too grand a plan: a proposed $3 million

February - Early March 2014 Ocean Pines PROGRESS natatorium that the general manager proposed for Fiscal Years 2021 and 22. Stachurski said he also believes that the Country Club, which has an estimated renovation cost of $3.2 million in the draft CIP, should be replaced with a much smaller pro shop and snack bar building. “Given our substantial investment in a new Yacht Club, with two separate kitchen and dining venues, I don’t believe we need a Country Club,” he said, adding that he believes it’s possible to put up a smaller replacement building for much less than $3.2 million in renovations proposed for Fiscal Years 2017 and 18. As for the Beach Club in Ocean City, Stachurski said it can be renovated, also at a cost less than the $3.2 million that Thompson estimated in his draft CIP in Fiscal years 2021 and 22 for this pur-

pose. While expressing some interest in Thompson’s proposal for a new police station, Stachurski said he does not believe another Thompson idea contained in the draft CIP, a $350,000 fitness center proposed for the Assateague Room in the Community Center, should be supported. “Those services are being offered in the Ocean Pines area by any number of private concerns,” he said. “We don’t need to duplicate.” Once the draft CIP is reined in, Stachurski said the OPA will have a much better idea on how much money is needed for all the proposed capital spending. He said he disagrees with Pete Gomsak, a former board member who is serving as the OPA’s assistant treasurer, on how much in assessment dollars

will need to be allocated to the OPA’s replacement reserve to fund future capital needs. “He’ll tell you we’re about $10 million short of where we should be,” Stachurski said. An additional $10 million from the current reserve balance of $5.36 million suggests that Gomsak wants a balance of somewhere close to $15 million or more, which would be roughly half of the OPA’s current asset base as shown in its latest balance sheet. Stachurski said he believes that reserves don’t need to be anywhere close to that level, and that Ocean Pines property owners would never tolerate assessments that would produce reserves in the neighborhood of $15 million. He said that Thompson did well in hiring Facilities Manager Jerry Aveda last year to aid in preparing the draft

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From Page 11 CIP. “And I know for a fact that Phase II of the plan (the one with the proposed rack-and-stack) was ready at the same time that Phase I was released, in early summer,” Stachurski said. Phase II was released in November. “There was no good reason why it was delayed as long as it was.” Stachurski said that Thompson should accept Aveda’s wise counsel on how to manage the CIP going forward. Looking back over his eight and a half years as director, Stachurski said he witnessed first-hand the differing styles of three general managers, from Dave Ferguson’s preference for letting “the termites hold hands” at OPA’s aging OPA facilities to what he says is Thompson’s far more aggressive approach. “I would suggest that our approach needs to be refreshed in the middle,” Stachurski said, nonetheless complimenting Thompson on his successful campaign to promote the building of the new Yacht Club. He recalled his own frustrations in serving as project manager for an unsuccessful effort to build a new community center at the Sports Core earlier in his OPA board career. He said he is proud of his efforts on the board to enclose the Sports Core

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swimming pool in 2006 and 2007. “I know it continues to upset some people, but it was ridiculous that a community that at the time had upwards of 10,000 people base population did not have a year-round swimming pool,” he said. “Now, you can swim in the winter if you want to.” He acknowledged that aquatics surpluses have turned into deficits since the pool was enclosed, but he said it’s a cost that is relatively modest. “The Rec Department has a cost associated with it that is far in excess of aquatics,” he said, adding that aquatics is just another recreational activity that is subsidized by all property owners through the lot assessment. “Recreation and amenities is what we are. They set us apart from a lot of our neighbors,” he said. He also said that OPA assessments, when compared to many others in Worcester County and elsewhere up and down the Atlantic seaboard, remain comparatively low. “My HOA fees in Port St. Lucie are $6,000 a year,” he said. “Really, Ocean Pines property owners are getting a huge bargain for what they pay in assessments.” Another accomplishment he cites is the launch of a road resurfacing program in the early 2000s. “I was real happy to be part of that,” he said. “Obviously, we need to keep the

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project going.” Stachurski said he was involved in three separate efforts to lobby for state legislation benefiting Ocean Pines. One law passed by Maryland’s General Assembly certified the Ocean Pines Police Department as an agency with the power to enforce state law. “It really was a glorified security force before that,” he said. Another law adopted by the General Assembly gave the OPA the authority to accept credit cards for payment of annual lot assessments. “It was something we couldn’t do before because of issues with fees and other problems,” he said. Stachurski said he is most proud of the behind-the-scenes role he played in lobbying the General Assembly for a law that permits the OPA to receive a portion of local impact funds related to video gaming at the Ocean Downs casino just south of Ocean Pines. “It was our connection with Delegate

Norm Conway that got the bill passed,” he said. A group of about 30 Ocean Pines residents outside the control of the OPA board of directors successfully lobbied for the casino funding, which under current OPA policy is being used for road resurfacing. Stachurski said he resigned from the board only because the cost and time associated with commuting back to Ocean Pines for meetings made it impractical, although he said he would have continued in the job had Terry been unable to find a suitable replacement. Stachurski will be back in Ocean Pines for the opening event of the new Yacht Club this spring. He’s rented out his Ocean Pines home, joining the ranks of those property owners who own Ocean Pines investment property. He’ll be staying with friends on his trips back north. “Wouldn’t miss that for the world,” Stachurski said of the Yacht Club opening.

Dan Stachurski’s letter of resignation The following letter of resignation was sent to Ocean Pines Association President Tom Terry on Jan. 13 by Dan Stachurski, who stepped down as an OPA director roughly seven months before the conclusion of his latest three-year term.

his email is to confirm verbal discussions you and I have had recently. Specifically, I was, and am, completely prepared and qualified to finish my third and last three year term as an Ocean Pines Director. However, it has been my hope that a qualified and capable person could be found who would be willing to step into my shoes, complete my term of office, and then run for his or her own term in order to continue their work on the Board. After eight and a half years of service to Ocean Pines as a Director, I am fully aware of just how difficult it is to find qualified OPA property owners who are willing to contribute their time, experience, energy, and skills to the demanding task of being a Director of the organization. This is even tougher when we exclude nearly half of those qualified candidates who are not permanent residents of Ocean Pines by not having a corporate travel expense

policy in place that would reimburse them for the travel costs involved in attending Board meetings. As a new resident of Florida, but still a property owner in Ocean Pines, I can certainly report that the cost of travel to attend meetings is not something that I want to add to the high personal costs in time and energy of being a Director. Therefore, I›m submitting my resignation as a member of the Ocean Pines Association Board of Directors, effective immediately. I am confident that you, as President of the Board, will find a suitable replacement for me to complete my current term and that the Board will approve any candidate you wish to place before them. Eight and a half years of service as an OPA Director, including three years as president of the Board, two years as vice-president, two years as secretary and, finally, some time as a plain old working director have given me the opTo Page 14

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Stachurski letter From Page 12 portunity to develop several very clear suggestions to the board as guideposts for their actions in the future. First, always place the big picture of the overall well being of Ocean Pines at the top of the decision making process when considering any Board decision on any issue. How an issue fits into the fabric of the community, how it will affect that fabric, and will the result of approving the issue be a positive contribution to the well being of the whole community should be key questions each Director asks and answers before voting for each and every issue placed before the Board. Second, remember that the Board represents 100 percent of the property owners in Ocean Pines --- not just the vocal minority. Third, get realistic about the Capital Improvement Plan (CIP) and develop a workable and working ten-year plan for Ocean Pines -- one that can and should be approved by the entire community by referendum. This begins with a clear understanding of what the community will be in ten years and what will be needed in terms of new, improved, or terminated amenities as well as uses of commonly held assets to support the community. For example, it is not likely that Ocean

Friends of the Ocean Pines library

Recently installed officers of the Friends of the Ocean Pines Library are, left to right: Holli Quillin, member-at-large; Robin Wolinski, member-at-large; Sharon Puser, recording secretary; Jean Fry, president; Peggy Timmons, vice-president; and Carol Wanzer, treasurer. Not shown: Paulette Mari, corresponding secretary. Pines will need a fitness center given the fact that more than adequate facilities are already commercially available at very reasonable prices nearby. A natatorium seems unreasonable given our current oversupply of aquatic facilities, but maintenance of existing facilities is not unreasonable. A smaller country club facility combined with a golf course run by a third party that provides the same amenity values members enjoy today is consistent with

the national trend toward reduced golf participation. This could very well be a franchise. Repurposing of existing commonly held property to accommodate bicycling, hiking, canoeing and kayaking is definitely important. But the decision criteria -- does the community need it ten years from now -- is the same. I had hoped, as a director, to see this plan become a reality. As a property owner, I am very hopeful that the board and the

administration can make it happen, soon. Eight and a half years is a long time. I’ve seen Ocean Pines evolve, stay dynamic and vibrant, and not crumble with age and neglect. It has been quite an experience. Thank you all for the privilege of serving with you. Dan Stachurski Ocean Pines Port St. Lucie, Fla.

OCEAN PINES

February - Early March 2014 Ocean Pines PROGRESS 15

Directors vote to opt out of 7 percent commercial bank loan but accept Gomsak proposal that avoids a big hit on OPA’s bottom line for the current fiscal year By TOM STAUSS Publisher n first blush it seemed like a repeat of a failed motion offered by former Ocean Pines Association Director Ray Unger in June of last year to pay off the remaining principal on the Sports Core pool enclosure loan. But it turns out the motion offered by OPA Treasurer and Director Bill Cordwell during the Board of Directors Feb. 5 meeting, while similar in purpose to the Unger motion, avoided the main reason it failed, a big hit against OPA’s operating results for the current fiscal year. The motion, based on an idea by Assistant Treasurer Pete Gomsak, a former OPA director who remains influential in OPA financial affairs, called for the OPA to pay off the 7 percent loan, to be replaced by an in-house financing mechanism that keeps the loan principal on the OPA books, but replaces the 7 percent interest rate with a 1 percent rate, thereby saving the OPA the difference in interest expense. Cordwell’s motion passed on a unani-

mous 6-0 vote, with Director Terri Mohr absent. OPA Controller Art Carmine, during a board work session Feb. 4, said funds to pay off the bank loan will come out of OPA operating reserves, not to be confused with the OPA’s allocated reserve funds. The loan principal, that he said will be about $200,000 by the end of the fiscal year in April, will remain on OPA financial documents as a self-financing loan in much the same way it has as a bank loan. The interest from the loan, about $2,000 next year, will be charged to the aquatics department as an operating expense, but because of the lower interest rate, the department will save about $11,000 next year in interest expense, he said. Principal will be retired at the same rate as it has since the beginning of the amortization period, when the OPA borrowed $500,000 to pay for about one-half of the cost of the pool enclosure, he said. The project to create the OPA’s first and only indoor swimming pool was complet-

ed in June of 2007. As explained by OPA officials, the virtue of the Gomsak in-house financing mechanism is that it avoids the $200,000 charge against operations that would occur should the OPA simply pay off the bank loan without replacing it with inhouse financing. A $200,000 charge-off treated as an operating expense probably would be greater than the projected $100,000-plus operating surplus that is projected for the current fiscal year, thereby pushing the OPA into deficit for the year. That result is avoided by in-house financing because there is no $200,000 net charge-off against operations. When Unger last June proposed to simply pay off the bank loan, he anticipated that the OPA would save $17,000 in annual interest payments, with the remaining loan principal at the time in the amount of $248,700. He proposed the OPA’s so-called historic reserve – the funded depreciation revenue stream within the OPA’s Major Maintenance and Replacement Reserve – as the fund-

ing source. One problem in choosing the maintenance and replacement reserve as the funding source to retire debt, on what essentially was a new amenity funded back in 2007, is that this reserve is designed to pay for capital replacement items. To shift funds out of the replacement reserve to pay for a new capital item, as opposed to a replacement item, Unger’s motion would have needed a supermajority of five directors to pass. OPA Director Terri Mohr, who at the time was serving as OPA treasurer, informed Unger that the business case for his proposal was not quite the slam dunk that it seemed on the surface. She didn’t try to explain why, other than to note that it would constitute an unbudgeted expenditure. She deferred to Gomsak, who just happened to be sitting among the chairs reserved for spectators. He was armed with facts and numbers and his usual supply of persistence and persuasion. He convinced five of the seven directors that paying off the $248,700 in remaining principal as of June 30 to save $17,000 would not be so beneficial after all. Gomsak said paying off that much in principal would blow an immediate hole in Thompson’s operating budget for the year. He said the money couldn’t be taken out of the replacement reserve – the pool enclosure was not a replacement

Board votes to pay off Sports Core loan, adopts in-house financing mechanism

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16 Ocean Pines PROGRESS

OCEAN PINES

February - Early March 2014

Tedium rules during discussion of search committee resolution By ROTA L. KNOTT Contributing Writer or more than an hour during its Feb. 5 month meeting, the Board of Directors debated at what point the names of property owners who are interested in running for election to the Ocean Pines Association’s governing body should be released publicly. The issue surfaced during the second reading of draft resolution M-09 that would establish guidelines for the Search Committee that solicits candidates to run for the board. For some among those who were observing the discussion, the board’s deep foray into the M-09 weeds was excruciatingly dull. Directors were concerned that since the Search Committee is required to hold meetings that are open to the public, names of property owners who are being solicited to run for the board or who have expressed interest in doing so would be mentioned during the open meetings of the Search Committee. “I think people asking for information about running for board should do that without having their name out there,” OPA President Tom Terry said. “I think it is unfair for someone who is simply trying to figure out whether they want to run or not for their name to be put out at a public session.” He said there should be some way to protect their identities until they become bona-fide candidates and pointed out that the resolution under consideration actually prohibits the Search

Committee from releasing any information about prospective candidates. By simply “mentioning somebody’s name in a meeting” the committee will have violated that provision of the resolution, he said. The resolution states that “while nothing will preclude an individual candidate from announcing their intention at any time, the Search Committee is not authorized to release any candidate information to the public.” Terry suggested the committee use a letter or number to identify potential candidates during discussions instead of mentioning names. Directors largely ignored advice of the man they pay to provide just that, OPA Attorney Joe Moore, who said the Search Committee’s discussions of potential candidates could be considered personnel matters and held in a closed session. He said technically even board members are considered personnel, as are committee members. “It’s a sensitive issue for someone’s personal information to be available until he becomes a bona-fide candidate,” Moore said. Once property owners become candidates, after the vetting process, then they essentially become a public figure and their information is public as well, he said. But still the debate continued on with directors and Jim Trummel, chairman of the Bylaws and Resolutions Committee, disputing Moore’s call that discussing

individual candidates is a personnel matter. The Search Committee resolution was proposed and drafted by the committee and has been in the review process for almost two years. Currently there is no resolution that outlines the responsibilities of the Search Committee, which replaced the OPA’s old Nominating Committee. While the Nominating Committee was charged with actually vetting candidates and recommending a slate, the Search Committee does not have that responsibility. Any property owner can file for election; the Search Committee’s job is to encourage property owners to do so. There is no screening involved. The vetting is done by the OPA secretary, who determines by consulting OPA records whether candidates are delinquent in paying lot assessments or are involved in compliance issues with the OPA Department of Compliance, Inspections and Permits. Trummel said currently the Search Committee is referred to in the OPA bylaws, which state that the OPA president will appoint members by Feb. 1 and the committee will solicit a minimum of two candidates for every board vacancy. It is required to submit a list of candidates to the OPA secretary by May 10. Much of the discussion at the board meeting also centered on a five-day difference between when applications for candidacy are due to the OPA and when the names of candidates are announced.

During that five-day lag time, from May 10 to 15, candidates are vetted to ensure they are eligible for election to the board, including verification that their annual property assessments have been paid by May 15. Director Sharyn O’Hare wanted to know why the OPA would release the names of potential candidates on May 10 before they are properly vetted on May 15. Moore asked the same question. “What is the purpose of having a public disclosure of people before they become a candidate?” Trummel’s only response was that “it’s at least in part to avoid the public guessing game” of the press and public trying to figure out who has submitted applications. OPA General Manager Bob Thompson suggested just waiting that extra five days until after the vetting process is complete to release the names of official candidates. When asked why by board members and Trummel, Thompson responded “out of courtesy, out of respect” and so as not to embarrass property owners who may turn out to be ineligible to run for the board. “It’s the right thing to do,” he said. Ultimately Director Marty Clarke offered a motion, which passed unanimously, to revise the resolution to state that the Search Committee is not authorized to release any application, potential candidate or candidate information. His motion also included a date change, stating that the OPA secretary will notify applicants of acceptance or rejection as candidates prior to the public release of candidate names, no later than June 1. The revised resolution will be posted on the OPA Web site for review and is scheduled for a vote at the board’s regular meeting Feb. 22.

Sports Core loan

cifically who was supposed to pay for it. Unger’s 2006 proposal was supposed to make aquatics members in Ocean Pines pay half the principal cost of the pool enclosure. Under the 2006 financing plan, half of the roughly $1 million Sports Core enclosure costs were to be allocated from the OPA’s future projects reserve, contributions to which had been made over the years by the full OPA membership base. The other half, and the one relevant to the board’s most recent action, was to come from a commercial bank loan. Debt service on the commercial bank loan, including both principal and interest, was to be paid for by aquatics members. That, at least, was the intent of the motion and the way it was commonly understood at the time. In an Aug. 3, 2006 special meeting, the board of directors had voted to pay for the pool enclosure entirely from reserves on a motion by Director Reid Sterrett, who said he had excluded borrowing as one of the financing mechanisms because he did not want to impose interest costs on the swimming membership or property owners. Over time,

he said that borrowing would add more than $400,000 in interest expense to the project. A week later, at the annual meeting of the association on Aug. 12, a majority of property owners of about 200 in attendance voted to cancel the pool enclosure contract with Structures Unlimited, the New England based company that installed the cover in 2007. The vote at the annual meeting was treated as advisory only, non-binding on the directors, on the advice of OPA attorney Joe Moore. Unger’s motion at the Oct. 18, 2006 meeting was intended to appease the opponents of the pool enclosure by supposedly requiring pool members to pay half of the construction cost along with the interest associated with the bank loan. Whether it had that result is debatable, given resentments about the enclosed pool that linger today. Even so, Unger’s motion supposedly was the controlling board action with respect to the financing mechanism. Not quite, as it turns out. In the years that followed the completion of the project in 2007, the OPA only

partially applied the letter and spirit of the Unger motion. While interest on the loan has been treated as an operating expense, and is buried under the “other expense” line item in the monthly financial statements for the aquatics department, the principal repayment has not. Effectively that means that all property owners, not just aquatics members, have paid down the Sports Core loan principal over time. Principal is being paid down at a rate of roughly $55,000 per year. During discussion at the board’s Dec. 18 monthly meeting, Gomsak said that, under generally accepted accounting principles, or GAAP, principal repayment can’t be treated as an operating expense, only interest can be. Cordwell’s motion during that meeting was intended to remove the contradiction between the OPA’s accounting practice and the letter of the 2006 Unger motion. Cordwell’s motion effectively clarified that only interest can be included in the aquatics financial statements and that principal repayment is an obligation of the entire OPA membership. It passed 5-1, with Clarke opposed.

Directors debate five-day difference in release dates for board candidate information

From Page 15 item – but would have to come from operating funds. In budgetary terms, he said the unbudgeted expenditure would have an impact of $30.82 per property owner, compared to the $8.25 impact of simply continuing with monthly principal and interest payments totaling $6,000 per month. Paying off the principal in a single payment would thereby produce a negative variance to budget of $22.57 per property owner, he said. The Unger motion failed 5-2, with Unger and Director Marty Clarke voting for it. Almost eight months later, the loan pay-off and in-house loan mechanism motion passed with no dissent. It was the second motion involving the Sports Core loan to be passed by the board in two months. At their Dec. 18 regular meeting, the directors voted 5-1 to amend an Oct. 18, 2006, motion, also drafted by Unger, that dealt with how the Sports Core pool enclosure would be financed, more spe-

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18 Ocean Pines PROGRESS

OCEAN PINES

February - Early March 2014

OPA FINANCES

OPA records sixth straight positive operating variance By TOM STAUSS Publisher he Ocean Pines Association’s financial report for December, eight months into the 2014 fiscal year, resulted in another positive operating fund variance, the sixth consecutive month the OPA has performed better than original budget forecasts. December’s operating variance was a positive $17,411. Revenues were under budget by $15,471, but total expenses were under budget by $35,813, a result that adds to the cumulative positive variance for the year so far. New capital expenditures are over budget by $2,931. According to the financial summary prepared by OPA Controller Art Carmine and distributed to the Board of Directors in mid-December, the variance to budget through Dec. 30 of last year is a positive $96,105, up from the $78,695 positive variance through November. This compares to the positive variance of $34,722 through October and September’s cumulative negative variance of $37,248. For the year through December, revenues were under budget by $361,442, while total expenses were under budget by $468,555. New capital expenditures, those funded out of this year’s annual assessment rather than reserves, were over budget by $11,008. All the fee based amenity departments were in deficit for December, as were all assessment based departments, with the exception of general administration. But the Yacht Club, with operations temporarily shifted over to the Country Club’s upper level over the winter, produced a $15,930 positive operating variance to budget. Tennis and marina operations were modestly ahead of budget, while both golf and aquatics generated negative operating variances to budget. Aquatics was the worst performing amenity during the month with a $14,192 negative variance to budget. Of the three major amenity departments, golf and related food and beverage lost the most in December. Its $47,358 loss for the month missed budget on the negative side by a relatively modest $4,249. Cumulatively, eight months into the fiscal year, golf has lost $118,825, with a $107,672 negative variance to budget. Aquatics lost $43,165 in December, compared to the budgeted $28,973 loss. For the year so far, aquatics has an operating deficit of $85,934 and a negative variance to budget of $39,054. Yacht Club operations lost $17,351 for the month. Yacht Club operations originally had been projected to lose

$33,281 in December. Cumulatively, the Yacht Club’s actual operating deficit for the year is $81,507 and its negative variance to budget is a relatively modest $9,682. Should the Yacht Club continue to beat budget for the remaining months of the fiscal year, there is a very real chance it will produce a positive operating variance for the year. Tennis, marinas, Beach Club parking and Beach Club food and beverage operations are for the most part closed for the season and Carmine’s report shows only minimal or no financial activity for them.

Status of reserves – The reserve summary released as part of the December financials shows that the OPA’s reserve balance stood at $5,584,632, a decline from the $5,922,921 balance in November, the $6,114,039 October balance and September’s $6,721,113 balance. Lot assessment dollars flow into the reserves at the beginning of the new fiscal year in May, boosting reserve totals that then decline over the course of the fiscal year as expenditures occur. The balance in the roads reserve through Dec. 31 was $66,937, virtually unchanged from prior months. The bulkhead and waterways reserve

OPA Net Financial Operations through December 31, 2013

through December stood at $857,992, compared to $899,332 in November and October’s $1,028,043 balance. The golf drainage reserve carried a $635,582 deficit through December, the future projects reserve was $59,965 in the red, and the operating recovery reserve stood at zero. The major maintenance and replacement reserve remains as the OPA reserve most flush with earmarked assessment dollars. Its Dec. 31 balance was $5,344,250, comprised of $5,270,184 in funded depreciation and $85,066 attributable to

Cumulative surplus for the year closing in on $100,000

OCEAN PINES OPA budget From Page 1 be unprecedented in the annals of the OPA. “I actually believe we will be reducing it,” Terry told the Progress in a telephone conversation Feb. 5. “I will be real proud of the board and management for making that happen.” He said it would not have been possible had Thompson not laid out a budget blueprint initially that put a reduction within striking distance. To bring about the likely reduction, the board during its budget review sessions informally agreed not to increase the assessment $10 to pay for a proposed $25 incentive coupon for use at the new Yacht Club. The coupon idea may survive as an optional incentive program later in the year, but the directors did not want to mandate the coupon or raise the assessment to finance costs related to it. The board also voted to trim a projected loss at the Yacht Club from about $97,000 in FY 2015 to zero, saving another $11.40 or so in a needed assessment increase. Some minor tweaks to the budget trimmed that back down to $10. The board action on the Yacht Club operations reflects the views of a board majority that this coming year, in a brand new building, the staff ought to be

February - Early March 2014 Ocean Pines PROGRESS

“I actually believe we will be reducing it (the lot assessment). I will be real proud of the board and management for making that happen.” OPA President Tom Terry

able to operate at break-even or better. A board consensus emerged that suggested the directors believe that what had been projected as a loss can be made up by more aggressive budgeting and actual performance on the revenue side. This belief is fed in part by solid bookings so far for banquets and other special events at the new Yacht Club amenity. Even so, it represents a departure from attitudes of previous years, when the board of directors and the Budget and Finance Advisory Committee thought that OPA management had been too optimistic in some of its amenity revenue projections. While the lot assessment seems as if it’s heading down, the board seems likely to approve some amenity fee increases, notably Beach Club parking passes and membership, greens and cart fees for golf. The Beach Club parking pass would increase from $160 to $175 for those without other amenity memberships,

from $55 to $75 for those with memberships, and from $50 to $55 for weekly passes. [See separate story elsewhere in this edition of the Progress for a recap of amenity fees likely to be approved in the budget when it’s adopted by the board Feb. 22.] In its two days of budget review, the directors dealt with a wide range of policy questions, including a potentially controversial issue over whether to impose an entry fee for first-time homebuyers in Ocean Pines and a license fee on owners of rental property. OPA General Counsel Joe Moore has been asked to consider these ideas, similar to proposals that have been considered by other boards over Ocean Pines’ almost 50 years of existence. Whenever these ideas have been broached in the past, Moore has advised the board that the OPA’s restrictive covenants require uniformity in assessments, with the sole exception being a higher rate for owners of waterfront property, the so-called waterfront differ-

ential. Amending the restrictions is possible but difficult. It would require section-by-section votes, with a majority of owners in each section having to endorse any changes. The result could be some sections approving the new fees and others not. Whenever similar ideas have been floated in the past, the difficulty in amending restrictive covenants has ended the discussion, until new board and new property owners arrive on the scene to revisit well-ploughed territory.

OPA financials From Page 18 the five-year funding plan. This reserve will be substantially reduced by the end of the year as expenditures related to the new Yacht Club continue. Status of balance sheet – There was no balance sheet included with the December financials, after Carmine noticed an inputting error and withdrew it. An updated balance will be included with the January financials, due to be released in mid-February. Nonetheless, Carmine said that the December balance sheet, if released, would have shown operating cash in the amount of $1,300,660 and investments in CDARs and money market funds totaling $5,552,000.

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February - Early March 2014

February - Early March 2014 Ocean Pines PROGRESS

By TOM STAUSS Publisher hile Ocean Pines Association General Manager Bob Thompson’s proposed assessment increase and Yacht Club coupon incentive program did not survive board of directors’ scrutiny in two days of budget review Feb. 3 and Feb. 4, most of his proposed amenity fee increases will be adopted when the budget for Fiscal Year 2014-15 is approved Feb. 22. Aquatics membership fees will remain as is, while golf and tennis are on tap for across the board increases. Beach Club parking and marina boat slip rental fees will all increase when the budget is approved by the Board of Directors. The merits of increase golf rates were extensively debated by the directors, but in the end the board agreed it was best to accept increases recommended by Thompson and Billy Casper Golf, the golf course management company. Annual golf family rates for residents will be increasing from the current $2,205 to $2,300 and the individual rate from $1,260 to $1,315. The resident family golf cart rate allowing unlimited cart usage will increase from $1,800 to $1,900 and the individual rate will increase from $1,200 to $1,300. The “after 12” resident rate for families will increase from $1,310 to $1,365 and for individuals from $840 to $875. The limited golf rate (30 rounds or fewer) will increase from $1,350 to $1,425 for resident individuals, including cart; there is no limited golf rate for family members. Stand-alone cart and green fees will rise under the proposed budget. Cart fees will increase from $10 to $12 for nine holes and from $20 to $22 for 18 holes. Combined in-season rates for non-member owners and guests will increase from $60 to $62 for play before noon, from $50 to $52 from noon to 3

OCEAN PINES

February - Early March 2014

Board seems ready to adopt some amenity rate increases Golf, racquet sports and Beach Parking passes fees to be hiked as recommended by staff p.m., and from $40 to $42, for 18 holes. Nine hole rates will increase $2 as well: from $35 to $37 before noon, $25 to $27 from noon to 3 p.m., and from $23 to $25 after 3 p.m. Resident tennis annual membership fees for individuals and families will not be increased, consistent with staff recommendations, remaining at $525 for families and $315 for individuals. But the afternoon rate for resident families will increase from $130 to $160 and for individuals from $80 to $100. Platform tennis rates will increase

from $115 to $150, and a new family rate, previously unavailable, will be established at $250. Also new will be a pickleball rate, at $150 for families and $100 for individuals. Daily rates for use of the tennis courts at Ocean Pines’ Manklin Creek Road complex will not change. Thompson has said that increases in golf and tennis reflect the views of member groups. Aquatics rates will remain at $580 and $370 annually for families and individuals, $315 and $190 for summer

memberships, and $445 and $290 for winter-only memberships. Beach Club parking pass fees will increase under the proposed budget, from $55 to $75 for those purchasing other amenity memberships and from $160 to $175 for households up to four people buying parking passes only. Weekly rates will increase from $50 to $55. Marina boat slip renters will also be paying for the privilege of mooring their boats at the Yacht Club and Swim and Racquet club marinas. The fee for boats up to 25 feet in length will increase from $1,660 to $1,745. The rate for boats from 26 to 39 in length will increase from $2,265 to $2,380 and for boats from 40 to 44 feet in length, and live-aboards, from $3,195 to $3,355. At the Swim and Racquet Club, fees for all slips will increase from $1,200 to $1,260 and storage rates will increase from $400 to $420.

Budget and Finance Committee proposes no increase in lot assessment for next year Panel wants lot assessment to remain at $914

By TOM STAUSS Publisher he Ocean Pines Association’s Budget and Finance Advisory Committee is proposing a budget for next year with no assessment increase or decrease, which would leave the base assessment at $914 for the 2014-15 fiscal year that begins May 1. The recommendation to hold the line on assessment increases seems to have resonated with the OPA Board of Directors, which met Feb. 3 and 4 to consider committee recommendations and to thrash out details of the FY 2015 budget.

In its list of suggestions to the board, the committee called the General Manager Bob Thompson’s proposed $25 incentive coupon for use at the new Yacht Club “a good idea” but said lot assessments should not be raised $10 to pay for it. The committee said other methods – one idea the group has looked at includes making the coupons optional – should be considered, and the committee also suggested that the coupons should be made available during the off-season rather than on the new amenity’s opening day. During its Feb. 3 and 4 deliberations, the board accepted these recommendations and informally voted to delete the $10 assessment increase related to cou-

pons from the budget. The committee recommended that the new Yacht Club should be budgeted for break-even operations in the new fiscal year, to be accomplished by bringing in about $98,000 in revenue more than had been included in Thompson’s draft. “Given the vast expenditures in capital and expense over the past and future years to improve the success of the operation, now is the time to break even,” the committee wrote. “If even half of this is accomplished, this will eliminate $5 of the proposed assessment (increase). The committee questioned what it regarded as overly optimistic projections of revenues for racquet sports and “strongly” questioned proposed dues increases for tennis, golf and marina boat slips. But it said that proposed increases in Beach Club parking passes were acceptable “specifically since the demand is high.” Indications are that the directors will not adjust any of these proposed increases in the budget scheduled for adoption at the board’s regular meeting Feb. 22. The committee said that golf operations should be budgeted to break even in the coming year now that the Ocean Pines golf course has been significantly upgraded. This recommendation was debated by the directors, but it appears that the golf budget as drafted by Billy Casper Golf with a $73,300 budgeted loss will be adopted by the board. The committee questioned but did not oppose Thompson’s proposed hiring of four new full-time positions in the Public Works Department for a yearround program of ditch cleaning. The group wondered whether Thompson had considered “contractual services” as an alternative to the four new hires and $35,000 in overtime expenses included

22 Ocean Pines PROGRESS

OCEAN PINES Assessments From Page 22 in the Public Works budget. Indications are that the board will approve these new positions, with the understanding that initially only two individuals will be hired to determine whether they can handle the work load. The committee cited inconsistencies among departments on the percentage of departmental budgets devoted to payroll and benefits. Thompson has acknowledged these inconsistencies but explained them as reflecting the fact that some departments have few full-time employees. The committee also “encouraged” management to hire a human resources director in the coming year. The general manager advised the directors he’s closer to that decision, and that HR job description will also include grant-writing functions. In a suggestion that OPA Board member Sharyn O’Hare has strongly opposed, the committee said an “entry fee” should be

February - Early March 2014 Ocean Pines PROGRESS considered for first-time Ocean Pines homeowners when they purchase a new or resale home in Ocean Pines, to be assessed at settlement. The fee would range from $250 to $1,000. The idea was extensively debated by the directors during their Feb. 3 and 4 meetings, with no consensus reached on the merits. Thompson was tasked with asking OPA General Counsel Joe Moore about whether imposition of such a fee would violate restrictive covenants or the Articles of Incorporation that govern OPA revenue-raising options. The committee recommended a larger spread between residents and non-residents for various classes and programs administered by the Parks and Recreation Department. During board discussion, it was noted that Ocean Pines fee structure is higher than fees charged by Worcester County for similar classes and pro-

grams. The committee advised against the $500,000 proposed in the draft capital budget for a new police station, suggesting it should be delayed and funding only included for comprehensive planning and design (size, locations, cost, etc.). “The construction funds should be included in the 2015-16 fiscal year budget once accurate bids are received. It is obvious new facilities are needed for compliance and safety reasons,” the committee said. In their budget deliberations, a consensus emerged among the directors to keep the $500,000 in the budget after Thompson told them funds for a new police station might not be expended in FY 2015 even if the funds were included. But he told them he wouldn’t do the preliminary work on implementing the concept if the funds were deleted. Similarly, the committee advised against including $135,000 in the capital budget for new bathrooms in White Horse Park, suggesting instead that “only those funds needed for comprehensive planning and design” should be left in the budget. Thompson seemed to successfully

persuade the directors that keeping the funds in the capital budget did not necessarily mean the dollars would be spent next year but that excluding them would be interpreted by him as an indication that the directors were not interested in the project. The committee recommended against a $200,000 capital budget item for Beach Club parking lot paving – the directors seemed inclined to accept this recommendation – and the panel also suggested elimination of $126,000 in paving of the walking/bike trail in Veterans Memorial Park. This recommendation, too, seems to have been accepted by board consensus. Other committee recommendations concerned needed improvements in OPA data collection capabilities and support for the staffing of an information technology person for the OPA. The panel expressed support for the OPA Comprehensive Plan Advisory Committee’s recommendation that the OPA contract with Salisbury University and Dr. Memo Diriker to develop a comprehensive ten-year plan “to help guide OPA planning, development and capital spending in the future.”

By TOM STAUSS Publisher ith a few exceptions, proposed capital expenditures in Ocean Pines Association General Manager Bob Thompson’s draft budget for next year avoided the axe during the Board of Directors’ budget review Feb. 3 and 4. Notable exceptions to the rule of broad-based support for Thompson’s proposed spending initiatives included decisions to defund Beach Club parking lot paving and another project involving asphalt – a proposal to pave a portion of the stone dust trails in the Sports Core/ Memorial Park area near the South Gate. Most of approved project list would be funded out of the OPA’s Major Maintenance and Replacement Reserve rather than through next year’s lot assessment. The draft budget had proposed a total of $3,486,348 in capital spending for next year, in addition to another $300,000 or so needed to pay final invoices related to the new Yacht Club.

OCEAN PINES

February - Early March 2014

Board endorses most of Thompson’s proposed capital expenditure list Directors axe Beach Club parking lot and Sports Core trail paving, but $500,000 for a new police department survives board scrutiny and indeed is enthusiastically endorsed by most of the directors The board deleted $200,000 for Beach Club parking lot paving and $136,000 for the South Gate trail. OPA Director Marty Clarke suggested a $100,000 cut in bridge work funding, from the proposed $175,000, but it’s not clear whether that kind of cut will make it into the final board budget. Similarly, Director Sharyn O’Hare said that the proposed splash pad for the Swim

and Racquet Club could be done for less than the $175,000 included in the capital budget. Inclusion in the capital budget does not mean the allotted funds will be spent, as Thompson made it clear that in some cases the allocated funds are placeholders. But on the items he was particularly keen on, he told the directors that if they deleted them, he would

stop working on them in the near term. Omission, he said, would be interpreted by him as a lack of board interest. It appears that message was heard loud and clear by the directors, who were generally sparing in cutting the capital budget. Perhaps the most noteworthy of all the projects that Thompson is proposing is $500,000 for a new police department annex that could be attached to the existing police department wing in the OPA’s administration building in White Horse Park. Under Thompson’s plan, the existing police station area would be refurbished into a meeting room. The proposed funding source for this is the five-year plan component of the replacement reserve, although that is subject to revision later. OPA President Tom Terry has said recently that he believes the five-year-plan funding stream should be reserved exclusively for funding the new Yacht Club. According to board discussion, it’s clear the directors endorse the conceptual need to replace and expand the exist-

Proposed capital expenditure list in the OPA staff’s draft budget for Fiscal Year 2014-15. The final list will be approved when the Board of Directors adopts the budget and its February regular meeting.

24 Ocean Pines PROGRESS

OCEAN PINES

February - Early March 2014 Ocean Pines PROGRESS

OPA reserve balance would drop precipitously if board approves capital expenditures as proposed Draft budget proposes $3.7 million in capital expenditures for Fiscal 2014-15, which, if approved by the board and implemented by the general manager, would reduce OPA reserve balances to about $1.1 million as of April of 2015 beginning of the fiscal year, this coming May 1, that’s about $1 million more than what would be spent throughout the year if Thompson can manage to spend every capital item or project approved by the board. According to the draft reserve summary sheet, the OPA’s Capital Assets Replacement Reserve is projected to

stand at $2,110,506 at the end of the current fiscal year on April 30, just a few weeks away. That number assumes that the bulk of the remaining invoices owed Harkins Construction, the Yacht Club contractor, will be paid before May 1, with $300,000 or more remaining to be paid in the new fiscal year that begins May 1.

Capital expenditures

is $135,000 for new White Horse Park bathrooms, which could replace those in the Pine’eer Craft clubhouse. When some directors suggested that this proposed expenditure could be deleted until such time as details are further fleshed out, Thompson argued that including it in the project list means the board is receptive to at least considering it. The directors raised no objections to another White Horse Park project, a new public boat ramp to replace the existing one at an estimated cost of $250,000. Other noteworthy items in the Parks and Recreation capital budget that seems to have survived board scrutiny are $150,000 for replacement lights at the Manklin Meadows ballfield and

From Page 24 ing OPPD space, accepting Thompson’s rationale. The leading advocate for new quarters is Director Bill Cordwell, who has a background in law enforcement. He said the situation is more critical than he had realized, with conditions that are potentially unsafe for both officers and for arrestees held for later pick-up. He urged action on a new police station sooner rather than later, while Thompson said practical considerations might mean construction isn’t undertaken until spring of next year. Also retained in the project list likely to be approved by the board Feb. 22

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The replacement reserve will be credited with an additional $2.75 million in fresh assessment dollars in May, the first month of the 2014-15 fiscal year. About $1.1 million of that is allocated to the so called five year funding plan, now in its sixth year, and another $1.65 million is allocated to funded depreciation, called “historical” on the reserve summary sheet. With the $2.75 million assessment infusion that will be recorded in May, the $2.1 million replacement reserve balance on April 30 is projected to grow to $4.85 million by the end of May. Thompson’s proposed capital spending from the replacement reserve of $3.7 million, when subtracted from the May 2014 projected beginning balance of $2.1 million, results in the projected $1.2 million May 2015 balance, with interest income and revenue from lifetime golf members thrown in the mix. Essentially, the draft budget proposes to spend about $1 million more from the replacement reserve than is projected to be collected in fresh assessment dollars.

By TOM STAUSS Publisher lthough it’s subject to some significant cutting by the Ocean Pines Association’s Board of Directors, the proposed capital spending list contained in General Manager Bob Thompson’s draft budget for the new fiscal year beginning May 1, if funded and fully implemented, would reduce the OPA replacement reserves to the lowest level in years. According to the proposed reserve summary in Thompson’s draft budget, under review by the directors before its scheduled adoption by the board later in February, the general manager is proposing to spend $3.7 million in capital expenditures next year, including final payments related to the construction of the new Yacht Club. Most of that spending would be funded by the OPA’s replacement reserves and accordingly does not directly affect the lot assessment to be established by the board for the new fiscal year. If all that funding is approved by the board, and if Thompson then would actually implement all of the approved projects, the balance in the OPA’s Major Maintenance and Replacement Reserve, also called the Capital Assets Replacement Reserve, would drop to $1,222,365, the lowest in many years, on April 30 of 2015. Not all of the proposed capital spending would be spent from the replacement reserve. The capital spending list includes $300,000 in spending for roads resurfacing, financed out of casino funds that are allocated to the Roads Reserve, and $72,300 in new capital projects funded directly from assessments. The proximate reason for the precipitous drop in the reserve balance is the fact that while about $2.75 million in new assessment dollars is scheduled to flow into the replacement reserve at the

$65,000 for new flooring in the Community Center gymnasium. The Public Works Department’s capital budget includes $175,000 in bridge work; $125,000 for a new dump truck and snow plough, $130,000 for two new Ocean Pines golf course fairway mowers, $58,000 for brush chipper and $32,000 for a new pick-up truck. Only the bridge projects received much attention during the board review, with Clarke suggesting that the estimated cost could be reduced by $100,000. Racquetball sports will be funded as proposed in the amount of $135,000, for four new pickleball courts and two platform tennis courts. When Thompson said lack of room will make locating the courts in the Manklin Meadows tennis complex difficult, the directors suggested that he should try again, even if it means moving some of the existing elements in the complex. The general manager has suggested that the pickleball courts could be set up on the existing tennis courts at the Swim and Racquet Club, with wind screens, but pickleball advocates have told OPA directors that the sport requires courts set well back from water-generated breezes. Aquatics receives a lot of attention in the proposed capital budget, highlighted by $175,000 for a new splash pad at the Swim and Racquet Club, and $45,000 in pool resurfacing and pump room improvements at that facility. The directors deleted $30,000 in ADA-related improvements at that facility’s baby pool, as it will be replaced by the splash pad instead. Other aquatics projects that survived board scrutiny include $100,000 for pool resurfacing and $50,000 for deck resurfacing at the Sports Core indoor pool. Furniture for all the pools is listed at $75,000, while $40,000 is earmarked for Beach Club restroom and related improvements.

26 Ocean Pines PROGRESS Reserve balance

February - Early March 2014

From Page 25 The board of directors may not accept Thompsonâ&#x20AC;&#x2122;s proposed list of capital projects. OPA Director Marty Clarke has proposed roughly $1 million in cuts from the list. Among the items that he would eliminate is $500,000 in a new police station, $135,000 in new bathrooms for White Horse Park and $200,000 in Beach Club parking lot paving, along with trims in projected bridge work spending. The latter is budgeted at $175,000, but Clarke has said that the actual cost to the OPA will be much less. If the board is able to slice about $1 million from Thompsonâ&#x20AC;&#x2122;s proposed capital list, the replacement reserve balance should end the new fiscal year at roughly where it began -- $2.1 million. Thompson told the Progress in early February that he believes every item on his proposed capital spending list is justified and that he will make the case for them during the boardâ&#x20AC;&#x2122;s budget review process. The draft budget proposes a total of $3,486,348 in capital spending for next year, in addition to final payments related to the new Yacht Club. Perhaps the most noteworthy of all the projects that Thompson proposes is $500,000 for a new police department addition that could be attached to the existing police department wing in the OPAâ&#x20AC;&#x2122;s administration building in White Horse Park. The existing police station area would be refurbished into a meeting room. The funding source for this would be the five-year plan component of the replacement reserve. Less costly but equally noteworthy is $65,000 proposed for flooring repairs in the Community Center gymnasium, to be funded out of funded depreciation. A report in the January-Early Febru-

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34!4% &!2- ary edition of the Progress inaccurately said that the $65,000 would be spent for a new fitness center in the Community Center. Thompson said heâ&#x20AC;&#x2122;s not ready to propose funding for a fitness center, although he remains committed to setting up the fitness center in the Community Centerâ&#x20AC;&#x2122;s Assateague Room. Also proposed in the capital budget is $135,000 for new White Horse

Park bathrooms, which would replace those in the Pineâ&#x20AC;&#x2122;eer Craft clubhouse. The general manager also appears to be ready to follow through on a White Horse Park boat ramp at an estimated cost of $250,000 to replace the one thatâ&#x20AC;&#x2122;s there now. Other noteworthy items in the Parks and Recreation capital budget are $150,000 for replacement lights

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at the Manklin Meadows ballfield and $126,000 for paving some of South Gate walking and bike trail system, some of which is prone to flooding. The Public Works Departmentâ&#x20AC;&#x2122;s proposed capital budget is noteworthy for several major items, including $175,000 in bridge work, including utility line replacement; $125,000 for a new dump truck and snow plough, $130,000 for two new Ocean Pines golf course fairway mowers, $58,000 for brush chipper and $32,000 for a new pick-up truck. Racquetball sports would receive $135,000 in funding for four new pickleball courts and two platform tennis courts, both paid for out of funded depreciation. Thompson recently said the pickleball courts would be constructed at the site of Swim and Racquet Club tennis courts, but thereâ&#x20AC;&#x2122;s been some push back against that idea. OPA President Tom Terry said heâ&#x20AC;&#x2122;s checked with the OPA Tennis Advisory Committee, and its members prefer that the pickleball courts be built at the OPAâ&#x20AC;&#x2122;s tennis complex in South Ocean Pines, just off Manklin Creek road. Aquatics receives a lot of attention in the proposed capital budget, highlighted by $175,000 for a new splash pad at the Swim and Racquet Club, $30,000 in baby pool improvements and $45,000 in pool resurfacing and pump room improvements at that facility, and $100,000 for pool resurfacing and $50,000 for deck resurfacing at the Sports Core indoor pool. Furniture for all the pools is listed at $75,000, while $40,000 is earmarked for Beach Club restroom and related improvements.

February - Early March 2014 Ocean Pines PROGRESS

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OCEAN PINES

February - Early March 2014

OPA Board ponders Ocean Pines ‘entry’ fee Directors also consider license fee for owners of rental property By TOM STAUSS Publisher lthough neither proposal is imminent or even likely to be adopted by the Ocean Pines Association’s Board of Directors, prospective new property owners and existing property owners who own rental property in Ocean Pines could be targeted by the

OPA as lucrative new revenue streams if legal hurdles can be cleared. The OPA’s Budget and Finance Advisory Committee has proposed that the board give consideration to what it calls an entry fee for first-time homeowners in Ocean Pines. The entry fee, which the committee says could range from $250 to as high as $1,000, would be added to the

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buyer’s cost at settlement. The proceeds would be dedicated to the OPA’s road reserve, according to the committee’s written recommendation to the board. During the board’s consideration of committee recommendations in budget review meetings Feb. 3 and 4, another possible new revenue stream surfaced for discussion, the imposition of license

fees imposed on owners of rental property in Ocean Pines. In both instances, the directors took no action, other than directing OPA General Manager Bob Thompson to check with OPA general counsel Joe Moore about whether the board even has the authority under articles of incorporation or restrictive covenants to impose the fees. Among the directors, only Director Sharyn O’Hare expressed a strong opinion on the merits of the so-called entry fee, and that was in opposition to its creation. O’Hare, the OPA vice-president who is in line to become the OPA president next year, is an active real estate agent. Real estate professionals are likely to oppose the entry fee en masse should its imposition become more likely or imminent. O’Hare said that the entry fee for new homeowners would set Ocean Pines apart from most subdivisions, communities or condominiums in the greater Ocean City area. Most do not impose such fees, she said, and for Ocean Pines to do so would place sellers of homes in Ocean Pines at a competitive disadvantage with most of their neighboring communities. One exception to the rule, she said, is the Parke community in Ocean Pines, which has had a new owner fee since its inception, having been explicitly established by its developers, Balfour Holdings and Centex Homes. The Parke’s new homeowner entry fee is $1,000 per proprty. The issue for the OPA is whether an entry fee, or a renter license for owners of investment property, can be imposed after all these years without one and without explicit authority included in the OPA’s founding documents, most notably the restrictive covenants or DRs (declaration of restrictions), as they are sometimes called. If the DRs do not permit them, the OPA would have to go through the arduous process of amending them section by section, adding explicit authority to impose any new fees. A majority of property owners would need to approve them before they would go into effect. Director Terri Mohr seemed ambivalent on the issue, at one point suggesting that it would be a bad idea to impose another cost on prospective homeowners in what remains a soft market for home sales in Ocean Pines. Later, however, she said the OPA ought to at least consider new revenue streams as Ocean Pines closes in on 50 years of existence as a community. OPA President Tom Terry at one point said that he thought it was more likely that the proposed entry fee would pass legal muster than would the renter license fee.

OCEAN PINES

February - Early March 2014 Ocean Pines PROGRESS

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Cub Pack #480 in Ocean Pines held its annual Pine Wood Derby on Jan. 12 in the Ocean Pines Community Center. The Pack is sponsored by the Kiwanis Club of Greater Ocean Pines-Ocean City. The track allowed three cars to race in each heat and was computerized, allowing spectators and entrants to see the results recorded at the finish line on a big screen. The weigh-in station was manned by scouts from local Troop 225, Tripp Ortega, Andrew Haas and Evan Haas. Pictured (left to right) are Cub Pack #480 Scout Master Ray Stever, Weblos Den Leader Matt McMillan, and Tripp Ortega at the table where the cars already weighed in were kept prior to the race.

Friends of the Library group scales back public meetings

or about 12 years after the formation of the Friends of the Ocean Pines Library, the group hosted a monthly membership meeting. Attendance many times was close to 100 people when the library was new and enthusiasm was high for furnishing it and buying books and supplies. In recent years, attendance has dwindled to between 12 and 20 persons per meeting. Speakers from various backgrounds have spent time preparing programs and have had very small audiences, despite publicity in the local newspapers and e-blasts sent out by the group’s newsletter editor. Late in 2013 a decision was made to eliminate all but two of these meetings. In 2014, there will be a membership meeting on Monday, June 9, and on Monday, Oct. 13. Both meetings will begin at 10 a.m. and will be held in the large meeting room at the library. The FOPL board will continue to meet on the Thursday before the second Monday at 2:30 p.m. at the library. Members of the FOPL are always welcome to attend the board meetings and offer suggestions or suggest projects. The board does not meet in August. The board sponsors a Staff Appreciation Luncheon in February for the employees of the Ocean Pines Library and recognizes an employee of the year award, decided by a staff vote. The Friends coordinate a large group of volunteers at the library. Openings are available for shelvers, phone callers, Adopt-a-Shelf checkers, sorters of donated books, and workers such as rovers, checkers, and cashiers at the annual book sale in July. There is a volunteer reception in late April for all volunteers at the library. Books are for sale in the back of the library during library hours. The best of donated books are culled for these shelves next to Luke the Maryland Terrapin’s tank. Proceeds go the FOPL treasury to support the library. Patrons are encouraged to clear off their bookshelves and donate books in good condition to the library by bagging them up and giving them to the librarians at the checkout desk. They will be sorted and will go to either the current book sale shelf, the storage room for books being held until the book sale, or the free shelf in the lobby.

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30 Ocean Pines PROGRESS

WORCESTER COUNTY

February - Early March 2014

COUNTY BRIEFS Country Club confirmed as one of Ocean Pines’ two polling places other term, said that the Ocean Pines Country Club may not be easily accessible to those with mobility issues as the site does not have an elevator. Rather it has a handicap lift that can accommodate one wheelchair and one standing individual at a time. In response to Boggs’ concerns, Jackson said that the Country Club location served as a polling place in the past without incident. Current District 6 Commissioner Jim Bunting asked about the requirements for locating polling places within a district. Jackson responded that a polling places do not have to be within the district that it serves but that her staff makes every effort to identify sites within each district that are suitable for use as polling places.

County considers changes to home day-care regs The Worcester County Commissioners on Jan. 21 introduced a bill to amend the home day-care regulations to include a

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new category for large day-care homes. The bill would permit in-home day-care for up to 12 children. Ed Tudor, county director of development review and permitting, said that state day-care regulations were amended last year to include this new category, and the county’s proposed legislation recognizes that change. He said the bill provides a definition of a large day-care home, amends several districts including all residential zoning classifications to make the new category a special exception use in them. It also makes changes to the home occupation section of the zoning code to allow two, instead of one, outside employees for day-care homes and large day-care homes, and makes large day-care homes a home occupation instead of a special exception use in agricultural and estate zones. The commissioners will hold a public hearing on the bill on Feb. 18.

Worcester sheriff may get salary increase

Following the next general election, the Worcester County Sheriff may be getting a $3,000 salary increase. The Worcester County Commissioners on Feb. 4 reviewed a resolution that will allow for an increase in the sheriff ’s salary from a flat $85,000 annually to $88,000. The commissioners are considering a 3.5 percent pay raise for the sheriff for the upcoming 2014 - 2018 term. The sheriff ’s salary is set by state law but simply says that it will be an amount of at least $85,000 annually. As a result, the salary has been automatically set at $85,000 annually for each term unless the commissioners pass a resolution to increase it prior to the election filing deadline for an upcoming term. A fiscal year 2012 Maryland Association of Counties salary survey indicates an average statewide sheriff ’s salary of $92,279. Sheriff ’s salaries in the nine counties on the Eastern Shore currently range from a low of $60,000 in Somerset County to a high of $85,750 in Dorchester County. County staff pointed out that the Worcester County state’s attorney will

automatically receive a 3.5 percent salary increase for the upcoming election term by virtue of the increased salary of the Maryland District Court Judges. The state’s attorney’s salary is linked to the judges’ pay rate.

Groundbreaking set for Snow Hill High

The ceremonial tossing-of-soil to symbolize the start of construction on the Snow Hill High School renovation and addition project will be held on Feb. 18. The groundbreaking ceremony will be held in front of the school. Participating will be elected officials, school system leadership, and members of the school community. There are four phases of construction for the Snow Hill High School renovation and addition project. Phase 1 is already underway and will include construction of the gymnasium, student entrance and parking lot, mechanical room, locker rooms, and band and chorus rooms. The project will double the size of the school to 121,000 square feet, eliminating the need for portable classrooms; add state-of-the art classrooms, a new media center, computer labs, science wing, gymnasium, cafeteria and kitchen, and a new athletic complex; and will include several sustainable highly-efficient features such as a geothermal heating/cooling system, motion activated lights, thermally insulated glass, and low-flow plumbing fixtures. The project is expected to be completed for the start of school in the fall of 2016.

College Goal Maryland comes to the shore

College Goal Maryland, part of the nationwide effort to help college-bound students complete the free application for federal student aid, is coming to the Eastern Shore on Saturday, Feb. 15. The Delmarva Education Foundation is the only host site on the Delmarva Peninsula for College Goal Maryland. During the event, students and their families will receive one-on-one assistance filling out the FAFSA, have the opportunity to meet with DEF’s college access advisors and be able sit in on fiq

uring a Jan. 21 meeting, the Worcester County Commissioners reviewed the list of polling places finalized by the Board of Elections for the upcoming primary and general elections. Patti Jackson, Board of Elections supervisor, reviewed new precinct and polling places for the seven commissioner districts including the allOcean Pines District 5 and the Ocean Pines-Bishopville District 6. The locations were established to reflect a redistricting of the county in response to population changes illustrated in the 2010 census. The polling places for District 5 are the Ocean Pines Country Club, moved from the Community Church of Ocean Pines during the last election cycle, and the Ocean Pines Library. District 6 polling locations are the Ocean Pines Community Hall, as well as Showell Elementary School and the Bishopville Fire Hall. District 5 Commissioner Judy Boggs, who is not seeking reelection for an-

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WORCESTER COUNTY

COUNTY BRIEFS From Page 30 nancial literacy seminars. Students of all ages, including high school seniors, returning adult learners and current college students, are encouraged to take part in this free event designed to help them complete the often confusing federal financial aid paperwork. The FAFSA deadline for students to be eligible for Maryland state financial aid is March 1. Students from all counties on the Eastern Shore of Maryland, Delaware and Virginia are invited to participate in this FAFSA day. All students who attend this one-day event will be eligible to win one of two $500 College Goal Maryland scholarships to help them fund their education. College Goal Maryland will be held at the Tri-County Council/One Stop building on Route 50 in Salisbury on Saturday, Feb. 15, 2014 (Snow date Saturday, Feb. 22, 2014) from 10 a.m. to 2 p.m. To register or for more information, please visit http://collegegoalsundaymd. org or call DEF at 410-219-3336.

Applications accepted for ag easements

Worcester County is accepting applications from interested landowners who may wish to participate in the Maryland Agricultural Land Preservation Foundation program through the voluntary sale of an agricultural easement. Eligible properties must be at least 50 acres in size, unless contiguous to an existing MALPF easement, and have a minimum of 50 percent Class I, II and III soils. An agricultural easement is a voluntary permanent agreement that runs with the land. Development of land encumbered by the easement is strictly limited, but agricultural and natural resource uses and activities are allowed, including crop production, timber harvest and hunting. The value of the easement payment is determined by property appraisals conducted at the expense of the State of Maryland. More than 6,300 acres in Worcester County are permanently protected from development with a voluntary MALPF easement. To be eligible for participation this year, applications must be submitted to Worcester County by May 2. Since preparation of this application can be a lengthy process, potential applicants are encouraged to begin the process as soon as possible. Worcester County landowners interested in selling a voluntary perpetual agricultural easement or learning about other land conservation options may contact Katherine Munson of Worcester County Development Review and Permitting at 410-632-1200, extension 1302.

February - Early March 2014 Ocean Pines PROGRESS

Pine’eer Craft Club installation

The 2014 Officers of the Pine’eer Craft Club were installed at the holiday luncheon at the Ocean Pines Country Club. Pictured are Sharon Puser, president; Barbara O’Connor, first vice-president; Linda Brindley, recording secretary; Louise Lassiter, corresponding secretary; Jane Wolnik, treasurer; Grace McCormac, assistant treasurer; Luz Castillo, shop treasurer; and Barbara Stillwell, assistant shop treasurer. Missing from the pictured are Midge Powell, assistant shop manager; Jackie Kollar, shop manager; and Lynn McGraw, second vice-president.

32 Ocean Pines PROGRESS

WORCESTER COUNTY

February - Early March 2014

LEGISLATIVE WRAP-UP

Mathias, McDermott cite bills each have filed in current legislative session in Annapolis Route 113 right-of-way acquisition funds in governor’s proposed budget By ROTA L. KNOTT Contributing Writer

ith the General Assembly now engaged in session in Annapolis, a variety of bills is being introduced in the Senate and House of Delegates that could have an impact on Worcester County residents. Hearings have been held so far this session on three bills sponsored by Senator Jim Mathias. The first was on the need for an economic analysis to be conducted before changes to the existing agricultural phosphorous site index are implemented. “Grain and poultry farming are so crucial to our economy and heritage here on the shore, and we need to fully understand the impact of such a big change on that industry,” he said. The second hearing was on a bill to allow restaurant businesses to deduct from their state taxes the amount of taxes they pay on tipped employees. This legislation will put Maryland in line with the federal tax code. His third bill would have the POW/ MIA flag fly on state buildings. “It is important that we honor our brave combat veterans who have been deemed missing in action or prisoners of war, and whose fate is still unknown,” he said. Bill hearings are also scheduled in February for several pieces of legislation that Mathias sponsored as well. If ultimately adopted, SB 441 would abolish the Worcester County Bingo Board and transfer the board’s responsibilities to the Worcester County Department of Development Review and Permitting. Mathias said abolishing the Bingo Board would save the county up to $3,000 a year by streamlining the county government. SB 441 was requested by the Worcester County Commissioners. SB 438 would allow local municipalities to request that local offices and ballot questions be placed on state election ballots. Mathias said this change will simplify municipal elections and save money for local boards of elections by not requiring them to run a second election for local offices. SB 438 was requested by the mayor and town council of Ocean City. Del. Mike McDermott said he had a successful hearing on his bill HB26 to require the state to provide a fiscal impact statement on any regulations brought before the AELR Committee, a joint, bi-partisan committee that reviews regulations when the General Assembly is not in session. “It is hard to believe that this is not generally required when you consider

the significant impact these regulations often have on businesses and our people. No bill can be approved in the General Assembly without a fiscal note, and it only makes good sense to require the same treatment on these regulations.” Other bills highlighted by McDermott were HB73 and HB80. HB73 would allow for a rebuttable presumption in cases of damages for injuries sustained from dog bites. It would stop a court from presumptions that a dog is inherently vicious simply because of the breed. HB80 would establish by law that the owner of a dog running at large is responsible for any damages caused by the dog whether or not the owner knew or should have known that the dog was dangerous. There are exceptions in this bill for service dogs and for dogs that were provoked prior to the attack. Another bill, HB59, would allow for the transfer of property and wealth by a person to another person that would take place upon the owner’s death. This would be similar to a life estate that currently exists within the law. “It was said that this would help many elderly folks who do not desire to create a will or other type of document, but who do want to ensure that their final wishes are implemented upon their death,” McDermott said. Mathias said that Governor Martin O’Malley’s 2015 proposed budget includes funding for many vital projects on the Lower Shore. He said the budget includes more than $97 million for new facilities and facilities renovations on the campuses of Salisbury University, Wor-Wic Community College, and the University of Maryland Eastern Shore; $11.52 million for school renovation and construction, $1.55 million for the new Crisfield library, $1 million for the Ocean City Beach Replenishment fund, and $1.7 million for right-of-way acquisition to continue the dualization of Route 113. The session began with a Special Order offering an open ended extension of the Maryland Health Insurance Program. The bill would provide unlimited coverage for anyone who tried to get insurance and was rejected prior to the deadline. This bill would provide direct payments to cover any medical issues experienced by these persons during the time that they could not receive coverage through MarylandObamacare. McDermott said the administration could offer no realistic estimate on what the associated costs might be or how long the state would need to continue making this available. “So even though they received hundreds of millions to set up this

Mathias

McDermott

system in Maryland as an ‘example’ to the rest of the states… and even though this democrat bureaucracy under O’Malley-Brown had over two years to plan ahead and make it happen… and even though, when questions began to be raised and it appeared months in advance that this was completely in the weeds and not going to work out… we followed the Obama plan and rolled it out to our fellow Marylanders anyway,” McDermott said in his field notes. McDermott said a briefing was conducted to hear about recommendations for eliminating the problems associated with criminal defendants being entitled to representation during their initial appearances before the court; this is currently performed by District Court Commissioners without the presence of counsel. The Office of the Public Defender estimates the additional costs would be around $30 million. The judicial task force estimates it can provide services through a variety of changes and by utilizing video conferencing with judges for a cost of roughly $6 million in total costs. “I have previously proposed expanding the ability of persons to be released on citation by law enforcement, and I have called for my former bill, HB119, which passed the House in 2012, to be revisited and considered as a means of dealing with some of these issues. It is clear that there will be additional costs associated with ensuring people have representation at all phases of the court process, but Governor O’Malley failed to include any money in his budget appropriated for this purpose,” McDermott said. In January, members of both the Senate and House gathered to discuss a Business and Economic Development Agenda for the 2014 session. This agenda covers eight different topics including: creating a commission to review Maryland’s economic development support and business climate, lowering Maryland’s estate tax so it matched the federal standard to make us more competitive with surrounding states,

and providing increased transparency on tax bills to show how tax dollars are spent. Mathias said the Eastern Shore delegation has had productive meetings so far this session. On Jan. 31, the committee met with Dominick Murray, secretary of the Department of Business and Economic Development, about several projects in his department, including the proposed increase in the state budget for tourism. He also spoke about the benefits of Wallops Island, noting that one half of the employees from Wallops Island live in Maryland. The committee also heard from the Maryland Tourism Board. The tourism directors from all nine Eastern Shore counties were present, including Ocean City’s Greg Shockley, president of the Maryland Tourism Board. The group spoke to us about tourism being a $2 billion industry in Maryland and how the Hospitality and Tourism Management program at UMES contributes to it. The delegation in January met with Ted Dallas, secretary of the Department of Human Resources, spoke about efforts to move people off state assistance and provide them with job training, and Col. Marcus Brown, superintendent of the Maryland State Police, about the collaboration between the state police and local police agencies to combat drugs and drug trafficking. Raymond Skinner, secretary of the Department of Housing and Community Development, updated the delegation about funding for Hurricane Sandy relief and other programs and accomplishments on the Eastern Shore. The superintendents of all nine county boards of education briefed the delegation about both their successes and needs for the coming year. Maryland Superintendent of Schools, Dr. Lillian Lowery, discussed efforts to implement the common core curriculum and the need to help prevent high school graduates from requiring remedial courses at the college level, as well as efforts to expand universal pre-K for all children in Maryland. Memo Diriker, director of the Business Economic and Community Outreach Network (BEACON) at Salisbury University, informed the delegation that for every $1 spent on education on the Eastern Shore, there is a return on that investment of almost $2. McDermott argues that the comparison could not really be made “since the school system must first extract millions from our economy through tax dollars before it returns the money through various sources.” Much of the discussion was centered around the new Common Core standards that have been implemented in the public schools in every grade level. Most of the discussion was anecdotal, but it was made clear that many states are rethinking their commitment and making significant changes to slow their process of implementation, according to McDermott.

LIFESTYLES

February - Early March 2014 Ocean Pines PROGRESS

Cofflands commemorate memory of lost son with helping hand to wounded veterans Non-profit provides gym memberships or home-based equipment to returning soldiers who served in Afghanistan or Iraq By SUSAN CANFORA Contributing Writer here’s a look unique to a proud father, a twinkle in his eye remembering the children as toddlers, jokes shared, teasing each other, then laughing, “Oh, c’mon, man.” When he talks about his youngest son, Chris, David Coffland has that look, blended with pride and deep love. “He was a modern-day Indiana Jones,” he said about Chris, who was killed in Afghanistan in 2009. “He was the youngest of five. We had three girls and two boys. He always analyzed everything. He was very intense. He would look at things 100 ways. We would say, ‘Come on. Make up your mind.’ And charming? Oh, yeah. My God, yeah,” Coffland said. He was sitting at the kitchen table in the neatly kept Ocean Pines home he shares with his wife, Toni, hands in front of him on the tablecloth, the devastation of a losing a child still so fresh. “It’s pretty hard,” he said, managing a smile. In Cpl. Chris Coffland’s honor, the family founded Catch-a-Lift Fund. Based in Baltimore, it’s operated by a board of directors with the heavy involvement of Chris’ sister, Lynn Coffland, and provides gym memberships to wounded veterans who served in Afghanistan or Iraq. It’s based on Chris’ philosophy “that through physical fitness you can achieve your highest potential for a healthy mind and body.” That’s explained on the Web site, www. catchalift.com, which has a picture of the handsome, bearded soldier and also states: “His dedication and mindfulness to physical fitness was part of a daily regimen his entire life. He actively encouraged others to participate as well, so that they could lead a healthier and well-balanced life.” Chris had a habit of saying, “See you later. I’m going to catch a lift” when he headed for the gym. Now, Catch-a-Lift Fund offers the gift of exercise, to build strength and elevate moods, to veterans nationwide. So far, 43 states are represented. “We will give soldiers wounded or injured in Afghanistan or Iraq a gym

membership for one year; then we will renew it for the first few years,” Coffland said. Caretakers also get a membership so they can accompany the veteran. For the homebound, gym equipment is sent to the residence. Catch-a-Lift’s budget is in the $100,000 range, and it is mainly funded by donations and sponsorships. More are needed, Coffland said. The average price of a membership is $1,000, since prices vary state to state. Home equipment costs about $800. There’s a steady stream of applications and a waiting list of 300, with some standing by for a few months. “That shouldn’t be,” Coffland said. The Department of Defense estimated 50,000 veterans were wounded in the past 12 years in Afghanistan or Iraq. Of those, 30 percent have post-traumatic stress disorder or brain injury. Doctors agree exercise is beneficial for them, “but nobody in the Veterans Administration funds gym memberships. We are the only ones in the country who do this,” he said. The long-term goal is for national recognition and funding from the Veterans Administration. Chris Coffland would love the idea of helping. About 1,500 mourners were at his funeral in Baltimore, and from many of them, the family learned of his quiet selflessness. “We found out about all the people he helped. He talked about deep, deep religious topics with people, about what makes man behave a certain way and counseled people. If there was an emergency he would be there at the drop of a hat. One of his friends, her boyfriend threatened her with bodily harm so he went there and slept on her couch. That’s the kind of guy he was,” his father said. When military assignments were being given, he traded with a friend who had a wife and two children, volunteering to go to a highly dangerous part of Afghanistan to protect the friend. Later, that couple had a baby boy and named him Christopher James, for Coffland. His mother and father were at dinner the night his sister, who lives in Baltimore, was informed of his death. When they got back to their Ocean Pines

home, her car was there. She and Chris had been particularly close, and he asked her to handle his personal affairs. “We came in the house and she let out a scream that he had been killed. He was targeted,” David Coffland said, explaining he was involved in military intelligence and killed instantly by a bomb. “He was in covert operations. He was in villages, and he was turning in members of the Taliban. He was riding in an M-RAPP, like a big tank, but he was killed right away,” his father said. Two others also lost their lives, and two more were injured. Chris enlisted in the military when he was 41. Earlier, he had been accepted at West Point to study cultural anthropology and genetics. His life was full and varied. He played and coached football in Germany and other countries and traveled to Africa to study the Bakola tribe of pygmies, living with them as he researched. He returned home after a tree fell on him, but his adventurous spirit wasn’t dampened. “When he was at West Point he didn’t want to commit during peace time because nothing was going on. He liked excitement. Before he went to Afghanistan, he was accepted for investigative intelligence for the government. And, he needed military experience to be in covert specialties. You have to have that military training, so he joined the Army. “You couldn’t argue with him. He was very adept at talking to people, and he was very persuasive. He would tell you

it’s OK,” his father said, smiling at his son’s personality. “We wanted to do something to commemorate, something to keep his memory going. The people we have on board and the people doing the work for Catch-a-Lift, my daughter Lynn and the other people, were his friends. I am amazed at how much effort and how strongly they believe in it. “I’m amazed at those people. And, I am a little disappointed how hard it is and how long it takes to get people to realize that the people who left a part of themselves on a foreign land deserve help. There are people who really need help from the government. “Chris always wanted to be part of a non-profit, so he would like that, but he would be appalled that we named it after him,” Coffland said, and the look of a proud father flashed in his eyes again. “He was really a quite an individual,” he said, smiling. “He lived a good life.”

34 Ocean Pines PROGRESS

CAPTAIN’S COVE

February - Early March 2014

Cove continues to seek financing for road construction Positive feedback from Howard Bank suggests that $250,000 line of credit could be imminent By TOM STAUSS Publisher aptain’s Cove association board member Jim Silfee continues to pound the pavement in search of a bank willing to establish a line of credit to finance new road construction in Captain’s Cove and is making some headway. As of Feb. 5, as the deadline for this edition of the Progress approached, Silfee was unable to report a solid commitment from Howard Bank to provide the line of credit that the Cove property owners association is seeking. Howard Bank probably represents the last possible source of conventional bank financing for the roads project, with ten or so banks having rejected overtures for financing. Nonetheless, he reported encouraging feedback from the bank which he interpreted as a good sign that a line of credit of roughly $250,000 will be forthcoming shortly. “I got word at the end of last week (of January) that we are expecting to receive a term sheet from Howard Bank sometime” in early February for a line of credit, “though we won’t know for

sure until we see what they have actually crafted up for our review. Even a $250,000 line of credit would be a very positive step in my opinion.” In a late January email, Silfee told the Progress that a recent meeting with Howard Bank representatives was “OK. I was hoping to get a stronger commitment from them in the meeting, but it turns out we had to follow up with a bit more financial detail and bullet point the information a little more ... for them. I think we have a very solid and clear case for them.” One factor that should work in the Cove’s favor is that Cove developer interests, that include Silfee and Tim Hearn, the Cove association president, established a lending relationship with Howard Bank late last year, Silfee said. “At least they know where to find Captain’s Cove on a map,” he joked, in a brief conversation that preceded the Cove board’s monthly meeting Jan. 10. Issues related to geography – Captain’s Cove straddles the MarylandVirginia border, across the bay from Chincoteague – have contributed to the Cove’s credit difficulties thus far in the hunt for financing. Banks also have

been looking for a longer track record of the Cove POA having its finances in order. During the Jan. 10 meeting, Hearn spoke of ongoing efforts to secure financing, indicating that it would appear the Cove POA will have to back off efforts to secure $1 million in a line of credit, opting instead for a lower amount in order to establish a solid relationship. He also said that if efforts to secure conventional bank financing fail, the remaining option would be private equity, which normally involves interest rates that can be twice that of more conventional commercial rates. Silfee told the Progress at the time that he thought the line of credit might have to begin in the $250,000 range, which at least would allow the Cove POA to begin a systematic program of road construction in those areas of Sections 1 through 13 that lack them. Hearn said that roads construction is of critical importance to the Cove POA, because properties with road access have a much lower rate of lot assessment delinquencies. Previously, Hearn said that whenever roads are constructed the Captain’s Cove Utility Co. will be installing utility lines

as well. There’s an 85 percent compliance rate for properties with roads and a 20 percent rate for those without, he said. Once financing is secured, Section 7 will probably be the first on the list of priorities for new roads. Ambulance service – During the Jan. 10 board meeting, Hearn advised that efforts should continue to prevent Accomack County from instituting changes in ambulance response times that, at certain times and days during the week, could result in Cove residents having to wait 20 minutes or longer for emergency responders. Staffing cutbacks at nearby Greenbackville Fire Department means that, in some instances, ambulances will have to travel 20 miles and 20 minutes to reach Captain’s Cove, Hearn said. “If you think 20 minutes is OK, do nothing, but if you think it’s a problem” then he urged residents to take their complaints to the county’s board of supervisors, who could restore EMT staffing in Greenbackville, which is only a few minutes away from Captain’s Cove via State Line Road.

Cindy Welsh 888-241-9590 (Ofﬁce) • 410-912-4701 (Fax)

302-381-6910 (cell)

candhwelsh@aol.com

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February - Early March 2014 Ocean Pines PROGRESS

Professional Services Cleaning Services

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36 Ocean Pines PROGRESS

February - Early March 2014

Saturday, Feb. 8 Kiwanis Club’s annual winter pancake breakfast, 8-11 a.m., Ocean Pines Community Center. Tickets $5 for adults, $3 for children under 12, and free for children 4 and under. Pre-purchase tickets 410-208-6719, or at the door. Carry-out available. Monday, Feb. 10 Ocean Pines Camera Club, monthly meeting, 7 p.m., Ocean Pines library. Professional photographer Chris Parypa, guest speaker. New members welcome. Thursday, Feb. 13 Ocean Pines Garden Club, month-

HAPPENINGS ly meeting, 10 a.m., Ocean Pines Community Center. Linda Doherty, presentation on organic gardening. New members welcome. Thursday, Feb. 20 Pine’eer Craft Club, monthly meeting, Ocean Pines Community Center, refreshments 9:45 a.m., business meeting 10 a.m. Free craft project to follow. Guests welcome. 410-208-3032. Monday, Feb. 24 Ocean City Power Squadron boating course, first two-hour session

of eight-hour course, Ocean Pines Library, 7-9 p.m. Registration 6:30 p.m. Basic boat handling, navigation, federal and state regulations, rules of the road, aids to navigation, required equipment and more. Students successfully completing this course may be eligible for six months free membership in the Ocean City Power Squadron. Nominal charge for course materials. Call 410726-1509 or 302-253-0533 for advance registration information. Wednesday, March 12 Worcester Chorale, beginning of

February 15, 2014 10am—2pm Snow date: February 22, 2014

Delmarva Education Foundation

Inside the One-Stop Job Market 31901 TriCounty Way, Suite 118, Salisbury, MD 21804 Contact: Rota Knott, (410) 219-3336 rknott@delmarvaed.org FAFSA on the Web available. Spanish interpreters available.

LIFESTYLES spring concert rehearsals, home of the Chorale’s musical director, pot-luck dinner, music read-through. Rehearsals to continue Wednesday evenings at Atlantic United Methodist Church, 4th Street, Ocean City, 7-9 p.m. for June 29 concert. 410-208-4707 for details. Thursday, March 13 4th Annual Ocean Pines Chamber of Commerce Business Expo, 4-7 p.m., Route 50, across from Stephen Decatur High School, 4-7 p.m. No fee to attend. Complimentary food, beer, wine and beverages. Displays of local products and services. Booth space available. 410-641-5306, Friday, March 21 Kiwanis Club of Ocean PinesOcean City’s second annual wine tasting party and Chinese auction, Ocean Pines Community Center, Assateague Room, 4-7 p.m. Donation of $15 includes samples of wine, hot and cold hors d’oeuvres, desserts, soft drinks, coffee and water. No one under 21 admitted. All proceeds benefit Kiwanis scholarships to local graduating and deserving high school senior students. 410-641-7712 or cwarner4411@verison. net. See what we do on our web page at kiwanisofopoc.com. Friday, June 12 Ocean Pines Garden Club’s annual garden tour. The club is asking Ocean Pines homeowners to consider placing their garden on the tour. Large or small, cultivated or “natural,” formal or informal -- all gardens are given consideration. Homeowners will be given the opportunity to have an artist painting “plein air” in their gardens during the tour and will also be invited, as guests of the garden club, to the luncheon immediately following the tour. Those interested in placing their garden on the tour or with questions about doing so, contact Marian Bickerstaff, 410-208-2508. Ongoing Suicide Grievers Support Group, 3rd Wednesday every month, 6 p.m., Worcester County Health Department, Healthway Drive, Berlin, adjacent to Atlantic General Hospital. Open to anyone who has lost a friend or loved one to suicide. Free of charge. Quiet listening, caring people, no judgment. 410-629-0164. The Kiwanis Club of Greater Ocean Pines - Ocean City meets weekly at 8 a.m. on Wednesdays in the Ocean Pines Community Center. Doors open 7 a.m. October through April. Sanctioned duplicate bridge games, Ocean Pines Community Center, Sundays 1 p.m., Mondays noon, Tuesdays 10 a.m. Partners guaranteed. $5, special games $6. Third Sunday of every month is Swiss teams (no partner guaranteed for teams). Felicia Daly, 410208-1272; Pat Kanz, 410-641-8071 The U.S. Coast Guard Auxiliary, Flotilla 12-05, meets the first Monday of each month at 7:30 p.m. in the U.S.C.G.

Tax and spend mentality

Let me start by saying that I know that Ocean Pines Association dues are technically not a tax. Sadly, I am reminded of that fact every year when I prepare my federal and state income tax returns. Since I am unable to deduct association dues, the $1,004 I paid in Association dues will cost me about $151 in additional 2013 federal income tax and another $60 in Maryland and Worcester County income taxes. For purposes of this letter, however, I will refer to OPA dues as a “tax”. I own single-family residential properties in Philadelphia and Ocean City in addition to the residence I purchased in Ocean Pines in 2007. Between calendar years 2007 and 2014 my real estate taxes in Philadelphia went up less than 7 percent, much of the increase attributable to the fact that I lost the homestead real estate tax credit when I moved to the Pines fulltime in 2010. In Ocean City my real estate taxes, including the Town, State of MD and Worcester County, remained essentially the same between fiscal years 2007 and 2013. The County and State real estate taxes on my Ocean Pines property actually went down between fiscal years 2007 and 2013. Overall, the total real estate taxes I am paying on the three properties went down over 7 percent. However, during that period my OPA dues went from $815 in 2007 to $1004 in 2013 and are projected to increase another $15, to $1019 in 2014, an increase of 25 percent for the period 2007-2014. How is it that the elected officials in Philadelphia, the Town of Ocean City, Worcester County and state of Maryland understand and have been sympathetic to the pressure taxpayers have been under in a depressed economy combined with a collapsed real estate market, but the OPA Board of Directors and general manager of Ocean Pines have not? Yes, it appears that the OP Board and GM are the only ones oblivious to what has happened in the economy and to the value of real estate in Ocean Pines (as well as the rest of the country) over the last several years. In my own case, using Zillow as an approximation of market value, the value of my Ocean Pines property went down 32 percent from the time I purchased it in March 2007 to January 2014. You can argue the validity of the Zillow valuations, but there is one thing I am sure of and that is the equity (and I put down 20 percent) in my Ocean Pines residence has been totally wiped out. The Board and GM also seem to be unconcerned with the fact that many of the Ocean Pines residents are seniors on fixed incomes, like me, or young families with children to raise. It was Board member Sharyn O’Hare, I believe, a Realtor, who said that the Ocean Pine amenities add value to the properties in the Pines. I seriously question this statement. So many of these so called amenities suffer from a lack of

February - Early March 2014 Ocean Pines PROGRESS

LETTERS resident support that Association dues must be used to subsidize them. And I submit that high assessments, payable by all residents, do more to negatively impact property values than subsidized amenities, used by a few, add value. Take the Yacht Club for example. It was a major financial disappointment. We were told that building a new facility, paid for out of assessments, at a cost of nearly $5 million (including change orders) would turn things around. Yet in the proposed budget the GM felt it necessary to provide a $25 coupon to entice property owners to use the new facility. I, for one, say forget the coupon incentive program and eliminate the $10 assessment increase attributed to the program. If you truly believe your own rhetoric the new facility will make it without such a costly jump start. Then there is the matter of the golf course and aquatics facilities, both historically under-performing amenities. And it appears that they will once again disappoint. The projected fiscal 2014-2015 budget shows that combined these amenities will run a deficit of over $200,000. If there are any amenities that truly add to the value of Ocean Pines properties, it is the amenities God has provided in the form of a beautiful bay and close proximity to the Atlantic Ocean and Ocean City’s public beaches, none of which require an OceanPines budget appropriation, except for the Beach Club, which makes money. Finally, there is the matter of “funded depreciation” and the funding of capital improvement projects in general. In accounting, depreciation is an artificial “non-cash” expense recorded on the books in accordance with Generally Accepted Accounting Principles (GAAP) to allocate an asset’s economic benefit over its estimated useful life for financial statement purposes. However, proper maintenance and, when necessary, refurbishment can extend the actual, or “functional”, useful life of an asset well beyond its estimated “accounting” life. Funding depreciation based upon the artificial GAAP accounting life of an asset can therefore result in an excess of cash if the functional useful life is extended by proper maintenance and repair. This means current residents are overpaying into the funded depreciation reserve and management has less incentive to properly maintain an asset in an effort to extend the actual functional useful life of an asset beyond its artificial accounting useful life. For example, assume a new pick-up truck is purchased by Public Works at a cost of $40,000 and that for accounting and financial reporting purposes the truck has a depreciable life of 5 years (with no salvage value). Under the straight line method of depreciation, the truck will be depreciated at $8,000/yr. ($40,000 divided by 5 yrs.).

Accordingly, during the five-year accounting useful life $40,000 will have been deposited in the funded depreciation reserve from association dues, enough to purchase a replacement truck (ignoring the possible impact of inflation). And given that the funding is in hand, what is to prevent management from purchasing a replacement truck regardless of the condition of the fully depreciated truck? But now assume that same truck was properly maintained and its functional useful life is actually 10 years. Under this scenario only $4,000 would actually be required to be funded annually by property owners into a funded depreciation reserve. Furthermore, funding of depreciation should be discounted by recognizing interest earned on the depreciation reserve balance that accumulates, especially on long-lived assets funded by the reserve. Discounting funded depreciation by recognizing the interest earned on the depreciation reserve and the differential between the accounting and functional, useful life of assets will help assure that current property owners are not disadvantaged compared to future owners. In summary, full funding of depreciation expense calculated in accordance with GAAP ignores the fact that if assets are properly maintained their functional useful lives can be much longer than the estimated useful lives used to calculate depreciation for financial statement purposes. Based upon the foregoing and what I read in the Tom Stauss article “OPA collecting too much for future capital expenditures” (pg. 39, Ocean Pines Progress, January-Early February 2014) I am of the opinion that funded depreciation could easily be reduced by a minimum of $5 per year, which when combined with the $10 savings that could be achieved by eliminating the Yacht Club voucher program, would make it unnecessary to increase assessments above their current level. And what a welcome change that would be. N. James Fluck Ocean Pines

Homeless geese

I didn’t know the geese were such a problem, but what a noble solution to feed them to the homeless. Did anyone check to see how the homeless feel about this? I hope they wouldn’t prefer to go hungry. I’ve never eaten a goose. The only people I’ve heard of that did were the Cratchits when Scrooge sent them one. Perhaps it could be an item on the menu for the new Yacht Club. Hal Boyd Ocean Pines

Advertising expense

I am not an accountant, but I fail to

see why I should have to pay a proposed $10 increase in the lot assessment for a coupon which I see as an advertising expense. I realize that the General Manager wants to drive business to the new Yacht Club, but I am not interested in paying for an assessment increase to cover the $25 coupon. Charge it to advertising. Denise Lutz Ocean Pines

Lot owner burdens

I have just completed my review of the most recent edition of the Ocean Pines Progress [January-Early February 2014]. The cover story entitled “Thompson proposes $15 increase in lot assessments for next year” has just smacked me in the face. It appears that Mr. Thompson’s solution to any perceived improvement or need for additional funds is to assess the property owners. I search my memory and seem to remember that when we purchased our home in 2001 the assessment per lot was in the $600 range. I realize that there is the need for some increase in assessment but enough is enough. In the past I seem to remember increases or assessments for the Yacht Club, golf course and other alleged needed improvements. I also note that there is a proposed “amenity fee hike” being proposed. Those items serve the few, not the many. Mr. Thompson needs to remember that many residents of Ocean Pines are retired and living on a fixed income. Additionally, I seem to recall that there is a substantial amount of money outstanding in unpaid lot assessment dues owed. Contrary to the information furnished in reference to those outstanding debts, filing suit in small claims court does not require the assistance of an attorney. For matters less than $10,000 the aggrieved party can obtain the paperwork from the District Court and complete the paperwork themselves. After doing so the suit can be filed in District Court for a small fee and the Sheriff will attempt to make service. If he cannot do so there are alternative methods that are accepted by the court. A private process server can be used and, I believe, registered mail with a signed return receipt is acceptable. Let’s make some effort to obtain some available funds before we place the burden upon the lot owners. Ronald Sallow Ocean Pines

Coupon ‘nonsense’

One needs to ask why the Ocean Pines association is offering an inducement for community members to have a meal at an eatery that they in all likelihood will go to on their own to check out. I’m sure everyone knows that gift giving is a time honored tradition in our country. In Ocean Pines there is a new twist on gift giving. A $25 coupon is

OPINION

38 Ocean Pines PROGRESS

OPINION

February - Early March 2014

COMMENTARY A few simple steps for cutting the assessment even more

here is every indication that the 2014-15 Ocean Pines Association budget won’t include an assessment increase, and that’s as it should be. OPA General Manager Bob Thompson came in with a draft budget that had only a modest proposed increase, well within striking distance for cuts if the Board of Directors was so inclined. It turns the directors were just as much in a mood for a pause in increases as many property owners in Ocean Pines. In fact, after two days of budget review in early February, it appeared as though the board had cut enough to reduce the current $914 assessment by $5 or so. The board made the right move when it decided to cut $10 out of the proposed increase by eliminating or at least modifying the general manager’s proposed coupon incentive program for the new Yacht Club. It shouldn’t take too much to entice property owners to try out the new building when it opens in May. The more challenging task will be to keep them coming back. Good food and service is the key to that. Here are a few additional measures the board could consider to coax the assessment back down below $900: 1. Eliminate all funding of so-called “new capital” projects from the annual assessment. The draft budget proposes $72,300 in “new” capital spending to be funded directly out of next year’s assessment. Instead, these new projects could be paid for out of the fiveyear-plan funding stream or the Future Projects reserve. This would reduce the need to raise the assessment by $8.50 ($72,300 divided by 8,470 properties = $8.50). It would also slightly lengthen the time period in which the five-yearplan revenue stream fully pays back the construction cost of the new Yacht Club. The board has already extended this pay-for schedule by approving the new Yacht Club kitchen cost overrun, which pushed the “pay-back” period from one fiscal year to the next. Pushing it forward by a few additional months is not going to matter to anyone. OPA President Tom Terry is sincere in his desire to keep the five-year funding plan revenue stream as the source of funding for the new Yacht Club. He believes that’s the promise made to property owners in the run-up to the successful Yacht Club referendum. But using the five-year-plan revenue for purposes other than paying for the new Yacht Club doesn’t vitiate that promise; it’s a modest change on the margins. In addition, even the general manager is treating the five-year plan revenues as a source of funding for capital projects other than the Yacht Club. He is proposing to pay for $175,000 in bridge repairs and a new police station costing $500,000 out of the five-year plan. The proposed use of the five-year funding plan in this way

LETTERS From Page 37 being proposed to be spent at the new yacht club, along with a $15 increase in assessment fees to cover the cost of our so-called gift and other spending increases. As an Ocean Pines resident, does any of this make sense to you? Frankly I don’t care where the originator and supporters of this idea find new jobs as long as it’s not here in the state of Maryland. And I hope it does not take ten years for the Ocean Pines community to show them its appreciation by demanding the resignations of everyone involved in this nonsense. Perhaps at the very least let’s all be good little Indians and ask for our assessment fees back. Everyone who voted in the last Ocean Pines election should also be asking why the OPA Board of Directors is considering a $15 dollar increase in assessment

is not irrational, but it’s likely to be changed before the budget is finalized by board. 2. Eliminate “double charging” for the new Yacht Club. Under the current Yacht Club funding plan, property owners will be paying twice for it – once through the fiveyear-funding plan ($130 in the assessment) and then again with a new funded depreciation charge, which is equivalent to a little more than $13 in next year’s lot assessment, based on a $4,300,000 construction cost depreciated over 50 years and $500,000 in kitchen equipment depreciated over 20 years. [$4,300,000 divided by 50 = $86,000; $500,000 divided by 20=$25,000; $86,000 + $25,000=$111,000; $111,000 divided by 8470=$13.10.] In the recent board resolution clarifying the funding mechanism for the 2007-08 Sports Core pool enclosure project, one of the reasons given for the change was that it avoided charging aquatics members “twice” for the same amenity. If not paying twice for an amenity is a virtue for aquatics members, then it is similarly desirable to avoid double charging OPA members for the new Yacht Club. This double charging can be avoided in a number of ways, but the simplest way would be to forgo assessing a depreciation charge for the new amenity during the period in which the fiveyear-funding plan is collecting the remaining funds “needed” to pay for it. Depreciation would still show up on the books in accordance with GAAP; let the green eye-shade folks worry about how it shows up on the balance sheet. The OPA does not collect and has not collected depreciation on all of its assets over the years. Roads have been depreciated on paper but roads depreciation has been not been funded by lot assessments. It was belatedly discovered that the old golf course greens had not been depreciated over their useful life span. A thorough review of OPA assets might reveal similar funding omissions over the years. News flash: No one cares. A two- or three-year delay in funding Yacht Club depreciation to allow the five-year-plan funding to fully pay for the new building will only minimally affect the five-year-plan reserve balance. Because of an arcane accounting rule, only half of that depreciation expense will show up on the books in the new fiscal year. According to OPA Controller Art Carmine, a halfyear of depreciation is allowed for an asset that is not fully online at the beginning of the fiscal year. The new Yacht Club probably won’t make a May 1 opening, as there will be lingering punch list items to be addressed and some invoices outstanding. So it goes. The point here is that paying once for the new Yacht Club through the five-year plan funding stream should be enough.

3. Turn Management’s proposed $97,873 loss in the Yacht Club operations next year into a surplus The Board of Directors has done well in reducing the proposed $98,000 loss at the Yacht Club to zero, on the theory that operating under industry cost standards in a brand new building ought to produce it. The net effect on the lot assessment from a reduced operating loss: $11.55 [$97,873 divided by 8470 = $11.55] Another more “business-oriented” option would be to lease out the downstairs to an experienced restaurateur or management company – Billy Casper Golf could be considered, if willing to deviate from its typical business model – for a $1 a year, while operating the upstairs banquet business (and all the business booked to date) in-house with current OPA Yacht Club management. This could easily flip the projected $98,000 loss to a $98,000 surplus, with a positive $23.10 “swing” in the net assessment impact. Here’s a summary of the effect each of the proposed changes would have on next year’s proposed $15 assessment increase: Item #1: $8.50 decrease in the proposed assessment increase Item #2: $7 decrease in the proposed assessment Item #3: Additional $11.55 decrease in the proposed assessment increase Will the directors accept any of these suggestions? Possibly, but probably not.The more likely scenario is that they will take the win and declare a moral victory. Yes, a budget that reduces an OPA budget, and a previous year’s lot assessment, is noteworthy, commendable even. It’s just that another $25 reduction is achievable by acting even more boldly. – Tom Stauss

The Ocean Pines Progress, a journal of news and commentary, is published monthly throughout the year. It is circulated in Ocean Pines, Berlin, Ocean City, and Captain’s Cove, Va. Letters and other submissions should be sent via email only. We do not accept faxes or other submissions that require retyping. Letters should be original and exclusive to the Progress. Include phone number for verification. 127 Nottingham Lane, Ocean Pines, MD. 21811

fees. Even with the addition of $400,00 for kitchen equipment the community is awash in cash. Shouldn’t we expect the board to do due diligence and avoid this projected increase? It appears to me and others in the community that there are ulterior motives behind the $25 coupon. Could it be that our leaders are just looking for a photo opportunity with a packed Yacht Club as a background? Would the revenue that the coupon generates be used as an excuse to cloud the losses at the new Yacht Club, or even to beef up attendance figures to show it’s not as bad as we think? The $25 coupon would be better targeted to those outside the community in order to act as an enticement to build a larger patronage base and profitability. Roland Langevin Ocean Pines

PUBLISHER/EDITOR Tom Stauss tstauss1@mchsi.com 410-641-6029

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OPINION

OPINION February - Early March 2014

Ocean Pines PROGRESS

Proposed $3.7 million in capital spending next year isn’t ‘real’

he number of Ocean Pines property owners who have checked out the thick draft 2014-15 budget book available for inspection in the lobby of the OPA administration building probably can be counted on two hands, maybe one. It can be a daunting task, but it really doesn’t require an advanced accounting degree to make sense of it. Just a little time, patience and a healthy dose of skepticism, or cynicism, as the case may be. For those few intrepid souls who made it through to the back of the book, the draft reserve summary probably caught them by surprise. If the reserve summary sheet, helpfully printed elsewhere on this page, is an accurate crystal ball into Ocean Pines’ financial future, the OPA reserve balance in April of 2015 will be precariously low. That’s a big If, of course. It’s difficult to imagine that the OPA administration would ever allow it to sink that low, or that the Board of Directors would approve the spending binge on capital spending (funded from reserves) that the summary sheet suggests could happen. First, a bit of in-the-weeds analysis. According to the summary sheet, the OPA’s Capital Assets Replacement Reserve (which is called the Major Maintenance and Replacement Reserve in the monthly OPA financial statements) will stand at a healthy $2,110,506 at the end of the current fiscal year on April 30, just a few weeks away. It’s healthy, because it will reflect the fact that the new Yacht Club will have been substantially paid for by that time. Final payments to Harkins Construction, the Yacht Club contractor, mostly likely will occur sometime early in the new fiscal year that begins May 1, in the range of a few hundred thousand dollars. Those payments will be charged against the five-year-plan revenue stream, one of two funding sources for the replacement reserve. The year-end balance is healthy, or least acceptable, because, in the May 2014 financials, the replacement reserve will be credited with an additional $2.75 million in fresh new assessment dollars, $1.1 million attributed to the so-called five-year funding plan (in its sixth year) and another $1.65 million in funded depreciation, bizarrely called “historical” on the summary sheet. (Perhaps it should be relabeled hysterical, because it certainly is amusing that the OPA number-crunchers insist on calling fresh new assessment dollars “historical.”) But whatever these funding streams are called or the amusement value therein, the $2.1 million replacement reserve balance on April 30 will grow to $4.85 million by the end of May, a wee bit short of $5 million. Now that’s healthy; at least, it should be so regarded.

ically at the proposed capital spending list, inclusion on the “approved” list does not mean every approved project will be An excursion through the curious cul-de-sacs An excursion through theby-ways curious and by-ways and cul-de-sacs executed. of Worcester County’s County’s most densely community. of Worcester mostpopulated densely populated community. A dirty little secret of Ocean Pines By TOM STAUSS/ By TOM Publisher STAUSS/Publisher financial management is that the “approved” capital spending list really is just a suggested list of possibilities: the As for the coming year, a case can be made General Manager reserves the right not to launch a particular capital project or that reserve funding is about where it should buy a new vehicle or whatever; it takes additional board action to spend the be, but that really depends on just how much money that’s been authorized (above the spending will actually occur. general manager’s $15,000 spending authority). So how, with a beginning balance of over-funding its reserves would be withThe approved capital plan is chock almost $5 million at the beginning of the drawn in shame and abject apology. full of placeholders, projects that might new fiscal year, could the OPA’s reserve Don’t expect that to happen anytime happen in the budget year but might balance fall by almost $4 million by the soon. Over the next ten years, there is not. end of the fiscal year, given the fact that every reason to believe that the OPA is Of course, surprises and emergencies The Ocean Pines Progress, a journal of Yacht Club construction invoices have collecting more than it could possibly sometime happen, too: The fact that a news and commentary, is published been mostly paid for in the current fiscal spend on capital expenditures that have particular capital expenditure hasn’t monthly throughout the year. It is year? been included in the OPA’s latest Capi- been included in a capital budget for circulated in Ocean Pines, Berlin, West How is it even conceivable that the tal any particular fiscal year doesn’t mean Improvement Plan, not yet approved Ocean City, Snow Hill, Ocean City OPA could have a paltry reserve balance by the OPA Board of Directors. and it won’t be spent. Ocean Pines’ history Capain’s of $1.2 million on April 30 of 2015? As forCove, the Va. coming year, a case can is replete with examples of unbudgeted Letters other editorial submissions: Simply put, it won’t. It’s only con- be madeand that reserve funding is about expenditures that needn’t be recounted Please submit via email only. We do not de- here. ceivable if one accepts the possibility or where it should be, but that really accept on faxes or submissions that require probability that the OPA will manage to pends With all that said, the projected just how much spending will retyping. Letters should be original and spend almost $4 million in capital proj- occur. $1.22 million April 2015 reserve balance exclusive to the Progress. Include phone ects or items -- $3.7 million is the numThe approved capital budget simply shouldn’t be regarded as a serious, plauber shown on the draft reserve summary is not a reliable guide to capital expen- sible number. OPA directors well know – next year. that they would be justly accused of poor ditures in any given year. If indeed the OPA manages to go financial management should they alThe127 general manager’s proposed list Nottingham Lane, on that kind of spending binge, then of $3.7 million in capital spending from low the balance to fall that low. Ocean Pines, MD arguably the OPA should be raising as- reserves has already been reduced by the It’s anyone guess as to how much sessments next year to make sure the directors; it would have been irresponsi- capital spending actually will occur next PUBLISHER/EDITOR reserves don’t drop down to that level. ble not PUBLISHER/EDITOR to do so. But even if the capital year, given the generous number of Tom Any opinions expressed previously on spending list hadStauss been rubber stamped placeholder items in the proposed capTom Stauss these pages that the OPA is on a path to by a board tstauss1@mchsi.com that had declined to look crit- ital budget

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The proposed OPA reserve summary in the initial budget draft for Fiscal Year 2014-15; note the replacement reserve number of $1.22 million as of April 2015.

40 Ocean Pines PROGRESS

February - Early March 2014

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