February 2019 Ocean Pines Progress by Ocean Pines Progress

February 2019

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THE OCEAN PINES JOURNAL OF NEWS & COMMENTARY

COVER STORY

Bailey under withering fire from directors unhappy with his job performance Dissatisfaction with an unauthorized salary increase, the announced hiring of an Information Technology consultant, a significant cost overrun in a human resources position, and a budget process in disarray has general manager in the crosshairs By TOM STAUSS Publisher

ohn Bailey’s continued tenure as general manager of the Ocean Pines Association may be in jeopardy. In a meeting of the Board of Directors Feb. 16, he came under sustained and withering fire for a series of actions that could contribute to a vote of no confidence in his tenure later this month. After an opportunity to mend his ways, should he fail to do so to the satisfaction of his board critics, his eventual exit from Ocean Pines seems more likely than not. There had been some speculation that Bailey might be fired because of a board vote to go into closed session to discuss personnel and legal matters after the regular meeting Feb. 16. Sources say that terminating Bailey was never on the radar of the meeting, however. But sources also said that the board was preparing to have a vote of no confidence on his continued tenure, with the intent of giving him a certain amount of time to redeem himself in the eyes of his overseers. But the closed session was taken up with other matters, and an

NEWS ANALYSIS expected debate over his job performance did not occur. It might occur at a special meeting of the board Feb. 23, however, or perhaps await his annual performance review scheduled for March. How much time he might be given to improve is a topic for behind-the-scenes discussions among individual directors, the Progress has learned. Some directors are said to want give him about a month to turn things around, another until May 1. One other director reportedly wants to give him six months, while another wants to make a move immediately with no opportunity for redemption. OPA President Doug Parks, on the other hand, is reportedly in the camp of wanting to work with Bailey and opposing any board action that could lead to his eventual departure. Also considered a supporter is Director Collette Horn. To Page 3

Assessment increase now at $20, but board continues to work on lowering it even more ~ Page 24

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New golf clubhouse takes center stage; renovation fades

Interest among members of the Board of Directors in a second floor renovation of the aging Ocean Pines Country Club is fading, replaced by an apparent consensus, overcoming previous division, in a new, 7,000 square foot foot golf clubhouse that has gone out to bid and which, depending on construction costs contained in design-build bid proposals, might be approved without a community-wide referendum. ~ Page 5

Estimates for police station expansion balloons to $800,000 An estimate of $400,000 for the expansion and remodeling of the Ocean Pines Police Station contained in last year’s reserve study has ballooned to $800,000, reflecting costs associated with a larger footprint from that envisioned not long ago. General Manager John Bailey included the $800,000 estimate as part of budget documents released during a public hearing on the budget Feb. 2. ~ Page 12

Board denies Bailey authority to issue craft shop RFP Director Steve Tuttle had intended to offer during a Feb. 16 Board of Directors meeting a motion to approve a concept design and a new location for the Pine’eer Craft building in White Horse Park. The motion would have authorized General Manager John Bailey to move forward with developing construction plans based on the conceptual design. It didn’t come to pass. Without a lot of explanation, the motion was pulled from consideration. ~ Page 15

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Bailey in the crosshairs From Page 1

Prompting much of the dissatifaction is this year’s budget process, which has been much more protracted than most years as the directors have struggled to find ways to lower projected assessment increases. Some directors blame Bailey for not following board budget guidance in the preparation of his intial draft, including a directive to propose 2.5% or more cuts across the departments. Director Esther Diller criticized Bailey at the meeting for not talking individually to department heads before submitting revised departmental budgets to the board for review. She told Bailey that it should have been a collaborative process and it wasn’t. At the Feb. 15 board meeting, Director Slobodan Trendic went after Bailey in three areas, in tones that at times resembled that of a prosecuting attorney. He said that the general manager is currently receiving a salary of $157,000, $7,000 more than the amount specified in his employment contract. He wanted to know how the overrun occurred. He also said that Bailey had decided to offer a consulting contract to Len Smith, who had served previously as an information technology consultant for the OPA, as a project manager to help oversee the roll-out of new management software by NorthStar Technologies. Trendic said that the decision to hire Smith exceeds Bailey’s spending authority of $15,000 and that Bailey should have brought the proposed hiring of Smith to the board before making the hire. Trendic also slammed Bailey for spending more on a human resources manager for the OPA than the amount budgeted, without obtaining board approval for the overrun. Trendic said the position was budgeted for $18,000 and has ended up costing the OPA $40,000. Bailey also came under fire for recommending a drainage project award to a vendor that was not the lowest bidder. The low bidder was qualified nd has worked for the county in Ocean Pines previously.

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February 2019

February 2019 Ocean Pines PROGRESS

Board focusing on new golf clubhouse; interest in Country Club renovation fades A decision on a referendum will probably depend on amount of bid; estimate is for $1.6 million, but local builder submitted proposal for $1.3 million By TOM STAUSS Publisher nterest among members of the Board of Directors in a second floor renovation of the aging Ocean Pines Country Club is fading, replaced by an apparent consensus, overcoming previous division, in a new, 7,000 square foot foot golf clubhouse that has gone out to bid and which, depending on construction costs contained in design-build bid proposals, might be approved without a community-wide referendum. The abrupt change in the narrative about the Country Club renovation followed a board decision in mid-January to invite local builder/ developer Marvin Steen to review the condition of the aging building’s first floor. At the board’s January meeting, Steen presented a proposal for

roughly $500,000 in renovations to the second floor, well under estimates and actual bids for renovation that had been on the table for some time. Steen had offered his proposal for a low-cost renovation last year, but there was little interest by General Manager John Bailey or most directors in inviting him to discuss his ideas. OPA President Doug Parks seemed to be of the view that if Steen wanted to be part of the dislog, he should have submitted a bid proposal as others did. Two directors, Slobodan Trendic and Esther Diller in particular, pressed their colleagues to invite Steen in to discuss his proposal, and in the end they went along. Two directors, Steve Tuttle and Colette Horn resisted, but they were

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out-numbered by other directors who felt nothing would be lost by extending Steen the courtesy of listening to what he had to say. One factor in why Steen’s proposal was so much less costly than bids submitted by local contractors is that Steen had offered his assistance in coordinating sub-contractors for various components of a second floor renovation with OPA department heads, Eddie Wells of Public Works and Kevin Layfield of facilities management. Steen was offering his assistance with no contractor’s mark-up or charge of any kind. After accepting Steen’s estimated component costs for a second floor renovation, the board informally invited him to tour the facility again, with the aim of getting his views on what needed to be done with

the first floor, which despite roughly $500,000 in renovations more than a year ago has had all sorts of problems since, including persistent flooding and mold growth. Director of Golf John Malinowski told the Progress that the building has leaked persistently both on the bag room side of the building and in the Terns Grille side, making working in the building challenging at best. Previously, there were complaints about roof leaks, but other reports indicate that most if not all of those have been repaired. Steen and his design associate Bill Stamp took a close look at the first floor and were appalled by its condition. Steen later told the Progress that he wasn’t sure that the first floor could be fixed for $500,000. He said he wasn’t sure how the drainage issues could be permanently fixed, at one point suggesting that some sort of wall would be needed to keep storm water from penetrating the building’s exterior. Faced with the potential cost of a q

OCEAN PINES

Golf clubhouse From Page 5

COVERY STORY

February 2019

$l million or more for a total renovation of both the first and second floors, Steen said he and Stamp concluded that the best course of action was to demolish the building and replace it with a new, 7,000 square foot building that a local golfer had roughed out as an option. Also contributing to the aboutface was the fact that Steen saw a copy of a proposal from Gillis-Gilkerson, a Salisbury contractor, for a new, 7,000 square foot building costing $1.3 million. “It was signed by the contractor, and my reaction was that the board should have signed it as soon as they received it, it was such a good offer,”

Steen said, adding that at $1.3 million it cost less than $200 a square foot, almost unheard of in the commercial construction business. “Plus, they use reputable sub-contractors for their jobs.” His only caveat was that the OPA would have to agree to avoid change orders once a contract was signed. “Just sign it and let em go to work,” he said, “and avoid interfering.” Because of a requirement in OPA bylaws requring at least three bids for major projects, the board was in no position to award a sole source contract to Gillis-Gilkerson for a new building. The offer for a new building reportedly had been contained in Gillis-Gilkerson’s bid for a renovation

of the second floor and other exterior and roofing improvements costing $1.6 million. A conceptual drawing of a new building prepared by a local golfer was part of a request for proposals for a new building that the board authorized Bailey to issue at the board’s mid-January meeting. The general manager’s draft budget, and the budget approved by the board at its Feb. 16 meeting, includes an estimated cost of $1.6 million for a new building, the same amount that Gillis-Gilkerson submitted for a renovation. Bids for a new building are due back by Feb. 22, after which it will become clear whether Gillis-Gilkerson has resubmitted its previous offer to build a golf clubhouse for a

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$1.3 million and what sort of proposals that company’s competitors have submitted. The OPA administration will vet the competing bids after Feb. 22, with a recommendation and board action possible in March. Both Diller and Trendic, who had promoted the lower-cost Steen renovation option as the best option, changed their opinions once they learned of Steen’s changed attitude toward a renovation. “We did our due diligence by inviting him and he gave us his ‘best practices’ judgment on what we should do,” Trendic said. Diller made

similar comments. “I’d say that renovation is dead as an option,” she said. What remains to be considered, assuming that the low bid comes in at acceptable cost, is whether the board will seek property owner approval for building a new golf clubhouse even if it isn’t strictly required by the OPA bylaws, which spell out a thresheld of 20 percent of annual OPA revenue from assessments at which a referendum is required. The threshold is roughly $1.8 million, and the current project cost estimate is less than that. How close the total cost compares to the referendum threshold is what probably will decide the issue for a board majority. Director Ted Moroney told the Progress that he is prepared to vote for a referendum only if the construction cost comes within $100,000 of the referendum threshold. Outside that window he said he is prepared to proceed without a referendum, he told the Progress. Moroney wondered what might happen if a referendum was conducted and the project voted down by OPA members. “We are still obligated under our bylws to repair the building under those circumstances,” he said. He said the OPA received bids well over $1 million but under a referendum threshold for a renovation of the existing Country Club, which could be revisited should a new golf clubhouse fail in a referendum. Previously, another director, Frank Daley, said he was inclined to let OPA property owners to decide whether to build a new golf clubhouse, but more recently he indicated he was willing to go along with “the flow” of board sentiment. It was Daly who first disclosed that it was Gillis-Gilkerson who submitted a low bid for renovation, at $1.3 million, with other bids ranging from $1.5 million to $1.7 million. Daly said that OPA President Doug Parks had contacted Gillis Gilkerson to obtain a rough estimate of the cost of building a new building, a single-story golf-oriented building of about 7000 square feet. He said the estimate was close to the cost of a renovating, which to his way of thinking favors a new building over renovating a building built in the 1970s. Parks said the estimate for a new building covered construction costs only, excluding site preparation and q

6 Ocean Pines PROGRESS

Page 36

Bayside Gazette

February 2019 Ocean Pines PROGRESS 7 February 7, 2019

8 Ocean Pines PROGRESS Golf clubhouse

OCEAN PINES

February 2019

From Page 6

demolition. Daly, who is liaison to the Golf Advisory Committee, has said he was open to consideration of both renovation and replacement options, with the caveat that changing the use of the Country Club into a golf-only facility would require buyin from the Ocean Pines Association membership in the form of a community-wide referendum. “Although I am open to listening and evaluating all alternatives, a golf-only facility will be a tough sell; in my opinion any golf-only facility would need to be approved by referendum,” Daly said then. “The very good thing about the current RFP is that it creates a ‘community centric’ space, an area to be potentially utilized by all Ocean Pines homeowners and clubs. Take that away and the dynamics of the discussion change significantly.” As designed conceptually, the new golf clubhouse contains a room where community meetings could be conducted. Early reports were that some sort of sliding glass door would separate the dining area with a room that could be used by community groups.

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Bailey issues RFP for replacement cart barn

Moroney initially said construction of a new cart barn could provide space for a temporary golf pro shop but that option has been taken off the table.

Estimated cost is $120,000; bids due back by March 9 By TOM STAUSS Publisher t the same time that he issued a request for proposals for a new golf 7,000 square foot golf clubhouse to replace the aging Country Club, action he took in response to a motion by the Board of Directors, General Manager John Bailey also posted an RFP for a replacement golf cart barn, this time without a specific board directive to do so. Both motions were posted on the Ocean Pines Association’s Web site Jan. 24, with responses due back from contractors Feb. 22 at noon. Ocean Pines Association Director Ted Moroney confirmed in response to a question from the Progress that Bailey had not discussed the cart barn with the board prior to posting the RFP. He said the cart barn replace-

ment is a project listed in the OPA’s recently completed reserve study, and that Bailey was acting on his authority as the GM when he issued the RFP. Moroney said that the RFP should produce solid cost estimates for a cart barn replacement and it will be up to the board to decide whether to proceed with it. According to a list of replacement reserve items included in a Feb. 2 budget update prepared by Bailey, he estimates the replacement cost for a new barn at $120,000. The board is facing a fiscal year, 2019-20, in which there appear to be lots of demands for spending from the OPA’s replacement reserve, so it’s not clear whether a board majority will favor cart barn replacement once bids are opened, vetted and presented. There also could be pressure from

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the community to put both projects before the community in a referendum if their combined costs approach the referendum thresheld of roughly $1.8 million.

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Police station construction cost balloons to $800,000 Bids due back Feb. 22 for enlarging, remodeling existing structure By TOM STAUSS Publisher n estimate of $400,000 for the expansion and remodeling of the Ocean Pines Police Station contained in last year’s reserve study has ballooned to $800,000, reflecting costs associated with a larger footprint from that envisioned not long ago. General Manager John Bailey included the $800,000 estimate as part of budget documents released during a public hearing on the budget Feb. 2. In those documents, which he summarized during the meeting, he suggested that half of the revised project costs could be paid for out of the replacement reserve with the remaining $400,000 treated as new capital. The new capital portion of the project could be handled through an internal borrowing procedure that has been used several times over the years by the OPA. Bailey suggested that the $400,000 in new capital spending could be borrowed from the OPA’s replacement reserve and paid back over ten years at 3 percent interest, presumably from revenues generated by the annual lot assessment. Elewhere in his budget documents, however, Bailey listed the entire $800,000 as a replacement reserve item or project, which suggests a degree of ambiguity on how the po-

per, calling it a “stupid” way to manage OPA capital financing. This mechanism was last used to pay for a portion of the Sports Core pool enclosure that occurred in 201617. The board at the time authorized internal borrowing to pay for half of the enclosure’s construction cost,

Golf cart barn From Page 11

square foot building, presumably within the footprint of the existing cart barn. The RFP also calls for the complete demolition of the existing building, an “engineered layout” of a new building, additional earthwork to raise the elevation, a storm-water system to tie into the area’s existing system, stabilization and paving to tie into existing driveways, landscaping, and connection to existing water and sewer lines. Among other features, the RFP calls for garage doors to be installed at each of the building and a blue metal roof to match other OPA facil-

Floor plan of 3,000 square foot addition to the Ocean Pines police station in White Horse Park.

lice station project will be paid for. He told the Progress in a Feb. 8 telephone interview that the reference to $800,000 in the document as a replacement reserve item was a mistake, but in the end could turn out to be the way the board handles it. “I’m certainly not opposed to keeping things simple,” Bailey said. The board of directors has not made a final determination of the funding mechanism. Former OPA Director Jeff Knepper and others criticized internal borrowing during the Feb. 2 budget hearing as overly complicated or, in the case of Knepities, along with engineered plumbing for cleaning and washing of golf carts, as well as a fire supression system if required by code. The garage doors on both ends of the building appears to address an acknowledged defect in the existing building, a single door that makes manuevering golf carts inside the building somewhat difficult. The RFP is asking for a guaranteed maximum price for the project. Assuming the requisite number of bids are received by the deadline of Feb. 22, evaluation of the proposals will take place over the next several weeks. Bailey is envisioning a contract award by March 9.

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Police station From Page 12

over a ten-year period. According to the OPA’s audited financial statement dated April 30, 2017, the internal loan was paid off on schedule with a final “payment” of $69,115 during the 2016-17 fiscal year. No such payment was recorded on the 2017-18 audited statement, suggesting that this particular instance of internal financing occurred without much fanfare or controversy. Director Slobodan Trendic, during a January board meeting, suggested treating a portion of the OPPD project as new capital since it involves expanding outward from the existing building. Any portion of the enlarged building that’s considered new capital would directly affect the operational bottom line for the fiscal year in which the spending occurs or is booked under the OPA’s accrual accounting. In the case of the OPPD expansion, a $400,000 new capital expenditure would affect this year’s bottom line if it a building expansion were completed and paid for this year. The same would apply to the $400,000 if applied to next year’s budget. New capital expenditures are paid for directly from the relevant’s year’s lot assessment revenue. If booked as new capital in the current fiscal year, it would most likely produce another operating fund deficit. If applied next year as new capital, it would add to pressures to increase the assessment. The operating fund would be unaffected if the entire project is considered a replacement project, which could then be funded out of the OPA’s replacement reserve, with no immediate effect on the operating fund or the relevant year’s operating deficit. There is uncertainty about when the police department project will actually occur. When Director Frank Daly, during the mid-January board meeting, offered a motion to solicit bids for the expansion project, he said he wanted “sawdust to fly” as early as March, underscoring the urgency with which he wanted the OPA administation to proceed with the project. His motion was adopted unanimously, suggesting all the directors gree with Daly’s sense of urgency. Chief of Police Dave Massey, during budget review meetings in January, had appealed for board action on the project, which had been awaiting completion of the reno-

February 2019 Ocean Pines PROGRESS vation of the Country Club second floor, which also been a project that has had trouble gaining much traction. That renovation now has apparently been scrapped in favor of a new golf clubhouse building. Massey told the board that the current space allotted to the OPPD is inadequate, is unsafe for both department staff and detainees, and is a disaster just waiting to happen. According to some who have toured it recently, it’s a dark, dingy and unwelcoming work environment for both staff and visitors.

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Bailey provided some quick turnaround on Daly’s motion, which had passed unanimously. He posted a request for proposals Jan. 24 on the OPA Web site for an enlarged and remodeled police station. The RFP included a floor plan for the project that called for 5,300 square feet finished facility, with 3,000 square feet of that comprised of new space and 2,300 square feet of existing space, with uses within the space substantially rearranged. The enlarged police station would continue to share a roof with the

adjoining administration building, which, together with the police station, would be comprised of roughly 11,000 square feet. It was built in the 1980s. Bailey said a revised floor plan for the expanded police station actually called for a modest increase in the square footage from 5,300 to 5,700. The revised floor plan was provided free of charge to the OPA by Marvin Steen of Steen Associates, Bailey said. “The design still conforms to q

OCEAN PINES

14 Ocean Pines PROGRESS

OCEAN PINES

February 2019

Police station From Page 13

specifications provided by criminal justice design experts,” he added. Although Bailey did not offer any explantion for the higher price tag associated with the project in public comments, he told the Progress it reflected the larger footprint that has emerged in recent weeks. It’s more than 1,000 square feet larger than had been allocated for the project in a previous iteration that was reflected in last year’s reserve study. In the initial RFP that was posted, Bailey went with a larger footprint recommended by Massey that had been prepared back in 2016

with the help of “criminal justice design experts,” according to language in the RFP. The Steen addendum for a 5,700 square foot footprint was sent out to contractors subsequent to the initial version of the RFP, Bailey said. The basic layout of the space was the same, he said. “Any design-build plan for the Police Department must meet criminal justice design and construction standards,” the RFP states. “The goal is to provide adequate sapce for the OPA Police Department and the Administration Offices of the OPA.” That the project scope includes any expansion at all is the result of a recommendation offered several months ago by Bailey, which in turn

was a defacto rejection and replacement of a police station renovation plan that a previous board had adopted as official OPA policy more than two years ago under the presidency of former OPA President Tom Herrick and Acting General Manager Brett Hill. The earlier, now discarded plan had been to expand the police station within the existing footprint, shrinking the portion of the building used by the OPA administration. It was anticipated that some administrative functions would be shifted over to the renovated Country Club, but that plan, too, has fallen by the wayside. There appears to be an emerging

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consensus on the board to replace the Country Club with a new, smaller golf clubhouse of roughly 7,000 square feet. The police station RFP, which calls for the contractor to provide temporary facilities for the OPPD to operate during the renovation and expansion, asks contractors to respond with proposals by Feb. 22, with vetting to follow, and a contract award by March 8 or sooner depending on board actions. The temporary facilities would probably be an operations trailer set up near the basketball court located behind the Administration building, Bailey said. Detainees would be transported to neighboring police deparments utilizing current mutual aid agreements, he said. “We don’t keep detainees for very long as it is,” he added. Bailey said there have been preliminary discussions with county officials about any potential wetland or other regulatory issues and that so far no “red flags” have emerged that could delay the project. He noted that the expanded OPPD footprint would be contained to existing impervious surface, so no new disturbance of non-wetlands would occur as a result of the expansion.

Property owners cited for covenant violations

ith the property owners declining to bring their lots into compliance with the Ocean Pines Association’s restrictive covenants, the Board of Directors on Feb. 16 voted to send four properties to legal counsel for resolution of outstanding violations. Directors found the properties each in continuing violations of provisions of the declaration of restrictions. At 74 White Horse Drive and 124 Sandyhook, the wners were cited for having an unregistered vehicles on the property. At 44 Pinehurst Road, the property was found in violation of OPA maintenance requirements. An initial inspection was conducted in July 2018 and found the property was in need of maintenance and was generally unkempt. Repairs must be made to siding, deck, and soffit and yard debris. A violation was found a 6 Ivy Lane in October 2018 because two sheds are located on the property. Only one shed is permitted per lot in Ocean Pines.

OCEAN PINES

February 2019 Ocean Pines PROGRESS

Conceptual drawings for a new craft building in White Horse Park.

Board denies Bailey authority to move ahead with craft building RFP By TOM STAUSS Publisher irector Steve Tuttle had intended to offer during a Feb. 16 Board of Directors meeting a motion to approve a concept design and a new location for the Pine’eer Craft building in White Horse Park. The motion would have authorized General Manager John Bailey to move forward with developing construction plans based on the conceptual design. It didn’t come to pass. Without a lot of explanation, the motion was

pulled for consideration, reportedly out of concern that the board and the OPA needs to get a better handle on capital expenditures over the next year. If the project is brought before the board at some point, plans developed by MAD Engineering, the same firm that completed the White Horse Parks bathrooms, will be the basis for the new craft building. Tuttle’s motion would have directed General Manager John Bailey to issue the RFP as soon as the design work was provided to OPA.

The Bids for construction were scheduled to be presented to the board for additional action at a board meeting in April. Construction had been anticipated to start in early May with completion by early August, with interior outfitting expected by Aug. 20. The plan is to locate the new building north of the bathrooms across from the administration building and adjacent to the Farmers Market. According to project plans, the exterior colors and finish will match

the bathrooms keeping with the new look of Whitehorse Park. An open floor plan allows for the placement of shelving and displays in a fashion that best suits the needs of the club. Exterior Windows will wrap across the front and up each side allowing for abundant natural light and displaying of merchandise, there will be a small 8-foot by 6-foot storage closet behind a 4-foot by 6-foot counter. Customers will enter through double doors located on the side facing the Administration building; the rear of the building will have a small window and an access door. The existing craft building would be demolished and will provide a place for additional parking that should help resolve the issues with parking and drop offs at the community center. The building will have the same footprint, exterior finish, and roof line as the bathrooms. MAD Engineering can modify the existing plans they developed for the bathrooms for an estimated $4,000. Once the plans are completed, Bailey had intended to release an RFP based on those plans. The building if built will be approximately 19-foot by 25-foot for a total of approximately 475 square feet and will include HVAC equipment. Cost of outfitting the building are to be borne by the Pine’ eer Craft Club. The Pine’eer Artisan and Gift Shop was established in 1974. To date they have donated over $151,182 to Ocean Pines organizations.

Trendic pushes back on Terry’s critique Says former director had operating deficits, too, including $1.02 million in 2013

board from the period in which the operating deficit ballooned. Terry said when he left the board in 2016, the OPA’s operating fund was in good shape. It was only when he was off the board that massive failures in mangement occurred, Terry said. He exempted all four directors who were present at the meeting from any criticism, but said there was one director, not present at the meeting, who served on the board when the financial debacle occurred. In a rebuttal delivered during a Feb. 9 work session on the budget, Trendic said Terry’s reference to a director who was on the board in the

fall of 2016 and not present at the Feb. 2 meeting could have only referred to him. “I wasn’t there because I was out of town,” Trendic said, explaining why he felt compelled to respond to Terry’s critique. “My wife was having surgery. That was my priority.” Trendic said that he was elected in the summer of 2016, joining the board in August, the same month Terry retired after six years as a director. Trendic said that current OPA president Doug Parks was appointed to the board in the fall of 2016, Ted Moroney was appointed in 2017 (elected in 2018), and Colette Horn was elected in August of 2017,

Slobodan Trendic

Tom Terry

all serving during the time when financial challenges occurred. Trendic said that during the time period when the operating deficit ballooned, the year Hill served as acting general manager, he fought against board inaction that he said q

By TOM STAUSS Publisher ormer President and six-year member of the Board of Directors Tom Terry criticized former directors and one current one for racking up a $1.6 million operating fund deficit over one and a half years, apparently referring to a year in which Tom Herrick and Brett Hill served as president and acting general manager, respectively. In remarks delivered during Public Comments at a Feb. 2 budget town meeting, Terry also targeted Slobodan Trendic for criticism, not naming him but making a reference to the “only” director still on the

16 Ocean Pines PROGRESS

OCEAN PINES

February 2019

Trendic vs. Terry

Former human resources manager says there’s been ‘no response’ to his request for reinstatement

From Page 15

Douty says he’s disappointed but not surprised by OPA’s silent treatment By TOM STAUSS Publisher ormer Human Reources Manager Nate Douty, terminated from his position by General Manager John Bailey in early January, says he’s not received any response to his letter to the Board of Directors asking to be reinstated. “No response,” he said in a recent telephone interview. “I’m disappointed, but not surprised.” He said he is struggling to come to terms with how the Board of Directors, who Douty said forced Bailey to terminate him, would make a “politically-motivated decision rather than a performance-based one.” He continues to believe he was the victim of a “political take-down” aimed not at him initially but at Director Slobodan Trendic. When his investigation of an alleged but subsequently deemed meritless complaint against Trendic’ failed to yield the results desired by some of Trendic’s colleagues, Douty said he paid the price. “I’m at a loss of how the board could have allowed this,” he said. “I would have preferred that they would see the fallacy of their decision” and reinstate him. Douty provided some new details or clarifications of the events that led to his dismissal. As reported in the January edition of the Progress, Douty first learned of a complaint against Trendic by Public Works Director Eddie Wells, who shared it with Bailey, who then ordered Douty to initiate an investigation. The complaint involved an interaction by Trendic with Public Works employees on a job site near Trendic’s home. Douty said that three OPA directors -- President Doug Parks, Vice President Steve Tuttle and Secretary Colette Horn -- sat in on a meeting with Bailey and Wells in which the complaint and his investigation was discussed. Douty said he was grilled by the directors, in particular a “short-tenured director” who he thought was a “Trendic ally,” on details of the investigation. He declined to name the director but it could only have been Tuttle, since Parks and Horn have been on the board for at least two years. He said he was told to obtain a written statement from a private construction contractor on site to verify the accuracy of the complaint. Douty said he tried to obtain the written statement from the contractor who had promised one but who then declined to do so, probably “because he didn’t want to get involved in Ocean Pines politics.” Douty said he informed Bailey and the directors that he had made the attempt and also conveyed to them what the contractor had told him in person. The essence of what Douty’s investigation led him to conclude was that Trendic had made no attempt to tell the employees how to do their jobs. Had he done so, it would have been a potential ethics violation. “There was no violation,” Douty said, suggesting that Parks and Tuttle weren’t happy with that fact. “But I did everything they asked of me.” The former human resources manager said he assumed that the entire board of directors was involved in the decision to terminate him, but that turns out not to be true. The Progress has learned that there was no board vote to terminate Douty, that such an overt intervention in the day-to-day management perogatives of the general manager would violate governing documents that specify that it’s the general manager who has the power to hire and fire contractors or employees. “I don’t know for a fact that the entire board voted to terminate me,” Douty said. He previously had indicated that Bailey, when delivering the news that he had been terminated, would only say “board no confidence” in explanation for why he had been terminated. “But if they didn’t vote to fire me or agree that it should be done, they haven’t said that they didn’t, nor have they rescinded the termination.” Douty said he Bailey told him that the general manager was forced to terminate him, perhaps threatened with the loss of his own job if he didn’t do so. “I know JB didn’t want to fire me,” he said. “He and I had a great relationship.” Douty said he did “a lot of good things in the job,” helping to run the OPA in a more business-like manner that he thought was something the board would have endorsed. He said after his termination he would have expected more help from some directors to get his job back, but none has been forthcoming.

contributed to the problems. He said he opposed a 20 percent give-back at restaurant venues and urged the board at the time to make budget cuts that could have reduced the operating fund deficit. He was also critical of then director and OPA Treasurer Pat Supik, who he contended passively accepted the accumulated deficits that occurred while she was treasurer and chief financial officer. The criticism of Supik was said to have been a factor in her decision to resign from the board and as treasurer, a decision that led to friction between Parks and Trendic at the time. The frostly relationship between the two has not dissipated. He said he voted against budgets in the two years at issue, adding that Parks did, too, in one of those years. He also suggested that Terry, in his six years on the board, was not the paragon of fiscal rectitude that his remarks seemed to indicate. Trendic said in 2013, a year Terry was OPA president, the operating fund deficit was $1.02 million, citing the audited financial statement for that year. The deficit was $559,000 in 2014, $712,000 in 2015, and $402,000 in 2016, the year Terry retired. “It was $363,000 the following year,” Trendic said. During the year of Herrick’s presidency and Hill’s year as acting general manager, of current directors, only Trendic and Parks were on the board. In a response to a Progress email, Terry attempted to explain why he was critical of Trendic for his alleged role in the financial debacle while exempting Parks. He also said he had not been aware of why Trendic had not been at the Feb. 2 meeting and that he hoped Trendic’s wife’s operation “went well.” “My reference, about [Trendic’s] absence from the meeting, was to show I was not referring to any of the board members who were present. None of the Board Members present for the meeting voted to remove the GM back in 2016. In addition Doug Parks did not vote to remove the GM in 2016 either since he was not on the board yet,” he wrote. “In my view the vote [to remove then general manager Bob Thompson] started the community on the downward path,” Terry said. “If cer-

tain Board Members, who voted to remove the GM, later pushed back on what was happening, that is good they did, but the failure still happened,” he concluded.

Terry made no mention of the August, 2016, firing of former general manager Bob Thompson in his remarks on Feb. 2, focusing on the operating deficit that accumulated

in the years that followed. Terry did not respond to a question about whether he would be attempting a comeback this year as a candidate for the board.

OCEAN PINES

February 2019 Ocean Pines PROGRESS

Douty

From Page 16 What he recalls from the meeting attended by Parks, Tuttle and Horn is that there “was a lot of questions and grilling,” especially by the “short-tenured” director that had to have been Tuttle. Douty said that was one of the peculiar plotlines of this saga “because I thought he was an ally of Trendic’s.” Douty said he continues to consider his options. If he isn’t reinstated or doesn’t receive a response to his recent letter, there could be consequences. Options include complaints to state or federal agencies that deal with alleged cases of wrongful termination. It could also include a law suit alleging wrongful termination. Following the publication of Douty’s letter published in the January edition, the Progress asked Parks for comment, but he declined, indicating that the OPA’s attorney, Jeremy Tucker, advised the board not to respond to questions.

Indoor pickleball

Pickleball enthusiasts are invited to play indoors this winter at the Ocean Pines Community Center, located at 235 Ocean Parkway. Drop-in rates are $5 for Ocean Pines residents, $7 for non-residents and free for Ocean Pines pickleball members. Drop-in hours through May (excluding holidays) are Mondays 7-9:30 p.m., Tuesdays 7:309:30 p.m., Thursdays 1:30-4:30 p.m., Fridays 1:30-6 p.m. and select Sundays 1:30-5:30 p.m. (dates available at OceanPines.org).

18 Ocean Pines PROGRESS

OCEAN PINES

February 2019

Board criticizes GM for not opting for low bid on drainage project General manager had wanted to award contract to bidder with previous experience in Ocean Pines

ith the busy summer season just around the corner, the Ocean Pines Association is prepping in part by purchasing new capital equipment and making infrastructure repairs. During a Feb. 16 meeting, the Board of Directors approved a series of capital purchase requests that include golf maintenance equipment and bulkhead repairs, but deferred action on deck replacement at the Yacht Club and drainage improvements. One project in particular, a drainage pipe replacement on Boston Drive, had Bailey and the board at

loggerheads, with the directors insisting that the project should to be awarded to the low bidder. Bailey had recommended a higher bid because it was submitted by a contractor with experience in Ocean Pines. Instead of following the staff recommendation, directors opted to award the contract to the low bidder, Kent Construction Company of Smyrna, Del., in the amount of $44,370. Bailey recommended awarding the contract for the work to Murtech Marine Division of Salisbury at a price of $47,714, saying the OPA has

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worked with the company, which recently completed the bridge repairs on Clubhouse Drive and Ocean Parkway. Director Ted Moroney grilled Bailey about his reasons for not recommending contract award to Kent Construction Company. He said staff comments noted that the company is the low bidder and is very qualified but has not worked with the OPA in the past. He said it doesn’t make sense not to award the contract to the company that is qualified and submitted the low bid. Bailey argued that low bid is not the only factor considered when recommending contract awards. He said staff also considers whether the OPA has worked with a company previously and if so, the quality of their work. He said staff recommended contract award to Murtech because they have completed other projects for the OPA on time and on budget, and their price was only a few thousand dollars more than the low bidder. Director Frank Daly said that argument “doesn’t wash with me as a board member.” Trendic agreed, and said past work with the OPA isn’t stated as part of the bid criteria. He said Bailey disqualified a bid based on criteria that is not a requirement of the request for proposals. “It sends the wrong message to the community,” he said. Moroney made a motion to accept

the low bid and award the contract to Kent Construction Company. The motion carried unanimously. For the golf course the board gave the go-ahead to buying two new pieces of equipment, a reel grinder and a bedknife grinder. The contract for the reel grinder, at a cost of $41,654, was awarded to Finch for a spin grinder with an express relief. Staff recommended and the board approved the Finch bid award, which was below the budgeted amount of $43,043, because the company offered equipment with specific reel attachments and included tax in its bid, while the second lowest bidder did not. The board also awarded the contract for purchase of a new bedknife grinder to Finch in the amount of $17,060 including tax, below the budget of $22,278. Director Ted Moroney questioned the purchases, saying neither one was included in the capital budget for the year. However, Bailey pointed out the equipment is identified in the reserve study and the expenses will come from reserve funds. He said the pieces of equipment were put in service in 2003 and scheduled to be replaced in 2018. Both were included in prior year budgets of fiscal year 2016 and 2017 but not purchased. The board approved both purchases of golf maintenance equipment, with Trendic abstaining. After extended discussion about replacing a defective second floor Yacht Club deck, the board decided to wait for additional information on warranties from Bailey before deciding on a new porcelain deck at a cost of $63,796. An email vote is expected soon.

OCEAN PINES

February 2019 Ocean Pines PROGRESS

Precious Paws Animal Hospital

OCEAN PINES BRIEFS Board lowers delinquency interest rate to 6 percent

The Board of Directors during a Feb. 16 regular meeting set the delinquency rate for unpaid assessments at 6 percent for the 2019-20 fiscal year that begins May. 1. OPA bylaws require the setting of the deliquency rate no later than February of every year. OPA President Doug Parks offered the motion, that was passed unanimously. While the delinquency rate has been 20 percent over the last several years, “a more conservative approach of 6 percent [was] recommended to further uniform application and collectability,” according to Parks. In previous years, Director Slobodan Trendic has pushed for a lower interest rate on delinquenices to encourage collections and to treat property owners in arrears more fairly.

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Police department releases annual report

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OCEAN PINES BRIEFS From Page 19 enforcement is necessary. The department has also concentrated on following up on criminal investigations, per the report. Incidents in 2018 included home improvement scams, a suicide attempt, damage to Ocean Pines Golf Club, drug overdoses and civil complaints, among others. The costs of these efforts are borne in part by grants, although the police department is a part of and funded by the Ocean Pines Association. The report highlights that nearly $500,000 in grant money was received by the department in 2018, funding everything from operational costs to specialized equipment such as infrared cameras and a ballistic shield. Although the Ocean Pines Police Department’s workload has continued to grow, the community has the distinction of being rated one of the safest communities in Maryland, per capita, by SafeWise for 2018. “We take great pride in offering our residents a higher level of police service,” Massey said. “Our police officers are truly community police officers who know their community

and the crime patterns that exist within our community.”

Seats on golf committee reserved for golf groups

The Board of Directors has accepted on first reading an amendment to Board Resolution C-02 that will reserve places on the Golf Advisory Committee for representatives of various golf organizations active in Ocean Pines. The action was taken during the Feb. 16 meeting of the board on a motion by Frank Daly. The groups with reserved seats on the committee include the Ocean Pines Ladies Golf Association, the Ocean Pines Men’s Golf Association and the Golf Course Members Council, so long as these group’s represenatives are willing to serve on the committee and meet all applicable requirements for committee membership.

Board considers changes in amenity policies

The Board of Directors accepted on first reading amendments to Board Resolution M-02 regarding amenity goals and objectives. The action was taken during the Feb. 16

meeting of the board on a motion by Frank Daly. The proposed change deletes a reference to the amenities operating in accord with “published industry or overning association best practices with applicable metrics developed and reported to the Board on a monthly basis as part of management reporting. In addition, “as part of the annual budget development, all pay amenities will develop plans and metrics to be reported on a montltly basis to the Board to achieve their best financial and best practices objectives.

Board approves new insurance broker

In a recent email vote authorized by uanimous consent of all seven directors, the Board of Directors voted to award an insurance broker services contract to the Deeley Insurance Group of Willards, with no hourly fees and commissions not to exceed 15 percent on all policies, except for flood policies, which are called at a 21 percent commission rate. The decision was announced at the Feb. 16 board meeting by Secretary Colette Horn.

A request for proposals for brokerage serves had been issued this past November. Eight proposals were received and reviewed by the insurance review team that included former Sharyn O’Hare, a former OPA director; Larry Perrone, a member of the Budget and Finance Advisory Committee member; Jeff Knepper, a forme OPA director and newly appointed member of the B&F committee; Steve Phillips, OPA director of finance; and General Manager John Bailey. Horn said the review team used a weighted priority review sheet to narrow the field of options to three choices and received presentations from each. After the presentations were complete, each member of the team weighed in with their thoughts. The result was a unanimous decision to stay local, go with a new broker, and provide for a completely new, unfettered by history, review of OPA policies.

Board OKs Ortt request for new POS system

In a recent email vote, the Board of Directors approved a new point of sale system for the Yacht Club and Beach Club. The action, announced

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OCEAN PINES

February 2019 Ocean Pines PROGRESS

OCEAN PINES BRIEFS New Kiwanians

From Page 22

Three new members were inducted into the Kiwanis Club of Greater Ocean Pines - Ocean City on the Dec. 30. Pictured are new member Tony Winter, who is a retired college professor and previously a Kiwanian in Shippensburg, PA; his sponsor, Ron Graybill; Ed Weeks, who works for the local Fyzical Therapy and Balance Center; Lynne McAllorum, his sponsor and the club’s membership chair; Tim Collins, who works for the local I.G. Burton dealership in Berlin; and his sponsor Dave Herr.

at the Feb. 16 meeting of the board, will allow the Matt Ortt Companies to procure the POS system so that installation and training etc. can be achieved in preparation for the upcoming amenity season. The Toast POS system purchase was recommended by Matt Ort Company to replace the Micros system. Toast is recommended because of features that will support improved service and revenues at both venues, according to information included in support of the motion. The purchase will be paid for out replacement reserves, as it will be for replacement of a system that is currently in service.

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For the fourteenth consecutive year, the Maryland Department of the Environment has exempted residents in the Ocean Pines Sanitary Service Area from paying the $5 monthly charge into the Chesapeake Bay Restoration Fund (BRF). This exemption will result in an annual savings of $60 per household in the Ocean Pines SSA. “Exemption from the BRF fees reflect years of investment in the Ocean Pines Wastewater Treatment Plant made by the service area customers, without state or federal assistance, and the skill of the plant operators to operate the plant to meet the mandated treatment goals,” Public Works Deputy Director John Ross said. Commonly referred to as the Flush Tax, the BRF is a dedicated fund financed by residents and businesses served by wastewater treatment plants (WWTPs) throughout the State of Maryland. The Ocean Pines WWTP is equipped with ENR technology, meeting the criteria for the fee exemption, which requires a maximum effluent concentration of 3 milligrams per liter (mg/l) of total nitrogen and 0.3 mg/l total phosphorous. Nitrogen is a natural element found in the earth and in the atmosphere. It is a vital component of life for many organisms, but too much nitrogen in waterways can be harmful. Excess nitrogen can cause algal blooms, which deplete the oxygen from the river that fish and other aquatic life need to survive. BRF exemptions are valid for one year and must be renewed annually.

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Callable Date: 07/15/2028 (00/00/00 or N/A) Prince Cnty 100 Call Price: Georges (000) / AAA Rating: Aaa (XXX/XXX) Other: 98.500 (Obligor)

Md (Name of Muni Bond)

OPA 2019-20 BUDGET

February 2019

Assessment at $971 after latest cuts; some directors still want no increase

Price: (00.00) (0.00%) TAX-FREE* 3.25 TAX-FREE* Coupon:%3.25 (00/00/00) Carrie Dupuie, AAMS (Financial Advisor Name) 07/15/2036 Maturity Date: (00/00/00) Harford County Maryland (Approved Title) Prince Georges Cnty Md (Name of Muni Bond) 07/15/2028 (Address) Callable Date: (00/00/00 or N/A) Price: 100.98 98.500 Price: (00.00) (City, ST 00000) Coupon: 100 (00/00/00) 3.25 (000-000-0000) I (Toll-Free: 800-000-0000) Maturity Date:10/1/2038 Call Price: (000) (000-000-0000) Maturity Date:Fax:07/15/2036 (00/00/00) (E-mail Address) Callable: 10/01/2028 / AAA 07/15/2028 Rating: (XXX/XXX) Callable Date: Aaa (00/00/00 (Website) or N/A) 100 Call Price: (000) Call(Obligor) Price 100 Other: / AAA Rating: Aaa (XXX/XXX) Financial Advisor

215 North Main Street Berlin, MD 21811 410-208-1704

Board sets Feb. 23 special meeting with budget approval possible

ing to estimates, that will leave the OPA’s replacement reserve with a projected balance of about $3 million on April 30 of 2020. Decisions made by the board during the Feb. 16 meeting cut the budget and reduced the assessment increase to $20, which would hike it to $971 from the current $951. But that might increase slightly once costs for a new payroll study are added in and consultant costs associated with implementation of the NorthStar Technologies software contract are clarified. Director Frank Daly persuaded his colleagues that a new payroll study is warranted after one conducted by the former human resources manager was deemed deficient because of its reliance on county and municipal payroll comparisons. It’s also possible that directors will insist on additional cuts. Director Esther Diller questioned General Manager John Bailey on whether the

latest round was based on consultation with department heads. When pressed, he acknowledged that they had not been, which elicited a sharp Rating Aaa/AAA Other:%(Obligor) (0.00%) TAX-FREE* 3.25 TAX-FREE* push-back from Diller. 06/07/2018 **As As ofof 00/00/00. She said the latest departmentalSubject to availability and price change. Minimum purchases Prince Georges Cnty Md (Name ofThe Muni Bond) may apply. yield is the lesser of yield to maturity or yield to call. Interest is generally exem from federal taxation and may also be free of state and local taxes for investors residing in the state and/or locality where the bonds were issued. Howev AAMS may be subject to federal alternative minimum Carrie tax (AMT), and Dupuie, profits and losses on tax-exempt bonds may be subject to capital gains tax treatme budgets should have been the workbonds Carrie Dupuie, AAMS (00.00) Ratings by Moody’s/Standard & Poor’s. A credit ratingPrice: of a security 98.500 is not a recommendation to buy, sell or hold the security and may be subject to revie (Financial Advisor Name) suspension, reduction or withdrawal at any time by the Financial assigning RatingAdvisor Agency. Insurance pertains only to the timely payment of principal and int (00/00/00) est. No representation is made as to(Financial any insurer’sCoupon: ability to meet its3.25 financial commitments. Ratings andName) insurance do not remove market risk since they product of consultation between therevision, Advisor (Approved Title) Financial Advisor not guarantee the market value of the bond. 215 North Main Street Maturity Date: 07/15/2036 (00/00/00) Securities offered through member FINRA/SIPC. GM and the department heads. Berlin, MD 21811 (Approved Title) (Address) or N/A) Callable Date: 07/15/2028 (00/00/00 215 North Main Street 410-208-1704 ST 00000) The exchange between Bailey 100 Call Price:(City, (000) Carrie.Dupuie@RaymondJames.com (000-000-0000) I(XXX/XXX) (Toll-Free: 800-000-0000) Berlin, Aaa /MD AAA 21811 Rating: and Diller exposed a deep rift in re(Address) Fax: (Obligor) (000-000-0000) Other: 410-208-1704 (E-mailST Address) lations between ome direcctors and (City, 00000) (Website) Carrie.Dupuie@RaymondJames.com Bailey over budget development this (000-000-0000) I (Toll-Free: Carrie Dupuie, AAMS 800-000-0000) (Financial Advisor Name) year. (Approved Title) Fax: (000-000-0000) Some directors have gone to de(Address) (E-mail (City, STAddress) 00000) partment heads to seek out budget (000-000-0000) I (Toll-Free: 800-000-0000) 06/07/2018 (Website) **As As ofof 00/00/00. Fax: (000-000-0000) information directly because theySubject to availability and price change. Minimum purchases may (E-mail Address) apply. The yield is the lesser of yield to maturity or yield to call. Interest is generally exem from federal taxation and may also be free of state and local taxes for investors residing in the state and/or locality where the bonds were issued. Howev (Website) may be subject to federal alternative minimum tax (AMT), and profits and losses on tax-exempt bonds may be subject to capital gains tax treatme felt Bailey had ignored a board di-bonds Ratings by Moody’s/Standard & Poor’s. A credit rating of a security is not a recommendation to buy, sell or hold the security and may be subject to revie suspension, reduction or withdrawal at any time by the assigning Rating Agency. Insurance pertains only to the timely payment of principal and int rective to produce 2.5 percent cutsrevision, est. No representation is made as to any insurer’s ability to meet its financial commitments. Ratings and insurance do not remove market risk since they not guarantee the market value of the bond. Securities offered through member FINRA/SIPC. in department budgets. Subject to availability and price change. Minimum purchases may apply. The yield is the lesser of yield to maturity or yield to call. Interest is generally exempt from federal taxation and may Bailey has resisted, in one inalso be free of state and local taxes for investors residing in the state and/or locality where the bonds were issued. However, bonds may be subject to federal alternative tax (AMT), and profits and losses on tax-exempt bonds may be subject to capital gains tax treatment. Ratstance denying a director, who had ings by Moody’s/Standard & Poor’s. A credit rating of a security is not a recommendation to *As of 06/07/2018 buy, sell or hold the security and may be subject to review, revision, suspension, reduction or * As of 00/00/00. an requested permission to contact withdrawal at any time by the assigning Rating Agency. Insurance pertains only to the timely payment of principal and interest. No representation is made to any insurer’s ability to meet its Subject to availability and price change. Minimum purchases may apply. The yield is the lesser of yield to maturity or yield to call. employee, for access. financial commitments. Ratings and insurance do not remove risk since they do not guarantee from federal taxation and may alsothebemarket free of stateof and local taxes for investors residing in the state and/or locality where the b the bond. The situation remainedbondsfluid asto federal alternative value may be subject minimum tax (AMT), and profits and losses on tax-exempt bonds may be subject to Raymond James Financial Services, Inc.,

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215 North Main Street Berlin, MD 21811 410-208-1704

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Subject to availability and price change. Minimum purchases may apply. The yield is the lesser of yield to maturity or yield to call. Interest is generally exempt from federal taxation and may also be free of state and local taxes for investors residing in the state and/or locality where the bonds were issued. However, Raymondbonds James Inc.,minimum member FINRA/SIPC ICD BSbonds 8/15 may Financial be subject to Services, federal alternative tax (AMT), and profits15-MFI-0113 and losses on tax-exempt may be subject to capital gains tax treatment. Ratings by Moody’s/Standard & Poor’s. A credit rating of a security is not a recommendation to buy, sell or hold the security and may be subject to review, revision, suspension, reduction or withdrawal at any time by the assigning Rating Agency. Insurance pertains only to the timely payment of principal and interest. No representation is made as to any insurer’s ability to meet its financial commitments. Ratings and insurance do not remove market risk since they do not guarantee the market value of the bond. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC.

Securities offered through Raymond James Financial Services, Inc., member FNRA/SIPC. Ratings by Moody’s/Standard & Poor’s. A credit rating of a security is not a recommendation to buy, sell or hold the security an (c) 2015 Raymond James Financial Services, Inc., member FINRA/SIPC 15-MFI-0113 ICD BS 8/15 revision, suspension, reduction or withdrawal at any time by the assigning Rating Agency. Insurance pertains only to the timely pa est. No representation is made as to any insurer’s ability to meet its financial commitments. Ratings and insurance do not remo not guarantee the market value of the bond.

By TOM STAUSS Publisher roperty owners can breathe a sigh of relief. The assessment won’t be set at $1,078, an increase of $127, as a recent budget iteration had it. Nor will it be set at $1,005, an increase of $54, as a motion offered by President Doug Parks at the Feb. 16 meeting of the board had it. That motion was tabled on Parks’s suggestion to a special meeting of the board on Saturday, Feb. 23, when another revised version of the budget will be presented after another round of tweaking by staff. Final budget approval is possible at the Feb. 23 meeting. Parks’s tabled motion called for a 2019-20 budget with total revenues of $12.837 million and expenses and fund transfers of a like amount. It also called for capital expenditures totaling $5.47 million. Accord-

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OPA 2019-20 BUDGET Budget From Page 24

related to a $2 cost associated with internal borrowing was possible. The biggest cut came from another holiday in the $19 assessed all property owners in previous years for bulkhead repair and replacement. At the same time, the board agreed to retain the $465 waterfront differential that owners of most bulkheaded property owners pay each year for bulkhead repair and replacement. All these cuts add up to $36.46 on the assessment. But the board went the other way on the Ocean Pines Police Department, adding $2.48 per property in expenses. The effect was to reduce the assessment savings to $33.98. The intent is to help the OPPD offer competitive starting salaries relative to area police departments. From the proposed $1,005 assessment envisioned in Parks’s motion, board actions at the Feb. 16 meeting reduced the assessment to $971.02, or rounded off to $971. The board previously took action to reduce the assessment to $1,005 from $1,078. A major reduction resulted from a decision to eliminate a payroll study conducted by the for-

p To Winter Sav U m i

Salisbur y

ptical

the Progress went to press Feb. 16. Some directors are continuing to insist on additional reductions in the hopes of producing a budget with no assessment increase. The Feb. 16 cuts approved by the board include $47,180 from the marketing and public relations department, for a $5.58 savings on the assessment. Director Slobodan Trendic suggested that cuts could come from television and radio advertising, with flexibility for cuts in print media advertising if deemed appropriate. Aquatics was cut by $29,503, for a $5.50 savings on the assessment. Parks and Recreation incurred a $17,250 cut, for a $2.04 savings. Public Works has been tweaked in the amount of $7,000, for an 83 cent savings on the assessment, and the Tern Grille, because it’s expected to be closed for a period of time because of the construction of a new golf clubhouse, has been cut by $12,816, for a $1.51 savings. Because the board previously decided not to build a room addition to the Sports Core pool this year, a cut

February 2019 Ocean Pines PROGRESS

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B&F Committee to answer budget questions in special live-streamed meeting Feb. 19

he Ocean Pines Budget & Finance Advisory Committee will hold a special meeting on Tuesday, Feb. 19, from 9 to 11 a.m. in the Assateague Room of the Ocean Pines Community Center, located at 235 Ocean Parkway. This meeting has been scheduled to allow the B&F committee to answer Fiscal Year 2019-2020-related questions from the membership of the Ocean Pines Association. “At recent board meetings, association members have asked questions about details regarding OPA’s budgeting, accounting, and finance processes,” said Gene Ringsdorf, assistant treasurer of the Ocean Pines Association. Members are encouraged to submit questions and comments to the B&F Advisory Committee in advance via email to info@oceanpines. org. Those unable to attend the meeting may view it live at oceanpines. org or on Mediacom channel 78. According to Resolution C-03, the B&F Advisory Committee advises the Ocean Pines Board of Directors in the preparation of budgets, both operating and capital; reviews financial performance and updates financial forecasts throughout the year; reviews and provides recommendations regarding the annual audit of the Association’s financial statements; and develops programs of asset management and investment policies and procedures.

mer human resources manager and its ballooning effect on spending levels. Also at the Feb. 16 meeting, the directors agreed once again to a 2 percent average increase in salaries, ranging from 0 to 4 percent. The directors also agreed to an 80-20 split in individual employee health insurance premiums, with the OPA paying the 80 percent but offset it with a “one-time” pool of $97,000 to soften the blow on employees. The directors acknowledged that they had reconsider an earlier decision to reduce legal expenses from $125,000 to $75,000 Trendic presented a series of motions including cuts in Yacht Club and golf operations designed to pro-

duce surpluses; and a 2.5 percent across-the-board cuts in department sAll failed to gain much traction among his colleagues. Another motion called for 86-14 split in employee health insurance and a 78-22 split for families, but the board later opted for 80-20 instead with the one-time offset, which some directors privately have said should be eliminated entirely. Trendic and Diller are both on record as saying they will oppose the budget if it calls for any assessment increase. Trendic said he believes additional cuts are possible in the Public Relations and Marketing Department over and above those related to advertising expenses.

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26 Ocean Pines PROGRESS

OPA 2019-20 BUDGET

February 2019

Board considering $3.6 million in replacement reserve funding Budget also includes $1.6 million for bulkhead replacement, $633,000 for road resurfacing, and $913,000 for pipe replacement and related engineering and permitting By TOM STAUSS Publisher he 2019-20 Ocean Pines Association budget discussed but not approved by the board Feb. 16 includes what could be described as a very ambitious capital spending plan. It includes $3.6 million in spending from the replacement reserve, including $1.6 million for a new golf clubhouse, $120,000 for a new golf cart barn, and $800,000 for an enlarged and renovated police department. The police department is also budgeted at $35,000 for a replacement police car. The capital budget includes $1.6 million for bulkhead replacement, $633,000 for road resurfacing, and $913,000 for drainage pipe replacement and associated engineering and permitting costs. Combined, all these capital improvement projects totalled $6.75 million. The final version could be less. About $620,000 of the $913,000 budgeted for drainage covers the

cost of pipe replacement on Cathell Road and Ocean Parkway, Borderlinks Condominiums and Mumfords Way, with the rest for engineering and permitting. General Manager John Bailey has proposed that the spending come out the roads reserve, but the board in the end could decide to fund such projects out of the replacement reserve. The budgeted $1.6 million for bulkhead replacement is considered a ceiling, and there is some concern among OPA directors whether OPA management will be able to accomplish that much in a single year. The $3.6 million in replacement reserve funding covers $430,300 in recreation-related funding, including $135,000 for a replacement crabbing pier, probably in the Whitetail Sanctuary section of Ocean Pines where a deteriorated and unsafe pier was demolished last year. Other recreation-related capital items include $100,000 to resurface tennis courts at the Swim and Racquet Club and $150,000 in White Horse Park playground equipment. The budget for Aquatics calls for

$179,800 in capital spending including $64,000 for Sports Core pool decking, $40,000 for Sports Core glass sliding doors, and $30,000 for Sports Core pool roof shingles, along with $18,000 for pool furniture and $14,500 to restrap existing pool furniture. Not funded is $200,000 for a Sports Core room addition designed to accommodate lifeguard training, parties and and an after-school program that encountered some resistance from OPA members who opposed what they said was the OPA going into the day care business. [See separate article in this edition of the Progress for details.] Golf-related capital spending is budgeted at $1.815 million in capital spending, $95,000 in golf maintenance equipment and $1.72 million in buildings, $1.6 million for a golf clubhouse and $120,000 for a replacenent cart barn. The budget contemplates $203,156 in capital spending at the Beach Club, topped by $77,228 in decking replacement and $52,000 to bring sand fencing up to code.

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That number could be adjusted higher, as the board last year instructed the general manager to solicit proposals for renovation of the Beach Clubâ&#x20AC;&#x2122;s second floor, including the replacement of leaky windows. Estimates for these additional renovation costs are not included in the $3.6 million approved in replacement reserve funding. Approved capital funding at the Yacht Club is relatively modest at $38,922, including $20,000 for sealing and striping the parking lot, $8,000 for bollard lighting, and $10,922 for replacing the wood sail sign.

Indoor Soccer to begin in Ocean Pines Feb. 20

The Ocean Pines Recreation and Parks Department is kicking off its popular indoor soccer program this winter at the Ocean Pines Community Center, located at 235 Ocean Parkway. Happy Cleats Soccer will allow children ages 2-3 the chance to burn off some energy in a non-competitive environment. Socialization, simple soccer fundamentals and fun will be the focus. The six-class program will be offered weekly on Wednesdays from 5-5:30 p.m. for children ages 2 and from 5:30-6 p.m. for children ages 3 beginning Feb. 20. The cost is $40 for Ocean Pines residents and $50 for nonresidents. This program is open to the public and registration is required. For more information or to register, call the Ocean Pines Recreation and Parks Department at 410-6417052. Information regarding additional recreational programs, including an online version of the Ocean Pines activity guide, is available at www. OceanPines.org.

February 2019 Ocean Pines PROGRESS

Sports Core pool room added, then deleted from 2019-20 budget Addition erroneously described as day care center by critics By TOM STAUSS Publisher $200,000 room addition to the indoor Sports Core pool is not included in the 201920 budget approved by the Board of Directors this month, a casualty of erroneous claims by critics that the room addition was intended to be a day care center. The room addition, not included in General Manager John Bailey’s early January draft budget, was tentatively added to the budget on the recommendation of the Budget and Finance Advisory Committee. The panel had been persuaded that

the room construction cost could be paid for over time by program revenues, including an after-school program, which some critics maligned as a day care center. The committee had suggested that the room addition could be paid for by either a bank loan or internal borrowing, a mechanism last used to pay for half the construction cost of the Sports Core pool enclosure completed in the 2016-17 fiscal year. That internal loan was retired in 2016-17. In the case of the room addition, however, the plan was to pay off the construction cost with surpluses

generated by the after-school program, which had been estimated at $30,000 per year by Aquatics Director Colby Phillips. In a budget review meeting with the B&F committee in January, and later in discussions with the Board of Directors, Phillips did not lobby for the room addition. She said it could wait, citing other more critical capital projects, such as expansion of the police station. She also said she could establish an after-school program -- not to be confused with day care for infants or toddlers -- at the Community Center so committee and board members

could more accurately assess the program’s revenue potential. She told the committee that the room was intended for much more than an after-school program. Other uses would include space for life guard training classes, classes for other groups, private, fee-generating parties and equipment storage. She said that the deck area at the Sports Core pool has become increasingly congested with equipment and furnishings such as aquabikes, trampolines, lap lines, and tables and chairs. An extra room would make it easier to accommodate birthday parties, she said, without inconveniencing other pool patrons who use tables and chairs in the pool’s lounge area. She said the county health department would not certify the Sports Core for day care for infants and toddlers because of the presence of water that would pose safety concerns, even if that had been the plan. It never was, despite claims by

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OPA 2019-20 BUDGET

28 Ocean Pines PROGRESS

February 2019

Sports Core addition From Page 27 critics who equated “after-school” with a day care or baby-sitting service. The after-school program that she could launch later this year will bewill be targeted at older children and could include swim lessons, she said, which would be a “huge draw” for parents. Not well understood by critics, however, is that Phillips said she could do without the room addition next year to allow time for an after-school program to take root at the Community Center. While she was not advocating for it in next year’s budget, committee members seemed persuaded by the rudiments of a business plan that she presented. On the recommendation of the committee, Bailey included the room addition in the next iteration of the 2019-20 budget, describing it as a new capital project that would not be financed from next year’s assessment revenue but rather through a 6 percent bank loan or internal borrowing.

OPA 2019-20 BUDGET

Diller critical of GM for poor budget prep Ocean Pines Forum’s Joe Reynolds defends Bailey for budget roll-out By TOM STAUSS Publisher he start to the Feb. 9 work session on the 2019-20 Ocean Pines Association budget was acrimonious, with Director Esther Diller coming under fire from oceanpinesforum.com moderator Joe Reynolds for singling out General Manager John Bailey for poor budget preparation, including what she contended was the premature release of the draft budget in early January showing no increase in the lot assessment. Reynolds called for an ethics investigation of Diller for her critical comments of Bailey, made during a January board meeting. Reynolds said Bailey was following the same roll-out procedure used by other GMs over the years. Diller did not respond to the criticism. No OPA director is calling for an ethics investigation of Diller. Director Slobodan Trendic told the Progress that any director is entitled to express his or her opinion in public, and that the initial draft of the budget was deficient in a number of ways and should not have been released because of that. In remarks during the Feb. 9 work session, he said he that the initial budget could and should have shown an assessment decrease had Bailey properly applied board directives, including adjustments in health insurance benefits and a 2.5 percent directed cuts in departments. Also defending Diller was Treasurer and Budget and Finance Advisory Committee chair John Viola, although he said the original budget draft was deficient because it didn’t include items that would have increased the lot assessment. In an earlier email exchange with Reynolds, Diller told Reynolds that he was not correct when he defended Bailey for releasing the initial draft of the budget in compliance with the bylaws “not less than 90 days of the fiscal year.” Diller also took exception to a press release that indicated no assessment increase. “The GM was premature in releasing that [press release] that showed no increase,” she said. “There were key elements missing from those initial budget projections.” She said that she was “working diligently” with her board colleagues and the [Budget and Finance Advisory Committee] “to straighten all this out and make sense of the worst budget preparations in 15 years.” Diller described the board’s budget challenges this year as “the type of mess you get when things are disclosed prematurely. How about you give us a chance to work with the GM and get these numbers in line?” Reynolds was not in a conciliatory mood when he took to the microphone to excoriate Diller during the Feb. 9 meeting. She was reportedly seething at what she regarded as Reynolds’ ill-informed remarks.

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OPA 2019-20 BUDGET

February 2019 Ocean Pines PROGRESS

Golf rates restored to those in place from 2014 through 2017 By TOM STAUSS Publisher hile much of the recent 2019-20 budget review process involved controversy over potential increases in the lot assessment, that at one point envisioned an increase as high as $127, there been very little debate over relatively modest increases in amenity fees that were part of the draft budget initially proposed by General Manager John Bailey in early January. Amenity users will be paying on average three percent more for annual memberships, but that’s an almost meaningless number, as every amenity is treated differently in

percentage terms. Amenity rates are the same for property owners and year-round renters in Ocean Pines, with so-called associate memberships for non-resident, non-property owners paying more. In the proposed budget, boat slip rental fees are not increased, as those fees were increased last year and Bailey suggested it would not be right to raise them again so soon. Marina Harbormaster Ron Fisher told the committee that there are 35 applications for slips on file, which could have led the board to decide to increase these fees s part of a general policy to raise all rates in tandem. In the end, the board accepted Bailey’s recommendation and did

not raise the boat slip fees. Golfers, on the other hand, will be paying substantially more in percentage terms for annual memberships than they did this year. Bailey’s draft budget restores fees that were in place in the 2014-15 through 2016-17 fiscal years, The fees were lowered in 2017-18 in the hopes of stimulating increased membership and were not adjusted n the current fiscal year (2018-19). The hoped-for net increase in golf memberships has not materialized, with new memberships failing to offset continuing erosion in the membership rolls. According to the latest membership report included in the monthly

financial reports, golf declined from 122 memberships in December of 2017 to 113 a year later, not including lifetime memberships, which declined from 19 to 16 during that same period. Memberships include households in which more two or more occupants might be covered by a single membership. Family membership rates for golf will rise from $2,000 to $2,300, a 15 percent increase. Individual memberships will increase from $1,200 to $1,315, 9.58 percent higher yearover-year. The family after 12 noon rate will increase from $1200 to $1315, 13.75 percent higher, and the individual after 12 noon rate will increase from $800 to $875, a hike of $9.37 percent. The approved budget does not change one golf membership category, the one that offers 30 18-hole rounds or 60 nine-hole rounds for $1,290. It was $1,440 during the 2015 through 2017 fiscal years, but lowered with the other rates in 2017-18. It remains at $1,290. The Golf Advisory Committee initially objected to the higher rates. Aquatics memberships have been q

Board set to ratify Bailey amenity fee increases with little debate

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OPA 2019-20 BUDGET

February 2019

Amenity rates From Page 29

adjusted only modestly for families and individuals. For families, the summer membership will increase from $315 to $325, winter membership from $445 to $460, and yearly from $580 to $660. That’s slightly more than three percent higher, year-over year. For individuals, the summer membership will increase from $190 to $195, winter membership from $290 to $300, and yearly from $370 to $385, with increases of 2.5, 3 and 3.9 percent, respectively. The one aquatics rate that has been approved for a much higher percentage increase is the so-called Realtor package rate. The six-week option will increase from $600 to $1050, while the 12-week option wlll increase from $1,000 to $1,800. Aquatics Director Colby Phillips told the Budget and Finance Advisory Committee during the budget review process that the increase was in response to complaints from property owners who buy the $150 weekly rate for swimming, which is unchanged in Bailey’s draft budget.

She told the committee that property owners who buy the $150 weekly membership for tenants felt that in comparison Realtors who buy the six- and 12-week packages have received a much more attractive rate on a weekly basis. So the response was to bring the two categories more in line with one another, she said. Racket sport memberships will increase modestly this summer, in percentage and dollar terms. Tennis family rates will increase from $425 to $435 (2.4 percent), individual rates from $260 to $270 (4.3 percent), families after 12 from $160 to $165 (3.1 percent), and individuals after 12 from $100 to $105 (5 percent). Platform tennis rates will increase from $250 to $260 for families (5 percent) and from $150 to $155 for individual (3.3 percent). Pickleball individual and family rates will increase the same as platform tennis. The racket sport combo rate, which is currently set at $625 for families and $400 for individuals, remains the same.

Board reacts favorably to coupon give-back OPA treasurer express hope that coupons won’t be usable at Ocean Pines food and beverage venues

hile details remain to be worked out, it appears that Ocean Pines Association members will be receiving a gift from the OPA when they receive their assessment notices for 2019-20. The Board of Directors reacted favorably to a suggestion from a property owner at a special work session Feb. 9 called to discuss the budget for the fiscal year that begins this coming May 1, The suggestion was for a gift card usable at any OPA amenity. All directors who spoke on the proposal were glowing in their praise for the idea, which was described as a way to give back to assessmentpaying members who, if they like their experience at the amenity of their choice, might be encouraged to pay fees or purchase an amenity membership, or, in the case of food and beverage venues, return as paying customers. OPA Treasurer and Chief Financial Office John Viola told the Progress in mid-February that he hoped the coupon give-back would be for Ocean Pines amenities other than food and beverage venues, because of the complexity of accounting for the lost revenue. He said the restaurants managed by the Matt Ortt Companies need all the business and revenue it can earn through good food and service. The OPA tried a 20 percent discount at the restaurant venues two summers ago, contributing to massive deficits that the OPA is still dealing with in the annual budget process.

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OPA FINANCES

February 2019 Ocean Pines PROGRESS

OPA records $152,000 positive variance for first eight months of fiscal year

For the year through December, the Beach Club recorded a $117,946 surplus, ahead of budget by $4,788

ance sheet as of Dec. 31 showed $10.6 million in short-term investments, compared to the November balance

of $11.2 million and $8.1 million year-over-year. Operating cash of $793,406 compared to $756,764 in November and $995,093 in December of 2017. Total assets were $34.9 million, balanced by $1.3 million in liabilities and $33.6 million in owners equity.

OPA operating results by department for December, 2019 Source: OPA Department of Finance

and substantially better than the $59,277 loss through December of 2017. Aquatics gained some momentum in December assisted by previously deferred swipe card revenue. While losing $15,169 for the month, that was ahead of budget by $8,347. For the year, Aquatics is $48,630 behind budget but in the black by $219,420 through December. Deferred swipe card revenue of roughly $14,000 per month will be credited to Aquatics for the duration of the fiscal year, which could help bring the department close to its budget for the year. In any event, Aquatics most likely will be a net revenue generator this year for the OPA. Other amenity departments lost money for the month and missed their budgets by modest amounts. For the year through December, pickleball and platform tennis are in the black by an amount greater than tennis is in the red, meaning that combined racket sports are in the black so far in the fiscal year. Reserve summary -- As of December 31, the OPA had $9.7 million in reserve accounts, comprised of $5.9 million in the replacement reserve, $2.7 million in the bulkhead and waterways reserve, and $1.15 million in the roads reserve. This was little changed from November. Balance sheet -- The OPA bal-

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By TOM STAUSS Publisher he Ocean Pines Association racked up another solid month financially in December, eight months into the fiscal year, continues to be in solid financial shape seven months into the 2018-19 fiscal year. On the back of positive operating fund variances starting in July and continuing through November, the OPA added another positive month in December with an $11,880 variance compared to budget. For the first eight months of the fiscal year, the positive variance to budget was $151,557, including new capital, or $162,670 without it. The positive variance to budget through December resulted from revenues over budget by $72,638 and expenses over budget by $60,858. Eight months into the fiscal year, the OPA recorded an operating surplus of $2,755,434, well ahead of the pace of the previous year, when the surplus was $1,881,333 in December of 2017. That’s a year-over-year swing of $874,101. The Yacht Club recorded a second consecutive month with a loss in December, before closing in January and reopening Feb. 1. The Yacht Club lost $38,711 in December, behind budget by $7,0444. Year-to-date, however, the Yacht Club remained in the black by $90,317 through December, $115,077 ahead of budget. The Yacht Club’s bottom line was $470,000 better than it was through December of 2017. Golf operations recorded a $27,492 loss in December, but that was $8,294 ahead of budget. For the year through December, golf remained in the black by $12,897, ahead of budget by roughly $26,000. A year ago through December, golf had recorded a $65,213 surplus, so there’s been a year-over-year negative swing of roughly $52,000. The Tern Grille recorded a $1,714 surplus in December, ahead of budget by $4,514, and was $9,910 to the good through the first eight months of the fiscal year. The grill had recorded a $23,924 loss through December of 2017. The Beach Club, not open this time of year, nontheless produced a $12,474 loss for the month, attributable to “other” costs that were not identified on the monthly financials.

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WORCESTER COUNTY

February 2019

County ponders using new casino revenue to pay down school bond OPA, municipalities not likely to benefit from table games, at least for another four years By ROTA L. KNOTT Contributing Writer lthough local jurisdictions are all angling for a larger portion of the local impact grant revenue received from the Ocean Downs Casino, Worcester County officials are considering using an increase in the funds to help hasten retirement of debt service on Worcester Career and Technical High School. Phillip Thompson, county finance officer, met with the Worcester County Commissioners on Feb. 5 to head off a potential proliferation of requests for new impact grant revenue, expected due to the addition of table games at Ocean Downs, from municipalities and the Ocean Pines Association. The county made the decision in June 2011 to allocate the grants received from Ocean Downs Casino to retire the debt service on the

Worcester Career and Technical High School. The school was constructed in 2008 and the county financed the project with a 15-year $28.1 million bond. The first transfer of impact grant monies did not occur until fiscal year 2014 and the transfer was not sufficient to cover the total annual debt service for the school. Thompson said it is important to note that through FY18 the grant revenue has yet to reach an amount sufficient to satisfy the annual debt service for the school. Instead the balance of the amount needed each year to cover the school’s debt service has been pulled from the general fund. “As a result, I would recommend that we stay the course as original planned and continue to allocate the county local impact grant revenue, which includes the table games activity, to the WCTHS debt service.”

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The bond is scheduled to be paid in full in four years, at which point the county will have the opportunity to re-evaluate how these funds will be spent in the future, he said. Under state law, 5.5 percent of video lottery terminal proceeds are distributed to local jurisdictions near Ocean Downs Casino, including 60 percent to Worcester County, 20 percent to Ocean City, and ten percent each to the OPA and Berlin. Although state law also specifies that the county benefit from table games revenue, it does not require distribution of any of those funds to local jurisdictions. The total revenue in FY18 was $2.485 million, with $167,486 from table games. For the first six months of FY19 revenue totaled $1.637 million, including $233,967 in table games. The county’s debt service for Worcester Career and Technical High School totals about $2.5 million annually. Thompson said he was optimistic that with an increase Local Impact Grant revenue may cover the full amount of debt service this fiscal year and in future years. However, he said any deviation from use of grant funds to help cover that cost would result in the county having to find additional revenue to direct to the debt service payment.

Commissioner Jim Bunting lobbied for directing the table games revenue to public safety for each of the local jurisdictions, including Pocomoke and Snow Hill. “I think this would be a good opportunity for us to help the fire companies with the table games monies,” he said. Commissioner Josh Nordstrom asked how much faster the county could pay off the school debt if it used all of the new Local Impact Grant revenue for that purpose. Thompson anticipated that it would accelerate the pay-off by less than a year. Ocean Pines Commissioner Chip Bertino asked whether once the school debt service is paid off, the county can decide for what to use its portion of the grant revenue for next. Assistant County Administrator Kelly Shanahan said the commissioners adopted a multi-year plan in 2011 but can revise it to reflect new priorities. The state allows for Local Impact Grant revenue to be used in six categories: public safety, facilities, infrastructure, sanitation, economic and community development and other public services and improvements. The commissioners plan to discuss the revenue allocations during budget work sessions.

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CAPTAIN’S COVE

February 2019

Board to conduct meeting in Captain’s Cove March 14 KCIK/Noovis making progress on broadband RFP By TOM STAUSS Publisher aptain’s Cove residents upset with the recent practice of conducting meetings of the Board of Directors in Towson, Md., close to where most directors have their primary residences and work their day jobs, received a bit of good news during the Jan. 29 board meeting. That meeting was conducted in Towson, with a satellite location set up in the Town Center Grille. One resident director, Pat Pelino, attended from that site. Other directors attended by phone, with President Jim Silfee, director Tim Hearn, alternate director Dawn Wagner and General Manager Justik Wilder at the Towson location. During the Jan. 29 board meeting, the directors voted to conduct

their next meeting in the Marina Club in Captain’s Cove on March 14 at 5 p.m. The board could be approving the release of a request for proposals for broadband service in Captain’s Cove on that date. KCI Technologies/Noovis, hired by the board last year to oversee the process leading to the issuance of an RFP, has already issued a request for information (RFI) to contractors expected to be interested in providing broadband services to Cove homeowners. But the rubber will truly hit the road with the issuance of the RFP.

A draft is due to be delivered to the Cove directors Feb. 18, with a review to take place from Feb. 18 to March 1 and a final draft to be prepared no later than March 7. A board vote to approve the RFP

is then likely at the March 14 board meeting. KCI has the right to submit a proposal to build the fiber optic system that the company believes can q

34 Ocean Pines PROGRESS

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February 2019 Ocean Pines PROGRESS

provide high speed Internet to every home in Captain’s Cove within a two-year sectional build-out, with Cove community facilities considered a top priority. High speed is defined as a minimum of 25 Mbps. KCI’s draft RFP also is expected to provide for a way for subscribers to earn a return on their upfront investment in the system.

KCI’s business plan does not envision any investment in the system by the Captain’s Cove property owners association, otherwise known as Captain’s Cove Yacht and Golf Club. Consent agenda motions -The board during the Jan. 29 meeting ratified actions taken via email votes in the weeks prior to Jan. 29. The board ratified a chance in the community rules related to noise,

requiring residents to comply with noise limits in the Accomack County noise ordinance. The county defines quiet hours as 9 p.m. to 7 a.m. Monday through Saturday and all-daySunday. Also passed unanimously was a motion to ratify the purchase of a lot adjacent to the Golf Cart Path in Section 2, Lot 177, for $3,500 from Loretta Shepard-Hirst.

Building report -- Silfee summarizing building activity in Captain’s Cove during 2018. There were 55 Environmental Control Committee applications processed, including 14 new builds, 39 modifications, and two variances. So far in 2019 there have been six ECC applications processed, including two new builds, three modifications and one variance.

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February 2019

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OPINION

February 2019 Ocean Pines PROGRESS 37

COMMENTARY

Assessments too high in latest budget draft

he latest projection for the 2019-20 budget is for a $971assessment, a $20 increase. Not bad, but it could and should be less. Somebody needs to pick up a phone and get the Matt Ortt Companies to calculate the revenues from 36 booked banquets and expense ratios based on their many years in the business. It shouldn’t be that difficult. Other department heads have been contacted for better budget numbers and it’s been helpful. The omission of banquet business from the Yacht Club budget is a glaring one and should be rectified before the budget is finalized. What’s driving the omission is over-wrought fear about risk factors from non-performance.

But it’s a fear that is selectively applied to the Yacht Club when it could just as easily be applied to any other department. The banquet business has performed quite well for Ocean Pines over the years, and the community was promised better results in the second year under the Ortt Companies. It’s inexplicable that almost all of the directors are allowing themselves to be driven by fear of non- or under-performance because of what happened under a prior GM. But that was a Yacht Club budget built on a rosy scenario, a hope and a prayer: Booked banquets are hard numbers.The Ortts are professionals, not wedding planners promoted to roles for which they’re ill-prepared.

Esther Diller didn’t deserve attack for budget comments

f there’s any hero in this year’s protracted if not agonizingly complex budget process, it surely is Director Esther Diller, along with colleagues Frank Daly and, it goes without saying, Slobodon Trendic. All three directors kept up the pressure on their colleagues for additional cuts in the 2019-20 budget with the aim of keeping assessment increases, assuming any were needed, to the absolute minimum. This was in contrast to some of their fellow directors, whose enthusiasm flagged and sagged when the going got rough. Director Steve Tuttle, for instance, much too early in the process, signalled his acceptance of a $50 increase in the assessment, over the current $951. That was well before a whole lot of additional cuts surfaced for debate and board action, some of which were adopted in the run-up to budget approval Feb. 16, which actually has not yet occurred This was a sad development, because Tuttle as a board candidate ran on the notion, as did Diller and Daly, that assessment increases should be kept to an absolute minimum after an unnecesary increase of $30 the previous year. During a budget work session Feb. 9, Diller was the victim of an unseemly verbal attack by a local blogger whose website address we’ll withhold to protect the innocent. She stoically and even courageously declined to respond to this barrage because she was there at the meeting for one purpose and one purpose only: ﬁnding ways to cut the budget without adversely affecting core services. What was particular over-thetop and risible, on a par, let’s say, with the Green New Deal garnering well-deserved mockery throughout these not so united states, was the assertion that she should be subject of an ethics complaint for an imaginary infraction. Her supposed sin was her forthright (and accurate) criticism of the general manager’s initial draft budget released in early January. To her,

and to others steeped in budgetary minutiae, this draft was deﬁcient both for what it contained and what it didn’t. While her initial reaction to the budget seemed to focus on serious omissions that would have had the effect of raising the assessment, Trendic in her defense at the Feb. 2 meeting emphasized all the ways the draft failed to reduce the budget and the assessments needed to support them. Shortly after the release of the initial budget, recalculations were presented that raised the OPA’s contributions to the Ocean Pines Volunteer Fire Department and collected more from property owners to fund depreciation of OPA capital assets. These items should have been included in the initial budget even if it resulted in the delay of the release by a week or whatever. No less a budget expert than Treasurer and Chief Financial Ofﬁcer John Viola in comments during the Feb. 2 meeting also effectively defended Diller’s critique of the original roll-out, especially as it created the impression that there would be no increase in the assessment in 201920. The pattern in Ocean Pines is that initial drafts usually call for assessment and budget increases and a process ensues that cuts both. Bailey’s initial reversed that typical pattern, setting the board up as the heavies when proposed increases, not decreases, ensued. Trendic more compellingly said the draft was a flawed creation because of all the ways it increased spending instead of cutting it, as board budget guidance had mandated. Included in the initial draft were $125,000 in payroll cost increases related to a flawed payroll study that sampled area county and town governments rather than homeowner associations. There was no attempt to more fairly allocate health insurance premiums for employees on a 80-20 split that the board a year ago had set in motion.

Also frustrating in the budget as it currently stands is a one-year give-back to employees to offset an 80-20 split in employee health insurance premiums. This is not fair to property owners. The idea is to bring OPA into harmony with national standards. The board has done that, as it should have, but then reversed course and offset it with a one-year give-back. The directors should have the courage of their convictions and act like hard-headed business people looking out for the interests of property owners as well as employees. If there are hardship situations, use the 2 percent bonus pool to soften the blow. -- Tom Stauss Among many other examples, the draft budget’s Yacht Club numbers contained no revenue or net earning projections for a revived banquet business, that as of mid-February already has 36 booked banquets for the coming year. In the end, what a certain blogger said or didn’t said about a particular director isn’t particularly important, mere background noise in a gruelling budget process. The criticism clearly stung, not because there was any validity to it because Diller and all her colleagues have spent an inordinate amount of time working on behalf of the OPA as volunteers. Unlike her measured and supported criticism of the draft budget, the criticism of her was personal and overtly hostile. She deserved better, especially because of her unflagging determination to keep her promises to property owners. -- 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. 127 Nottingham Lane Ocean Pines, MD 21811

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38 Ocean Pines PROGRESS

OPINION

February 2019

Douty termination won’t fade way

f the powers that be in Ocean Pines think that the Nate Douty termination issue will fade away, never to be heard from again, they may discover to their dismay that the OPA’s former human resources manager has other ideas. His letter to the Board of Directors published in the January edition of the Progress raises all sorts of questions that beg for answers from OPA’s elected leadership, particularly President Doug Parks. Unfortunately, Parks and his colleagues are under an effective gag rule imposed by Association attorney Jeremy Tucker. Lawyers always tell their clients to keep it zipped when the possibility of litigation looms, and when the possibility of saying anything at all increases the chances of an adverse decision in the halls of justice. But that gag order, which the clients are free to ignore, selectively, means OPA’s side of the story remains untold. It allows the impression left by Douty’s letter that certain OPA directors, invested in the hope that a Douty investigation of Director Slobodan Trendic would lead to a revelation of wrong-doing, retaliated against Douty when he failed to deliver actionable evidence to justify Trendic’s removal from the board.

LIFE IN THE LIFE INPINES THE PINES

action to remove him? 8. Who among the board wantAn excursion through the curious cul-de-sacs An excursion through theby-ways curious and by-ways and cul-de-sacs ed Douty terminated? Who didn’t? of Worcester County’s County’s most densely community. of Worcester mostpopulated densely populated community. Was the matter even discussed in a Publisher By TOM STAUSS/ By TOM STAUSS/Publisher closed session of the directors? 9. Who told Bailey that he had to Douty’s letter paints an ugly pic- and Tuttle seemed to be hoping that fire Douty? ture of internal OPA board politics Trendic would be implicated in some 10. Why no response to Douty’s gone seriously astray. Short of some sort of wrong-doing. Is this true? letter and request for reinstatesort of administrative hearing at 3. When he failed to deliver the ment? relevant state or federal agencies verdict Douty says Parks and Tuttle There are probably a few other that handle employment disputes, seemed to want, Douty alleges that questions that could be posed, such or wrongful termination litigation, General Manager John Bailey was as why Parks and Horn, the board we may never get answers to all the forced to terminate him, possibly on secretary, decided to post as a closed questions that can be asked about threat of losing his job if he didn’t. Is meeting agenda item the matter of this sorry episode. this true? the complaint against Trendic. But here are just a few of the 4. Douty says he assumes he was By then, as Parks, Tuttle and questions that could be asked of terminated as the result of a board Horn surely had to know, Douty’s inParks, and perhaps a couple of other vote or consensus short of a vote, but vestigation had yielded no smoking directors who involved themselves is that really what happened? As gun showing any wrong-doing by in the Trendic investigation, for rea- OPA bylaws give hiring and firing Trendic. sons that seem petty and person- authority to the GM, not the board, He had indeed had discussions al and, dare we say, unbecoming of can anyone confirm that there was a with Public Works employees at a board members: vote to terminate Douty? job site near his home, but had not 1. Why were Parks, Steve Tuttle 5. Was there a board consensus crossed any ethical line, such as inand Colette Horn involved in any short of a vote to remove Douty, or structing them how to perform their way in a meeting with Douty to dis- the consensus of a board minority? jobs. cuss his investigation of Trendic? 6. According to Douty, Bailey told That indeed would have violated Would not a hands-off approach him “board no confidence” was the OPA bylaws, something of which by any and all directors, especially reason for his termination. If this is Trendic, as an expert on them, three OPA officers, have been better true, what was the justification for would have known. With his innocence of any for the integrity of the investigation? the lack of confidence? 2. Douty in comments to the Prog7. Douty says that he worked well wrong-doing known with a fair if ress alleged that Tuttle in particular with Bailey who had never indicat- not absolute degree of certainty, why “grilled” him about the conduct of his ed any dissatisfaction with his job would this issue, that Bailey and investigation and that both Parks performance. If this is true, why the Douty were capable of conducting without board interference or oversight, appear as an agenda item to be considered in closed session? It should have been closed well short of any board-level adjudication at all. But it wasn’t, suggesting that it was done to embarrass or humiliate Trendic and apply enough pressure on him that he might want to resign. Given his health issues and the health issues of his wife, there perhaps was a cold, cynical calculation that he very well might throw in the towel. Who could blame him, under the circumstances? And his departure from the board would mean that an independent voice of reason and fiscal conservatism would be silenced, something that this board and this association benefit from immensely. Douty, too, seems to have been mistreated in all of this. He has told a compelling tale of political vengeance, with both himself and Trendics the unfortunate victims. If the powers that be have an alternative story-line, they ought to tell it.

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