January 2017 ocean pines progress by Ocean Pines Progress

www.issuu.com/oceanpinesprogress

January 2017

443-359-7527

A Bethesda law firm has said the way that Acting General Manager and Director Brett Hill handled his recusal from a request by his company for a proposed easement to bring fiber optic Internet service to Ocean Pines was proper and that so long as he remains uninvolved in any board discussion of the proposal, he need not resign from the OPA Board of Directors. ~ Page 14

THE OCEAN PINES JOURNAL OF NEWS & COMMENTARY COVER STORY

ON AN EVEN KEEL

Hill’s draft budget for 2017-18 keeps assessments constant

By TOM STAUSS Publisher

Acting General Manager Brett Hill

cting General Manager Brett Hill has proposed a cautious Ocean Pines Association budget for 2017-18 that doesn’t increase or decrease lot assessments or amenity fees, increases operational funding year-over-year by roughly $800,000 but trims capital spending not related to bulkhead replacement by $1.7 million. The result is a $13.5 million budget plan that is about $1 million less than the $14.5 million approved and projected for the current fiscal year. The draft budget calls for $11.71 million in operational expenditures and $1.81 million in capital spending excluding bulkhead replacement. The last payment for Sports Core loan principal appears to have occurred this year; there is no funding next year in the draft budget for repayment. In remarks to the Budget and Finance Committee Jan. 11, Hill said that his draft budget could have resulted in a $16 increase in the assessment based on inflation. But he said he decided not to propose an assessment increase. He cited, in an executive summary whose wording borrowed heavily from previous years, an “economic climate” that “is still a challenging one” for many OPA members. His executive summary indicates that, as long sought by Director Dave Stevens and publicly endorsed by Director Slobodan Trendic, the Legacy Reserve component of the so-called Major Maintenance and Replacement Reserve has been eliminated. The legacy reserve, previously called the five-year plan funding stream, “was deemed no longer necessary” as major capital projects that the five-year-plan was designed to finance “have been completed or replaced with renovations by the current Board of Directors.” While the legacy reserve and its companion component, the historic reserve, have been merged into a simple and single “replacement” To Page 31

WINTER TUNE-UP

only

Trendic, Stevens support creating group to draft CIP

Draft budget calls for $3.77 million in capital spending next year

Operating expenses increase by roughly $800,000 year-over-year, but $13.5 million proposal is $1 million less than this year

Law firm says Hill acted properly on fiber optic recusal

By TOM STAUSS Publisher he proposed 2017-18 budget unveiled Jan. 11 by Acting General Manager Brett Hill projects $1,812,300 in capital spending from the general fund, replacement reserve and roads reserve, with another $1,956,563 in bulkhead replacement and repair spending from the bulkheads and waterways reserve. That totals $3.77 million in capital spending next year, if approved as is by the Board of Directors. According to the capital summary page contained in the draft budget, which is available for inspection in the administration building lobby in White Horse Park, the $1.81 million in non-bulkhead-related capital spending includes $129,308 in new capital funded directly from 2017-18 lot assessments, $1.53 million from the replacement reserve, and $150,000 from the roads reserve for street repair.

The bulkhead replacement spending, a significant year-over-year increase, is projected to replace failed bulkheading caused by worm infestation in Wood Duck Isle, affecting 16 properties. The biggest ticket items other than bulkhead replacement in the proposed 2017-18 capital budget is $417,000 for Country Club renovation; $288,000 for police department expansion, within the current administration building footprint; $250,000 in telephone and computer system improvements; $225,000 in Sports Core pool area structural additions, including a new party/training room and enclosed space for possible future conversion of the pool from a 25-yard pool to a 25-meter pool. Other proposed capital spending is $72,000 for To Page 30

Although it remains to be seen whether it will have much effect on the 2017-18 budget cycle now under way, Ocean Pines Association directors have been working quietly behind the scenes to analyze and massage the recently complete reserve study in the hopes that they can arrive at some semblance of a capital improvement plan relatively soon. Two OPA directors said they would like the board to formally appoint a task force of directors along with OPA Facilities Manager Jerry Aveta to create a revised and reasonably accurate capital improvement plan. ~ Page 17

County, school board agree on design for Showell Elementary The Showell Elementary School replacement project moved forward following the Worcester County Commissioners’ approval of $1.6 million for school design plans in early November. It took weeks of behind-the-scenes negotiation to trim estimated costs of the project from $45.96 million in September to a new revised estimate of $42.4 million, which in turn should reduce the county’s share of the cost of construction. Because the state’s share of the cost is still to be precisely determined, the county’s share also can’t be precisely known at this point. ~ Page 21

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Pictured with a car full of toys donated by Kiwanis members and supported by some club funds are, left to right, Co-Chair Tom Southwell, club President Barb Peletier, and Chair Dave Landis, whose wife Rita also shopped for the toys. About $700.00 worth of toys were delivered mostly to Worcester County GOLD in Snow Hill and some to Diakonia in West Ocean City for distribution to children for Christmas.

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Although there’s been much attention of late on plans by the Ocean Pines Association to renovate both the ground floor and second story interior spaces of the venerable Country Club, this doesn’t necessarily mean the Board of Directors will stop there in trying to make the building better. OPA President Tom Herrick told the Progress recently that the board’s first priority has been to make the interior spaces more functional and usable by Ocean Pines residents and property owners. The board is well along in the process to make that happen, he said, with improvements slated for the current fiscal year and likely to be approved in the 2017-18 budget now under review. But he said that after interior renovations are made, some attention will probably be given to improving the appearance of the building’s exterior, now covered with vinyl that some people believe is inherently unattractive. Underneath that is the original cedar shake siding, not necessarily in pristine condition but perhaps more attractive than vinyl in a retro-chic sort of way. Herrick didn’t commit or comment on what sorts of improvements could be made to the building exterior, only that it’s a matter that will receive some board attention at some point in the future.

OPA still looking for technology director

Acting General Manager Brett Hill said he expects quickly to fill the vacancy of technology director after the person recently hired to be the OPA’s new go-to person for all things technology-related didn’t work out. When asked by the Progress in a Jan. 9 telephone interview if he would explain what happened with the recent hire, who had been announced as the OPA’s new technology czar back in December, Hill responded with a terse (and not unexpected) “nope,” then went on to say it was a personnel matter that should remain confidential. He said that the OPA had a number of solid applicants who had responded to the posting for the technology director position and that he would be going back over the applications with the expectation that he would be able to find a suitable replacement from among those applications. “I expect to have someone in place by the end of the month,” Hill said.

Department reps disinvited from committee meetings?

When Aquatics Director Colby Phillips didn’t show to a meeting of the Aquatics Advisory Committee on July 9, concerned committee members wondered why. There was some speculation that a new policy was in place discouraging department heads

from attending advisory committee meetings because of some recent bad behavior by some committee members. Not In a recent conversation with the Progress, Acting General Manager Brett Hill said there was some truth to that speculation. He said there indeed had been some abusive behavior at the committee level, without naming names. Sometimes committee members will take it upon themselves to direct department heads to take action, and department heads, wanting to respond affirmatively to OPA members, will act accordingly. That degree of involvement with staff is regarded by Hill as improper, because it usurps the role of the general manager and the board to direct department heads. Hill said there appears to be conflict between committee charters that call for interactivity between committees and staff and other governing documents which state committees are designed to be advisory to the board. “I’m following board policy” in asking department heads not to attend advisory committee meetings as a general rule, Hill said, but he suggested calling OPA President Tom Herrick for clarification, Herrick said while he agreed with Hill’s characterization of the new policy for the most part, he differed in that he said there was flexibility when a department head had a pattern of working closely and well with a particular committee. He also said it would be helpful if a committee met during normal business hours. “It’s OK for a department head to meet with advisory committees when needed,” he said. In the case of a wellfunctioning committee like Aquatics, he said he would have no problem if Phillips attends committee meetings when her schedule permits.

Trendic calls for posting of 2017-18 draft budget

In the interests of full transparency and to encourage property owner input into the 2017-18 budget cycle, now under way in earnest, OPA Director Slobodan Trendic is suggesting that the full draft budget unveiled in a meeting with the Budget and Finance Committee Jan. 11 be posted on the OPA Web site immediately thereafter. He made the suggestion in a recent email to his board colleagues. He said arguments could be made that posting the draft budget might give property owners the idea that the posted draft budget is the final, approved version, but he said the board should give property owners more credit than to assume they can’t tell the difference between a draft and final version. Transparency and encouraging property owner input into the process outweigh that and any other concern, he said. As the January edition of the Progress



Country Club exterior modification possible

OCEAN PINES

January 2017 Ocean Pines PROGRESS

From Page 4 was nearing its publication date, the draft budget had not been posted on the OPA Web site. A copy of the draft was available in the lobby of the administration, however.

LU golf course contract not in jeopardy: Herrick

Since the election of a new Board of Directors this past August, relations between the Ocean Pines Association and Landscapes Unlimited, the contract manager of the Ocean Pines golf course, have markedly improved. There is no longer any interest among board members to force out LU from its management contract, which seemed imminent at times with the prior board. The word from OPA President Tom Herrick is that the relationship between OPA and LU executives are cordial and that the OPA is hopeful that a business plan drafted by the company will bear fruit in building membership and encouraging golfers in Ocean Pines without prepaid annual memberships to play the golf course anyway. Herrick said that non-member play by Ocean Pines residents and property owners continue to be a substantial portion of the revenue base. “We want to continue that and build on it,” he said. A strong suit of LU is its commitment

to member services, Herrick said. Until such time as improvements are in place to both the interior and ultimately the exterior of the Country Club, Herrick said that amenity makes it more difficult to attract outside play to the course, despite its reputation as one of the best courses on the Eastern Shore and excellent greens and playing conditions.

Board approves pool resurfacing

At the Jan. 9 meeting of the Aquatics Advisory Committee, chair Kathy Grimes reported that two pool resurfacing projects advocated by the committee and OPA staff had been approved by the board and would be started “as soon as the weather breaks,” well before the launch of the summer season. Out of ten pool companies that were given the bid materials, only three participated in a pre-bid walk-through and only two, Pearl Pools from Rockville, Md., and Pool and Spas from Milford, De., submitted bids. Staff recommended the low bid submitted by Pearl Pools. Kathy said the Board of Directors had approved the low bid, and that the work would be scheduled by Pearl Pools as soon as the weather breaks. Cost of the two projects is $27,147. While the committee is very pleased that these two pools will be resurfaced prior to the reopening of the pools,

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Grimes expressed concern that the pool covers that were part of the bid specs were not the same as the highquality “Smart-Mesh” cover in place at the Yacht Club pool. Instead, the bid specs included a Dura-Mesh cover that she said is one “step down” from Smart-Mesh. The difference is that Smart-Mesh covers screen 100 percent of sunlight from penetrating under the pool covers, while Dura-Mesh screen only 95 percent. By not screening 100 percent, there is the possibility of algae growth with the Dura-Mesh cover, she said, as algae requires sunlight to grow. She said she would call Pearl Pools to see how much the better grade pool cover would cost, suggesting that she thought it would be relatively modest. The committee unanimously voted to recommend the better-quality pool cover as a way of eliminating the possibility of algae growth in any way damaging newly resurfaced pools. Once cost information is obtained, Grimes said she will make sure OPA staff and the committee’s board liaison, Doug Parks, is informed.

Pines woman charged with credit card theft

Ocean Pines Police have charged a female resident with multiple counts of theft, as the result of a criminal complaint. According to the incident report, a 70

year-old woman had reported her credit cards stolen on Dec. 28. The complainant told a responding officer that her credit cards were used at the Walmart located on Route 50. An Ocean Pines police officer reviewed surveillance video at the Walmart. Store management provided police with pictures of a female, wearing a red jacket, purchasing a flat-screen television using the victim’s stolen credit card. The 70 year-old woman was able to positively identify the female in surveillance pictures at Walmart to be her daughter, Heather Lynn Camp, 43, of Ocean Pines, police said. Camp faces two counts of theft of credit cards, and three counts of charge of a stolen credit card, less than $500. She was taken before a District Court Commissioner, and was held on $7,500 bond at the Worcester County Jail.

GOP women sponsor Valentines for vets

For the 17th year, Valentine’s Day cards will be sent to four veteran rehab medical centers through an activity sponsored by the Republican Women of Worcester County. All area schools, clubs, businesses, organizations, and individuals are invited to participate with purchased cards, but home-made cards are particularly appreciated. No postage is necessary and the card is addressed to “A Veteran”.

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Yacht Club to reopen this month after brief hiatus By TOM STAUSS Publisher fter a two- or three-week closure for upgrades beginning Jan. 4, the newly rebranded Ocean Pines Yacht Club will be reopening the latter part of January after a face-lift, thorough cleaning and cosmetic upgrades, technology improvements, a new menu and a change in top management. E-mail blasts and other promotional material will be sent out by the Ocean Pines Association to alert residents and non-residents alike when the amenity is reopening. First, the rebranding. For some time the restaurant in the Yacht Club has been known as the Cove at Ocean Pines, or often, just the Cove. The Yacht Club itself has been known, more or less, as the Ocean Pines Yacht Club since its inception. As conceived by the Ocean Pines Association’s new marketing and public relations director, Denise Sawyer, the Yacht Club will be known as Mumford’s

Landing in Ocean Pines. The restaurant has been rebranded the Cove at Mumford’s, and the newly installed 20-foot bar in the hallway leading back to the dining room has been christened Tuffy’s Tavern, the name of the bar area in the old Yacht Club. Signage from the old Tuffy’s Tavern was dug out of storage and has been attached to the new bar. The rebranding honors the late Charles “Tuffy” Mumford, who was associated with the primary early developer of Ocean Pines, Boise Cascade Home and Land Corporation. He was a fixture of the original Yacht Club that was opened in 1975. That building was in replaced in 2014 by a newer, more modern version, with a few design flaws that Acting General Manager Brett Hill has been working mightily to overcome since assuming his current role last August. One such flaw has been remedied by a new hostess station in the front entrance foyer, to replace sterile and unwelcoming signage that had directed patrons previously. In addition, the Tuffy’s Tavern bar was built by OPA Public Works staff in



Restaurant rebranded ‘Cove at Mumfords’; Tuffy’s Tavern returns

Tuffy’s Tavern

Action at the recently installed bar at Tuffy’s Tavern at the Ocean Pines Yacht Club.

OCEAN PINES BRIEFS From Page 5 Through the generosity of Linda Dearing and the Copy Central staff, the cards, plus some candy, will be delivered to Charlotte Hall Veterans Hospital, Baltimore Rehab Center, Baltimore VA Medical Center, and Perry Point Hospital. Drop off locations are Shamrock

Realty Group, 11049 Racetrack Rd, Ocean Pines; Copy Central, Cathell Road, Ocean Pines; the Worcester Library at Ocean Pines, the Ocean Pines Community Center, and other locations as they become available. The deadline is Thursday, Jan. 26. For more information, call 410-208-9390 or email at ultimateenergy@verizon.net. The Republican Women of Worcester County is the event sponsor.

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From Page 6 the long, somewhat empty hallway leading back to the dining room. It offers eight craft beers and six-pack beer and bottles of wine to go. “It’s been very well received so far by the community,” Hill said of the new Tuffy’s Tavern bar and carry-out service, made possible by the existing license “that was granted and previously paid for but never had a means to exercise.” It opened in December. “We are really trying to better identify our food and beverage operations so that nonresidents realize we are open to the public and have a lot to offer,” Hill said. During the brief hiatus before the reopening, Public Works crews are adding more features to the Tuffy’s Tavern bar. Crews will work to paint a good portion of the facility and complete a thorough cleaning of the entire building. Newly hired Information Technology Director Paul Fazzalaro had been spearheading the installation of new information technology, but probably wasn’t on the job long enough to make much progress. Signage will be replaced around the facility and community to reflect the recent rebranding. “The Cove at Mumford’s” will also

January 2017 Ocean Pines PROGRESS see some menu changes. New items when the restaurant reopens will include weekend specials that have been crowd-favorites. A carry-out menu will also be added to the mix. A job fair to fill positions at the Yacht Club, originally scheduled for Saturday, Jan. 7, has been rescheduled one week later because of heavy snow that fell on the 7th. Available positions include bartenders, servers, floor managers, hosts, line cooks, prep cooks and server assistants, among others. The Yacht Club also underwent an unexpected and sudden personnel change just before New Year’s Eve, with Hill announcing that Jerry Lewis was no longer the amenity’s food and beverage manager. The OPA was expected to begin advertising for a replacement manager the second week of January. “It was not moving in the right direction” Hill said of Yacht Club management, declining to elaborate. “It had to happen sooner than later.” After positive financial results in September and October, posted November results for the Yacht Club showed an operating loss, even though the results beat budget forecasts for the month by roughly $17,000. Banquet manager Brian Townsend has “stepped up,” Hill said. “But his role essentially is unchanged.”

Trendic continues to push for leasing out Yacht Club Hill pushes back, says offering bonuses to management could solve the problem of ‘no skin in the game’ By TOM STAUSS Publisher he sudden exit of Yacht Club manager Jerry Lewis just before New Year’s Eve has at least one Ocean Pines director, Slobodan Trendic, thinking that perhaps the time is right to consider prospecting for an experienced restaurateur willing to lease the amenity from the Ocean Pines Association. “It could be a golden opportunity that we shouldn’t pass up,” he told the Progress recently. Trendic, a long-time proponent of leasing the Yacht Club and out-sourcing certain OPA management functions as a way of saving money and operating more efficiently, is well aware that there is resistance to the concept of leasing because of the perception that it means that the OPA will lose effective control over the amenity. “Over the years, we’ve proven that we haven’t been able to succeed while controlling the Yacht Club,” he said.

Slobodan Trendic

Tom Herrick

Trendic wanted to make clear that he is supportive and appreciative of the job that Acting General Manager Brett Hill is doing to improve operations at the Yacht Club. “This is not meant to be against anything Brett is trying to do,” Trendic said, adding that he believes all of the cosmetic changes at the amenity have been improvements. Hill said that he is not necessarily

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8 Ocean Pines PROGRESS

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Leasing From Page 7 opposed to leasing per se, but he told the Progress in early January that if there is any individual interested in taking on that challenge, he or she has not made an overture or proposal to him. As for the possibility of sending out a request for lease proposals, or hiring a search firm to assist in the search, Hill said there isn’t time for that. “I have to keep the Yacht Club running and prepare for the summer season,” Hill said, adding that he didn’t believe that closing the Yacht Club during the winter months was the best option to serve Ocean Pines residents. “There are plenty of restaurants in the Ocean Pines area that stay open year-round and do well,” he said. “We have to do a better job of convincing our residents and others in the area to support us,” and he said that all the recent changes at the dining amenity, as well as the rebranding, are designed to do just that. OPA President Tom Herrick said that with the recent vacancy created by Lewis’s departure, “all options should be on the table” for managing the Yacht Club, including leasing. But an option that she said should be in the mix would be to hire the right manager and give him or her incentives to run the Yacht Club’s operations more efficiently than has been done in the past. “There are more ways than leasing to

have someone in charge with skin in the game,” he said. Hill agreed that bonuses or other rewards for measurable performance should be part of the compensation package offered to a new Yacht Club food and beverage manager. “I offer bonuses to staff as part of the way I run my business,” Hill said, alluding to his fiber optic installation company that is active installing fiber cable in the mid-Shore area and has designs on the Lower Shore. It remains to be seen whether Trendic will press for board consideration of the leasing option, but an opportunity to do so could present itself at a special meeting of the board scheduled for Jan. 20. Former OPA Director Martin D. Clarke has been in contact with current directors to urge them to close the Yacht Club for the winter and use that time to prospect for potential tenants. “I would offer a lease for a dollar a year to start,” he said, adding that closing the Yacht Club for a few months would only inconvenience a small percentage of residents – he called them Ocean Pines’ one percent – for a relatively brief period. With Hill making a concerted effort to turn things around at the Yacht Club and putting in a lot of extra volunteer time as the OPA’s acting general manager, it may be difficult to persuade a board majority to opt for leasing, as it may come across as under-cutting Hill’s latest turn-around efforts.

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Bunting, Bertino ‘find’ money for Ocean Pines bridge repairs

County bond issue to pay for a $44,000 change order approved by the OPA board in December of fortune from a Dec. 5 work session, when Acting General Manager Brett Hill informed the Board of Directors that, because the OPA had let $150,000 in utility relocation funding slip away last year, the OPA would have to cover the full cost of the bridge repair project, including the portion related to relocating county-owned utilities. After reading of the funding snafu in

the local media, Ocean Pines’ two county commissioners, District 6’s Bunting and District 5’s Bertino, went to work to see if there was sufficient funding available in a recent county bond issue to cover the shortfall. Because of a change in the way in which the utilities will be positioned under the canal bridges, the full $150,000 was not needed. Bunting told the Prog-

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ress that he and Bertino worked with the county Public Works staff to urge them to free up roughly $44,000 in bond money to cover the cost of a $44,000 change order related to the bridge project approved by the OPA board at its regular meeting in late December. “They came through,” Bunting, the county commission president, said, adding that the money will come from a county bond issue that already had raised substantial sums for improvements to the Ocean Pines water and wastewater treatment systems, including pump station upgrades and water line replacement. “It’s not that we found the money. It was already there and just needed to be allocated for this specific purpose.” Bunting said it was reasonable for the county to pay for the relocation of utility lines because those lines are actually owned by the county. The OPA, on the other hand, is responsible for funding bridge repairs. At the December work session, Hill told his board colleagues the repair project had hit a funding snag because project delays under the previous general manager had caused the county to lose funding support for utility relocation. Hill said the project should have started in December of 2015 but was delayed. When work finally got under way this year, the OPA discovered that because of the delay, county funds through the Ocean Pines Services Area in the Water and Wastewater Division were no longer available. Hill said the county had dedicated $150,000 in funding for the utility project, which included boring under the canals to install water and wastewater lines in lieu of suspending them from the bridges, last year. However, because the project didn’t occur last year the funding went away and did not carry over into fiscal year 2017, apparently because no one from the OPA asked, Hill said. “This year they did not have funding,” Hill said at the December work session. After a revised, less expensive plan was devised for relocating the utility lines, Hill presented the board with a $44,000 change order for the project’s contractor, Murtech Inc., calling for construction of support structures that were not included in the original bid to allow placement of the water and wastewater lines on or just under the bridges. The support structure will bear the weight of 12-inch iron water and wastewater pipes that serve Ocean Pines, some of which won’t even be attached to the bridges. The change order was unanimously approved by the board during a regular meeting Dec. 9. As a result the bridge repairs could continue without any significant delays at both the Ocean Parkway and Clubhouse Drive locations. Hill said the current utility line attachments to the bridges are among the reasons the structures are deficient. He said the existing bridges were not built

By TOM STAUSS Publisher orcester County Commissioners Jim Bunting and Chip Bertino recently worked together to scrape together roughly $44,000 in county bond issue funding that will help pay for the relocation of water and wastewater utilities on the Ocean Parkway and Club Drive bridge projects. The funding, to be provided to the Ocean Pines Association when the projects are complete, represents a reversal

January 2017Ocean Pines PROGRESS 11

OCEAN PINES

Police may get more space in renovated admin building

Bridge repairs From Page 10 to withstand the stress of having lane utility lines place on them. The new support structures will be able to handle the burden to the extent that there still is an issue. In response to questions from directors, Hill said the only alternative was to wait until next fiscal year and hope the county includes funding for the project in the OPSA budget. Even if the county did foot the bill, Hill said it would be recouped from Ocean Pines property owners via a charge on their water and wastewater bill. He said that is unfair to residents. “Even though it is money out of our pocket it is best for us just to absorb it,” he added. Absent an understanding of how water and wastewater operations and capital improvements are funded within the OPSA, some members of the board

Hill to include funding in draft 2017-18 budget, says OPPD needs more room for more efficient operations; Trendic skeptical ance meeting and asked for board input on the $360,000 proposal. The feedback so far has been positive, with one notable exception. Director Slobodan Trendic told the Progress recently that he is not convinced that the OPPD can’t function within its existing square footage if it operates within the parameters set by the OPA’s articles of incorporation. He noted that police services were originally intended to be a joint responsibility of OPA and local law enforcement authorities. More particularly, he said he doesn’t believe the OPA needs to be holding people arrested on various charges. “Those arrested on charges serious enough for holding should be transferred to the custody of the state police,” originally thought all Worcester County residents should help pay for lines to be relocated as part of bridge rehabilitation projects by the Ocean Pines Association. “It just sounds like once again Ocean Pines is getting short-changed by the county,” Director Cheryl Jacobs said during the Dec. 5 work session. John Ross, deputy director of county public works, clarified the process for making and funding water and wastewater infrastructure improvements at the Dec. 9 board meeting. He said when the OPA did not ask for the budgeted money for tunneling under the canal for the placement of utility lines in the prior fiscal year, it got spent on other county priorities. That, however, changed with the direct intercession of Bunting and Bertino. Because the $44,000 in county funding will come from bond issue proceeds already available, Ocean Pines rate-payers will not be paying any more in quarterly fees to the county as a result of the funding solution.

Trendic said, in effect questioning the extent to which a police department operated by a homeowners association has evolved into a department indistinguishable from those operated by incorporated towns. He questioned the justification for a police department with a budget in excess of $1.5 million, with salaries for certain top department personnel very generous for the lower Eastern Shore. Trendic said he would be raising his concerns with board colleagues in the budget review process set to begin this month. Hill said plans for a new facility for the police department have been in the capital planning process for several years. Instead of constructing a new facility on OPA-owned land along Route 589, as was under consideration by the previous administration, he proposed a “more economical solution” that would still meet the needs of the OPPD, which currently occupies just 1,770 square feet within the existing administration building in White Horse Park. He said that existing space falls sig-

nificantly short of the space requirements for the police department, but added that providing additional space in the same building would meet the needs of the OPPD. Hill’s proposal also apparently removes from consideration a proposal to enlarge the existing administration building to accommodate an expanded OPPD space. “We’ve come up with, I think, a compromise footprint,” Hill told his fellow directors. While the option of expanding the police department’s working space in the administration building to about 4,000 square feet does better suit the needs of the OPPD, he said some sacrifices to staff areas, at just about 2,000 square feet, will still need to be made. However, it will provide adequate space for prisoner processing and public access areas, according to Hill. The $360,000 cost estimate for renovating the administration building includes $231,500 for the police department, $55,000 for the administration space, as well as $28,700 funding for IT, $15,000 for engineering, and a 10 percent contingency cost. He asked the board to include the $360,000 in the fiscal year 2018 budget for capital planning.

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By ROTA L. KNOTT Contributing Writer lans for the construction of a new building to house the Ocean Pines Police Department have been abandoned and the Ocean Pines Association is now considering an extensive renovation of the administration building in White Horse Park to provide adequate working space for its 17-officer law enforcement agency. Director Brett Hill, who is serving as the OPA’s acting general manager, recently presented an overall strategy to accommodate the needs of the OPPD, maximize use of the Country Club and provide adequate meeting space for community organizations. Hill proposed moving Board of Directors functions to the Country Club so more of the administration building can be converted into usable space for the OPPD. Hill presented initial plans for the project at a December budget guid-

12 Ocean Pines PROGRESS

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Police department From Page 11 Police Chief Dave Massey supported the proposed plans for renovating the administration building to accommodate his department instead of building a standalone facility elsewhere in Ocean Pines. “ I think it’s a reasonable compromise,” he told the directors. According to Massey, the OPPD has simply outgrown its existing space. He said when the facility was originally constructed the police department had six officers but now it has 17. “What we have now is something morphed into something it wasn’t originally designed to be,” Massey said. Massey, a retired Ocean City chief of police, said the administration building was not designed to accommodate the operations of a full-service police department thatRacetrack the OPPD Rd. has become. 11029 As an example, he said when a prisBerlin, MD 21811 oner is brought in they have to walk the entire length of the department for processing. The officers’ work area is also their break area and space for prisoner processing. “The security is lax in that area,” Massey said, adding that the design of the renovated and expanded space will provide dedicated areas for prisoners, officers to work and for administrative services. “It’s functional. It flows,” he said. Hill said staff reviewed a reserve study to determine the anticipated life span of elements of the building and associated replacement costs. He said several components of the building are aged and ready for replacement. Any expansion of the building would promote the need to proceed with replacement of components for the entire structure, such as roofing, siding and ceilings. That escalates the project cost. Hill said the police department and administrative staff would share a breakroom but there would be no access between the two sections of the building after regular business hours. The entrance to the administration area would be shifted to the east side of the building, a door that is currently a staff-only access. T The existing entrance and vestibule would then be for police department access. He said the most noticeable up-

grade in the appearance of the building would be the addition of fencing in the parking lot for police access and to provide a secure environment for moving detainees into the building for processing. Storage and meeting space are two areas that are reduced in proposed renovations to the administration building. Hill said construction of new bathrooms in White Horse Park will allow for the old bathroom facilities to be used for storage. The need for meeting space can be accommodated at the Country Club, he said. When asked by directors about an earlier suggestion that the police department be merged with the fire department into a single facility Hill out on Route 589, said that is not an option. PRSRT “All we’ll ever be is neighbors,” he said of the OPA and the fire department. USPOS According to Hill, the OPVFD owns the PAID land and building which houses the Southside fire station, and OPVFD offiMAILMO cials had no serious interest in relocating into a public safety building once proposed by former OPA general manager Bob Thompson. Hill said the proposed renovations to the administration building to provide more space for the OPPD addresses the department’s immediate needs and takes off the table any discussions of a new building for now. He said the OPA can further investigate that option in the future. Massey reiterated that he does not anticipate the need for a “grandiose huge police building.” He said if the department expands in the future it will not be by more than a few officers and they can be accommodated in the proposed renovations. He said the need is for space for his department to operate more efficiently. He added the Ocean Pines does not have the crime to justify the need for more police officers. And, he added, that he is hoping that need never arises. “We will do our utmost to prevent that,” he said. OPA directors reviewed Hill’s proposal to renovate the administration building in conjunction with recommended renovations and repurposing of the Country Club, but has not yet made a decision regarding incorporation of funding for the project as part of the FY18 budget process.

By TOM STAUSS Publisher n extensive survey of bulkheaded waterfront property in Ocean Pines has revealed the need for emergency replacement of bulkheading affecting 16 properties in Wood Duck Isle, Acting General Manager Brett Hill recently disclosed. In an early December interview with the Progress, Hill said he was still waiting for a final survey to present to the Board of Directors. But in the meantime, anticipating the use of emergency funding approved by the board several months ago, he and Facilities Manager Jerry Aveta were preparing request for proposals that he said should be posted on the Ocean Pines Association web site by mid-December. The emergency replacement of bulkheading affecting 16 properties in Wood Duck Isle is necessitated by a worm infestation uncovered in the October-November timeframe. During a Nov. 17 board meeting, Hill disclosed the presence of a worm infestation in parts of Wood Duck Isle with wood bulkheading, last replaced roughly 15 years ago. Bulkheading is supposed to last 35 years or more, he noted. That much of the Wood Duck Isle bulkheading may need replacement well before its expected shelf life is over is a “scary proposition,” Hill said. Subsequent to that, Hill said a survey of all the bulkheading in Ocean Pines revealed conditions that in some cases were worse than feared, but in other instances less worrisome. The 16 properties identified for emergency replacement are the ones in which worm infestation is too far gone, necessitated immediate replacement, he said. Other bulkheading with some evidence of worm infestation can be done over a five-year period, depending on the extent and pace of deterioration, he added. Hill said that he and Aveta have been working on a plan for a new bulkhead replacement program to replace the original 35-year program, which is now approaching its 40 year. He said he expected that it would be ready for board consideration in the 2017-18 fiscal year, if not before. He said the challenge is identifying those bulkheads that need replacement before their expected shelf life of 35 years and those that whose life cycle might exceed that longevity. He said that simply starting over at the beginning of the original program isn’t feasible. The problem in Wood Duck Isle in particular is that a board of directors from roughly 15 years ago elected to replace bulkheading in Wood Duck Isle with wood that is prone to the sort of worm infestation that has occurred. Developer Marvin Steen elected instead opted for metal bulkheading that is worm-resistant, even though at the time it was somewhat more expensive than wood. The acting general manager made his initial disclosure about worm infestation in the context of a discussion of whether the OPA could afford to give owners of OPA-maintained bulkheads

January 2017 Ocean Pines PROGRESS

Wood Duck Isle properties identified for emergency bulkhead replacement Worm infestation requires immediate action, Hill says a holiday in the waterfront differential, an idea advocated by Director Slobodan Trendic in the absence of a new multiyear bulkhead replacement program. The original 35-year program is now approaching year 40. With evidence of a worm infestation, and with the potential of substan-

tial outlays required in the future, Hill seemed to be saying that any waterfront differential holiday would potentially be a big mistake. Indeed, he has not backed off of that view in light of the recently completed survey of bulkheading throughout Ocean Pines. But other directors will be

weighing in on the matter once the written report on the condition of the bulkheads is provided to them After Hill made his comments about the “scary proposition” facing the OPA with respect to bulkheads, Trendic continued to insist that Hill needed to present clear, convincing evidence of need before the OPA continued to collect money from waterfront owners. “If we don’t have a bulkhead plan, how do we justifying taking the money?” he asked his colleagues. He said that if Wood Duck Isle bulkheads are in such poor condition because of worms, “let’s document it” before collecting money that may not be needed.

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By TOM STAUSS Publisher Bethesda law firm has said the way that Acting General Manager and Director Brett Hill handled his recusal from a request by his company for a proposed easement to bring fiber optic Internet service to Ocean Pines was proper and that so long as he remains uninvolved in any board discussion of the proposal, he need not resign from the board. In an early January telephone interview with the Progress, Ocean Pines Association President Tom Herrick said the Lerch Early law firm of Bethesda issued an opinion in the latter part of December that advised the OPA that it could legally enter into an easement agreement with FTS Fiber, Hill’s fiber optic company, while Hill remains on the board and acting general manager. While acknowledging that the arrangement constitutes a conflict of interest, the opinion said that as long as Hill steps away from any board “process” relating to the fiber optics, then the board is free to act in any it chooses. “He (Hill) did everything legally proper,” Herrick said, referring to a Nov. 28 letter from Hill to the board notifying the board of a potential conflict as specified in board resolution B-05. “There was no violation” of B-05, he said. In addition, Hill left the board’s work session in early December when his company’s request for an easement was

BOARD OF DIRECTORS

January 2017

Law firm issues opinion that says Hill acted properly in fiber optic recusal Bethesda law firm says no reason for Hill to resign brought up for discussion by Director Doug Parks, the board member tasked with overseeing efforts to upgrade OPA information technology systems. Herrick noted that Parks, in bringing the matter to the attention of directors, was attempting to introduce the subject to the board and community as a “matter of information,” well short of recommending that the board take any particular action at that time. “That intent was somewhat lost” in the subsequent media coverage of the proposal, Herrick said. Although Hill and the OPA have been given a clean bill of health legally and ethically with respect to the conflict situation, Herrick acknowledged that there may continue to be some lingering perception in Ocean Pines about some degree of impropriety. “There may be some push-back, some perception,” Herrick said. “What some people will interpret the situation to be” could differ from the way it actually is. As a way of further separating Hill

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from any perception that his company’s proposal might be more favorably treated because he is a director, Herrick said it is likely that the OPA will request proposals from other companies that install fiber optic cable. It does not appear that the OPA is in any hurry to move on fiber optic in any event. Parks had introduced a representative of Hill’s company, as well as representives from a partnering Internet service provider, at a November meeting for informational purposes, not with the expectation that any board action was imminent. The Nov. 28 from Hill to the board, in addition to raising the issue of a potential conflict of interest and asking for an easement to lay cable, also noted the possibility of direct fiber optic connectivity between the Ocean Pines Police Department and the Worcester County sheriff’s office in Snow Hill. Actually, to accomplish that goal, a fiber optic line would need to be installed from the OPPD station on Ocean Parkway to a junction on Route 589, where a fiber line already exists. “Mr. Hill, having a personal interest in FTS Fiber, shall recuse himself from any discussions regarding the opportunity and (shall) abstain from any votes involving FTS Fiber and its relationship to Association property to avoid an inherent conflict of interest,” the letter said. Despite that declared recusal in a notice to the board, Director Cheryl Jacobs said during board discussion that Hill faced a conflict of interest, and Ocean Pines resident Joe Reynolds said Hill should resign from the board in a comment at the end of the discussion. Hill offered his resignation to the board after the Dec. 5 work session. The offer was rejected. They in effect said that Hill should not be penalized or leave the board because his company is offering a service that may be well received by many

Wood Duck Isle From Page 13 Aveta said the initial discovery showed worm infestation “all over” Wood Duck Isle. “Please don’t cut the waterway reserve,” he said during the November discussion. In the proposed 2016-17 draft budget unveiled in mid-January by Hill, there is no change in the waterfront differential assessed on most owners of bulkheaded property in Ocean Pines. The current $800,000 or so collected in waterfront differential funds “doesn’t get you very far” if an accelerated replacement program is needed, he said.

Ocean Pines residents, as an alternative to a cable television provider not beloved by many of its customers. They also said that Hill’s departure from the board would be counter to the will of property owners who voted for him in last summer’s election. Hill told the Progress that he offered his resignation because, if faced with a choice, he has to put the economic interests of his family above his volunteer role as a director and acting general manager. He said he was of the belief that recusing himself in any involvement in the easement request, including opting out of any meetings in which the matter is discussed, would eliminate any concerns about the perception of a conflict of interest. While four of his colleagues seem to agree that this recusal is sufficient and compliant with board resolution B-05, the board also has elected to obtain a legal opinion from the law firm in Bethesda, Md., Lerch Early, on the conflict of interest question, with the hope and expectation that the firm will allay any conflict of interest concerns. That law firm is the same one that is used by the Parke subdivision in Ocean Pines. Of the six directors with an opinion on the conflict issue, Director Cheryl Jacobs and Slobodan Trendic seemed to be the most outspoken, at least with respect to a willingness to speak publicly and on the record. Before the law firm weighed in on the matter, Jacobs said she had “serious conflict of interest concerns with Brett” serving on the board as this issue unfolds. She did not say whether his Nov. 28 recusing himself from all discussion and board votes on the matter complied with board resolution B-05. She also asked whether granting FTS Fiber and its Internet service provider partner an easement would violate Mediacom’s exclusive contract to provide cable television programming in Ocean Pines. Director Slobodan Trendic dismissed concerns about competition with Mediacom. “It’s Internet only,” he said, so it poses no conflict with the Mediacom contract. He said there may be grants available to allow the OPPD to connect to the state-financed fiber optic line out on Route 589, He also pushed back against the notion that Hill, as the owner and CEO of FTS Fiber, faced a conflict of interest or entanglement of his business affairs with those of the OPA. “Mr. Trump is dealing with the same thing, only in a bigger way,” Trendic quipped, alluding to the president-elect’s numerous corporate holdings and potential conflicts and refusal, so far at least, to transfer his holdings into a blind trust. Later, Trendic clarified that Hill, in recusing himself in the way he did, was doing all he could do to remove himself from the board’s deliberations on the easement request.

BOARD OF DIRECTORS

January 2017 Ocean Pines PROGRESS 15

Board, committee closing in on final draft of questionnaire By TOM STAUSS Publisher he Board of Directors and Comprehensive Plan Advisory Committee have made significant progress in arriving at a final draft of a community survey. Committee chair Frank Daly confirmed that, after directors exchanged copies of proposed survey questions following a joint meeting of the board and committee Nov. 17, the number of questions have been whittled down from 42 to 28. The questions with board comments were forwarded to the committee by Director Dave Stevens in December. In an early January meeting, the committee went through roughly two thirds of the 28 questions, arriving at what members hope will be the final version of those questions. Later this month, the committee will be meeting again to scrutinize the remaining questions and board comments, Daly said.

Comprehensive Plan Advisory Committee chair Frank Daly optimistic that goal of having survey ready for sending out with annual assessment will be achieved After compiling all the questions into a final draft, Daly said the committee will forward them to the board for a final review. “Even if there are some additional changes at that point, we expect we will have a survey ready to be mailed out to property owners with the annual assessments in March or whenever they’re sent out,” Daly said. The committee chair said the process used by the board to whittle the questions down to 28 was an efficient one, using a version of Microsoft Word that allows a single draft to be appended with comments from individual board members. In some cases, directors felt questions were no longer needed because decisions have made that make the questions unnecessary. In other cases the

Trendic to offer motion directing staff to aid 50th anniversary panel By TOM STAUSS Publisher n apparent decision by Acting General Manager Brett Hill not to send a staff representative to attend a recent meeting of the 50th Anniversary Committee, an informal grouo of individuals formed to plan for Ocean Pines’s 50 years as a community in 2018, has generated some push-back from the Board of Directors’ liaison to the committee, Slobodan Trendic. At a meeting of the group in early January, the panel discussed the absence of an OPA staff representative as indicative of possible lack of support for the committee’s efforts. Trendic assured them that he felt certain the Board of Directors and Hill are fully behind the effort to organize anniversary events next year, including those that require input from department heads. Trendic, while telling the group he did not agree with Hill’s apparent decision not to send a staff member to the meeting, explained it as an effort by the acting general manager to “get a handle” on the large of “ad hoc requests” for staff assistance made by various OPA advisory committees. The 50th anniversary group is not an official OPA committee but nonetheless its members feel that staff involvement in planning the anniversary will increase the chances it will be a successful year.

“They (the committee) need ongoing staff and financial support to make a go of it,” Trendic told the Progress. He said he plans to include on the agenda of the Jan. 23 work session a discussion of Hill’s decision. Then, he said he was planning to follow through with a formal motion at the Jan. 28 regular meeting “authorizing staff to support the efforts of the 50th Anniversary committee and directing the acting GM to provide administrative support” to the committee. In subsequent meetings, Trendic said he was planning to offer similar motions to authorize and direct department heads to attend meetings of advisory committees. The existence of the 50th Anniversary committee first surface at a Dec. 5 board work session, when Mike and Kathy Sabini announced that they had volunteered to chair the group. They said that 18 individuals had already stepped up to serve. Since then, a source told the Progress that some volunteers have dropped out because they came to believe that the OPA would not be providing the logistical and funding support that previous boards have given previous anniversary committees. At the Dec. 5 meeting, Mike Sabini said the committee would need some front money for signs and logo redesign adapted from the one used for the 25th anniversary.

directors thought the questions were too complicated. Daly said he appreciated how quickly the directors sent in their suggestions to Stevens for compilation. “One of the committee members, (former chairman) Steve Cohen, said the old board had never responded as quickly to any of his requests or emails as the current board did to the survey draft,” Daly said. The committee chair said the committee is agnostic on which method the OPA employs to compile survey data. At the November meeting, the committee had proposed software called Survey Monkey for that purpose. While those without computer access could send in their survey answers for manual inputting, Survey Monkey would allow property owners to go onHe did not have a budget number to give to the board. There would also appear to be plenty of time to plan the events during calendar year 2017. Trendic, already the board’s liaison to the Communications Advisory Committee, volunteered to serve as the board’s liaison to the anniversary committee. He said he was planning to attend a committee meeting on Dec. 7 to get a feel for what kind of support the panel will need to plan for and conduct anniversary events. Hill had suggested the board appoint a liaison, adding that he believes newly appointed Marketing and Public Relations Director Denise Sawyer will be involved in promoting anniversary events. There was no indication at the Dec. 5 meeting that Hill would advise an OPA department head or representative not to attend the committee meeting.

line and answer questions using their own computers, thereby saving the OPA lots of time. However, Acting General Manager Brett Hill told committee members that the OPA actually has a survey capability with in-house software already in place. It’s been used on a limited basis already, but he said it might be possible for the more comprehensive survey to be conducted using the in-house software. The OPA’s newly hired information technology director will be able to assist in making a decision on which platform to use to conduct the survey, Hill said. Also during the November meeting, Hill suggested that the survey could be sent out with annual OPA assessments in March or whenever, based on when the board completes the budget for next year and sets the lot assessment rates. Hill told the committee that he had been surprised to learn that the OPA’s existing management and invoicing software includes an online survey module that could be accessed by property owners to input survey responses. Eventually, this software, or something like it, could be used by property owners to access their individual accounts on-line, perhaps even paying their assessments or amenity memberships on-line, Hill said. By using this software, the OPA could periodically send out new surveys without a lot of new effort, he added. Daly had begun the meeting describing how the committee might conduct the survey by using Survey Monkey software, which he said would cost the OPA $300 for a licensed copy. He said the plan would be for the committee, working with the OPA public relations department, to send out an e-blast to property owners whose email addresses are on file to advise them that the survey was available online. He said there would be the ability to segregate responses from renters from those of property owners.

16 Ocean Pines PROGRESS

OCEAN PINES

January 2017

OPA maintains modest negative operating variance for 2016-17 year Aquatics continues to lead other amenities compared to budget By TOM STAUSS Publisher he Ocean Pines Association remained modestly in negative territory seven months into the 2016-17 fiscal year, with November financial results indicating that the OPA has a negative operating fund variance of $58,031. Contributing to that was a negative operating variance of $6,607 in November. Excluding an overage in new capital expenditures, the OPA actually recorded a net operating surplus of $11,867 relative to budget. New capital spending exceeded budget by $18,473, however, pushing what would have been a net operational surplus into a slight deficit. According to Controller Art Carmine’s November financial report, the OPA’s negative operating fund variance of $6,607 for the month was driven by revenues that exceeded budget by $26,430 and total expenses over budget by $14,564. Through the end of November, the negative operating fund variance of $58,031 resulted from revenues under budget by $269,889, expenses under budget by $206,151, and new capital under budget by $5,707. Excluding new capital expenditures, the net operating variance for the year so far is a negative $63,738. There are essentially three ways to look at OPA financial performance. One is to measure actual results against budget, with either positive or negative variances possible. Another is simply actual results, which can be surpluses or deficits. Both measurements are presented in OPA financial reports for a particular month and cumulatively for the entire fiscal year. The monthly financial reports posted on the OPA Web site under documents also include detailed break-outs for each amenity department, along with yearto-date numbers for the current and previous year, making year-over-year comparisons possible. Year-over-year performance is the third way to measure financial performance. The OPA runs its fiscal year from May 1 through April 30 of the following year. Amenity performance in November was typical for this time of year. All three racquet sports, aquatics, golf operations, the Beach Club, Beach Club parking and marinas recorded losses for the month, as they did in October.

Also recording a deficit for the month was the Yacht Club. Its $38,298 loss reversed positive numbers in September and October. All major amenities remain in the black for the first seven months of the

Trendic to oppose location of proposed Yacht Club play area By TOM STAUSS Publisher hat seemed at the time to be a non-controversial, mom-andapple-pie proposal for playground equipment to be donated and installed at minimal cost at the Ocean Pines Yacht Club has evolved into one of those classic Ocean Pines kerfuffles and is revealing some erosion in the tight camaraderie of a board coalition that formed after this past summer’s Board of Directors election. Evidence of some community opposition to the pirate-themed playground equipment for the yacht Club disclosed by Acting General Manager Brett Hill in December during a board has emerged on oceanpinesforum,com. The objections seem to focus mostly on the proposed location of the equipment on the outdoor decking east of the building. The concern is that playground equipment would be set up in close proximity to three separate bar areas serving alcohol – the outdoor tiki bar, the original bar set in a corner of the building, and the new Tuffy’s Tavern. Director Slobodan Trendic, in recent memos to board colleagues, has suggested that Hill exceeded his bounds in accepting the donation of playground equipment and deciding where it was to be located. When Hill made the disclo-

sure of the playground equipment donation at a December board meeting, there really was no reaction by board members, at least nothing too overt. Trendic said nothing. He said later that he was just taking in information and was not ready to comment without obtaining additional input from the community. That reaction has come in e-mails and it’s mostly negative, Trendic said. When he heard that Hill was planning to have Public Works staff on hand on the week of Jan. 9 to begin installation – work was not possible because of the aftermath of a winter storm the previous weekend – Trendic fired off an email to Hill asking that no work begin unless and until a board vote authorized it. Trendic said that Hill responded to him by saying that only OPA President Tom Herrick could put a stop to planned work by staff. Trendic said he then contacted Hill, who, according to Trendic, agreed to delay the installation until the board could consider the matter in more detail. Trendic said he would put the issue on the agenda for the board’s work session on Jan. 23. Trendic said he was opposed to the proposed location of the equipment anywhere on the Yacht Club decking but said he might be able to support a loca-

tion “as close as possible” to the nearby Mumford’s Landing family pool, if a site is available that could obtain a county permit. Depending on board discussion on the 23rd, Trendic said he might offer a motion for an up or down board vote on the issue at the following regular meeting. So far, Trendic said that two directors, Doug Parks and Cheryl Jacobs, expressed some support for the position he has staked out on the issue. Trendic said he did not want to turn his disagreement with Hill on this issue into anything personal. “It’s a professional disagreement,” he said. “Brett is doing a great job in a volunteer role of acting general manager.” In disclosing the existence of the donation in early December, Hill said the equipment would be named after a late Ocean Pines resident he didn’t identify and that the playground would be ready for use in late winter or early spring. To accommodate the equipment, the Ocean Pines Public Works department would remove decking pavers. A rubberized mulch-like material would then be added to the ground to soften the inevitable scrapes and bruises that might otherwise occur. Some sort of barrier between the equipment and the decking that would surround it also is anticipated.

OCEAN PINES

January 2017 Ocean Pines PROGRESS

Stevens, Trendic support creation of formal group to craft revised CIP Directors say recent changes in capital projects initiated by the acting general manager will be very helpful as the board devises a road map for future capital spending needs By TOM STAUSS Publisher lthough it remains to be seen whether it will have much effect on the 2017-18 budget cycle now under way, Ocean Pines Association directors have been working quietly behind the scenes to analyze and massage the recently complete reserve study in the hopes that they can arrive at some semblance of a capital improvement plan relatively soon. Two OPA directors, Dave Stevens and Slobodan Trendic, said in recent interviews with the Progress that they would like the board to formally appoint a task force of directors along with OPA Facilities Manager Jerry Aveta to scrub last year’s reserve study for outdated data and incorporate capital improvement decisions made by the Board of Directors in recent months to create a revised and reasonably accurate capital improvement plan. The last CIP was drafted by former General Manager Bob Thompson several years ago and was never officially adopted by the board, although Thompson used it as a guideline for the capital spending portion of his proposed budgets. It has been made largely obsolete by capital spending decisions made by the board in recent months affecting the Country Club, the Ocean Pines Police Department, the administration building, and the Beach Club. OPA President Tom Herrick told the

Pine’eeer Craft Club donation

Source: Ocean Pines Association Controller Art Carmine

The Pine’eer Craft Club of Ocean Pines, at its Dec. 15 holiday luncheon at the Captain’s Table Restaurant in Ocean City, handed out donation checks of $4,700 to various departments and organizations in Ocean Pines. The proceeds from the annual August and November artisan and craft shows provided the funds to make these donations possible. Donations were made to the police department, $500; fire department, $1,500; parks and recreation, $1,500; public works, $400; Friends of the Ocean Pines library, $300; Worcester County Veterans Memorial Foundation, $400; and Neighborhood Watch, $100. Accepting the checks were Bob Abel from Neighborhood Watch; Chief of Police Dave Massey; Billy Bounds, fire department; Marie Gilmore, veterans memorial foundation; Kim Goldberg, public works; and Debbie Donahue, parks and recreation.

think we as a board would listen to that,” he said. OPA Acting General Manager and Director Brett Hill seemed less certain of the need to formalize the effort. He told the Progress that individual directors and Aveta have been going over the reserve study for some time individually and Aveta is working to craft a new capital improvement plan. Aveta also has emphasized the need to devise an

ongoing maintenance plan with funding requirements attached. What may separate Stevens and Trendic for their colleagues is their assertion that the task of updating the reserve study is urgent, and that having a new CIP in place, even if it requires additional revision later, should be done quickly. Stevens said he believes that two or three days of concentrated work

Financial summary

cated to reserves. The reserve balance was composed of $5.08 million in the Major Maintenance and Replacement reserve, $1.83 in bulkheads and waterways, and $550,180 in roads. The operating recovery reserve was zeroed out in September. There are two components of the maintenance and replacement reserve. One, the so-called historic reserve, composed of funded depreciation, had a balance of $5,085,523 as of Nov. 30, a sizable decrease from the Oct. 31 balance of $5,735,557. The supplemental legacy reserve, once known as the five-year-plan, carried a negative balance of $498,949, an increase of almost $150,000 from the Nov. 30 negative balance. Balance Sheet – As of Nov. 30, the OPA had total assets of $34.54 million, up from $32.89 million a year previous. The assets were matched by $1.5 million in liabilities and $33.07 million in owner equity. Cash on hand for operating purposes as of Nov. 30 was $2 million, with short term investments totaling $8.07 million.

From Page 16 year. Of the amenities which are still open for business during the winter months, Aquatics remains the most profitable for the OPA, with a $132,437 surplus through November. The Yacht Club’s cumulative surplus was $64,837 through November, followed by tennis, $7,420 in the black; pickleball, $7,032 to the good; and platform tennis, with a $3.017 surplus. Golf operations, still open weather permitting, have slipped into a $10,923 deficit for the year. Three amenities that are shuttered for the winter all recorded robust surpluses during late spring, winter and early fall. Beach Club parking is in the black by $391,359, marinas operations are ahead by $216,819, and Beach Club food and beverage operations recorded a $157,500 surplus through November. All three won’t change much for the remaining months of the fiscal year. Reserve Summary – The OPA through Nov. 30 had $7.47 million allo-

Progress in early January that he is open to “formalizing” the effort to update the CIP, including the appointment of a working group of directors and staff to do the job. “If Dave wants to propose that, I

18 Ocean Pines PROGRESS

OCEAN PINES

January 2017

Revised CIP From Page 17 in January could accomplish a lot, and the results of that effort could influence this coming year’s capital budget and the level of reserve funding needed. Stevens said he is aware that funds will be needed to finance a consistent maintenance plan for OPA assets, a point upon which he agrees very much with Aveta. Indeed, that is a point upon which all the directors seemagree. Trendic is convinced that a new, accurate capital improvement plan will show that the OPA probably has been overfunding its reserve funds and that a decrease in the annual assessment is justified. He has also that relying on the reserves to finance the entire cost of major capital projectS is not a good idea, that alternatives exist. Stevens is not necessarily on board with lowering assessments because of his concerns that recent history shows there is a lot of needed maintenance in Ocean Pines that has been deferred. But like Trendic, he is not a fan of extracting assessment dollars from property owners without a plan in place on how that money will be spent over a period of years. It would appear that any hopes that assessments will be lowered by the current board are fading. The draft budget for 2017-18 proposed by Hill and released for public scrutiny in mid-January keeps assessments the same as this year. In addition, an initial look at the proposed budget shows close to the same level of funding for reserves as is in place for the current fiscal year. However, Hill seems to have decided to eliminte the so-called legacy reserve, a component of the Major Maintenance and Replacement Reserve, while retaining most of its funding stream, next year. Stevens has been a strong proponent of eliminating the legacy component and had set his sights on doing so in the 2017-18 budget. Trendic is on board with that objective. When the Board of Directors approved budget guidance for 2016-17 during its Oct. 22 regular meeting, conspicuously absent was acceptance of a recommendation from the Budget and Finance Advisory Committee to continue funding the so-called legacy reserve, which the two directors have made clear they want to abolish. The legacy reserve was once called the five-year plan and is now in its eighth year. It was used as the primary funding source for building the new Yacht Club. As of the end of November, it carried a negative balance of almost $500,000. When the board met again on Nov. 17 to discuss next year’s budget, Stevens and Trendic made it clear they would like the legacy reserve to go away next year. Trendic opened the discussion by noting that the legacy reserve costs every property owner $109 and that the board

$284,650 loss for 2016-17 predicted

DEPARTMENTAL SUMMARY FORECAST FOR YEAR ENDING 4/30/17

Source: Draft 2017-18 Ocean Pines Association budget

should decide whether to keep it. Previously he has said that without a specific plan or identified need for that money, the OPA should not be collecting it. OPA Director and Treasurer Pat Supik, a former chair and member of the budget and finance panel, said she would “err on the side” of keeping the legacy reserve and its funding stream, and she suggested that the board once and for all set a percentage of the annu-

al component cost of OPA assets – said to be roughly $16 million – that would be held in the Major Maintenance and Replacement Reserve at the end of the fiscal year. She said the OPA is “in transition” and that the OPA should exercise caution before taking less from property owners in assessments. She seems to have won over Hill to her point of view. “Pat and I are on the same page on this,” Hill told the Progress recently.

cean Pines Association management is anticipating a $284,650 loss for the current fiscal year, according to a document issued as part of the draft 2017-18 released for public viewing on Jan. 11. The loss is based on $10,834,396 in anticipated revenue, and $10,907,395 in anticipated expenses, producing a loss before certain capital expenses and the Sports Core loan principal of $72,999. When expenses for new capital of $143,851 and Sports Core loan principle payment of $67,800 is factored in, the loss climbs to $284,650. Of the major amenities, the Yacht Club is projected with the largest operating loss, $178,416, followed by golf and related food and beverage with a $157,923 loss. If these numbers hold firm, the Yacht Club would exceed its budget for the year by $34,496, while golf operations would be behind budget by $24,545. Aquatics is projected with a $32,371 year-end loss, which would be $17,461 better than budget. However, Aquatics could conceivably still break even if the department performs close to budget for the remainder of the fiscal year. Of the three racquet sports, pickleball is the only one projected to be in the black for the year, on projected $17,500 in revenue and $13,586 in expenses. Pickleball’s positive variance to budget is projected at $2,369.

Tennis is projected to lose $15,612 for the year, while platform tennis would lose $2,352. Both of these sports are expected to be ahead of budget at year’s end, however. Tennis has a projected positive variance of $721. The projected positive variance for platform tennis is $1,284. – Tom Stauss

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WORCESTER COUNTY

January 2017

County properties continue to show modest increase in value West OC, southern property assessments grow during tri-annual state review By ROTA L. KNOTT Contributing Writer roperty owners in West Ocean City and the southern end of Worcester County are finally seeing a slight spike in the assessed value of their lots. Worcester County experienced an overall 4.1 percent increase in the assessed value of residential and commercial properties, which will be phased in during the next three years, as part of a tri-annual reassessment released by the State of Maryland in December 2016. The subject properties in Worcester County were last reassessed in 2014 and had a 7.8 percent decline in value at that time. Ocean Pines properties were reassessed a year earlier and showed similar modest increases. Among the 24 Maryland counties, Worcester County placed mid pack with the increase in its average annual reassessments at exactly 50 percent of the statewide average; state wide assessments increased by an average of 8.2 percent. Neighboring Somerset County had the largest drop in the state at 6.4 percent for both residential and commercial properties, while Wicomico County had a 6.4 percent increase. The full cash value change in the as-

sessments in Worcester County before the phase-in for the year is $2.7 billion, up from $2.59 billion as of Jan. 1, 2014, when these properties were last reassessed. Residential properties saw the largest increase at $2.16 percent, with commercial properties increasing by just 2.5 percent. The full cash value of the assessments statewide is $276 billion, up from $255 billion for the year beginning Jan. 1, 2014. More than 59.7 percent of all residential properties and 44.84 percent of all commercial properties in Worcester County that were included in the 2017 reassessment increased in value. Statewide 71.35 percent of residential properties and 62.28 percent of commercial properties included in the reassessment had growing values. Statewide, assessment notices mailed on Dec. 28 to 758,749 property owners. These properties, also known as “Group 2,” are reassessed by the Department every three years and account for one-third of the more than two million real property accounts in the state. This year’s reassessment showed that Group 2 property values increased on average by 8.2% since they were last assessed for the 2014 tax year. Elsewhere in Maryland, Prince

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George’s County had a 13.5 percent increase in assessments, the largest in the state. On the Eastern Shore, Dorchester County saw a nominal increase in residential property values at 1.2 percent and in commercial properties at 2.1 percent. Talbot County, on the other hand, continued to experience a decline, with residential properties down 1 percent in assessed value and commercial properties dropping by .5 percent. The 2017 assessments in Group 2 were based on an evaluation of 68,757 sales that occurred within the group over the last three years. If the reassessment resulted in a property value being adjusted, any increase in value will be phased-in equally over the next three years, while any decrease in value will be fully implemented in the 2017 tax year. In Maryland, properties are reassessed, by law, once every three years. Properties are required to be assessed at their current market value so that all property owners pay only their fair share of local property taxes. The assessment only partially determines a property owner’s tax bill. Ultimately, next July’s tax bill will be calculated with the tax rates that local governments will set in the spring. As part of the budgetary process, the property tax rates are established by the revenue requirements of each local government. The county can offset assessment increases by lowering its tax rates to the “constant yield” tax rate level. The constant yield tax rate provides local governments with a stable level of property taxes from one year to the next. The increase in assessments could translate into more property tax revenue for Worcester County for fiscal year 2017-18. However, if the county maintains the current property tax rate of 83.5 cents, despite the boost in revenue, it would mean the owners of those properties that experienced an increase in value will pay more in property taxes during the next few years.

If Worcester County holds its property tax rate steady at 83.5 cents per $100 of assessed value it will translate into a savings on properties where the assessed value has decreased and an increase on those that have gone up in assessed value. For example, a home that is assessed at a $200,000 value would have a $1,670 tax bill. If the assessed value drops by $10,000 the tax bill would decrease to $1,586, but if the value increases by $10,000 the tax bill goes up to $1,753. Eligible residential property owners can also receive a Homestead Tax Credit that limits the assessment to which local tax rates are applied. In Worcester County that limit is 3 percent. This reduced taxable assessment lessens the impact of past rising property values and assessments for homeowner-occupied properties that experienced increases in prior years. The Homestead Tax Credit is a state law that mandates that all taxable assessment increases for homeowner occupied properties cannot increase by more than 10 percent per year and by a lesser percentage if chosen by the county government. Homeowners, regardless of age, may be entitled to a credit against their tax on the dwelling that is their principal residence. The amount of the credit is determined by the household income and the taxes levied on the home. A homeowner must apply for the credit each year, no later than Sept. 1. Anyone who received a reassessment notice and feels that the total new market value on their notice does not accurately reflect the market value of their property, can file an appeal with the State Department of Assessments and Taxation. The state offers an online appeal form at http://taxappeals.resiusa.org/. All property assessment appeals must be filed with the state by Feb. 13. Once an appeal is filed, the state will schedule either a personal or telephone hearing on the matter.

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WORCESTER COUNTY By TOM STAUSS Publisher he Showell Elementary School replacement project moved forward following the Worcester County Commissioners’ approval of $1.6 million for school design plans in early November. It took weeks of behind-the-scenes negotiation to trim estimated costs of the project from $45.96 million in September to a new revised estimate of $42.4 million, which in turn should reduce the county’s share of the cost of construction. Because the state’s share of the cost is still to be precisely determined, the county’s share also can’t be precisely known at this point. “I am very pleased that the hard work and dedication of the County Commissioners, Board of Education (BOE) members and our staff have brought us to this point,” County Commissioner President Jim Bunting said, “where we have now approved the proposed Showell Elementary School (SES) replacement project with a conceptual design that will meet the needs of the students at an affordable cost to Worcester County.” The County Commissioners unanimously approved both the school system’s Capital Improvement Plan (CIP) and approved funding the $1.6 million design plan request to begin the next steps in rebuilding the estimated $42.4 million Showell Elementary School. Plans include the schematic design, de-

January 2017 Ocean Pines PROGRESS

Commissioners, school board agree on design phase funding for new Showell Elementary sign development and construction documents for the 94,866 square foot facility, which will replace the 1970’s building that is there now. The estimated $42.4 million building cost will be shared by the state of Maryland and county taxpayers. The estimate is down from the $45.96 million in September, when the commissioners held off from approving the project because of concern that it was still too expensive. “Special thanks to Board President Jonathan Cook and Superintendent Louis Taylor for inviting the Commissioners to be a part of the SES replacement planning process,” Bunting said. “All involved rolled up their sleeves to resolve issues and through cooperation and communication have developed plans for a first-rate new SES that teachers, students and the community can be proud of, at a cost that will allow the Commissioners to address other vital needs and capital projects of the County and the Board of Education in the future.” The architectural firm Becker Morgan Group is expected to complete de-

sign documents by spring 2018, and state school construction funding should be approved by the Interagency Committee on School Construction (IAC) in the same timeframe, allowing the project to go out to bid in summer 2018. School construction is expected to kick off in early 2019. The new Showell Elementary School will replace the existing 38-year-old school, which a 2014 feasibility study said had major instructional and building system deficiencies. Space in the new school will eliminate the need for the nine portable classrooms currently in use and provide room to relocate the fourth grade back to SES from Berlin Intermediate School. Additionally, the new facility will be designed to meet Leadership in Energy and Environmental Design (LEED) Silver construction standards and certification. Back in September, faced with the $45.96 million price tag for the new building, the commissioners held off on taking action on plans presented by the

Board of Education. Jerry Wilson, outgoing superintendent of schools, and Jonathon Cook, board president, met with the county officials seeking approval to move forward with schematic designs, only to be rebuffed. The commissioners were concerned about the estimated cost of the proposed new school, of which the county would have had to fund $38.42 million. In 2015, the commissioners reviewed and approved the pro forma cost estimate for the Showell Elementary School replacement project with total approved funding from the State and County not to exceed $37.18 million. The price creep to $46.96 million had the commissioners concerned about cost. The school board had sought funding to proceed with the full design of the Showell replacement school in order to complete design and proceed to project bidding on schedule in the summer of 2018. The $1.6 million request for funding from the county would allow the board to complete the schematic design, design development and construction documents required by the state Public School Construction Program. Upon completion of the construction documents and approval by the state, tentatively scheduled for April 2018, the school system will still require the county’s OK to proceed with the bidding phase of the project.

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WORCESTER COUNTY

January 2017

County struggling with videos of commissioner meetings By TOM STAUSS Publisher he Worcester County commissioners as of the beginning of 2017 have been unable to post videos of their meetings on-line because of problems with camera work in the videos, County Commissioner President Jim Bunting told the Progress in early January. While audio quality has been excel-

lent, he said, the same can’t be said of the videos themselves, primarily because a mere cough by one commissioner or county staffer can aim the cameras used to video the meeting at that commissioner, even if he was not preparing to say anything. Bunting also said a winter cold or worse has been making its rounds in the county building in Snow Hill where meetings occur.

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The result has been videos that have been regarded by the commissioners as not ready for prime time, specifically for viewing on the county’s Web site. Bunting said the county cmmissioners will shortly have to be make a decision on whether to beginning posting the videos despite the video problems or ask the vendor to retrieve his equipment, with the commissioners deciding to end their video experiment or to shop for better equipment, even if it is more expensive. The commissioners voted unanimously in August to move forward with installation of an audio visual system in their meeting room at the Government Center in Snow Hill to provide video access of their meetings on the county website. The action did not call for live streaming of meetings, as occurs in meetings of the Ocean Pines Association. Commissioner Joe Mitrecic offered a motion, which was unanimously approved by the commissioners, to accept a proposal from ePlus to install a fully automated audio visual system at a total installed cost of $24,509 and an annual maintenance cost of approximately $4,000. Kelly Shannahan, assistant chief administrative officer, said ePlus has agreed to install the system for a 60-day trial period at no obligation. He concluded that this audio visual package is far

less costly than recording options the commissioners had considered in the past, some of which were estimated to cost upwards of $200,000. Mitrecic thanked staff and noted that this is a small fee to pay to assure that county residents can keep current with county business at their convenience, rather than taking time off from their jobs to attend the meetings. Commissioner Ted Elder concurred and thanked his fellow commissioners for having declined an earlier option to install a more expensive system in favor of identifying a cost-effective means of providing constituents with access to their meetings. In response to a question by Commissioner Chip Bertino, Brian Jones, information technology manager, advised that IT staff will be able to track the number of times each video is viewed on the county website. County Attorney Maureen Howarth said that the contract with ePlus includes a retention plan of 90 days, but that plan can be altered, and the commissioners should develop a policy that identifies the length of time the videos will be retained, which can then be approved by the State Archivist. The contract also said that if the commissioners were not happy with the system, they could part company with it. That option is now on the table.

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January 2017 Ocean Pines PROGRESS

Hill gets greenlight to include Country Club second floor upgrade in budget 2017-18 planning Proposed renovations include new meeting rooms, kitchen, and banquet hall By ROTA L. KNOTT Contributing Writer xtensive renovations to Country Club given initial approval as part of the fiscal year 2017-18 budget development process will create a permanent meeting space for the Board of Directors, a trio of public meeting rooms, a banquet hall, and upgraded kitchen, all on the second floor of the aging structure. During a Dec. 15 special meeting, directors unanimously approved in concept the renovations, one of three scenarios developed by Ocean Pines Association staff and initially presented to the board in November. Director Brett Hill, who is spearheading the planning effort as acting general manager for the OPA, told his fellow board members that he needed them to choose between two remaining options for the second floor layout, both of which included dining facilities and meeting rooms. A third option, which included moving the primary ern’s Grille restaurant to the second floor, was taken off the table by an earlier board vote to renovate and expand the first floor restaurant. At the work session, he asked for answers to two primary questions: “Are we maintaining banquet facilities and do we have adequate meeting space as presented or do we need to modify the layout for one or both of those questions?” The option selected by the board maximizes meeting space, with three flexible rooms and a fixed, raised dais in a so-called board room. What’s shown as the board room on preliminary floor plans for the second floor could also be used by Ocean Pines organizations for monthly business meetings. The board’s preferred option also provides an opportunity for the OPA to hold additional small food-based functions on the second floor of the Country Club. An initial cost estimate for the project puts the second floor renovations at more than $400.000, with a significant portion of that expense is for the purchase of new kitchen equipment at $37,300. Hill said golf staff recommended the kitchen upgrades as a way to attract new banquet business to the Country Club. He told his fellow directors that one of the primary decisions that needs to be made regarding the upstairs renovations is replacement of kitchen equipment to make the facility operational for banquet service. “What we need to get to today so I can

accurately portray the budget is are we keeping a banquet kitchen and is there any other significant change to proposed usage that would impact budget,” Hill said. Director Dave Stevens questioned the size of the renovated kitchen as shown on Hill’s draft plans. He said it would be bigger than the existing kitchen. But Hill said the draft plans are not to scale and were just to provide a general illustration of the proposed second floor layout. He indicated that the plans call for the footprint of the kitchen to remain essentially the same but for the existing equipment to be sold and new equipment purchased. He said until the board approves a general concept for the project he would not expend any funds to retain and engineer and have design drawings developed. When Director Slobodan Trendic queried Hill about the cost differential for the design options presented by staff, Hill said there was a nominal difference. That being the case, Trendic said the board needs to consider the best use of the space. Trendic also questioned the impact of any county code requirements on the renovations. “There is no difference in the eyes

of the county in us taking on any of the options,” Hill responded. He said the only problem would be if the OPA opted to discontinue dining use of the second floor, which would affect its ability to retain a liquor license for the Country Club. He said if the board gives up its liquor license, it would be much harder to get it back in the future. “If we let them lapse and then ten years down the road decide we want to go back to that service in the facility and we try and reapply for it, we would be subject to the applicable zoning regulations and restrictions of the period of time of application versus right now we’re on zoning off of when it was done 30 years ago,” he said. Directors reviewed the interior layout for the meeting rooms, and asked whether existing columns that now divide the second story space would stay in place. Hill said some of the columns are cosmetic, while others are structural supports. Those in the main banquet area are structural to support the building roofline. As a result, he said there could never be one large open room in the Country Club. Dividers will be used to break up the space. The proposed renovations will allow

for a bar capacity of 20 patrons, and dining area with the bar could hold 50 to 60 people. Hill said the OPA could remove the dividers and use the additional space designated as meeting rooms in order to accommodate larger food-based functions of up to 140 people. Hill said the only fixed element in the meeting rooms would be a permanent board dais, much as the county commissioners have in the Government Building in Snow Hill. That will alleviate the constant struggles to achieve good quality audio and video recordings of board meetings, he said. “It would better allow us to share the content of those meetings out to our residents,” he said.Director Pat Supik noted that the proposed board room at the Country Club is not as large as the Assateague room that is used for board meetings held at the Community Center. She said that room is filled for certain board meetings, like the annual association meeting held in August. Hill said staff has already considered the issue of the annual meeting and determined that it should continue to be held at the Community Center, because of both the need for additional meeting space and parking. It would also conflict with golf operations because the annual meeting is held on a Saturday in August. “The golf course is packed,” Hill said, adding of the proposed Country Club meeting rooms, “the one time that we would conceivably overfill the place is the one time that we just couldn’t use it.” Regular monthly board meetings are not so well attended so there should be plenty of space at the Country Club for members who want to attend, he said. To Page 27

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26 Ocean Pines PROGRESS

2017-18 DRAFT BUDGET

January 2017

‘Hard to understand’ OPVFD funding pact to be revisited Hill finds ‘true-up’ mechanism to be confusing; only one end-of-year adjustment seems to have been done since the ‘memo of understanding” went into effect in 2011-12

in negotiating the MOA but probably had reviewed it in passing, barely remembered it. Very much involved in drafting the agreement was former General Manager Bob Thompson and then OPA President Tom Terry, none of whom are on the A-team of advisors that the current board is calling on for background information. Presumably retiring Controller Art Carmine could offer some insight, but whether he has offered counsel to Hill on the workings of the MOA is unclear. According to Progress reporting at the time, the agreement in part was drawn up to deal with the fact that the OPVFD had been receiving significant insurance company reimbursement covering ambulance calls, for which, under an earlier operating agreement, the OPA also was providing reimbursement to the OPVFD. Under OPA founding documents, the OPA was responsible for providing fire protection to Ocean Pines residents. That function was later delegated to the OPVFD as an independent organization eligible to receive state and county funding support identical to that provided other fire companies in the county. Under a subsequent agreement,

the OPA began subsidizing universal ambulance service on behalf of all residents in Ocean Pines, for which the annual contribution to the OPVFD from the OPA was, in part, designed to cover. In addition, the MOA was drafted to deal with the fact that the OPVFD reaps some financial benefit from its annual house lotto fund-raiser. The board at the time the MOA was drafted didn’t want to discourage the OPVFD from continuing to fund-raise, because the result from less fundraising probably would have been for the department to ask the OPA for a larger operating subsidy. The MOA essentially was crafted to establish a funding model for continued financial support of the OPVFD without the chance of any double-dipping for ambulance call reimbursement, while at the same time incentivizing, or at least discouraging, the department from continuing its annual house lotto. The MOA lists all of the OPVFD’s revenue sources, excluding a substantial portion of its house lotto or other fundraising. These revenue sources include an annual Worcester County appropriation for both fire and ambulance services, grants and other revenue from

bequests, gifts and fundraising in excess of $150,000, insurance company reimbursements for ambulance calls, and interest income. The MOA also lists department expenses, including those related to operations, capital reserve costs, and debt service. The difference between the two results in what the MOA calls the unadjusted budget request. According to the agreement, the OPA “shall make” an annual adjustment to this “unadjusted” of revenue less expenses for two itemized reasons. One adjustment would be for “cumulative fund-raising” amounts in excess of $150,000. Since the house lotto fund-raiser takes place over the summer months and into early fall, net proceeds of ticket sales less the cost of the home (donated at cost by a local builder) could at least in theory exceed $150,000 by the end of the OPA’s fiscal year in April. If it’s been a good year for fund-raising, any amount collected in excess of $150,000 would be added to the revenue column, thereby reducing the amount the OPA would owe the OPVFD the following year. The other adjustments could occur q

By TOM STAUSS Publisher n agreement that dates back to the 2011-12 fiscal year between the Ocean Pines Association and the independent Ocean Pines Volunteer Fire Department may be revisited if not renegotiated as part of the 2016-17 budget process, Acting OPA General Manager Brett Hill disclosed in early January. Hill, who candidly described himself as new to the OPA budget process, said he finds the so-called memo of understanding (MOA) from the 2011-12 budget year to be confusing. “I don’t understand it,” he said. And that lack of understanding has made it difficult for the acting general manager, appointed to the position after his election to the Board of Directors in August, to craft a draft OPA budget for 2017-18, at least in so far as the budget for the fire and ambulance department is concerned. The Board of Directors called in OPA attorney Joseph Moore for a closed session in December to discuss the memo of understanding, but Hill and his colleagues came away not particularly better informed than before the session began. One director told the Progress that Moore, who was not intimately involved

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2017-18 DRAFT BUDGET OPVFD funding

From Page 26 from the OPA either under- or over-funding the department based on actual financial performance, although here the MOA’s language is at best opaque. If the adjustments are based on actual performance compared to what was budgeted the previous year, that is not made clear in the MOA. On that point alone, Hill’s confusion would appear to be justified. “Any under-funding contributed from the previous year’s funding contributed by the Association shall be added to the Unadjusted Budget Request amount. Likewise, any over-funding from the previous year’s Unadjusted Budget Request shall be deducted from the funding amount,” according to the MOA. The agreement calls this method of adjustment the annual “true-up,” and goes on to say that this adjusted number “shall be the amount which the Association shall budget for its contribution” to the OPVD the following year. How this annual “true-up” has worked in practice, however, is not clear. There’s no evidence that there has been any annual “true-up” done since the agreement was put in place, except for the 2015 fiscal year, when apparently there was a “true-up” $40,000 adjustment from the previous year that reduced the OPA’s contribution to the OPVFD from an “unadjusted” $323,225 to $283,225. The OPVFD budget worksheet for 2016-17 that is part of the approved OPA budget posted on the OPA’s Web site indicates that there was no trueup in 2014, 2016 or in the current fiscal year, 2016-17. The Progress has examined the annual OPA reports for the years 2012 through 2016 to determine if there is any official acknowledgement of some sort of true-up adjustments for those years. None is shown, not even in the 2014-15 fiscal year when a $40,000 reduction from the unadjusted number occurred. It’s possible one occurred in 2011-12, because the OPA’s contribution to the OPVFD decreased from $592,146 in FY 2011 to $423,968 the following year, according to OPA audit reports. But in FY 2013 the contribution swung back up to $577,332. In FY 2014, when the OPA worksheet indicates there was no true-up, the contribution fell back down again to $360,130. FY 2015 including the $40,000 trueup reduction produced the lowest contribution to the OPVFD from the OPA in some time -- $283,225 – but in FY 2016, concluded this past April 30, the contribution had jumped back up to $485,321, without a true-up adjustment. Hill said that he and the board would be meeting with OPVFD officials as part of the 2017-18 budget review cycle, when the new OPA director of finance might be able to assist in revisiting or renegotiating the MOA.

January 2017 Ocean Pines PROGRESS

Country Club

From Page 25 Stevens wanted to know why the enclosed porches are scheduled to be uncovered as part of the renovations. He said that will result in a reduction in the amount of usable meeting space. Hill said the new Yacht Club negates the need for the additional space created by enclosing the second floor decks at the Country Club. He said that was originally done so the facility could host larger banquet functions. Now, however, the value is in the views from those decks, which he wants to make as accessible and as open to the

clientele as possible. “So you’re telling me that the reason for eliminating all of that space is that we will have a better view during golf banquets?” Stevens asked. OPA President Tom Herrick said it would not just be golfers enjoying the vistas from the second floor. “I don’t think you should preclude somebody from bringing a drink upstairs during the day when they finish golfing if they want to sit upstairs at outdoor tables and enjoy the view,” Herrick said. Stevens responded that last month the board agreed to expand the downstairs dining area for patrons to enjoy. “Why do we need it enclosed? I’ll turn

it around the other way,” Hill said. Stevens said he was just asking the question because there is a need for more meeting space, yet this would eliminate some of it. “I’m just asking the question. I’m not pro or against it or anything like that. Don’t get me wrong,” Stevens said. Herrick responded that the renovated space would contain four areas in which meetings could be held concurrently. Directors asked about the need to meet an Americans with Disabilities Act requirements as part of the renovations. Hill said no changes are planned that would necessitate additional steps to comply with ADA.

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28 Ocean Pines PROGRESS

2017-18 DRAFT BUDGET

January 2017

Beach Club parking revenue sharing proposal not included in budget draft Panel suggests that Aquatics has been shortchanged by more than $100,000 in revenue allocation, recommends formula based on actual usage of pool passes sold as part of bundled Beach Club package By TOM STAUSS Publisher proposal for “more equitable sharing” of bundled Beach Club parking and swim pass revenue with the Aquatics Department, which by some estimates could add more than $100,000 more per year to the department’s bottom line, didn’t make it into the draft 2017-18 budget unveiled by Ocean Pines Association management Jan. 11. OPA Acting General Manager Brett Hill told the Progress in a Jan. 9 telephone interview that the proposal’s absence from the draft budget didn’t necessarily mean that the proposal is dead for this year. He said it would be explored as part of the budget process and could be added if a board majority believes it should be. “Including it or not doesn’t change the overall bottom line of the association, so it was not critical” that it be included in the draft budget, Hill said. The proposal for a revision in the revenue-sharing formula for bundled parking and swim pass revenue at the Beach Club is supported by Aquatics Director

Colby Phillips and the Aquatics Advisory Committee. However, retiring Controller Art Carmine, not a fan of even the limited revenue-sharing that is embedded in the current year’s budget, is even less enamored of expanding it. The simplest way to split the bundled revenue is to divide it equally 50-50, but the aquatics committee has suggested that it could be based on actual Beach Club-only passes used at the Beach Club this past summer. At issue is roughly $300,000 generated by the sale of Beach Club parking passes bundled with four passes good for use at the Beach Club pool only. In the current year’s budget, the Aquatics Department’s share of the bundled revenue is budgeted currently at about $48,000. The committee has recommended adoption of a revenue-sharing formula that would boost that up to slightly more than $165,000 in the current fiscal year and in 2017-18. The formula is based on the actual usage of the Beach Club-only pool passes this past summer. Phillips kept

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both electronic and manual records on the number of card swipes from the four pool passes distributed with the parking passes this past summer. The records indicated that more than 92 percent of Beach Club pool usage was attributable to those who used the bundled pool passes during the Memorial Day to Labor Day season when the pool is open. Phillips informed the committee during its Sept. 6 meeting that this past summer, 25,623 people visited the Beach Club pool. Out of those, 23,593 (92 percent of the 25,623 distinct users) used the pool passes bundled with the parking permits. The remaining 8 percent were annual or seasonal pool members, coupon debit card users or those who paid cash to enter the enclosed pool area. Annual or seasonal pool members, who have prepaid access to the Ocean Pines Association’s five swimming pools, including the Beach Club, can purchase, for $75, a Beach Club parking pass without any bundled pool passes. The bundled pool passes sold for $175 in a package with annual parking passes are good only at the Beach Club pool. Phillips, who supports the committee’s recommendation, suggested that $7 per visit would be mid-way between the lowest and highest daily fees at the Beach Club pool. She said that $7 would be a good number to use to determine the amount of revenue that would have been generated had passes sold in a bundle with parking been sold and purchased separately, with the revenue allocated to the Aquatics department. MONDAY NIGHT Multiplying $7 by the number of Beach Club pool-pass-only card swipes ($7 x 23,593) produces revenues of $165,151, well above the budgeted placeholder of $48,000. The committee unanimously voted to recommend to the Board of Directors that the OPA allocate $165,151 (rather than the budgeted $48,000) to Aquatics membership revenues this year out of revenues generated by the bundled package. The committee’s argument is that the bundled parking-and-pool pass package has been a too-little-noticed and appreciated Ocean Pines success story that should be celebrated and continued in its current form, but with a fairer and more accurate sharing of the revenues generated. The $48,000 allocation was determined two years ago, based on the estimated cost of operating the Beach Club pool rather than actual usage of the bundled pool passes.

A calculation based on the number of actual number of card swipes from the bundled Beach Club pool passes is, in the committee’s view, the most accurate method of determining a fair allocation of the bundled parking-and-pool-pass revenue. For the current fiscal year, using the $165,151 calculation means that slightly more than 50 percent of Beach Club parking-and-pool pass net revenue (which does not include revenue generated by $75 passes for amenity members and $55 weekly passes used mostly by weekly renters) would be allocated to Aquatics. The reallocation can be done any time in the current fiscal year, but at the very least should be adjusted no later than April, 2017, the final month of the current fiscal year, the committee suggests. Since $48,000 has already been included in the department’s membership revenue for the year, about $117,000 more could be allocated under the committee-recommended formula. The committee also supports using the summer 2016 calculation as the basis for estimating aquatics department revenue in the 2017-18 budget. When the board first adopted a degree of revenue sharing two years ago, some critics posting on oceanpinesforum.net said the change amounted to the Aquatics Department “stealing” money from beach parking to make aquatics look better in OPA monthly financial statements. Department and committee members have vehemently objected to that characterization, contending that Aquatics is entitled to a fair share of revenue generated from the bundled package. If the pool passes were not distributed with the parking passes, anyone wanting to visit the Beach Club pool would have to pay daily user fees, buy coupon books or purchase annual or seasonal memberships, all of which would generate substantial revenue for the department, they say. Revenue-sharing from the bundled package simply offsets this lost revenue, they add, producing a more accurate accounting of Aquatics’ financial performance. There is no question that the $48,000 in revenue-sharing last year helped the department come close to break-even for the year, but an additional $100,000 or so year-over-year performance swing was attributed to cost controls and additional revenue from a variety of sources, such as new memberships, swimming lesson revenue and pool parties. In short, the $48,000 in revenue-sharing was responsible for roughly one third of Aquatics’ dramatic financial turn-around last year, in which the department came within $5,000 of the coveted break-even status. If the board accepts the committee recommendation for additional revenue-sharing, specifically the formula based on the actual number of bundled parking pass card swipes, then Aquatics would be well into surplus territory in 2016-17 and in the years that follow.

October - Early November 2015Ocean Pines PROGRESS January 2017Ocean Pines PROGRESS

33 29

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30 Ocean Pines PROGRESS Capital budget

COVER STORY

January 2017

From Page 1 reconfiguring space in the non-police area of the administration building, $30,000 for a new Public Works truck, $34,000 for a new police vehicle, and $39,000 for a new 12-passenger van to be used by the Parks and Recreation Department. The Beach Club parking lot would be resurfaced with a permeable crushed stone and striped to create additional parking spaces, at an estimated cost in the capital budget of $35,000. Aquatics has more items in its pro-

posed capital budget than any other department. In addition to the proposed structural addition, the draft budget includes $5,600 in new water treadmills, $7,824 in aqua jumps (trampolines), $7500 in Mumford’s Landing restroom improvements, $20,336 in new pool furniture, among other items ranging from pumps, to vacuums and mats. The Yacht Club also is generously targeted in the draft capital budget, including $25,000 in new patio furniture, $25,000 in new information technology, $18,000 for a stage, $11,000 for a fire pit, $15,000 in a point of service system,

PROPOSED CAPITAL SPENDING LIST - 2016-17 DRAFT BUDGET

among other items. [See summary of items elsewhere on this page.] The draft budget, still subject to review and approval by the Board of Directors, also include a schedule of items that Acting General Manager Brett Hill

Herrick uncovers conflict in OPA documents over budget completion date

cean Pines Association President Tom Herrick is asking his colleagues on the Board of Directors whether they believe an apparent conflict in OPA bylaws and a board resolution regarding the deadline for completing an annual fiscal year budget should be eliminated. Herrick told the Progress in an early January telephone interview that OPA bylaws specify that the board can complete a budget within 45 days of the May 1 start of a new fiscal year. But Herrick that Board resolution F-02 says the budget should be completed no later than Feb. 28, which gives the OPA more time to send out assessment notices and amenity membership solicitations. Herrick said that panel recently voted 2-2 not to attempt to bring the apparent conflict into harmony by changing either the bylaws or the resolution. Herrick said that bylaws supersede board resolutions in the pecking order and that board resolutions can be more easily changed. He said he has suggested that F-02 be changed to make it consistent with the bylaws, but some committee members say it may not be worth the trouble. The 45-day window in the bylaws set an effective deadline of March 15 for completion of the budget, roughly three

Source: Draft 2017-18 OPA budget

had considered but then excluded from the proposed capital budget. Items excluded were Somerset Park improvements at $3,000 and $50,000 for a wall expansion at the Beach Club pool to protect against sand infiltration..

weeks after the deadline in F-02. Herrick said that some committee members believe there is no requirement that the documents set the same deadline. Herrick sent an email out to colleagues Jan. 5 asking whether they were interested in discussing the matter further or taking action to harmonize the two documents. If they are, it’s possible that the board will consider the matter at scheduled meetings later in January or February. The bylaws and resolutions committee also recently considered changes to board resolutions regarding OPA election procedures, specifically a request by the OPA Elections Committee to move the counting of ballots in annual OPA election from a closed to an open session of the committee in which property owners can attend. Committee Chair Martin Clarke said altering just a few words in one resolution could accomplish that goal, but that other possible changes in the applicable resolutions might be somewhat more complicated. Clarke said he personally favors moving the counting of ballots out of Elections Committee to an outside firm but that he’s not sure there is support for that. – Tom Stauss

Budget timeline

he process for reviewing the draft 2017-18 Ocean Pines Association budget by the Board of Directors deviates in some respects from what OPA members may be accustomed to from years prior. The launch of the budget cycle followed a familiar pattern. Members of the Budget and Finance Advisory got a first look at the document on Wednesday, Jan. 11. Typically, in previous years, the board would dive right into the budget the week following the budget committee’s initial review, but that’s not how the process will work this year. OPA President Tom Herrick said the board’s first in-depth collective discussion of the budget will be in a special meeting Jan. 20 at 10 a.m. The meeting will be held in the Community Center’s Assateague Room and will be lived streamed. Hill as acting general manager will present his draft budget to OPA members on Saturday, Jan. 28, at 12:30 p.m. in the Community Center’s Assateague Room, where comments from OPA members will be encouraged. Herrick said the intent is to take community input before the board decides whether and when to conduct detailed budget deliberations as has been traditional in Ocean Pines. Those meetings would occur in February, Herrick said, and are yet to be scheduled. “We’ll set additional meetings as we decide they are needed,” Herrick said. The intent still is to adopt a formal budget for 2017-18 at the board’s regular meeting in February. This year’s it’s set for Saturday, Feb. 25.

COVER STORY

January 2017 Ocean Pines PROGRESS

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reserve, the funding attached to the legacy reserve has not been zeroed out. It does appear to have been reduced from the current year’s $865,000 contribution, however. Combined with the historic, or funded depreciation, component, contributions to the replacement reserve this year total $2.41 million. Next year contributions would fall to $2.25 million, a decrease of about $162,000, if Hill’s proposal is accepted by the board. Assuming that funded deoreciation as a revenue stream remains at $1.55 million, that means $703,000 in supplemental funding is deemed still necessary to bolster the replacement reserve next year. According to the reserve work sheet contained in the draft 2017-18 budget book available for member inspection in the administration building lobby, the current board is on a path to spend $3.3 million from the replacement reserve this year. That is projected to leave the replacement reserve with a $3.22 million balance at the end of the fiscal year this coming April 30. Contributions to the replacement reserve next year would raise that back up to $5.8 million. In addition to the $2.25 million from assessments, $28,947 in interest revenue is projected. But in a departure from previous years, Hill’s draft budget also allocates $300,000 in casino money to the replacement reserve. Previously, casino money has been designated to the roads reserve. The purpose of the reallocation is to finance repurposing of the administration building to include more space for the police department and less space for administrative functions and meeting rooms. The roads reserve, in Hill’s estima-

From Page 1

Draft 2017-18 budget

tion, is sufficiently funded currently to handle next year’s estimated expenditures for roads maintenance of roughly $150,000. With $1.53 million in projected capital spending next year from the replacement reserve, the April 2018 balance in that reserve is projected at $4.3 million, a healthy but not particularly substantial amount relative to past years. It would be at the low end of a range previously promoted by the Budget and Finance Advisory Committee and others as desirable for a homeowners association the size of the OPA. Bulkhead replacement costs, attributable to 16 properties with failing bulkhead resulted from a worm infestation, would dramatically rise next year to $1.96 million from the current’s year’s projection of about $708,000. After all that spending, the bulkheads and waterways reserve would be depleted. The budget draft projects that it will have a scant $48,963 balance in April of 2018, posing funding challenges for bulkhead replacement in the years that follow. The projected increase in operational costs next year is attributed in the draft to a three percent increase in payroll, driven in part by a 50 cent per hour increase in the minimum wage and health care benefits for full-time employees projected to rise at a 10 percent annual rate. Expected increases in overtime from new and pending legislation is also cited in Hill’s executive summary. The executive summary states that amenity financial results in the proposed budget are projected on a “realistic basis” and reflect “continuing efforts to increase revenues through greater usage, as well as decreasing expenses where feasible.” Budget and Finance Committee members pushed back on that assertion somewhat during discussion Jan. 12, contending that the projected revenue

32 Ocean Pines PROGRESS

January 2017

FORECAST/BUDGET COMPARISON

Source: Draft 2017-18 budget book

CAPTAIN’S COVE Draft 2017-18 budget From Page 31 may be overly aggressive. According to a forecast/budget comparison worksheet, certain amenities – the Yacht Club, Beach Club and golf, in that order – are expected to generate much more in revenue next year than they are projected to do this year. Yacht Club revenues would increase to $1.5 million, up $394,484 from this year’s projection. Beach Club food and beverage revenues would increase to $528,787, up about $200,000 from the current year. Golf revenues would increase by more than $102,000. With the hefty increase in Yacht Club revenue, the draft budget anticipates a $1,605 operating surplus for the amenity next year. Golf would lose $90,318, and the Beach Club would generate a $238,161 surplus. In the case of the Yacht Club and golf, these results would constitute a rather significant change in trend. Hill is suggesting that better management and product will generated more business at both amenities. Throughout the budget review process, it’s likely that these optimistic revenue forecasts will be questioned by directors, some of whom might share doubts expressed by committee members. Hill said that the Beach Club increase would come from operating more in the shoulder months and also from a new program to sell daily Beach Club memberships to the general public. While Beach Club parking permits have been available for purchase by non-Ocean Pines property owners and residents in recent years, the club’s liquor license permits sale of alcohol to club members only, The daily club memberships are designed to comply with the license requirements. In addition, Hill is proposing to increase the number of parking spaces by adding a crushed stone surface – not blacktop – and painting stripes to squeeze in more parking. If revenue and net results have been aggressively budgeted in the draft, another amenity, aquatics, has been treated more conservatively. Although Aquatics Director Colby Phillips has said that it’s possible Aquatics will break even this year – she’s very hopeful of that – the latest forecast shows a loss this year of $32,371. The draft budget projects little change next year, with a $32,519 projected loss. The finance department has been projected for a substantial increase next year, to $645,473, up from the current year’s $583,250 projection. A newly created position of information technology director has been shifted out of the administration department to finance, and there are some additional costs related to having a controller, Art Carmine, and a new director of finance on board during a transition period.

CAPTAIN’S COVE

January 2017 Ocean Pines PROGRESS

Hearn said actions to limit management company’s duties is not meant to be punitive By TOM STAUSS Publisher he Captain’s Cove property owner association’s board of directors has voted to restructure internal management of the bayside community, promoting Rob Girard to Director of Facilities and giving him responsibility over aquatics and other amenities and “general community management” except for golf and food and beverage operations. Girard already was in charge of security, public works and general maintenance in Captain’s Cove. The golf course and food and beverage operations will remain under the direction of Billy Casper Golf. Cove President Tim Hearn told the Progress that the board’s Jan. 11 restructuring vote was not intended to be punitive toward BCG but rather “played to their strength,” which he said was golf and food and beverage operations.

Aquatics was always going to be a third tier priority for them,” he said. Hearn noted that maintenance of the indoor pool at the Marina Club and the Cove’s two outdoor pools had already been part of Girard’s job description. Hearn said that Girard’s promotion and expanded area of responsibility was the result of him doing well in every area in which he has had direct supervision. He recently received an outstanding performance review Hearn said the transfer of oversight over aquatics means that the front desk receptionists at the Marina Club and lifeguards will report to Girard rather than the BCG general manager, Phillip Evans. “We think BCG is doing an excellent job running the golf course, keeping it in excellent condition, and managing food and beverage,” Hearn said. At the same time, he acknowledged

that that the company has fell somewhat short in reaching revenue goals but nonetheless has kept within industry standards for costs relative to revenue. BCG did not do well enough to earn an incentive bonus this year, Hearn said. The restructuring, which will be phased in over a period of weeks, will result in a reduction of BCG’s management fee from more than $80,000 per year to $60,000, reflecting the change in responsibilities, Hearn said. At the same time, BCG’s contract to manage golf and food and beverage operations has been extended through 2019, an indication of the Cove board’s confidence in the company. The financial impact of the change will be either neutral or modestly positively for the Cove association, Hearn said. While Girard will be receiving a boost in pay because of excellent performance

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reviews and his expanded responsibilities, Hearn said Girard has been authorized to hire an aquatics director, which will either be a year-round position or a seasonal one. If the decision is made to hire a yearround director, then Hearn said the net impact of the restructuring on the Cove POA will be neutral, while a seasonal aquatics position would produce a “slightly beneficial” effect on Cove finances, Hearn said. Governing documents – After identifying eight to ten possibile areas in which the Cove’s governing documents could be changed, the Cove board is taking the next step towards a possible community referendum on the various changes. At the Jan. 11 board meeting, the directors agreed to forward the possible changes to the association’s law firm, Inman and Strictler, for review and comment. “We want to be able to identify any possible changes that could be in conflict with Virginia law, so we can either eliminate them from the list or change them so they comply,” Hearn told the Progress. He said he hopes that the proposed list of amendments, which could involve covenants and restrictions, articles of incorporation and bylaws, will come back to the board for additional review at a board meeting in March.

Cove board votes to promote Girard to facilities director, restructures Billy Casper Golf responsibilities

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CAPTAIN’S COVE

January 2017

Cove restructuring From Page 33 At that point, or soon thereafter, the board could make a decision to allow the Cove property owner to vote on the proposed changes, either as a package or individually. Hearn has said that 2000 affirmative votes will be needed to pass any changes, meaning that developer- and association-owned lots casting affirmative votes will be insufficient to pass the

amendments in referendum. Some level of support from property owners will be required, Road safety – Concerned about speeding on Captain’s Corridor and other safety concerns, the Cove board is looking to hire a traffic consultant to help develop road improvements. Hearn told the Progress that not many years ago, there were roughly 500 homes in Captain’s Cove, now there are roughly 1000, and in another ten years that could grow to 1500.

The increase will mean growing concern over traffic and roads, Hearn said, citing existing narrow road width, the lack of curb and gutters and no center lines as areas of potential concern. Possible solutions include more stop signs, round-abouts, speed bumps, or security cameras at certain intersections, he said. At their Jan. 11 board meeting, the directors decided to “reach out” to area engineering firms to see if their traffic divisions are interested in assisting the

Cove to come up with solutions. One particular company that will be contacted is the Traffic Group, a company that offers traffic studies out of its Berlin office and elsewhere. Property tax checks cashed – After years of stalled and failed attempted interactions with the Accomack County treasurer’s office, in which checks issued by the Cove association and Cove developer interests for years of property taxes were never deposited, it appears q

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CAPTAIN’S COVE

January 2017 Ocean Pines PROGRESS

Cove restructuring From Page 34 that with the help of a new county attorney agreements have at long last been reached. Both the Cove association and developer interests are current with their property owners as a result of these agreements. Hearn announced at the Jan. 11 meeting that County Treasurer Dana Bundick had cashed a $6000 check for outstanding property taxes owed by the Cove association, after first returning checks totaling about $21,000. The smaller amount reflects current property values in the Cove, he said. At the same time, he disclosed that the lawsuit filed against the county by Captain’s Cove Group Note LLC and affiliates over similar disputes over proper valuation of property has been settled, very close to a $292,000 settlement offer proposed by CCG Note for the years 2013 and after. Jim Silfee, a Cove board member and CCG Note principal, at the Jan. 11 meeting declined to state for the record what amount in property taxes the county and the developer were able to negotiate. But he credited the new county attorney for his work in reaching a reasonable settlement and suggested that anyone interested should contact the county attorney and compliment him for a job well done. An informed source told the Progress that the county cashed a check for $302,000 from the developer to settle the lawsuit, just $10,000 more than the developer’s original offer. Neither the Cove nor the developers now owes Accomack County for any back taxes, Hearn said, and the amount paid by Cove association is much less

than critics of the board had said was at issue in the protracted dispute. The settlement is based on reasonable current valuations for Cove property, including $900 for many unbuildable lots in Sections 14 through 18, to a $2000 to $4000 range in future buildable lots in Sections 12 and 13, Hearn said. The depositing of checks by the county ends a protracted dispute in which Hearn repeatedly made public statements about how odd it was that a county government that needs money was unwilling to make use of payments that both the Cove association and the developer had made available. Section 1 roads – The Cove board at the Jan. 11 meeting approved up $360,000 for new roads in Section 1 to be installed over the next year, with the expectation to only $300,000 of that will be spent bringing paved roads to about 180 lots that currently don’t have paved road access. Some Section 1 streets nearest the bay – Hearn called them in environmentally sensitive areas -- have yet to received county engineering certification. If those approvals aren’t forthcoming in a reasonable time period, those affected areas of Section One will have to be removed from the priority list, with attention shifting to bringing roads to Sections 12 and 13, Hearn told the Progress.. That would still mean that roads will be available to 180 lots that didn’t have them before now, Hearn said. Dog Park – Aficionados of canines large and small got some good news at the Cove board’s Jan. 11 meeting when the directors approved up to $15,000 for installation of a dog park in the former campground area now known as Cove Commons.

Veterans Memorial donation

BJ’s Wholesale Club, in partnership with the Ocean Pines Association, donated $500 to the Worcester County Veterans Memorial at Ocean Pines as a part of its fall 2016 membership offer. BJ’s donated $5 of each membership fee paid as a part of the promotion to the foundation in addition to offering special benefits for new and renewing members. Marie Gilmore, president of the Worcester County Veterans Memorial Foundation, was presented a check by Ocean Pines Association Director of Marketing and Public Relations Denise Sawyer on Jan. 11. Area residents who missed the fall BJ’s promotion will have the opportunity to participate in the spring offer, which will run April 13-27. Roughly a quarter acre of the tenacre park will be segregated off into a dog park, with separate areas for larger and smaller dogs, The board also approved up to $175,000 for additional pumps and pipe equipment that will enable dredge ma-

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terial from canals in the northern and eastern sections of Captain’s Cove to be transported to Treasurer Island on the community’s southside. The action will mean that Cockle Point, which has been the dredge spoil site for the Cove for many years, can be abandoned once and for all. Hearn told the Progress that Cockle Point property owners, who for years have agreed to have their properties serve as a spoil site for the Cove, will soon have access and use of their properties again, including the possibility of building new homes. Most of the dredge material on Cockle Point will have to be removed by truck, but that which remains, mainly material used to build protective berms on the perimeter of the spoil sites, could be spread around the properties if the individual property owner agrees. “We’ll notify the owners and give them the choice.whether they want the berm dirt to be spread or removed,” Hearn said. Monument signage – Cove residents expecting a board decision on the proposed promotional “monument” sign on State Line Road and Route 12 didn’t get any satisfaction at the Sept. 11 meeting, but the matter could be taken up for a decision as early as February if the board decides to have another meeting then. March is another possibility. Hearn said the board simply ran out of time to discuss the signage issue at the Jan. 11 meeting. The issue has been very controversial among Cove residents.

36 Ocean Pines PROGRESS

January 2017

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LIFESTYLES Thursday, Jan. 19 Pine’eer Craft Club, monthly meeting, Ocean Pines Community Center, 9:45 a.m. refreshments, 10 a.m. business. Discussion of activities for 2017. Guests welcome. Sharon, 410-2083032. Friday, Jan. 20 Ocean Pines Association, Board of Directors, work session on the draft 2017-18 budget, Ocean Pines Community Center, Assateague Room, 10 a.m. First substantive discussion of next year’s budget by OPA elected officials. Budget-related comments by OPA members welcome. Monday, Jan. 23 Ocean Pines Association, Board of Directors, regular monthly work session, Ocean Pines Community Center, Assateague Room, 9 a.m. Agenda posted on the OPA Web site several days before meeting. Comments by OPA members welcome but should pertain to agenda items. Thursday, Jan. 26 Republican Women of Worcester County, January luncheon meeting, Clarion Hotel, Ocean City, 11 a.m. Guest speaker, Heidi McNeeley of Worcester County Warriors against Opiate Addition. $20 per person. Reservations, Pat Addy, 410-208-0171 or gorpataddy@aol.

January 2017 Ocean Pines PROGRESS

HAPPENINGS Saturday, Jan. 28 Ocean Pines Association, Board of Directors, regular monthly meeting, Ocean Pines Association, Ocean Pines Community Center, Assateague Room, 10 a.m. Agenda posted on the OPA Web site several days prior to the meeting. Ocean Pines Association, 2017-18 draft budget presentation by Acting General Manager Brett Hill, Ocean Pines Community Center, Assateague Room. 12:30 p.m. Comments by OPA members welcome.

Ongoing

Free platform tennis clinics, Saturdays at noon, Manklin Meadows tennis complex. Bring sneakers, the rest is provided. Annual memberships start at $150. Line dance classes, Monday and Wednesday, 9:30 -10:30 a.m., Ocean Pines Community Center. Beginners welcome. Betty Daugherty, 410-7261818, or bettydau@aol.com Pinesteppers Square Dance Club, Wednesdays, 7-9 p.m., Ocean Pines Community Center with caller Dennis O’Neal. Visitors welcome. The group also hosts a dance the fourth Saturday of the month from 7-9:30 p.m., Ocean Pines Community Center. Guest

callers lead the dancers with music and choreography. Mainstream/Plus square dancers welcome to join in. President Arlene Hager, 302-436-4033. Pine Tappers free adult tap dance classes, Tuesdays, 2-3:30 p.m., Ocean Pines Community Center. Exercise and have fun with choreographed tap dancing routines. From 2-2:30 p.m., brush up on basic techniques and a review of the routines, then join the regular class from 2:30-3:30 p.m. Every week or drop-in as convenient. Lori at 410-251-2162 or tntandcompany@gmail. com. Ocean Pines Ping Pong Club, Ocean Pines Community Center, Monday, Wednesday and Friday, noon to 2 p.m. All levels welcome. Eric Bowers, 410-208-1794. The Kiwanis Club of Greater Ocean Pines – Ocean City every Wednesday at 8 a.m., Ocean Pines Community Center. 410-641-7330 or kiwanisofopoc.org. Sanctioned duplicate bridge games, Ocean Pines Community Center, Sundays 1 p.m., Mondays noon, Tuesdays 10 a.m. Partners guaranteed. $5, special games $6. Third Sunday of every month is Swiss teams (no partner guaranteed for teams). Felicia Daly, 410208-1272; Pat Kanz, 410-641-8071

The U.S. Coast Guard Auxiliary, Flotilla 12-05, meets the first Monday of each month at 7:30 p.m. in the U.S.C.G. Station, Ocean City. Visitors and new members are welcome. Dennis Kalinowski, 410-208-4147. Web site http://a0541205.uscgaux.info. Life after loss support group, second and fourth Tuesday of each month at the Community Church at Ocean Pines, 11227 Race Track Road, Berlin, 11 a.m. Help in coping with any type of loss. 410-641-5433. Worcester County Democratic Club meeting, fourth Thursday of each month, 7 p.m., Marlin Room of Ocean Pines Community Center. No December meeting. Club membership is not required. All those interested in Democratic platforms and agendas are welcome. Beach Singles, every Thursday, 4-6 p.m., Castaways, Coastal Hwy. at 64th Street, Ocean City, 45+ singles for socializing and monthly activities, 302436-9577. Republican Women of Worcester County, fourth Thursday of each month, 11 a.m. meeting (doors open at 10:30), lunch at noon, local restaurants. For information, call membership chair Barbara Loffler at 410-208-0890. January through June, and again September and October. Dinner meeting in November. No meetings July, August and December.

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38 Ocean Pines PROGRESS

OPINION

January 2017

COMMENTARY

Time to amend OPA-OPVFD ‘memo of understanding”

cting General Manager Brett Hill has understandable difficulty in comprehending the opaque language in the 2011-12 “memo of understanding” that governs the funding relationship between the Ocean Pines Association and the independent Ocean Pines Volunteer Fire Department. There are few relationships that are more critical to the health and safety of Ocean Pines residents than the one the “memo of understanding” is designed to protect. Indeed, it’s so fundamental to the quality of life in Ocean Pines that it’s perplexing that the OPA actually doesn’t have a signed, dated copy of it anywhere in the administration building. At least none that Hill and administrative assistant Michelle Bennett have been able to locate. So much for the vaunted record-keeping of the previous administration. The unsigned copy is perplexing to Hill and others among his colleagues on the board in large part because of unnecessary complexity regarding a “trueup” mechanism that is supposed to adjust the department’s funding request each year based on how well it did the previous year relative to budget. At least, that’s one possible interpretation of the language. The fact that this is even an area subject to interpretation suggests that the “memo of understanding” is more accurately described as a memo of misunderstanding, or at least one that invites that unfortunate outcome. Then there’s a provision that exempts up to $150,000 in fund-raising revenue and donations from the calculation of department revenue each year. A reasonable interpretation of that provision is that it’s designed to encourage, or at least not discourage, the OPVFD from fund-raising. The department’s primary fund-raising project is its annual house lotto, and by all accounts it’s usually a lucrative one. The OPA and Ocean Pines residents should be happy about that, because every dollar the OPVFD collects in fund-raising is

a dollar that the OPA doesn’t have to provide in its annual subsidy. Encouraging the OPVFD to supplement its revenue by fund-raising is a worthy goal. What is odd about the $150,000 fund-raising cap is that it effectively penalizes the department should it have a particularly good year in house lotto ticket sales or reaps some other fund-raising or donation bonanza. It turns out in recent years, only in the 201415 fiscal year did the department do well enough to get hit with a $40,000 “true-up” adjustment. At least, that’s according to a departmental work sheet that was part of the approved budget for 2016-17 adopted a year ago. Presumably, this work sheet is accurate. That same worksheet indicates that from 2014 through the current year, there was no “true-up” adjustment for operations, debt service, and capital reserve funding, expense areas where one might expect a true-up adjustment. It’s not just an academic discussion. Presumably all of the department’s revenue (excluding up to $150,000 in fund-raising surpluses) less expenses equals the OPA’s adjusted contribution to the OPVFD. Judging by the worksheet, it’s not at all clear that anyone even has bothered to do a true-up calculation for expenses since the MOU was executed. If adjustments are to be made, for instance, on how well the department did in reality as opposed to budget, then one might think that there would be some evidence of it on the budget worksheet or perhaps in the annual audit report. If one is looking for evidence of an annual OPVFD true-up in the audit report, on the schedule devoted to the OPA’s annual contribution to the OPVFD, it’s going to be a frustrating search. It’s not there. That’s not dispositive as to whether anyone, anywhere conducted the true-up calculation, but it’s suggestive. Given the presence of zeros in the true-up columns in the worksheet document, either the calculation was

not done or, miraculously, no adjustment was needed all those years. Hill is prepared to renegotiate the so-called “memo of understanding” when he and the board sit down with OPVFD officials in the current budget cycle to discuss the department’s request for funding in 2017-18. Amending the agreement so it can be understood by those who weren’t involved in crafting it seems like a good idea. For starters, there needs to be a thorough discussion of the perplexing true-up mechanism and whether, since it seems not to have resulted in any adjustments in the following year’s subsidy, why it even needs to be part of the funding relationship between the OPA and the OPVFD. If there’s a shortfall in any particular fiscal year, either live with it or make up the difference in the fiscal year in which it occurs. True-ups that are supposed to be reconciled in the year after they occurred simply make things more complicated than they need to be. Further, the $150,000 cap on fund-raising after which the OPVFD is hit with a “penalty” for over-performance seems silly and counter-productive. It, too, adds unnecessary complexity to the funding mechanism. Let the OPVFD keep what it is able to fund-raise from the house lotto or any other source. To the extent proceeds are allocated to reserves that are used to buy equipment as needed, every resident and property owner benefits. It needn’t show up on OPA books as bonus revenue in a particularly robust year. Brett Hill is to be commended for asking questions about the memo of understanding and not pretending that he understands it when he doesn’t. Perhaps before the conclusion of the 2017-18 budget cycle, there will be much greater clarity and understanding all around. Keeping it simple whenever possible is also an inherently good idea. – Tom Stauss

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The Ocean Pines Progress, a journal of news and commentary, is published monthly throughout the year. It is circulated in Ocean Pines, Berlin, Ocean City, and Captain’s Cove, Va. Letters and other editorial submissions: Please submit via email only. Letters should be original and exclusive to the Progress. Include phone number for verification.

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January 2017 Ocean Pines PROGRESS

Brett Hill’s take-no-prisoners approach

he recent, unexpected departure of the Yacht Club food and beverage manager, by all accounts at the non-negotiable request of Acting General Manager Brett Hill, was announced to his board colleagues via email on the Friday prior to the traditional New Year’s Eve festivities. As is typical and even proper in personnel matters, details are scarce about the events leading up to the exit. Hill is saying nothing on the record, and what’s left is mostly speculative, not to be confused with hard, confirmed, attributed fact. For such a termination to occur just before the last big event of the year at the Yacht Club probably means something in particular precipitated it. One source told the Progress that there were reports that reservations secured by credit cards had some unspecified verification issues prior to New Year’s Eve, with management told to fix whatever the problem was but apparently not executing to Hill’s satisfaction. There also have been reports that staffing for the event had not been arranged to Hill’s satisfaction prior to the event. Some last-minute contract employees reportedly were brought in by Hill to handle the crowd. Ouch. Clearly evidence of a problem was evident by long lines waiting at the reception area, delayed by the protracted checking of credit cards prior to seating. One imagines that such an unwelcoming and inefficient system would never would have been employed had a private entrepreneur with “skin in the game” been in charge that evening. Then again, the real world of private enterprise is not without its challenges. Even without the New Year’s Eve fiasco, it’s possible that the slimming down of Yacht Club administrative personnel would have occurred anyway for budgetary reasons. While Yacht Club financial performance was more than respectable in September and October following Hill’s promotion to acting general manager, November’s numbers slipped into deficit, still better than budgeted but nothing that could be regarded as outstanding. While December’s numbers were not available at this edition of the Progress went to print, presumably Hill has access to preliminary financial results. As a competent manager able and willing to act on real-world conditions rather than what he want them to be, Hill must have decided that, entering the frigid months of January through April, more economies were warranted. Banquet manager Brian Townsend has been acting as a quasi, unofficial guy in charge pending a more permanent solution. Hill has already spearheaded a change in business plan at the Yacht Club during the off-season, reemphasizing the bar business and cutting back on

offering a bonus for successful operations -- is currently the leading alternative to the status quo. An excursion through the curious cul-de-sacs An excursion through theby-ways curious and by-ways and cul-de-sacs Clarke and Lind have long advocated of Worcester County’s County’s most densely community. leasing out the Yacht Club as an of Worcester mostpopulated densely populated community. alternative to in-house management, By TOM STAUSS/ By TOM Publisher STAUSS/Publisher and both reportedly have been working behind the scenes once again to promote dining, while reintroducing (reported- the in-boxes of OPA directors on that one this idea to members of the board. ly in place some years ago) a beer and -- and then November’s operating deficit Clarke suggests that, to give the board wine to-go operation. undercut to some degree the positive re- time to consider options, the club should With a new 20-foot-by-two bar open sults of September and October. be shuttered from January until May. in what has been snarkily labeled the Former OPA board member Marty That, he says, would give the board “hallway to nowhere,” Hill envisioned Clarke recently told the Progress, declin- adequate time to draft a suitable lease a slimmed down operation that could ng to provide details, that he informed agreement and find just the right have reduced losses at the Yacht Club Hill of something “disturbing” he had individual with “skin in the game” to to acceptable levels over the winter witnessed at the amenity in the latter operate the amenity. months. half of December. Of course, leasing out the Yacht Club Losing one high paid position is He also complained to the acting implies giving up control, and giving up hardly inconsistent with that vision. GM that no one answered the phone on control means a tenant could decide, as a Consolidating positions to save payroll a night the facility was open, and that way of maximizing profits, to close during outlays while increasing efficiency is there was no voice mail message indicat- the winter months. Lind in particular part of Hill’s m.o. ing that the Yacht Club was indeed open says a lease could be structured in a way The departure of the former recre- for business. to encourage a tenant to stay open yearational director and transferring her After showing up to the bar asking if round, while Clarke shrugs that off as budgeting and administrative duties to a phone was available, Clarke says he unimportant. the aquatics director is a recent exam- was told that the staff was too busy to Clarke told the Progress in early ple of that approach. answer phone calls even if a phone had January that he believes directors are Some months ago, Ocean Pines res- been readily available. Clarke also noted looking seriously at the lease option, ident and former (and, possibly, future) that the OPA’s own Web site indicated given recent developments. Perhaps. member of the Clubs Advisory Commit- that the Yacht Club was closed that parDirector Slobodan Trendic is the most tee Steve Lind suggested that Hill was ticular evening. outspoken advocate of leasing on the giving the former Yacht Club manager Lack of attention to detail is some- board. He recently said he wished that and his staff a fair opportunity under thing that a manager with “skin in the Hill had taken the action to eliminate new “oversight” from Hill to make a go game” is less likely to tolerate. top management at the facility in of the Yacht Club. It’s possible that it was accumulation September but that in any event the In the first couple of months of that of management mistakes that led to Hill current situation is ideal for the board new opportunity, things seemed to be on taking the action he did just before New to request lease proposals. the upswing, with Hill on a few public Year’s Eve. If leasing is on the table, Hill is acting occasions touting the evident improveWhatever those confluence of events, as if it isn’t. He’s commited to making inment. the situation presents the acting general house management work, no matter the Then things seemed to falter some- manager and the board with a golden challenges. Best guess: A board majority what, with reports of a poorly executed opportunity to consider management will continue to let him try, for some banquet event – complaints arrived in options. Incentivising management -- reasonable period of time.

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January 2017

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