Ocean Pines Progress June 2019 by Ocean Pines Progress

June 2019

www.issuu.com/oceanpinesprogress

443-359-7527

THE OCEAN PINES JOURNAL OF NEWS & COMMENTARY

COVER STORY

Board approves controlled release of forensic audit report

Board considering DR change to allow levying of fines Egregious violations of the Ocean Pines Association’s restrictive covenants are the target of a proposal to levy fines against members who fail to properly maintain their home or property. A twice-modified motion posed by Frank Daly designed to begin the lengthy process of pursuing a referendum to amend the restrictive covenants in each of Ocean Pines’ 26 residential sections to allow the OPA to issue fines for certain specified violations made it through a vote of the Board of Directors on June 1. ~Page 8

No email release authorized; hard copies only to property owners By ROTA L. KNOTT Contributing Writer roperty owners who want to read all of the details of a forensic audit that investigated allegations of financial misdoings at the Ocean Pines Association’s food and beverage operations and Public Works department will have to submit a written request for a hard copy of the document. The forensic audit report will not be widely distributed via posting on the OPA’s website or via e-mail. Director Frank Daly made the motion during a June 1 Board of Directors’ meeting authorizing a controlled release of the complete forensic audit without redactions to all assessment-paying members of the OPA beginning on June 10. His goal was to ensure all homeowners have complete and easy access to the forensic audit in compliance with the Maryland Homeowners Association Act. However, his proposal would have required a mass mailing to all property owners listed in the OPA’s assessment database with a “bounce back” or reply card they would need to complete and return to the OPA in order to secure a copy of the document. That idea didn’t win the support of his Daly’s colleagues. The reply card would have given them three choices for receiving the report: pick up a printed copy at the OPA administration building after showing identification, have a printed copy mailed to them at an address specified on the return card, or have a PDF copy sent to them at an email address specified on their reply card. After Aug. 30, the motion stated that copies of the forensic audit report would only be available to members by written request to the association. In the end, the board didn’t support sending email copies of PDF versions of the report. “This audit costing the association in the range of $200,000, has been completed, reviewed, accepted and is now ready for distribution. Given the extreme seriousness of the allegations, the findings of this audit should be

To Page 27

FORENSIC AUDIT REPORT

Auditors clear Finance Dept. employees of theft ~ Page 24

Auditors hit Public Works hiring, purchasing practices ~ Page 25

OPA far along in implementing report recommendations ~ Page 26

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Viola, Board agree on six-month GM contract The Board of Directors on June 6 entered into a sixmonth agreement to employ John Viola as the Ocean Pines Association’s general manager. Approval of the contract took place in a closed session of the board. The Progress has learned that the position pays Viola $70,000 over the six-month term, but does not include health insurance or retirement benefits.

~ Page 8

Petition drive close to collecting needed signatures As of June 14, former OPA Director Slobodan Trendic and his supporters were close to meeting their referendum petition goals. They had collected 750 signatures on a reduction of spending authority petition and 700 signatures on the petition to force a referendum on the the new golf clubhouse.

~ Page 16

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tarting Friday, June 14, the Ocean Pines Association will have an attendant stationed at the Ocean Pines Beach Club bathrooms in Ocean City from 10 a.m. until 6 p.m. daily. Guests using the bathroom will need to show their Ocean Pines homeowner ID, wristband from the pool, or receipt from Beach Club purchases. General Manager John Viola approved a request to hire and place the attendants, after concerns were raised about open access to the Beach Club bathrooms. “When concerns are brought to our attention, it’s important to the team to address them as quickly and as effectively as we can,” Operations Director Colby Phillips said. The Beach Club property covers the oceanside block of land between 49th and 50th streets in Ocean City. The three-level cedar shake building includes a snack bar with live entertainment, and alcoholic and non-alcoholic beverages available for sale on the central level. Alcohol may only be purchased by Ocean Pines property owners, residents and their guests. The upper level is available for dining, private parties, weddings and banquets for both residents and non-residents. The Beach Club pool is open from 10 a.m. to 6 p.m. daily, May 26 through Sept. 3. The Beach Club restaurant is open 11 a.m. to 6 p.m., May 25 through Sept. 3.

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Esther Diller resigns from OPA Board

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One day after the May edition of the Progress began circulating in Ocean Pines, Ocean Pines Association director Esther Diller announced her resignation from the Board of Directors. Health issues rather than any dissatisfaction with her board service led to the decision to resign. “It is with great sadness that I must tender my resignation today. I have to now deal with difficult personal and health issues at this time. I don’t

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June 2019

OCEAN PINES

June 2019 Ocean Pines PROGRESS

From Page 3

feel I could give the board position the time it needs and deserves,” she said in her resignation letter. She cited a lot of accomplishments during her relatively short board tenure. She was elected to the board in August of last year. “The right decisions are usually the hardest and after several years of “kicking it down the road” this board made those difficult decisions. I was able to gain a better understanding of the ins and outs of our community and have walked away from this experience better schooled and with a whole new appreciation for public service and governing of a community. “Governing isn’t easy. Volunteering isn’t easy. Everyone who serves on this board should be applauded for the time and effort it takes not to mention the personal attacks we must endure. This decision to leave the board has been difficult one for me and my family. I never like to start something I can’t finish but has now become necessary. “It has been an honor to work with all of you and I hope to again in the future be able to serve the community in a positive manner. I

intend to continue to work with several committees in our community and will be here to show support to the board,” she concluded.

Contract awarded for new craft building

Although over the budgeted amount, the Ocean Pines Association’s Board of Directors awarded a contract on June 1 for construction of a new craft building in White Horse Park. Based on a staff review, the contract was awarded to Ocean Tower Construction LLC of Ocean City in the amount of $86,826, which was $11,826 more than budgeted. General Manager John Viola said four contractors submitted bids of proposal. A detailed review of each proposal was conducted by a 5-person review team consisting of the Public Works Director, Public Works Assistant Director, President of Budget and Finance, Public Works Facility Manager, and Supervisor of Parks and Recreation. “It’s not that we just picked somebody. There was a thorough analysis on it,” Viola said. He said the staff recommendation was based on a leveling of the proposals in order to select the most qualified firm. The project consists of construcq

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tion of a 19-foot by 25-foot craft building on a concrete slab, wood frame construction, cedar shake vinyl siding, and standing seam metal roof. OPA will coordinate with Choptank Electric to provide service to building. The site will be cleared of trees and any necessary fill will be completed by OPA Public Works prior to start of project by contractor. HVAC will be provided by one Fujitsu mini Split system. The OPA will provide the indoor air handler unit and outdoor condenser. The contractor will be responsible for

installation of unit including mounting, wiring, installation of refrigerant lines, drain lines, mounting of condenser to base, and covering of exterior lines. The contractor is responsible for calling for utility locations prior to the start of the project. It shall be the contractors responsibly to coordinate their work with any utility owner who may be in conflict with their work. Any utilities, public property, or private property damaged due to contactors negligence during construction will be repaired at the contractor’s expense. The contractor will guarantee the construction for one year from the

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Four properties that are in violation of the Ocean Pines Association’s restrictive covenants were found in continuing violation and sent to legal counsel for action by the Board of Directors during a June 1 meeting. At 12 Sandpiper Lane, the board found the property owners in violation for having an unregistered vehicle on the property. All vehicles parked on lots in Ocean Pines must have a current li-

cense and registration. A Compliance, Permits, and Inspections report shows that the initial inspection of the property was conducted in March and the owner was notified but has not addressed the violation. The property owners at 12 Starboard Court changed the color of the house without permission and have a shed that is a different color than the house. The color change on the house requires a permit from Ocean Pines and paint the shed must be the same color as the house. The violation was first inspected in March. Screening is needed around the propane tanks at 19 Duxbury Road. The propane tanks by the house must be screened from view with evergreen plantings, lattice, or planking. The violation was first inspected in February. At 1435 Ocean Parkway, the property needs maintenance and contains unregistered vehicles. All vehicles parked on lots in Ocean Pines must have a current license and registration. Lots in Ocean Pines must be maintained to prevent them from becoming unsightly. It was first inspected by CPI in March.

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Board reverses motion on liquor license stock

OPA President Doug Parks made a motion to rescind the motion regarding issuance of one share of stock for the Yacht Club and the issuance of one share of stock for the Beach Club. The motion carried unanimously. Parks said the motion with negate an earlier action taken by the board to issue the noted shares of stock. The action was taken based on advice from legal counsel which noted that pecuniary interest under Maryland alcoholic beverage law required a share of stock be issued for the Yacht Club and Beach Club locations to comply with issuance of the liquor license at these locations. However, when the OPA applied to renew its liquor license at these locations, the county and state noted these had been listed as a single entity rather than as separate ones. That means the licensing does not require the issuance of a single share of stock to meet the license requirement.

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Amended motion starts process that could lead to OPA fining authority, recovery of legal fees Director wants narrowly tailored authority that could target poorly maintained property, unregistered or junk cars, additions and alterations without permits, unauthorized house color changes, and alternations without permits, unauthorized house color changes, parking of oversized vehicles and trailers By ROTA L. KNOTT Contributing Writer gregious violations of the Ocean Pines Association’s restrictive covenants are the target of a proposal to levy fines against members who fail to properly maintain their home or property. A twice-modified motion Frank motion by posed by Daly to begintothe lengthy Frankdesigned Daly designed begin the process pursuing a referendum to lengthy of process of pursuing a referamend theamend restrictive covenantscovin endum to the restrictive each of in Ocean 26 residential enants eachPines’ of Ocean Pines’ 26 sections to section allow the OPA the to issue residential to allow OPA fines for certain specified to issue fines for certainviolations specified made it through a through vote of the Board violations made it a vote of of June 1. on June 1. theDirectors Board ofon Directors Although it has not been well publized or understood, Daly also wants to give the OPA the explicit authority to collect legal fees associated with having to go to court to enforce the DRs, which he hopes will give the OPA more leverage in dealing with the small number of property owners who he said have figured out how to “game the system.” Daly said the intent is to enhance the ability of the association to improve and maintain homeowner value and safety by levying fines for certain but not all violations of the Declaration of Restrictions. The motion Daly made at the meeting, which differed from one included in the board packet for the day, called for initiating a twostep process to place a referendum question to all homeowners to permit the OPA to levy fines for violation of the Declaration of Restrictions. Phase one of the motion was to authorize the board and general manager to work with legal counsel to develop a referendum question that incorporates the violations that will be subject to fines, a violation correction period, the fine schedule, the collection of legal fees, due process and appeal requirements and to move to referendum on the approval with a positive vote in

phase two. Phase two of the process was the formal approval of the referendum question at the July board meeting. Daly said the association is limited in its ability to enforce the Declaration of Restrictions. The OPA’s existing enforcement existing process is time-consuming, expensive and ineffective, he said. Documented violations can extend for long periods of time. Legal fees incurred to enforce the declaration of restrictions cannot be recouped under the current declaration of restrictions and can run into thousands of dollars, according to Daly, adding, “the ability to fine for violations will result in faster, more effective enforcement of the declarations.” Targeted violations could include poor property maintenance, debris, unregistered or junk cars, additions and alterations without permits, such as fences, porches, sheds, and decks, house color changes and parking of oversized vehicles and trailers on lots in Ocean Pines, Daly said. Daly said he divided his motion into two phases in order to allow a team to work with legal counsel to better define violations that would be subject to fines and the process for implementing and issuing them. He said he doesn’t want to fine property owners for minor infractions like grass that is a little long or a trash can in the wrong location. He said he wants to “codify everything” and make sure all property owners know exactly what they will be voting on in if the issue moves forward to a referendum. He also wants to make sure that future boards can’t adopt rules that would expand the kinds of infractions that would result in fines. Other directors balked at committing to approving a referendum question at their July meeting when they aren’t sure they even want to proceed with implementing a sys-

Viola, board agree on six-month GM contract Extendable month-to-month

he Board of Directors on June 6 entered into a six-month agreement to employ John Viola as the Ocean Pines Association’s general manager. Approval of the contract took place in a closed session of the board. The Progress has learned that the position pays Viola $70,000 over the six-month term, but does not include health insurance or retirement benefits. Previously, Viola had been earning $700 per week as John Viola interim GM, a minimum payment required by federal labor law. The salary is consistent with what the OPA has paid its managers in recent years, but the contract is unusual in that it does not include health and retirement benefits, and that represents a significant cost savings to the OPA. The terms of the agreement are good through Dec. 1, 2019. The contract can be extended in monthly increments after that. There are no “golden parachute” benefits in the event of an early departure. Viola, a former budget and finance advisory committee chairman and current association treasurer, has served as interim general manager

tem of fines. “I like the concept. What I’m struggling with is the detail,” said OPA President Doug Parks. He supported the goal of having more authority to carry out certain enforcement actions to ensure properties are in compliance with the Declaration of Restrictions. He said the ability to issue fines would give the OPA the opportunity to move more quickly to resolve violations, but he was concerned about agreeing to consider a referendum question without more detail about the fine structure and process. Parks suggested moving forward with only the first phase of Daly’s proposal and garnering community input on the concept of implementing a schedule of fines for a defined list of violations of the restrictions. “We have to all be buying into the idea that this is the right way to go because it’s practical and it’s sustainable. And it’s not cost prohibitive,” Parks said. He favored moving forward with the first phase and said the second step “remains to be seen.” Director Collette Horn said she agrees conceptually as well, but was uncomfortable with a motion that has two phases. She said she would rather have a motion that addresses phase one including community input. “There are a lot of great ideas and different perspectives out there among the membership on this top-

ic,” she said, and suggested a friendly amendment to Daly’s motion to include only the phase one portion. Then the study team can bring a motion to the board for consideration as a second phase as some point in the future, she said. “I totally support the concept of putting more teeth in some sort of enforcement system that can correct the problem we’re facing,” Director Steve Tuttle said. However, he wanted to look at other options for expediting the enforcement of the restrictive covenants in addition to fines. “I don’t think just jumping to a fine system is going to be the way to solve this problem,” he said. Tuttle said the Declaration of Restrictions clearly authorize the OPA and its agents to go onto properties in Ocean Pines to repair, maintain, and restore the lot and exterior of buildings. “I think we have the teeth already. I think the problem is we’re not doing it. We’re not following through on the steps that need to be done and we’re just taking way too long.” Director Tom Piatti said he hopes the board will defer making a decision on whether or not to proceed to referendum until after the annual election this summer. “I hope that you push this out into the future,” he said, adding that with two short term members on the board it would q

8 Ocean Pines PROGRESS

mation, and get the membership in-

question to the board by Sept. 1.

OCEAN PINES Daly motion From Page 8 be best to give the new board an opportunity to weigh in and make the final decision on a referendum. Parks said there is no harm in taking the first step, to gather information, and get the membership involved.

June 2019 Ocean Pines PROGRESS Daly agreed to the friendly amendment to his motion to just pursue phase one, but insisted on having a deadline on that work. The revised motion specified that the board and general manager should work with legal counsel to study the issue, garner community input, and present a referendum question to the board by Sept. 1

He said he had no objection to starting with phase one and moving on to phase two later, provided it is not something that drags on for years. Daly said former General Manager John Bailey conducted a community survey in 2018 and asked if property owners would support a referendum to provide for better

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Candidates debate spending threshold, fines in first forum Kotwica, Turner stake out harder line on OPA spending

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By ROTA L. KNOTT Contributing Writer one of the six candidates for the Ocean Pines Association’s Board of Directors who attended a June 12 forum were enthusiastic about levying fines on property owners for violations of the Declaration of Restrictions, and they were split regarding the need to reduce the board’s spending authority without going to referendum. Candidates vying for open seats on the board who attended the first of two open forums were Tom Janasek, Larry Perrone, Camilla Rogers, Paula Gray, Shawn Kotwica and Gregory Turner. Edward Solum was unable to attend because of a car accident earlier in the day. Solum is espected to attend a second

forum later this month. During the forum they were given the opportunity to make opening and closing remarkss and to answer questions submitted by property owners in attendance. Several of the questions focused on the OPA’s finances. Regarding the levying of fines on properties where the owners fail to correct violations of the restrictive covenants, Perrone said he can see both sides of argument. “This is a great community. We don’t want to turn it into a ultra-authoritarian operation. But over the years we have seen homes in the community that are run down and you really you don’t have a lot of options.” Instead of fines, the OPA should do To Page 12

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12 Ocean Pines PROGRESS Candidates forum

OCEAN PINES

June 2019

From Page 10

Paula Gray

Tom Janasek

Shawn Kotwica Larry Perrone

violations is the structure, according to Gray. She said the plan is to give property owners just two weeks to correct violations before they get a fine, and that’s not enough time. “Now you have a ticking time bomb,” she said. Gray proposed taking six months to a year to study the proposal and cautioned members to be very careful and vote if the issue does go to referendum. “Realize what it could do to you if someone looked hard at your house,” she said. Kotwica said enforcement and cost are the problems with the proposal because the OPA will need to hire more staff to enforce the restrictions and to tell people

Camilla Rogers

to clean up their properties. He too supported studying the matter for six months to a year. “To put an allout fining system isn’t the answer. Where do you draw the line?” He said there are people who can’t pay to fix up their properties, so they won’t be able to pay the fines either. Turner questioned whether the OPA even has the right to issue fines to its members. He said the OPA used to cut the grass for members who didn’t do it and send them a bill. He said most of the issues are aesthetic in nature so bringing back that effort could help resolve many of the issues. So too, could a knock on the door to ask the residents

Edward Solum Gregory Turner

nicely to clean up their lot. Janasek said a resounding “no” to fines, adding “It just doesn’t need to be that way.” He said the Declaration of Restriction specifies how to deal with derelict properties, but some of them have been passed down from board to board. He saidd that many of the properties with violations are in foreclosure. Others may be owned by folks who need help fixing up things. He suggested a developing a system whereby the OPA could do the work and they could pay back over time. “No I would not agree with giving

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the maintenance and add the cost to liens placed on the properties, he said. “I don’t think I would like to see those fines implemented as long as we’re taking more aggressive steps to control the properties that are blighted,” he said. Rogers said much of property in Ocean Pines is nicely maintained and “having blighted properties is one of the things that is going to detract from our property values.” She said she wanted to try to gather input on the issue from focus groups, but added that placing liens on a property is one of the only ways the OPA is ever going to recover funds expended on the properties “I am really truly all in favor of ensuring that blighted properties have the attention that they need and the detail that they need. Are fines the answer to that? I don’t know. I think they probably could be.” The problem with the proposal made to fine property owners for

OCEAN PINES Candidates forum From Page 14 the board the authority to fine any homeowners in Ocean Pines.” Another question focused on the board’s authority to spend up to 20 percent of the annual property assessments for projects, and a proposal to cap that amount at $1 million. “Moving that number down is greatly important,” Kotwica said. He cited overspending on the Yacht Club construction project. He said while unexpected costs will occur, the membership has a right to know about all expenses related to a project. Turner concurred, saying “Ithink that the Board of Directors shouldn’t even be allowed to spend $1 million without the approval of the citizens of our community.” He said the $1 million cap should be breached only in emergency situations. Janasek didn’t favor a change in the board’s spending authority. He said the OPA will now have new facilities and shouldn’t need to spend funds on major projects any time soon. Instead, it needs to develop a maintenance plan for those buildings. “I think we can upkeep

June 2019 Ocean Pines PROGRESS all these buildings and not every have to spend 20 percent of our assessments.” Requiring a referendum on major expenditures would likely mean nothing would ever get done, he said. “I think the bylaws are fine I don’t think we need to change the bylaws to reduce the referendum number,” Perrone said. He too said the OPA’s current buildings now have a “workable life.” Despite rumors of overspending for a new Country Club, Perrone said it was necessary because the concrete slab under the building was crack, causing water intrusion and significant mold. Rogers didn’t seem the need for a change in board spending authority either. She said she would hate to see the membership constantly having to vote in referendums in order for anything to get done in Ocean Pines. She said such a change would slow down actions and that is the wrong way to go. She said they “don’t need to slow down they need to be acted on in a timely manner.” Gray lobbied for a per project spending limit rather than an overall cap of $1 million. She said the membership should know the true cost of each project, including work

done in-house by OPA staff. She said those items, like work performed by public works crews, is still at a cost to the members. “No I don’t want to see us have to vote on everything, she said, but added she wants the whole cost of projects to be made public.

Ballots will be mailed to all eligible OPA property owners on July 8 and are due back to the OPA by Aug. 7. A second candidates forum is scheduled for June 22 at 10 a.m. in the Assateague Room of the Ocean Pines Community Center.

SHA officials to host roundabout meeting

aryland State Highway Administration officials will host an informal informational meeting on the proposed Route 589 and Ocean Parkway roundabout on July 11 from 6-8 p.m. in the Assateague Room of the Ocean Pines Community Center on 235 Ocean Parkway. Bob Rager, Maryland State Highway Administration district community liaison, will lead the presentation. “This meeting is just one opportunity for engagement,” he continued. “We’ll certainly continue the conversation and look to engage Ocean Pines residents throughout this process.” Rager said recent roadwork on Route 589 and Ocean Parkway was “routine survey work related to the roundabout concept.” It is unclear if further work will be required, in the near term, he saud, Association Vice President Steve Tuttle said he personally forwarded about 60 or 70 emails from homeowners to state transportation officials, most of which were strongly opposed to the idea of a roundabout. “Many believe it will be very unsafe and they will not be able to use the North Gate exit from our community, and most believe this project is being thrust upon them because of the PRMC project [on Ocean Parkway and Route 589],” Tuttle said. “With that kind of community sentiment, we felt it was vital to have an informational meeting with the highway Administration officials present, so our homeowners can express their sentiments and hear directly from the planners of this project.”

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14 Ocean Pines PROGRESS

OCEAN PINES

June 2019

Fisher Marine back in the Pines after hiatus Bulkhead work to resume this fall; Hi-Tide unable to fulfill contract

Director Tom Piatti made the motion to award the contract to Fisher Marine Construction, saying the affected homeowners have waited since the fall of 2017 for this work to start. Because of many delays and the inability of the previous contractor, Hi-Tide Marine Construction, to deliver, the board instead awarded the project for bulkhead replacement affecting homes located at 10 through 20 West Mallard Drive to Fisher Marine. While other contractors were too

busy and said they didn’t have the ability to accept any more work at this time, Fisher Marine Construction jumped at the chance to get back in Ocean Pines, after a hiatus of several years. The Progress has learned that the Chincoteague-based contractor also will mostly be awarded a $22,500 contract to remove remants of the Whitetail Sanctuary crabbing pier, possibly before the end of this month. This suggests that going forward, Fisher Marine likely will be

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a major player as the OPA tries to jump start bulkhead replacement. Fisher Marine worked in the community completing bulkhead repair and replacement work for decades but fell out of favor with Brett Hill two years ago when he served as acting general manager. At issue at the time was the more or less automatic renewal of the annual contract, without the customary bidding process, a practice that dated back to the regime of former General Manager Bob Thompson. Hill didn’t much care for the automatic renewals, but in retrospect that practice enabled the bulkhead replacement program to continue apace without the delays and problems of recent years. It’s unlikely that the OPA will return to the practice of non-bid annual renewals. “We’re really working on trying to get a good system in place moving forward,” Operations Director Colby Phillips said during the June 1 board meeting of the OPA’s efforts to restart the bulkhead repair and replacement program. During the meeting Phillips displayed a bulkhead project and spending chart that showed the OPA has more than $1.2 million allocated across four contractors for bulkhead repairs and replacement, but only about $350,000 of that funding has been spent. There was no discussion during the meeting of the on-site storage of materials, an issue that has roiled the bulkhead program for years. The OPA has been looking for a solution to that issue, but so far no solution has been announced. Phillips said the OPA is also working to address another perpetual problem in Ocean Pines – drainage. She said a work group that includes staff, residents, “some people that are familiar with the background on drainage issues” has been meeting monthly to determine how to best resolve the stormwater woes. County commissioners Jim Bunting and Chip Bertino have also been brought into the conversation. A request for proposals is being circulated for drainage pipe replacement on Watertown Road. Meanwhile an OPA team is taking measurements on different ditches, grading them, and working on pipe q

By ROTA L. KNOTT Contributing Writer marine contractor with a long-standing relationship with the Ocean Pines Association will complete the bulkhead repair and replacement work on West Mallard Drive that has been at a standstill for more than a year. The Board of Directors during a June 1 meeting voted unanimously to award a $196,875 contract to Fisher Marine Construction of Chincoteague, Va.

OCEAN PINES Fisher Marine From Page 14

replacement in some other areas, Phillips said. Overall, the OPA’s Public Works and maintenance crews are busy, she said. Last month the Public Works team received 137 work orders. “Work orders are last-minute things. They’re not stuff that they normally do on a day to day basis. Work orders come in from the community as well as the staff. If we have issues in our buildings and stuff, we put in work orders,” Phillips said. She said Public Works completed 68 of those work orders, while still doing their regular tasks and getting all of the amenities open for the summer season. In addition, she said the Compliance, Permits, and Inspections staff processed 150 violations of the restrictive covenants, including visiting every one of those properties. Many of those violations, 87, were closed out or complied with by the property owners within the same month.

Landscaping crews are out mowing all community areas throughout Ocean Pines. Phillips said the easements have all been cut at least once and crews were preparing to go through a second time. Filling a proliferation of potholes is also high on the to-do list for Public Works. Phillips said many are the result of road cuts made by Worcester County that the OPA is now going back to address. New equipment for the White Horse Park playground was scheduled to be completely installed by June 17. “It’s gonna be a really nice playground for the kids. We wanted it done before camp,” Phillips said of the OPA’s annual summer camp. She added that camp is almost full with a capacity of 130 children per week. At the Swim and Racquet Club, the OPA has rebuilt the tennis courts because about 80 percent of the playing surface was cracked, according to Phillips. She said that project was budgeted at $100,000 but the OPA was able to complete the work for about $15,000 in midMay.

May. In his operations report, General Manager John Viola said the OPA received five bids in response to a request for proposals for management firms to oversee the association’s administrative operations. He said a review panel conducted a thorough evaluation of all of the proposals and determined that none of them were the right fit for Ocean Pines. “They were more expensive than the traditional GM position that Ocean Pines in our bylaws calls for,”

June 2019 Ocean Pines PROGRESS

he said. Additionally, Viola said most of the proposals did not even include information on the basic management requirements for Ocean Pines related to areas such as police and fire protection. All of the firms wanted to use their own management software, another problem for the OPA which has finally invested in and is installing the much-debated Northstar software package. Viola said installation of that sys-

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OCEAN PINES

June 2019

START petition drive within striking distance of reaching 845 names needed for referendums Volunteers talk one-on-one with residents in laborious effort to collect signatures

By TOM STAUSS Publisher ormer Ocean Pines Association Director Slobodan Trendic, who resigned from the Board of Directors in March in opposition to a board decision approving up to $1.6 million in replacement reserve funds to pay for a new golf clubhouse, is continuing a petition drive he launched last month to force the board to conduct a referendum on the golf clubhouse project before construction begins this fall. The old Country Club has been demolished. Trendic and his supporters are also continuing to collect signatures on a companion petition drive to force the board to conduct a referendum to change OPA bylaws to reduce board spending authority to $1 million, down from the $1.8 million allowed under current bylaws language. As of June 11, Trendic said he and his supporters had collected 670 signatures on the reduction of

spending authority petition and 630 signatures on the petition to force a referendum on the golf clubhouse. By Friday, June 14, those numbers had increased to 750 and 700, respectively. “We’re within striking distance,” Trendic said. Under community bylaws, owners of ten percent of the 8,452 lots in Ocean Pines must sign a petition for a referendum. Trendic has said he hopes his campaign will generate more signatures than needed to present to the board. Trendic said he intially had set an arbitary deadline of about June 1 to collect the signatures but decided to make the effort open-ended because the board resisted his request not to proceed with signing a construction contract for the new clubhouse. But he acknowledged that the petition effort has not gone as quickly as he had hoped, with many residents requiring detailed explanations of the petitioners’ intentions

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before they sign on the dotted line. In addition to placing ads containing the petition in the May edition of the Progress, Trendic sent out 2,000 direct mail pieces with copies of the petition to non-resident owners. He has also launched a new organization, called START, to serve as an umbrella organization that is sponsoring these petition drives. Volunteers are continuing the effort to collect signatures, and Trendic believes an additional 200 or more can be obtained. The acronym START stands for strategic planning, transparency, accountability, respect and trust, all of which Trendic says are lacking in the board’s recent decision to approve up to $1.6 million in reserve spending for a new golf clubhouse. Trendic told a group of roughly 100 residents at an April 22 town meeting that he was not opposed per se to the golf clubhouse project. But he said a decision of such magnitude should be approved by all property owners in a referendum, preferably after the project was vetted and justified in a community strategic plan. No such plan exists, Trendic said. He also assured OPA members that the purpose of petitioning for and then holding a community referendum on the golf clubhouse was not “about getting out of the golf business.”

At the same time, he said one of his purposes is to educate the community on the costs of being in the golf business, which he said over the past ten year amount to $2.2 million before depreciation in golf operating losses and $6.4 million if depreciation is included. But Trendic said that over the past ten years, the OPA has spent $6.2 million in golf-related capital projects, a number he has been able to extract from monthly financial reports. rather than audited financial statements, which he suggested is a real defect in the OPA’s reporting of financial results. The total of $12.6 million in golf-related costs equates to $1,490 per property, Trendic said, Depreciation, not the best understood concept in the OPA’s accounting methodology, is a real cost imposed on property owners through the annual lot assessment, currently about $1.7 million as reflected in the annual contribution to the OPA’s replacement reserve fund. The replacement reserve is the funding source for the golf clubhouse and two additional capital projects approved by the board last month, a replacement cart barn and the expansion of the Administration building to accommodate a larger and modernized space for the Ocean Pines Police Department. Funding depreciation on OPA assets is the primary method the OPA uses to collect funds to pay for replacement capital expenditures. Trendic’s petitions do not target the cart barn or OPPD projects. While Trendic says he does not support closing the golf course or converting it some other use, he has long been on record as supporting the possibility of leasing it out. , he lease option. with the board.

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OCEAN PINES

June 2019 Ocean Pines PROGRESS

Plans still on track to remove crabbing pier in Whitetail Sanctuary

By TOM STAUSS Publisher lthough there reportedly was some last-minute reconsideration by directors for the pending removal of the Whitetail Sanctuay crabbing pier after appeals by Southside residents and former Director Slobodan Trendic at the June 1 Board of Directors meeting, it appears plans to remove the old pier remain on track, consistent with a board vote in May. Fisher Marine of Chincoteague, Va., was the low bidder for the project, at a cost of $22,500. General Manager John Viola told the Progress that a contract has been drawn for the project, but as of June 13 it had not sugned, Two other companies submitted proposals. Depending on how soon the contract is signed, work could begin before the end of the end of the month.

Some Ocean Pines Association directors following the June 1 apparently had reacted sympathetically to appeals from Southside residents at the June 1 board meeting to retain the pier. But sources say interest in revisiting the board’s decision last month lessened considerably when county officials informed the OPA that, should the pier be rebuilt, some sort of “controlled access” to the pier would be required by the county. The pier is now a community asset and accessible to the entire community until it was closed for safety reasons last year. The conversion into a community asset from an exclusive use asset for Sanctuary resident was the result of a turn-over to the OPA about 20 years ago. But under the terms of the original county approval it was an amenity for the exclusive use of Whitetail Sanctuary

Community donations

The Women’s Club of Ocean Pines recently announced the award of $1,450 in community donations for 2019. Recipients were the Ocean Pines Volunteer Fire Department (OPVFD), Coastal Hospice, the Ocean Pines Parks and Recreation Department; the Worcester County Veterans Memorial Foundation; and the Mid-Atlantic Symphony Student Outreach Program. Pictured left ro right are Mike Birckner of the Ocean Pines Volunteer Fire Department (OPVFD); Amy Wigglesworth of Coastal Hospice; Irene Daly, treasurer of the Women’s Club; Donna McCracken, president of the Women’s Club; Katie Goetzinger from the Ocean Pines Parks & Recreation Department; Mary Adair from Worcester County Veterans Memorial Foundation; and Linda Olsen from the Mid-Atlantic Symphony Student Outreach Program.

residents, and that seems to be the source of the county’s latest directive that a rebuilt pier would need some sort of controlled access.

How to accomplish that is not readily obvious, which is why the board seems unlikely to reverse its May decision.

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OCEAN PINES

June 2019

New golf clubhouse schematics released Operations continue at golf course despite May Country Club demolition A

loor plans, roof plans and building elevations for the new Ocean Pines golf clubhouse were delivered the week of June 10 by Salisbury architectural firm Davis, Bowen and Friedel, according to an Ocean Pines Association press release. B

Plans for the roughly 7,200 single-story building include a large meeting room and space for the Tern’s Grille restaurant, along with an outdoor deck, pro shop and club-fitting area. Construction on the new building is scheduled to start later this year. The former, two-story golf clubhouse was demolished in May. Absolute Demolition, which had recently finished work for the Town of Ocean City, oversaw the demolition. The Ocean Pines Board of Directors in April approved construction of the new building at a guaranteed maximum cost of $1.6 million. The Whayland Company, based in Laurel, Delaware, will oversee construction. An advisory team that includes General Manager John Viola, Association Vice President Steve Tuttle, builder Marvin Steen and contractor Frank Brown also contributed to plans for the new building. Despite the current lack of a golf clubhouse, operations continue at the course. More than $12,000 was raised for local students during the annual Ravens Roost tournament last month, and the 35th annual Ocean Pines-Taylor Bank Golf Scramble is set for July 17 at the Ocean Pines Golf Course, with proceeds benefiting junior golf programs and scholarships for local students. Golf operations have moved to a trailer and will remain there until the new clubhouse is completed. Food and beverage service and restroom facilities will be available during the interim. “The project remains on track and it’s been a real team effort to get us this far,” Viola said. “We’re excited for the new building and thrilled with the work Golf Director John Malinowski has done to keep the course running with only minimal disruption.” D

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Directors want detailed anaylsis of employee pay and benefits By ROTA L. KNOTT Contributing Writer n an effort to ensure that the Ocean Pines Association is providing effective compensation packages and payment structures for its employees, the Board of Directors is seeking a qualified firm to conduct a comprehensive compensation, job comparison, and benefit study service. Proposals are due to the OPA on June 14, with a contract to be awarded on July 6 and the final study due to the OPA by Sept. 10. During a June 1 Board of Directors meeting, Collette Horn offered a motion to direct the general manager to put out a Request for Proposals to solicit bids for a compensation study that analyzes the Ocean Pines Association’s pay and benefit structure for its employees. The study will review the current OPA offerings relative to the marketplace, offer recommendations regarding any adjustments justified by the findings, and make suggestions for implementation of adjustments in benefits and pay going forward. As background for her motion, which carried unanimously, Horn said the OPA has received two pay studies that looked at pay only. One study was conducted internally, and one was conducted by an outside firm. During the past two budget cycles the board approved changes in benefit structure affecting employee contributions to health care coverage and employer contributions to 40lK plans. “With both of those changes the Board acknowledged the need to secure information about the competitiveness of our compensation package (both pay and benefits) in the marketplace, and to determine what adjustments may be needed. This motion is intended to address that need. The current year’s budget contains funds to secure a compensation study,” Horn said. She said time is of the essence in approving and distributing the RFP so the results of the compensation study can be available for consideration in the OPA’s fiscal year 2020 budget process beginning in September. -

The OPA employs about 150 fulltime, part-time and seasonal emal employees. While the OPA does have a set of salary and benefits, it is unsure if it has the appropriate full compensation package for its employees. The association’s objective is to provide a safe, stable, supportive work environment while compensating staff in a fair market driven levels which allows it to compete and retain critical personnel. Director Tom Piatti asked how many of those employees are salaried exempt versus non-exempt workers under employment law. John Viola, OPA general manager, said there are about 70 exempt employees. Piatti said it “sure would be great” for a company that understands the culture on the Eastern Shore to conduct the compensation study. “We’re different.” Horn said that in the process of formulating her motion she interviewed companies that do this work, and found there are a number of companies that include data on the Eastern Shore. However, she recognized that “I understand having the business here has a different cultural sensitivity.”

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OCEAN PINES

June 2019

Daly launches discussion of county permitting issues Some residents bypass OPA in obtaining county permits By ROTA L. KNOTT Contributing Writer lack of communication between the Ocean Pines Association and Worcester County’s construction permitting office has resulted in the issuance of permits at the county level without the consent of the Compliance, Permitting and Inspections office. After being informed of the issue, Director Frank Daly during a June 1 Board of Directors meeting called for an improved relationship between the two permitting entities. Daly placed the topic on the board meeting agenda as an item for discussion of “permitting issues with Worcester County.” He said the Architectural Review Committee brought the matter to his attention after cases of property owners receiving permits from the county’s Department of Development Review and Permitting and proceeding to complete their proj-

ects without even applying for a permit from Ocean Pines. “The Architectural Review Committee has requested that the Board discuss, bring to the attention of the GM and resolve with Worcester County certain permitting issues,” Daly said. He added that according to the ARC the county has issued building permits to residents of Ocean Pines for certain construction projects that have been in violation of the applicable Ocean Pines Declarations of Restrictions. “The ARC Committee made me aware of this situation at a recent meeting. I am requesting that the GM review this situation with Public Works and the county to see what can be done to prevent this from happening in the future,” Daly said. Director Steve Tuttle said when he built a new deck he had to go to both the county department and the OPA to get the required permits. He said he thought the OPA was able

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to review every request for a permit within Ocean Pines. Daly responded that there are times when property owners go directly to the county first for their permit and start work without approval from the OPA. “This doesn’t seem to be something that happens an enormous number of times,” Daly said. However, when it does happen and a property owner gets a permit for something from the county but not Ocean Pines then it becomes a violation of the OPA’s governing documents. When ARC tries to enforce the regulations, the property owners respond that they have a county permit. Daly said the issue needs to be addressed, but added that it seems like one of a need for improved communications between the county office and CPI. OPA President Doug Parks agreed and said “really what is boils down to I guess is just to make sure

that there’s maybe a better line of communication between ARC and the county or our administration and the county.” He said the OPA needs to open the dialog with ARC and “get input on what can be done.” Parks volunteered Director Tom Piatti, who he called out as a neutral board member, to reach out to ARC to discuss the issue further. He said Piatti should ask for feedback from committee members about how to address the issue and determine if there are any actions the OPA can take to facilitate the relationship.

Compensation study From Page 20 OPA President Doug Parks said the RFP is not limited to firms from outside the Eastern Shore. The bid process is open to all. The RFP states that the OPA wants to offer a cost-effective, competitive pay structure and adopt a fair and equitable transition to a revised structure. The study must measure and provide an analysis on base base salary, pay and step plans, employer-provided medical benefits, vacation and other incentive-based options.

WORCESTER COUNTY

June 2019 Ocean Pines PROGRESS

County increases property taxes rate by a penny, income tax by half percent By ROTA L. KNOTT Contributing Writer n order to pay for an increase in expenditures of more than $11 million for fiscal year 2020, the Worcester County Commissioners have hiked the property tax rate by one cent and the local income tax by a half percent. The commissioners on June 4 approved the $201,285,552 operating budget, which reflects an increase of $11,254,833 or 5.9 percent more than the FY19 budget. Significant increases in budgeted expenditures for FY20 include an additional $4.5 million in additional funding for Other Post-Employment Benefits to address the requirements for county and Board of Education employees, $3.0 million for the Board of Education operating expenses and new debt service for the Showell Elementary School, $1.6 million for waste collection at homeowner convenience centers and recycling operations, $1.1 million more for public safety including new radio equipment and increased funding for volunteer fire and ambulance companies, and $.6 million for parks projects. The commissioners included a cost of living adjustment, step increment or longevity pay in salary accounts for all eligible county employees and the Board of Education. To cover the cost of all of these extra expenses, the county will increase the real property tax rate by one cent to 84.5 cents per $100 of assessed value effective July 1, 2019. Based on the Real Property tax rate of .845 cents net property taxes increased by more than $5 million. The Homestead Property Tax Credit cap remains unchanged at 3 percent and will be $1.264 million for the county’s qualified principal resident homeowners effective July 1. The county’s local income tax rate will increase from 1.75 percent to 2.25 percent effective Jan. 1, 2020. Revenues are anticipated to increase by $3.5 million in FY20 based on estimated receipts. Other local taxes increased by $549,000 based on current year estimates and includes an increase of $75,000 in admission and amusement taxes, $250,000 in transfer taxes and $3,000 in food tax admin-

istration. Recordation tax increased by $162,000 with deeds being processed by the Treasurer’s Office beginning in 2020. Room tax administration increased by $9,000 and room tax receipts increased by $50,000 for unincorporated areas taking into account the construction and rebuilding of new hotels and the availability of rooms. State shared revenues increased $613,709 based upon estimated

highway user fees, licenses and permits increased $449,475, charges for services increased by $275,095, interest on investments increased $425,000 based upon projected rates of return. Federal grants project an overall decrease of $2,184 due to declines in estimates for the US Fish and Wildlife revenue, but state grants increased $1,301,471, which includes $461,749 from Program Open Space for parks, $180,716 in Waterway Im-

provement Funds for boat landings; $824,881 state aid for bridges, and $239,000 for a state grant for parks. Planned use of Casino/Local Impact Grant and Table Games revenue increased by $831,611 overall; additional Casino grant funds of $264,900 will be used to increase the debt payment for the Worcester Technical High School in FY20, and Table Games revenue of $566,711 will be used for public safety expenditures to benefit the county. The county allocation for the Board of Education’s operating budget is more than $91.63 million, an increase of $4.175 million over the current year budget.

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FORENSIC AUDIT

June 2019

Auditors clear Finance Department employees of complicity in missing $27,000 Auditors say loss ‘may relate’ to bank employees not following prescribed cash-mangagement procedures By TOM STAUSS Publisher wo Ocean Pines Association Finance Department employees were effectively exonerated of any involvement or complicity in $27,632 in bank deposits that went missing in 2017, according to a just released forensic audit report on OPA food and beverage activities by Gross Mendelsohn. In the report’s executive summary, the auditors said that during July and August 2017, 19 bank deposits totaling $26,550.49 went missing and two bank deposits were short $1,082, resulting in a loss totaling $27,632.49. “Our investigation of the missing bank deposits did not uncover any evidence that any of the missing money was taken by any OPA employee,” the report said. “The two finance department employees who handled the cash receipts and bank deposits both passed lie detector tests administered by the Worcester County Bureau of Investigation (WCBI). “Based on our investigation of the records obtained from OPA’s

bank, there is evidence that the bank’s procedures were not following by bank employees in the processing of OPA deposit bags on dates when it is likely that missing bank deposits would have been taken to the bank,” according to the report. In its conclusion, the report stopped short of attaching blame on the bank for the missing funds. “There is a possibility that that the missing deposits may relate to bank employees failing to follow the bank’s procedures,” the report said, having extensively detailed ways that could have happened earlier in the report. The auditors reference the bank’s official position that it was not responsible for the missing funds, although at one point the report says that the bank’s security officer acknowledges that standards procedures for handling cash were not followed in certain instances. Copies of the forensic audit are available at www.issuu/oceanpinesprogress for a detailed look at where the auditors contend the bank may have deviated from standard operating procedures with respect to han-

dling of cash. The report also mentioned that at one point during the investigation the auditors and the OPA had to subpoena bank records, after which the bank produced the records. In addition to the missing bank deposits, the auditors detailed a theft of Yacht Club petty cash by a former food and beverage manager, “who confessed and was terminated. The petty cash fund theft was $5,262, but after applying the manager’s final paycheck, the loss to OPA was was $2,484.” The auditors said their investigation “did not identify any other fraudulent activity” related to the OPA food and beverage operations during the examination period, from May 1, 2016, to April 30, 2018. The total loss to the OPA from missing or stolen funds during that period was roughly $30,000. But the report devoted considerable space to mismanagement at the Yacht Club and Beach Club during that period that contributed to substantial operating losses at both amenities.

“Based on information we obtained through intervies and our analysis of the payroll expenses at the Beach Club and Yacht Club, it appears that management was not properly managing, minitoring or controlling the restaurant operations during the 2017,” the auditors say. The auditors made some recommendations to avoid the operational losses at OPA food and beverage amenities in the future: • The accounting manager should verify the accuracy of each completed deposit ticket submitted, including counting the currency and examining checks to verify agreement with the amounts on the deposit ticket and verifying the determination of the total deposit. • The accounting manager should retain a copy of each deposit ticket sent to the bank, noting the deposit date and initialing the copy to document that they verified the accuracy of the amounts on the deposit ticket. • The accounting manager should review all cancelled checks returned with the bank statement each month and determine whether checks issued for amounts exceeding $15,000 contain two authorized signatures as required. • Budgets should be realistic projections of expected revenue and expenses and there should be detailed support for all significant budgeted amounts. • The finance department should perform periodic surprise counts of petty cash funds and document that all funds have been properly accounted for through cash counts and verification of documented expenditures not yet replenished. • All disbursements of petty cash funds must be supported by a receipt, signed by the recipient and with the recipient’s tax identification number noted. There have been questions raised whether the OPA has been removing funds from its Bank of Ocean City accounts as a result of the forensic audit, but in a press release issued by the OPA June 11 John Viola said that was not the case. He said the OPA had begun depositing funds in its other primary banking institution, Union Bank, as CDRs matured well before the completion of the forensic audit in late May. He said the purpose of the redirected investments was to obtain better yields, not in retaliation for any perceived unhappines with the bank for the missing funds.

FORENSIC AUDIT

June 2019 Ocean Pines PROGRESS

Auditors critique practices of Public Work Department

ing been obtained for the goods and services purchased from that vendor. • There were six dates on which the vendor issued multiple invoices, and on four of those dates the invoices issued totaled more than $5,000. • On one of the dates when two invoices were issued, the auditors “noted that one item on both invoices had the same description and amount billed. We also noted other invoices where items were billd reflecting the same description which appears on another invoice issued within the same week. These could be duplicate billings, but without any supporting documents, it is not known whether there were multiple deliveries of the same materials to support the amounts invoiced.” • No supporting documents were included with the invoices such as delivery receipts for materials * signed by an employee at the site of the delivery, and daily work tickets with details toCnty the Prince Georges Md work per(Name ofas Muni Bond) formed and signed by an employee 98.500 Price:the (00.00) who verified work was completCoupon: (00/00/00) 3.25 ed (00/00/00) • Maturity ManyDate: of 07/15/2036 the invoices did not 07/15/2028 Callable Date: or the N/A) date and provide details(00/00/00 such as Prince Georges Cnty Md (Name of Muni Bond) 100 Call Price: (000) location of the materials delivered

$137,000 in services were purchased from a company owned by a relative of the Public Works director, but that arrangedment ended in May of 2017

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section titled recommendations and conclusions, appeared to lay some responsibility for the practice of purchasing services from a relative of the Public Works on the Finance Department. The auditors said the Finance Department should be the “watchdog” over such practices and also noted that the OPA at the time lacked a written policy governing or precluding such practices. Public Works Director Eddie Wells, well thought of within the OPA, remains on the job with no indication that his job is in jeopardy. “Many of the purchases from that vendor were for items required on a frequent recurring basis basis and in the aggregate exceeded $5,000, but there was no documentation of three written competitive gids having been obtained as required” by the financial policy manual, according to the auditors. “Many of the / AAA Rating: Aaa (XXX/XXX) invoices lacked details and no supOther: 98.500 (Obligor) Price: (00.00) porting documents were included * with the invoices.” Coupon: 3.25 (00/00/00) The OPA ceased doing business Carrie Dupuie, AAMS University Md Sys Auxiliary (Financial Advisor Financial Advisor Name) 07/15/2036 (00/00/00) with that vendor in May of 2017, Maturity Date: (Approved Title) Prince Georges Cnty Md (Name of Muni Bond) Fac &215 North Tuition Main Street Rev but from January 2016 through Berlin, MD 21811 07/15/2028 (Address) or N/A) 98.500 Price: (00/00/00 (00.00) 410-208-1704 May 2017 the OPA paid out to that Callable Date: (City, ST 00000) Carrie.Dupuie@RaymondJames.com Coupon: 100 (00/00/00) 3.25 (000-000-0000) I (Toll-Free: 800-000-0000) vendor $139,375, the auditors said. Call Price: (000) (000-000-0000) 4/01/2039 MaturityDue Date:Fax:07/15/2036 (00/00/00) The auditors make no allegations of (E-mail Address) / AAA 07/15/2028 Rating: (XXX/XXX) Callable Date: Aaa (00/00/00 fraud or theft by the Public Works (Website) or N/A) Callable 04/2029 Call Price: 100 (000) director during that period, but Other: Aaa / AAA 100 Rating: (XXX/XXX) Call(Obligor) Price clearly indicated discomfort with * Other:%(Obligor) the practice. (0.00%) TAX-FREE 3.25 TAX-FREE* Rating Aa1/AA+ The firm noted that: 06/07/2018 **As As ofof00/00/00. Prince Georges Cnty Md (Name ofThe Muni Bond) to availability and price change. Minimum purchases may apply. yield is the lesser of yield to maturity or yield to call. Interest is generally exem • All of the invoices were ap-Subject from federal taxation and may also be free of state and local taxes for investors residing in the state and/or locality where the bonds were issued. Howev AAMS bonds may be subject to federal alternative minimum Carrie tax (AMT), and Dupuie, profits and losses on tax-exempt bonds may be subject to capital gains tax treatme Carrie Dupuie, AAMS (00.00) by Moody’s/Standard & Poor’s. A credit ratingPrice: of a security 98.500 is not a recommendation to buy, sell or hold the security and may be subject to revie proved by the Public Works director,Ratings (Financial Advisor Name) revision, suspension, reduction or withdrawal at any time by the Financial assigning RatingAdvisor Agency. Insurance pertains only to the timely payment of principal and int (00/00/00) No representation is made as to(Financial any insurer’sCoupon: ability to meet its3.25 financial commitments. Ratings andName) insurance do not remove market risk since they Advisor (Approved Title) Financial Advisor except for one approved by the for-est.not guarantee the market value of the bond. 215 North Main Street Maturity Date: 07/15/2036 (00/00/00) Securities offered through Raymond James Financial Services,Berlin, Inc. member FINRA/SIPC. MD 21811 (Approved Title) (Address) or mer controller. 07/15/2028 Callable Date: (00/00/00 N/A) 215 North Main Street 410-208-1704 ST 00000) 100 Call Price:(City, (000) • The invoices were for purchasCarrie.Dupuie@RaymondJames.com (000-000-0000) I(XXX/XXX) (Toll-Free: 800-000-0000) Berlin, Aaa /MD AAA 21811 Rating: (Address) es and hauling of various types of Fax: (Obligor) (000-000-0000) Other: 410-208-1704 (E-mailST Address) (City, 00000) stone, gravel, topsoil, etc., and for (Website) Carrie.Dupuie@RaymondJames.com services such as leaf removal, tree (000-000-0000) I (Toll-Free: Carrie Dupuie, AAMS 800-000-0000) (Financial Advisor Name) removal etc. (Approved Title) Fax: (000-000-0000) • The invoice amounts were all (Address) (E-mail (City, STAddress) 00000) less than $5,000, except for one in*As of 06/07/2018 (000-000-0000) I (Toll-Free: 800-000-0000) (Website) * As of 00/00/00. Fax: (000-000-0000) the amount of $5,175. The financialSubject to availability and price change. Minimum purchases may (E-mail Address) apply. The yield is the lesser of yield to maturity or yield to call. Interest is generally exem from federal taxation and may also be free of state and local taxes for investors residing in the state and/or locality where the bonds were issued. Howev (Website) may be subject to federal alternative minimum tax (AMT), and profits and losses on tax-exempt bonds may be subject to capital gains tax treatme policy manual “states that purchasesbonds Ratings by Moody’s/Standard & Poor’s. A credit rating of a security is not a recommendation to buy, sell or hold the security and may be subject to revie suspension, reduction or withdrawal at any time by the assigning Rating Agency. Insurance pertains only to the timely payment of principal and int costing $5,000 or more and purchas-revision, est. No representation is made as to any insurer’s ability to meet its financial commitments. Ratings and insurance do not remove market risk since they not guarantee the market value of the bond. es for items required on a frequentSecurities offeredSubject through Raymond James Financial Services, Inc. member FINRA/SIPC. to availability and price change. Minimum purchases may apply. The yield is the lesser of yield to maturity or yield to call. Interest is generally exempt from federal taxation and may recurring basis which in aggregate also be free of state and local taxes for investors residing in the state and/or locality where the bonds were issued. However, bonds may be subject to federal alternative tax (AMT), and exceed $5,000 “require written comprofits and losses on tax-exempt bonds may be subject to capital gains tax treatment. Ratings by Moody’s/Standard & Poor’s. A credit rating of a security is not a recommendation to *As of 06/07/2018 petitive bids. Many of the purchases buy, sell or hold the security and may be subject to review, revision, suspension, reduction or * As of 00/00/00. withdrawal at any time by the assigning Rating Agency. Insurance pertains only to the timely payment of principal and interest. No representation is made to any insurer’s ability to meet its from that vendor were for Subject items reto availability and price change. Minimum purchases may apply. The yield is the lesser of yield to maturity or yield to call. financial commitments. Ratings and insurance do not remove risk since they do not guarantee from federal taxation and may also free ofvalue stateof and local taxes for investors residing in the state and/or locality where the b thebemarket the bond. quired on a frequent recurring basis bonds may be subject to federal alternative minimum tax (AMT), and profits and losses on tax-exempt bonds may be subject to Securities offered through Raymond James Financial Services, Inc., member FNRA/SIPC. Ratings by Moody’s/Standard A credit rating of a security is not a recommendation to buy, sell or hold the security an but there was no documentation of & Poor’s. (c) 2015 Raymond James Financial Services, Inc., member FINRA/SIPC 15-MFI-0113 ICD BS 8/15 revision, suspension, reduction or withdrawal at any time by the assigning Rating Agency. Insurance pertains only to the timely pa three written competitive est. bids havNo representation is made as to any insurer’s ability to meet its financial commitments. Ratings and insurance do not remov

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compliance with its policy requring Board [of Directors] ap[proval for purchases of capital purchases of capital improvements of $15,000 or more on three out of 23 transactions (13 percent failure rate). OPA failed to have two authorized signatures on six out of 35 checks with an amount of excess of $15,000 (17 percent failure rate). Gross Mendelsohn discovered that the Public Works Department made purchases of goods and services “from a business owned by a relative of the Director of Public Works, and the owner of that business is [was] also the spouse of an OPA employee. All but one of the invoices from that vendor were approved by the Director of Public Works,” according to the auditors. The firm made no specific allegations of wrong-doing by the Public Works director and indeed, in a

By TOM STAUSS Publisher he Public Works Department came in for some pointed criticism by Gross Mendelsohn, the forensic auditing firm that recently completed a forensic audit of Public Works and food and beverage operations at the Ocean Pines Yacht Club. According to the auditors, the Public Works Department or the OPA generally frequently failed to comply with the OPA’s financial management policy manual with respect to purchasing and contracts during the test period of May 2016 through April 30 of last year. “OPA failed to document compliance with its policy requiring three written bids be obtained for purchases of $5,000 or more on 108 out of 119 transactions (91 percent failure rate). OPA failed to document

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FORENSIC AUDIT

June 2019

Public Works From Page 25 or work performed, and the quantity of materials delivered. • Supporting documentation for two of the purchases were estimates, not invoices. • The vendor invoices issued to the OPA during the period from Feb. 1, 2017, through May 10, 2017, were all sequentially numbered, which would appear to indicate that all of the vendor’s invoices during that time period were to the OPA. Also during its investigation, the auditors “became aware that one of the employees in the Public Works Department is a relative of the Director of Public Works. We noted that the director is the employee’s supervisor and performs the employee’s annual performance evaluations, which includes making recommendations for salary changes. We reviewed the employee’s personnel file and determined that the employee’s hourly rate is consistent with other employees pay rates. However, we believe that employees should not be supervised and evaluated by a relative.” The auditors evaluated the department’s cash management practices and found no major problems.

OPA already implementing recommendations in Gross Mendelsohn forensic audit report Purchasing, bid procedures targeted for reform

he Ocean Pines Association is taking action to address recommendations made by Gross, Mendelsohn and Associates in its recently released forensic audit. “The board and I have reviewed and are taking very seriously the information included in the forensic audit,” General Manager John Viola said in an OPA press release. “We have already taken several steps to tighten up the oversight of association finances and have addressed virtually all of the Gross, Mendelsohn recommendations, which Finance Director Steve Phillips is taking a leadership role on.” OPA President Doug Parks noted many of those items were addressed several years ago, based on the results of a “deep-dive” audit commissioned in 2017. “I want to ensure the public that the finance team has been proactive in addressing these concerns, and that John Viola and Steve Phillips have already implemented a number of changes to our processes and procedures some time ago, based on the ‘deep dive’ audit,” Parks said. Gross, Mendelsohn recommendations included having the accounting manager verify the accuracy of each completed deposit ticket, retaining a copy of each deposit ticket sent to the bank, reviewing all canceled checks, and ensuring checks issued for more than $15,000 contain two authorized signatures. The firm also called for more realistic budgeting, for the finance department to perform periodic surprise counts of petty cash funds, and for petty cash disbursements to be supported by a receipt and signed by the recipient. Conclusions and recommendations based on the public works forensic audit identified “several findings of noncompliance with OPA financial policies,” as well as purchases made from a business owned by a relative of the public works director and the spouse of an association employee. The report also identified a public works employee related to the public works director. According to Gross, Mendelsohn’s recommendations, “The Finance Department should require that all documentation of written bids and Board approval … be submitted along with the approved purchase order and vendor invoices (not estimates), before payment is issued.” The report recommended not releasing any check for more than $15,000, unless the check is signed by two q

26 Ocean Pines PROGRESS

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June 2019 Ocean Pines PROGRESS

Forensic audit recommendations

Controlled release

From Page 26 authorized signers, and establishing written policies to seek at least three written bids for purchases made on a frequent basis. Gross, Mendelsohn also recommended increasing the threshold for purchases requiring three written bids from $5,000 to $10,000. The firm called for written policies for purchases and contracts involving vendors who are relatives of association employees or board members, and written policies for employing relatives of association employees or board members. According to the report, “It is our understanding that some of the above-listed recommendations have already been implemented.” To address the personnel issues, General Manager John Viola has formed a working group to review the association handbook, which already includes a section on “Employment of Relatives.” According to the handbook, “members of your immediate family will be considered for employment based on their qualifications,” but immediate family will not be considered if employment would “create a direct supervisor-subordinate relationship with a family member, have the potential for creating an adverse effect on work performance [or] create either an actual conflict of interest or the appearance of a conflict of interest.” A human resources attorney was consulted about the matter and provided an opinion that Ocean Pines’ current policies comply with the law. It was also determined that no employees working for Ocean Pines directly report to a supervisor they are related to. “We have closely reviewed potential conflicts regarding the employment of relatives and expect a report from our work group to be forwarded to the board of directors for action,” Viola said. “Our human resources attorney is developing a script for us to perform training on the employment of relatives, which will be conducted on a department by department basis, and some changes to the employee handbook and our policies may be necessary, going forward.”

From Page 1 made available to all homeowners as quickly and conveniently as possible,” Daly said in making his motion. Director Tom Piatti, who said Daly’s proposed distribution method was too complicated and a waste of mone, offered a friendly amendment to the motion. Daly accepted it and was ultimately approved by the board. It simply required property owners to submit a written request for a hard copy of the forensic audit. Property owners can submit those requests via either physical written request or email. Piatti’s amendment to the motion carried in a 5-0 vote, while Daly’s motion as amended passed in a 4-1 vote with OPA President Doug Parks as the lone dissenter. Piatti opposed requiring property owners to use a mailed reply card to get a copy of the forensic audit. He called that a waste of money and said most of the reply cards would end up in property owners’ recycling bins. His amendment to Daly’s motion called for staff printing a minimum

of 25 copies of the full un-redacted forensic audit for pick up by OPA members at the association’s office beginning June 5. Copies can also be mailed to members upon written or email request. In making his amendment to the motion, Piatti specified that there would still be no posting of the document on the Internet, by which he probably meant the OPA’s Web site. “That’s not proper,” he said, adding the OPA is complying with the Maryland Homeowners Association Act by providing access to the report, which is actually in two parts, one devoted to food and beverage operations and the other the Public Works department. The two-part report has been posted on the Internet, however, by oceanpinesforum.com and www. issuu/oceanpinesprogress.com, both of which are owned and maintained by Ocean Pines property owners. Daly said that “because of the nature of this audit and what its intended to do and what is has successfully done, we have to walk a very fine line and the very fine line is this: As a homeowner that pays an assessment you are entitled to that q

FORENSIC AUDIT

28 Ocean Pines PROGRESS

FORENSIC AUDIT

June 2019

Controlled release From Page 27 report under the Maryland HOA act. But because it identifies exactly what I told you it did, we cannot distribute it widely and just throw it on the Internet or send a copy to somebody down in South Carolina without incurring some legal risk on the part of the association. That’s exactly the reason for the controlled distribution.” Daly later told the Progress that the legal risk involves the disclosure of information about the Bank of Ocean City, a local bank with which the OPA has had funds on deposit for many years. While the audit report stops short of blaming the bank for missing funds, carefully concluding that bank employees may have mishandled OPA cash deposits, several pages within the food and beverage portion of the audit seem to leave little doubt where the auditors believe fault lies. The report even cites the bank’s security officer as confirming that cash deposits were mishandled, although elsewhere in the report there is a reference to

the bank’s official position declining to accept responsibility for missing funds in the amount of roughly $28,0000. There is also reference to what appears to be the bank’s reluctance to turn over certain request documents. The documents were eventually issued after a subpoena was obtained to acquire them. Daly said the OPA’s former acting general manager, Brett Hill, made accusations of widespread theft, corruption and fraud within the ranks of the association. These accusations resulted in the board authorizing a forensic audit, conducted by Gross, Mendelsohn and Associates, of the food and beverage operation as well as the Public Works department. As it turns out, the assertion of widespread theft, corruption and fraud was not verified by the auditors, although lax procedures in certain instances were detailed. In the context of million of dollars that flow through the OPA and its local banks each year, the missing funds constitute a relatively small percentage. The auditors also cite a theft from

petty cash from the Yacht Club of roughly $5,000, more than half of which was recouped from the former food and beverage manager who confessed to the theft. Significantly, two employees within the OPA’s finance department were specifically exonerated by the auditors of any involvement in the missing funds, which occurred during the summer of 2017. “Look. The audit’s done. It’s cost $200,000. For the better part of two years everybody in this association from the board on down has operated under this fear or under a cloud of suspicion of theft, corruption and wrong doing. The purpose of a forensic audit is to determine whether or not a crime has been committed. If crimes have been committed who did it, when, how, where? Possibly why? It’s done, it’s time for you to read it,” he told property owners at the June 1 meeting. “The most important thing that you have is faith and trust that when you give us money that from the time of collection to the time of disbursement it has been handled properly and efficiently and to your

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best interest,” Daly said. Parks opposed altering the OPA’s process for the release of information to the membership for the forensic audit report. “I’m not in favor of doing anything out of the ordinary. I strive for consistency,” he said. The OPA doesn’t provide a special mailing or process for requesting other association documents like contracts or requests for proposals, Parks said. He added there’s a mechanism in place by which members can request information from the OPA that complies with both association and Maryland Homeowners Association Act requirements. “If you want information, you request it and its provided to you,” he said, adding “at the risk of diminishing the importance of the forensic audit, I treat it as just another one of the documents that’s collateral for this organization. If you want the information, please request it. It’s that simple.” Parks said he was not in favor of creating something special just for this particular document because the board would be setting a precedent by doing so. Discussion about controlled release of the forensic audit findings

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OPA FINANCES

June 2019 Ocean Pines PROGRESS

OPA records $130,000 operating surplus for 2018-19 Still subject to final audit, positive variance represents significant turn-around from prior year’s record deficit By TOM STAUSS Net operating results by Ocean Pines Association Department Publisher April 1 through April 30, 2019 hat a difference a year makes. Having lost roughly $1.2 million in the 2017-18 fiscal year, the Ocean Pines Association could hardly afford another year awash in red ink. Indeed, it didn’t happen. According to the unaudited financial statement for this past April, the final month in the 2018-19 fiscal year, the OPA recorded an operating surplus of just over $130,000, a financial turn-around of monumental if not historic proportions. Although both the Yacht Club and golf operations lost money this past year, those losses were more than offset by steller performance in marina operations, Beach Club parking and food and beverage operations, and Aquatics. The Yacht Club lost $81,170 for the year, slightly more than earlier projections. Golf lost $106,562, about $25,000 more than the most recent end-of-year projections, and the Tern Grille almost broke even, losing $1,265 for the year. But when combined, golf and Tern Grille operations did better than budget. Golf missed its year-end loss projection by a mere $1,789, while Tern Grille exceeded its budget by $10,045. Given some almost biblical rain Source: OPA Finance Department; results exclude New Capital expenditures patterns throughout the year, the loss could have been much worse. $1,399, ahead of budget by $695. Treasurer John Viola in remarks than others. The Yacht’s Club’s $81,170 loss Parks and Recreation was a solid he made at the June 1 Board of Reserve summary -- As of April was still better than budget in performer relative to budget for Directors meeting. Consulting 30, the OPA had $8.836 million in rethe amount of $11,781, and that the year, with a $120,050 positive services include expenses related to serve accounts, comprised of $5.257 includes bonuses to the Matt Ortt variance. The department generates the just concluded forensic audit. million in the replacement reserve, Companies for exceeding adjusted revenues in program and class For April, combined golf and $2.48 million in the bulkhead and budgetary and performance goals. fees, but historically that never has Tern Grille operations made money waterways reserve, and $1.1 million Marina operations generated been sufficient to offset operating for the OPA, while the Yacht Club in the roads reserve. a $209,399 surplus for the year, expenses. It’s set up as a department ended by the year with a $49,515 Balance sheet -- The OPA bal$25,293 better than budget. Beach substantially subsidized by lot loss for the month. ance sheet as of April 30 showed Club parking produced $343,403 assessments. May looks much better, according $12.41 million in short-term investin net revenues, $51,372 better Even so, the positive variance to to Viola, with indications that ments, compared to $9.72 million than budget. Beach Club food and budget in excess of $100,000 last the Memorial Day weekend was year-over-year. beverage operations earned $97,444, year is noteworthy. particularly profitable. Operating cash of $2.2 million missing budget by $3,564. Non-amenity departments were The reported April numbers are compared to $3.57 million year-overAmong the amenities, Aquatics a mixed bag. Departments that subject to change, as the OPA’s year. was second behind Beach Club exceeded budgfet included the Police auditing firm has commenced with Total assets were $41.23 million, parking in its positive variance Department, which had a $91,230 the annual audit. balanced by $10.95 million in liabilrelative to budget. With a surplus positive variance for the year; That process normally results in ities and $30.28 million in owners of $149,698 for the year, Aquatics Finance, with a $36,310 positive some adjustments, some years more equity. exceeded budget by $29,958, aided variance; Fire and EMS, with a by strong swim lesson and program $17,377 positive variance; Public fees and a one-time adjustment in Works, with a $45,346 positive Period Ending April 30, 2019 debit card revenues from prior years. variance; and Compliance, Permits Even with that one-time adjustment and Inspections, with a $45 positive -- debit card revenues currently are variance. being recorded when sold to users General administration missed -- Aquatics would have made money its budget by $89,752, the general for the year. manager’s office by $90,160, Racket sports produced a net loss membership by $5,549, Public for the OPA last year, although both Relations by $1,503, and general platform tennis and pickleball were maintenance by $87,036. in the black. Tennis lost $29,528, Among the factors that missing its budget by $13,511. contributed to these misses were Platform tennis was in the black excessive expenditures for legal by $173, behind budget by $2,942. and consulting services, according Pickleball was spot on, earning to OPA General Manager and Source: OPA Finance Department

Reserve Summary

30 Ocean Pines PROGRESS

OPA FINANCES

June 2019

Pines leadership vows to evaluate portion of waterfront differential that’s supposed to be allocated to canal dredging Property owners raise issue of whether funds have been used for their intended purpose

he Ocean Pines Association Board of Directors, General Manager John Viola and members of the Budget and Finance Committee during the next budget process will review the portion of the waterfront differential that is supposed to be allocated to dredging of canals in Ocean Pines. The disclosure was made in a June 12 OPA press release. The waterfront differential in Ocean Pines paid by most waterfront owners is $465, of which $90 is supposed to be allocated to canal dredging. Questions have been raised about whether that has occurred or whether that portion of the waterfront differential has been used for bulkhead repair and replacement instead. Viola, OPA President Doug Parks, Operations Director Colby Phillips,

Budget and Finance Committee Chairman Larry Perrone and Assistant Treasurer Gene Ringsdorf on June 12 with two concerned citizens to discuss the issue. Public Works Director Eddie Wells and Public Works Operations Manager Nobie Violante were also consulted on the matter. Richard Marchesiello and his wife, Pat, said they were worried the funds, collected for roughly the last 20 years, were not being used for the intended purpose. According to Ringsdorf, the dredging differential was originally $50, but it gradually increased and has remained $90 for some time. He said about $500,000 in total was collected during the last two decades and that money went into the bulkhead reserve, which currently totals about $2.5 million.

Perrone said the funds have largely been used for “spot dredging,” or dredging as needed rather than operating on a schedule, and he noted Ocean Pines is responsible for maintaining its canals, which also includes upkeep of signage and other items in the waterways. The dredging work is done by the U.S. Army Corps of Engineers, a national agency that since 1890 has been charged with regulating activities in the nation’s waterways. The passage of the Clean Water Act in 1972 greatly broadened this role by giving the Army Corps authority over dredging, among other areas. According to Phillips, dredging requests are passed on from Ocean Pines lot owners to the Army Corps, which has the final say on work performed. She said requests so far this year, if approved, would total about

$55,000. Apparently, no work was done last year. Marchesiello estimated about $145,000 each year is collected from 1,600 waterfront lot owners, meaning it appears much more is collected than used. He suggested once a reserve is established and it is determined how much funds are needed each year, collections can then be reduced or possibly even eliminated. Viola vowed that both the collections amount and fund level would be evaluated during the next budget process, and he asked Marchesiello to be a part of that discussion. Marchesiello said he had written letters “well over a year ago” that had been ignored, but praised the current action, and especially Phillips for taking a lead on answering his questions. “This time, it was addressed and very promptly,” he said. “I appreciate this and I’m impressed.” “The reason you’re seeing the responsiveness is because the board and the staff and committees are working very closely,” Perrone said. “We’ve got a lot of people with a lot of talent in this community and John’s [Viola] tapping into that.”

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OPA FINANCES

June 2019 Ocean Pines PROGRESS

Finance resolution amendments approved for reserve accounts, delinquent assessments By ROTA L. KNOTT Contributing Writer mendments to a pair of resolutions that govern Ocean Pines Association financial operations were approved by the Board of Directors on second reading during a June 1 meeting. One resolution changes the threshold for reserve expenditures and the other modifies the provisions for addressing delinquent property assessments. F-04 establishes a policy for the collection of delinquent annual assessment charges and has been amended to address the levying of interest charges on the past due amount. The OPA’s Declarations of Restrictions and Articles of Restatement cite actions that the board is authorized to take for the collection of delinquent assessments including establishing an annual interest rate to be charged on unpaid assessments. During first year of delinquency the OPA will send a series of letters notifying the member of delinquency with request for payment, which will include interest calculated at the annual rate established each year by the board, notice of suspension of recreation/amenity privileges, and a timetable of future actions that will be taken should payments not be forthcoming. If action isn’t taken by the mem-

ber to pay the past due amount, the OPA will place a lein on the property by November of that same year. By March 1, a review meeting including, the treasurer, a member of the Budget and Finance Advisory Committee, the general manager, the director of finance and the assessment supervisor will take place “to review the process to determine the effectiveness of the association’s current assessment collections strategy and determine what, if any, further actions should be taken by the association. An update will be provided to the Board of Directors on the overall assessment status, and to make any recommendations to improve or change our policy.” During subsequent years of delinquency, the OPA will foreclose on the properties of delinquent members except for those properties where the association considers it in its interest not to do so. This decision will be based on the recommendation from the review conducted during March of each year. Director Collette Horn said the resolution should specify that it is the board that will make that decision, not a review committee. OPA President Doug Parks said the language implies that the board that will make the decision. Horn said “people tend to read pieces and not the whole when interpreting” a document. So she wanted

to make it clear that the decision on foreclosure on a property will be made by the board. Resolution F-03 provides for the establishment of the various reserve accounts necessary to ensure that the association provides funding to maintain or replace, as necessary, capital assets and to provide for future capital assets that have been approved in the Association’s multiyear plans. Reserves are those portions of the net equity of the association appropriated for future use for specific purposes. Excluding bulkheads, replacement expenditures are fore purchases of replacement capital items including buildings, furniture, vehicles, and equipment having a useful life of over two years and an acquisition cost of at least $5,000. Also included are groups of lesser cost, where the number of items results in

a substantial expenditure of at least $5,000. The amended resolution increased that figure from $1,000. The cyclical maintenance and replacement schedule is a basic inventory of association owned assets that sets forth expected future expenditures for key repair and/or replacement, including capitalized labor costs. The amendment specifies that maintenance expenditures from reserves must be major and non-routine in nature. In the area of reserve requirements, the resolution requires the bulkhead maintenance and replacement plan or schedule to be developed separately for OPA owned bulkheads and privately-owned bulkheads. All charges against reserve accounts must have approval of the board, either in the annual budget process or other board action. The resolution says reserve funds will not be expended or transferred for purposes other than those for which the fund was established unless approved.

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32 Ocean Pines PROGRESS

CAPTAIN’S COVE

June 2019

Cove board agrees to begin negotiations with high speed ‘fiber-to-the-home’ Internet provider

for municipalities, school systems, state, commercial and government clients throughout the United States. Broadband Connect LLC (BBC) in partnership with Last Mile Broadband of Maryland LLC, Noovis and KCI intends to provide the Broadband Connection of Oxon Hill, Md., selected over rival Think Big Networks project management, engineering, installation, operation and mainBy TOM STAUSS Negotiations on a contract for dition of starting build-out. Publisher delivery of these services will begin Broadband Connection is not ask- tenance support for all efforts to aptain’s Cove association Gen- shortly, Wilder told the Progress in ing for such commitments, appar- provide a reliable fiber-to-the-home eral Manager Justin Wilder in email. ently taking the approach that once (FTTH) network and customer-oriearly July announced that the The board chose the Broadband high speed Internet is available in ented broadband services for the Cove’s Board of Directors by con- Connection proposal over that of neighborhoods as the roll-out en- Captain’s Cove community. Noovis and KCI have been active sent order approved a motion to en- Think Big Networks, which previ- sues, customers will then commit. in Captain’s Cove for some time, ter into exclusive negotiations with ously had attempted to bring high In response to the Captain’s Cove having been selected by the Cove Broadband Connect, LLC, of Oxon speed service to Captain’s Cove but Golf and Yacht Club’s request for board to craft and manage the proHill, Md., to bring high speed fiber couldn’t pull it off. That company proposals, Broadband Connect precess leading to the issurance of an optic Internet service to the commu- sought commitments from home- sented the board with a proposal for RFP earlier this year. Noovis and nity. owners for its services as a precon- serving the entire Captain’s Cove KCI made it clear they wanted the community with broadband fiber-tooption to respond to the RFP once •Wildlife Inspections, Exclusion the-Home in March. issued, one of the reasons the board In addition, Broadband Connect and Prevention awarded the RFP process RFP to •Wildlife Humane Live Trapping made a community presentation Noovis/KCI over competing proposoutlining their plans at the April •Bat Inspection, Exclusion als. and Prevention 17 general manager’s community Directors wanted to be sure that •Mole and Vole Control meeting. •BedBug Heat Treatment Specialist Broadband Connect LLC (BBC) at least one viable proposal would •BedBug Monitoring and Prevention is a Veteran-owned business, with emerge from the RFP once it was •Crawlspace Encapsulations a management team that has more issued. As it turned out, there were •Aprilaire Dehumidifiers than four decades of technology two responses. 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3912 Captain’s Corridor • $220,700 3 BR/2 BA 1497 sq ft., New Construction, Rancher Dolphin 2012 Model, 1-Car Garage, Screen Porch.

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$1. 3/1727 Wooded $1. 7/169 Wooded, Cert. Letter $1. 4/2268 Wooded, Cert Letter $250 10/140 Wooded $500 3/1800 Wooded, Cert Letter $500 5/54 Wooded, Cert Letter $500 5/47 Wooded, Cert Letter $500 4/2102 Wooded, Cert Letter $500 3/1813 Wooded $500 3/1810 Wooded, Cert Letter $975 4/2200 Wooded, Cert Letter

Move in ready, 4BR, 2 Full bathrooms, 2 half bathrooms, custom built waterfront home with wide canal views and Chincoteague Bay views located in Captains Cove. This well-maintained home features quality construction and being sold by the original owners. Home includes hardwoods, 9’ ceilings, crown molding, recessed lights on main living level, sunroom, Corian countertops, stainless steel appliances, 42’ cabinets, soft close drawers, 18” tile floors. Master on first living level w/walk-in shower, Sunroom, 3 additional BRs upstairs, with sitting area and full size laundry room, propane heat and On Demand gas hot water. Exterior features include 12x21 Trex deck, 12’ x 50 concrete pad on ground level perfect for entertaining, 82’ bulkhead & boardwalk, 2 garages, all stone landscape. Designed for future elevator.

$1,200 4/2185 Wooded $1,500 11/58 Wooded, Cert Letter $2,000 11/87 Cleared, Cert Letter $2,000 2/377 Cleared, Secondary System $2,000 11/77 Wooded $4,000 2/350 Cleared, Septic Approved $2,000 8/43 Mostly Cleared, $5,000 2/134 Wooded,Cert SepticLetter Approved $6,000 2/206 Cleared, Septic Approved $2,000 2/90 Wooded $2,000 7/181 Cleared $2,000 7/268 Cleared $2,000 10/119 Mostly Cleared $2,000 6/24 Wooded, Cert Letter $2,000 4/2206 Wooded, Cert Letter $2,000 4/2207 Wooded, Cert Letter $2,500 5/20 Wooded $4,900 3/1622 Cleared, W&S, Canal Views $4,900 1/1055 Wooded, W&S, Bay Views $5,000 3/1623 Cleared, W&S, Canal Views $10,000 1/1261 Cleared, W&S, Bay View $11,000 1/1258 Cleared, W&S, Bay View $25,000 1/1237 Wooded, W&S Future Development - $1. 16/2

34 Ocean Pines PROGRESS

CAPTAIN’S COVE

June 2019

New Cove Web site From Page 32 on the Web site correctly. We apologize for any alarm or concern this may cause, and we appreciate your patience while we work with the development team to correct the way payments are being displayed.” Wilder also said a popular feature of the old site, a message board allowing two-way communication

between himself, directors and Cove property owners, has not yet been incorporated into the new site but will be. Annual yard sale -- This year’s annual yard sale will be run by volunteers from the Library Committee and the Cove’s CERT organization. The date is Saturday, June 22, at Cove Commons, near the secondary entrance into the Cove. There is no rain date because of tight schedul-

ing. Hours are from 8 a.m. to noon. Like last year, there will be no tables provided, so instead residents will be reserving a space large enough to park a vehicle and set up tables or tarps to display wares within a designated circle. Reservation sign-ups are available at the Marina Club reception desk from 8 a.m. - 7 p.m. daily. The fee is $10 cash. Participants will be given a per-

mit that will need to be displayed on vehicle dashboards as proof of payment. Arrival time for the setting up will be 7 a.m. Those who decide to come “at the last minute” will be charged $5 cash and will be directed to park outside the circle if space is available. If the event is cancelled due to rain, refunds will be provided. Proceeds will benefit the Library and CERT.

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Sea Robin • $142,300

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• 3BR/2.5 BA New Construction • 1774 sq. ft. • Tarpon Plus Model with Extended Kitchen & Dining Area • Screen Porch • Unfinished Bonus Room

Raised Home on Pilings 3 BR/2 BA 1349 Sq Ft

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Mako • $272,200

Raised Home on Pilings 4 BR/3.5 BA 1940 Sq Ft

J&A Builders specializes in spec home sales and new home construction. All of our models are “stick built” and feature a first floor master suite with standard appliance package, and Low-E windows. These are a few of our models we can build on your lot. Prices DO NOT include the the lot. Homes are of similar design and may have upgrades. Prices good for Captain’s Cove, Greenbackville, Va. Only. MHBR #4790 PRICES SUBJECT TO CHANGE

CINDY WELSH - REALTOR Hall Realty

4323 Captain’s Corridor Greenbackville, VA. 23356 302-381-6910 (cell) • 757-854-1604 (office) 757-854-1606 (fax) • Email: candhwelsh@aol.com

June 2019 Ocean Pines PROGRESS

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36 Ocean Pines PROGRESS

June 2019

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OPINION

June 2019 Ocean Pines PROGRESS 37

GUEST COMMENTARY Compliance rules ‘cumbersome, weak, ineffective and costly’ Director seeks new powers to target eyesore properties, junk vehicles, additions and alterations without permits, unauthorized house color changes and over-sized vehicles/trailers.

By FRANK DALY Special to the Progress am responding to the recent commentary by Joe Reynolds [on oceanpinesforum.com] titled “Director Daly Wants to Fine You” because I believe this is another case of an important issue to homeowners that has been kicked down the road and ignored by past boards for far too long. First, let me make this point perfectly clear. Director Daly wants to fine NOBODY and neither does the Archiectural Review Committee [ARC]. However the motion put forth at the June 1 Board of Directors meeting is necessary to addresses serious shortcomings in our current system that adversely affect homeowner values. These issues were highlighted to the board by two separate information sources. 1. Former General Manager John Bailey conducted a community wide survey in 2018. The survey asked the following question: Would you support a referendum to provide for better enforcement of the covenants and regulations, including the possibility of limited and capped fines through due process? Here are the tabulated responses: 1158 yes, 68 percent; 538 no, 32

The Ocean Pines Progress, a journal of news and commentary, is published monthly throughout the year. It is circulated in Ocean Pines, Berlin, Ocean City, and Captain’s Cove, Va. 127 Nottingham Lane Ocean Pines, MD 21811

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percent. Perhaps Joe Reynolds and I read results differently. So be it. From my perspective I find it hard to believe that 1158 homeowners would consider a resolution to address the above question “troubled” “unbelievable” or “draconian”. The action proposed will put a system in place that exactly delivers what the above question asked. Joe may also be troubled that the board would consider the input of the 1158 homeowners who answered the above question affirmative. I am not. Considering and acting on this type of community input is exactly what a board should do. 2. The second item is a current actual situation involving a property located at 54 Bramblewood Drive. During the board meeting conducted on April 6, a homeowner adjacent to 54 Bramblewood approached Mr. Parks and very politely and quietly requested to speak first during public comments. As a recall the conversation she indicated that to address the board she had to leave work and was under a time constraint to return to her job. Her comment regarding the property was “this is the view I wake and have seen every day for 11 years.” When this property came up for review I was appalled at the conditions. Conditions like this should not exist within our community for 11 days, let alone 11 years. Joe Reynolds and I will agree on this point: The existence of a property in this condition for this period of time is a total failure of leadership at both the management and board level. After that homeowner spoke to the board, I made it my mission to find out why our Association so miserably failed a homeowner for such a long period of time and what could be done to make sure it doesn’t happen again on my watch. Joe feels the Association has “extensive and powerful tools to mandate compliance” of our Declarations of Restrictions. I believe the tools are cumbersome, weak, ineffective and costly. Let’s look at how effective the “extensive and powerful tools to mandate compliance” worked in this situation.

Here is the timeline for 54 Bramblewood: • 12/26/18 Initial inspection • 1/26/18 first letter sent by regular mail (30 days) • 2/1/19 Follow up inspection completed, second letter sent • 2/11/19 Violation forwarded to ARC • 4/6/19 Addressed at BOD meeting • 5/4/19 Motion to find owner in continuing violation and to have Public Works enter the lot to remove debris and to obtain a court order to remove other items. And we are still waiting for the court order. So why did these “extensive and powerful tools to mandate compliance” fail the homes adjacent to 54 Bramblewood? Well, let’s look at these tools. First the Board of Directors can, with six votes, instruct the Public Works Department to enter a property and to clean up yard debris. And the GM has the ability to bypass the ARC process and go directly to the Board to request this action. And that clearly could have been done to shorten this process by four months. So why wasn’t it done? First, the DRs that permit Public Works to enter the property do not give complete authority to remove all items; they basically permit the removal of litter and yard debris. Removal of any other items requires a court order. So one might ask, and I did, why not get a court order? This is where the “extensive and powerful tools to mandate compliance” discussion become myth instead of reality. A court order can take up to six months to obtain depending on the court docket and the response from the property owner in violation. But that’s not the main problem. The main problem is a court order can range in cost from $5,000 to $50,000. Our attorney has advised me that the typical range for these types of orders is $12,000 to $18,000. And under the current declarations, the cost of these orders cannot be recovered from the property owners inviolation of the DRs. In other words, the OPA eats the cost of the order; it goes against the operations budget and goes directly to your as-

sessment. So with either the standard process the involves the ARC Committee, or the “fast track” process that bypasses it, the Association ends up in the same place, getting a court order to force compliance. And the cost of the legal process to obtain that order is expensive and cannot be recouped from the homeowner violating the DR’s. This is exactly the reason that I am asking the Board to consider amending the Declaration of Restrictions to permit fines, to provide management with a tool that is fast, effective and burdens only the offender with the cost of enforcement. Since proposing this motion I have read each and every comment on oceanpinesforum.com, have received several emails, and have listened to each board member who has voiced support or disapproval based on individual concerns. Some have raised the issue of levying fines over minor offenses such as leaving trash cans in front of garage doors. Some have voiced concerns over expanded rules. So let me make several points clear: • Fines will be limited to the most egregious offenses that clearly detract from the value of adjacent properties. • There will not be any immediate fines. The recommendation is no fines until after a 30-day notice. • There will be defined ‘due process’ measures. • No additional restrictions are included in the motion; it is strictly designed to enforce the DR’s. I also want to clarify the potential number of violators that could be subject to fines. As of May 31, 2019, there were 26 open cases of unresolved violations sent to the attorney. The maximum cases for fining out of 8452 homeowners are really 26 individuals. Not all of the above violations would be subjected to fines; 8426 people need not live in fear of a police state, or worse yet, a fine for violating the Declaration of Restrictions. Frank Daly is an Ocean Pines Association member elected to the Board of Directors in August of 2018.

38 Ocean Pines PROGRESS

OPINION

June 2019

Is it time to abolish the Search Committee? Yes! The following is an edited version of an email to Ocean Pines Association President Doug Parks about a news brief in the May edition of the Progress about the Search Committee, the group charged with finding candidates to compete for seats on the OPA Board of Directors. The item incorrectly said that there were no volunteers willing to step up to serve on the committee this year. To: Doug Parks, OPA president Joe Reynolds, of oceanpinesforum.com fame, did an admirable job in rebutting your over-the-top assertion that in publishing a small news brief about the non-functioning Search Committee in our May edition, and apparently in getting a fact wrong, we were somehow lying about Doug Parks. Since you missed the opportunity to shed meaningful light on the matter of the Search Committee, here’s some context so your colleagues and the greater Ocean Pines community can better understand some key omissions in your version of events. 1. The Progress apologized to Mrs. Gallagher, the one member from last year’s Search Committee who was eager to serve again this year, for the news brief that mischaracterized her interest in wanting to continue to serve on the committee.

March and April for members, well after the deadline for populating the committee. An excursion through the curious cul-de-sacs An excursion through theby-ways curious and by-ways and cul-de-sacs 5. Two years ago, a director of Worcester County’s County’s most densely community. of Worcester mostpopulated densely populated community. tasked by the then OPA president By TOM STAUSS/ By TOM Publisher STAUSS/Publisher with finding members for the Search While the news item did not identify let you know she wanted to continue Committee reached out individually her by name, she recognized herself to serve on the Search Committee to friends and neighbors and manas the sole member from last year’s again this year. You acknowledged aged to populate the committee. committee who was willing to serve receipt of her email, but then never If you conducted similar personal this year. She went on oceanpines- followed up with an actual appoint- diplomacy this year, you’ve not so forum.com to complain, as she had ment, or even that she would be ap- indicated. Did you actually reach every right to do. pointed if other members surfaced. out to any individual to serve on 2. In none of your public state- Essentially, Doug, you ignored her the committee? If so, please provide ments or written remarks on this after the initial acknowledgment. names for verification purposes. The issue did you emphasize, or simply That could be construed as a purpose of this question is to ascermake clear, her interest in wanting profoundly discourteous act, unbe- tain the extent to which you went to serve this year. You turned this coming of an OPA president whose beyond issuing calls during board into something about you, going so occasionally says he respects volun- meetings for volunteers. far into turning yourself into a vic- teers who serve or who are willing to 6. In addition, it seems you made tim of lies. And as Reynolds noted in serve on committees. no effort to delegate this task to any a reply to you, you did write: “UnA more charitable interpretation of your colleagues this year. If you fortunately, as of today no one has is that you have a lot on your plate did, this is an opportunity to correct stepped up and volunteered to serve and didn’t communicate because the record. on the committee.” you really didn’t have much to say, 7. There was an email sent by the That statement actually gives given the seeming dearth of volun- Bylaws and Resolutions committee credence to our reporting, but we teers willing to serve with Mrs. Gal- in January reminding you of your won’t hide behind that as an excuse lagher. obligation under the bylaws to apfor a lack of precision in what we 4. The January communication point a Search Committee. wrote. Of course, let’s be clear that from Mrs. Gallagher should have So much for setting the record your statement is incorrect, because constituted a wake-up call that, un- straight. Now for some editorializclearly Mrs. Gallagher was willing der the bylaws, you had a February ing: to serve. That you got it wrong, too, deadline for appointing a Search If your intent was to effectively doesn’t make you a liar. Committee. You did not call for deactivate the Search Committee by 3. Nor did you mention that it members in the any of the critical not aggressively searching for memwas Mrs. Gallagher, who, in January months of January and February. I bers, you deprived your colleagues (she believes) reached out to you to do believe you issued verbal calls in and the community of the opportunity to offer their points of view and to participate in the decision-making. There is reason to conclude Search Committee has outlived its usefulness. The presence of eight candidates this year -- one later dropped out -- is proof of that. The committee does provide one important service, educating potential candidates of the perils and responsibilities of serving as a director, a task that can be delegated to others. This educational function did not occur this year. A community of our age and population really shouldn’t need a committee to find or coax candidates to run. I agree with a recent comment of yours that the community would benefit from a “conversation” about the status of the Search Committee. Perhaps this communication can be a start for that conversation. In the meantime, though, let’s be clear: The status of the Search Committee should not be decided by one person.

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