March 2016 Progress by Ocean Pines Progress

March 2016

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THE OCEAN PINES JOURNAL OF NEWS & COMMENTARY COVER STORY

Cost of pilings, permits, stormwater management obstacles to new bathroom building at Beach Club Renovation advocate says a new building isn’t even worth looking into By TOM STAUSS Publisher he $525,000 estimated cost included in the 2016-17 capital budget for engineering and construction of renovated bathrooms/locker rooms on the ground-level of the Ocean Pines Beach Club, or a separate building elsewhere on the Beach Club campus, might seem to offer two rather stark choices for Ocean Pines Association policy-makers. When Director Jack Collins initially proposed $500,000 to be included in the capital budget for Beach Club bathroom renovation, he did not envision the possibility that General Manager Bob Thompson and two OPA directors would suggest an alternative to renovation of the lower level’s bathrooms/locker rooms. During the budget review process, however, a process that began in early January and continued well into February, Thompson and directors Tom Terry and Bill Cordwell urged consideration of a separate building alternative. Their logic seemed to suggest an outsized concern about renovating bathroom facilities that inhabit the ground-level floor of the Beach Club, ac-

The Ocean Pines Associaiton is weighing its options for new bathrooms at the OPA’s Beach Club in Ocean City. tually a few feet below the grade of the gravel parking lot on the Beach Club campus. Thompson urged the board to at least consider building a separate bathroom/ locker room building adjacent to the Beach Club, an idea that had been explored and subsequently rejected by the then Board of Directors back in 2010.

The $300,000 cost of a new building as reflected in a low bid was too rich for the directors at the time. During board deliberation, Terry suggested an additional $25,000 in an engineering study to look at both options. Collins reluctantly went along with the additional $25,000 to study the two opTo Page 18

OPA directors approve budget with no assessment increase ~ Page 11 AC SPRING TUNE-UP

only $

Directors include $55,000 food truck in capital budget General Manager Bob Thompson’s proposed $55,000 food truck made it into the 2016-17 Ocean Pines Association capital budget, but just barely, and its approval on a 4-3 Board of Directors’ vote does not mean for certain that it will be up and running this summer as Thompson hopes. The 4-3 vote keeping the food truck in the capital budget occurred during the board’s final budget review meeting Feb. 19, with directors Pat Renaud, Tom Terry, Bill Cordwell and Cheryl Jacobs in favor. ~ Page 8

Site work drives up Manklin Meadows racquet sports cost With the lone bid for redevelopment of the Manklin Meadows Recreation Complex with additional racquet sports courts coming in at more than twice the amount budgeted, the Ocean Pines Association general manager is opting to complete the project in phases. Initial work on the Community Gardens and community-built playground will be done in-house to make way for new pickleball and platform tennis courts.. General Manager Bob Thompson during his Feb. 25 report to the Board of Directors said staff has regrouped and is looking at alternate ways to complete the project, ~ Page24

After delay, board approves bathrooms in White Horse Park It was to do their business or get off the pot when it comes to constructing new bathrooms in White Horse Park, some members of the Ocean Pines Association Board of Directors said during a Feb. 25 discussion of the project. Others argued that they haven’t had adequate time to review the proposal before being asked to vote on awarding a contract for the work.. Ultimately, directors opted to wait until March 3 so everyone could look over the bid packages and vote on the project via email. ~ Page 87

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March 2016

OCEAN PINES BUDGET

March 2016 Ocean Pines PROGRESS

Board takes steps to renovate or replace aging Country Club Directors authorize $50,000 to update 2011 study by Becker Morgan that recommended that the OPA do specific deferred maintenance on the building

wasn’t quite ready to move on it. Country Club replacement at a cost of $3.2 million is proposed for fiscal years 2018 and 2019 in Thompson’s draft capital improvement plan that he unveiled in early January. Unlike Cordwell and Thompson, though, other Ocean Pines Association directors seem more predisposed to renovate the Country Club rather than replace it. Most replacement scenarios that have been floated over the year envision a smaller building. Thompson has suggested a building that focuses on golf, with an upper level pro shop and snack bar and a lower level for golf cart storage. The existing cart barn would be demolished as part of this scenario. Jack Collins, Tom Herrick and Dave Stevens are the directors most likely to endorse a major renovation over replacement, judging by recent comments. Collins has said he believes a substan-

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By TOM STAUSS Publisher t may seem like baby steps, with $50,000 for engineering and another $30,000 for cosmetic improvements, but it seems that the Board of Directors is serious about renovating and possibly replacing the aging, poorly maintained Ocean Pines Country Club. The $80,000 included in the 2016-17 capital budget during the board’s final budget review session Feb. 19 was far less than the $3 million that Director Bill Cordwell wanted to include in the budget for engineering studies and replacement of the 45-year-old building. But it was $80,000 more than General Manager Bob Thompson had included in his draft budget for 2016-17, suggesting that the directors are serious about jump-starting renovation or repair of this underutilized amenity. The lack of funding doesn’t suggest that Thompson is any less interested in it, only that he

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From Page 3 tial renovation can be done for much less than the $3 million estimated by Thompson in the general manager’s draft CIP. Judging by her comments during board discussion, Cheryl Jacobs is opened-minded on the renovation or replacement options. She was the director who initially called for cosmetic improvements to the facility in the amount of $30,000, and she also urged the inclusion of $50,000 in the budget to conduct engineering studies designed to shed light on the renovation or replacement options. During the Feb. 19 meeting, Cordwell suggested that the board shouldn’t be content with allocating engineering funds in the 2016-17 budget but instead should “put $3 million in the budget” to replace a facility that he called a “mold-infested piece of crap.” Stevens was far less scathing in his assessment of the Country Club, acknowledging that the building’s heating-ventilation-air conditioning system is in “bad shape” and in need of an upgrade. But rather than devoting millions to replacing the building, Stevens said the OPA needs to answer the question of how the OPA can make it “habitable. We need a new study to look at the building,” he said, with a focus on updating a 2011 study that identified areas needing improvement. “Some (improvements) can be cosmetic” and others would be more substantive, like replacing the HVAC system, he said. Cordwell said because of mold, it will be necessary to tear out all the existing sheet rock walls to be able to the identify and eliminate the problem. He seemed far less amenable to replacing the HVAC system at an estimated cost of $130,000 than Stevens. Jacobs said that if the ultimate decision is to build a new Country Club modeled after the golf pro shop facility at Lighthouse Sound, an upscale community located between Ocean Pines and Ocean City, “you would lose the $130,000” invested in a new HVAC system. Collins pushed back against the idea that the OPA would want to replace the Country Club. “You’re getting more bang for the buck” if you renovate rather than build new, he said, and he later told the Progress that renovation might include gutting the entire upper level to the studs, removing the kitchen equipment, and opening up the existing space for meeting rooms. Jacobs at that point in the discussion urged her colleagues to “let’s do it, decide whether to replace or renovate,” prompting Director Tom Terry to say the 2011 study should be updated. Terry said the issue facing the board is whether to put the $3 million in the budget for a renovation or replacement or put money in the budget for a study only. Stevens said the budget should be

4 Ocean Pines PROGRESS

OCEAN PINES Country Club From Page 4 for a study only, prompting Cordwell to argue that not allocating $3 million “means it doesn’t get done.” Herrick’s comments seemed to suggest that he favored renovation over replacement, citing the 2011 study as suggesting that the shell of the building itself remained in acceptable condition, with components such as HVAC needing replacement. “Now we’re going to do it, put money in (the budget) to make it livable,” he said, adding that it was not a waste of money to put money in the budget for HVAC replacement. OPA President Pat Renaud said he preferred to put money in the budget for an updated study only to help resolve the repair or replacement dilemma Herrick repeated that he wanted money in the budget for HVAC repair in addition to a study update, and Jacobs joined him in urging money for HVAC replacement. Thompson advised against it. “You’re going to find other things” that need repair or replacement, the general manager said, arguing that $130,000 allocated for a new HVAC system wouldn’t be sufficient to cover the additional items that would be discovered “when you’re opening up walls.” Thompson said the 2011 study “said replace it. The engineers (in the study) are saying replace it. We don’t want to

March 2016 Ocean Pines PROGRESS keep putting money into it if we’re going to replace it.” None of the directors who were advocating renovation of the building challenged Thompson’s assertion that the 2011 study recommended replacement. According to former OPA Director Marty Clarke, the report did nothing of the kind. “Thompson lies or makes things up to support his agenda (of replacing the Country Club),” Clarke told the Progress. “The 2011 report by Becker-Morgan recommended that the OPA do simple deferred maintenance on the building so it wouldn’t have to be replaced.” According to Clarke, OPA management didn’t act on the engineers’ recommendation for regular and routine maintenance of the Country Club because that would make it more likely that the Board of Directors eventually would endorse replacing the building. He said a similar strategy was employed successfully with the old Yacht Club and before that the original Community Hall, both of which were replaced with new buildings. Thompson prevailed on the issue of whether to include $130,000 in the budget for HVAC replacement. The motion to approve $80,000 for an engineering study and $30,000 for cosmetic improvements to the Country Club passed 5-2, with Stevens and Collins opposed because they do not want the possibility of a replacement building to be considered.

The “rack and stack” from the general manager’s draft capital improvement plan.

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WINDSCREENS BENCHES NETS RECTRAC PROGRAM

March 2016 CAPITAL SUMMARY BUDGET 2017

DESCRIPTION ADMIN COMPUTER & PHONE SYSTEM

STAFF

DESCRIPTION

GENERAL HISTORICAL ROADS LEGACY FUND RESERVE RESERVE RESERVE

250,000

FINANCE COMPUTER

2,000

MEMBERSHIP COMPUTER

1,500

PUBLIC WORKS ROAD PROGRAM BRIDGE WORK TRUCK TRACTOR/LOADER DUMP TRUCK SKID STEER Z-MOWER SNOW PLOW SALT SPREADER COMPUTER BUSH HOG SEWER CLEANER TIPS POLICE FIREARMS VEHICLE RADIO COMPUTER BUILDING VEHICLE RECREATION/PARKS PRESSURE WASHER SHED FOR GYM EQUIP WI FI FOR COMM CENTER PLAYGROUND SURFACING COMPUTERS S&R TENNIS COURTS HUNTINGTON PARK PLAYGROUND HUNTINGTON PARK FIELD LIGHT DISPLAYS OUTDOOR EVENT SPEAKERS REC TRAC PROGRAM ADA ACCESSIBILITY SHEDS FOR MANKILIN MEADOWS SOUTH GATE POND TRAIL GYM FLOOR TENNIS PAINT HARD COURTS SPRINKLER HEADS WINDSCREENS BENCHES NETS RECTRAC PROGRAM

DESCRIPTION PLATFORM TENNIS RESURFACE COURTS PICNIC TABLES / BENCHES UMBRELLAS / BASES WINDSCREENS PICKLEBALL AWNINGS FENCE GUARDS WINDSCREENS TABLES/CHAIRS/UMBRELLAS AQUATICS AQUA CYCLE BIKES FURNITURE - ALL POOLS POOL SLIDE LIFEGUARD STANDS LAPTOPS FOR POOLS POOL VACUUM CAT CONTROLLER HANDICAP CHAIR SC POOL & DECK RESURFACE GOLF PRO SHOP RADIOS RANGE BALL DISPENSER GOLF SHOP FIXTURES RANGE PICKER REELS GOLF MAINT FAIRWAY MOWERS FAIRWAY SPRAYER COUNTRY CLUB UPGRADES ENGINEERING BEACH CLUB HOT DOG ROLLER HEATED DISPLAY CABINET BEER BOTTLE COOLER HORIZONTAL FREEZER MICROS REGISTER RESTROOM RENOVATION

550,000 425,000 61,000 81,000 65,000 70,000 14,000 5,000 10,000 2,000 7,000 2,000

11,500 4,000 1,500 34,000 7,700 3,500 12,000

14,500 8,000 2,000 1,000 1,800 1,000

STAFF

3,500 2,500 2,000 3,000

14,094 29,631 17,500 2,129 2,910 1,000 3,018 6,400 250,000

14,094

160,000 60,000

30,000 50,000

30,000

1,905 1,708 1,165 3,126 3,200 525,000

1,905 1,708 1,165 3,126

9,883 25,000 9,000 3,490,800

3,200

4,094 55,000 1,200 5,467

50,000

525,000 15,000 4,770

17,000 25,000 12,000

1,738,545

550,000 1,075,000

STAFF

2,000 1,000 1,800 1,000

OCEAN PINES BUDGET GENERAL HISTORICAL ROADS LEGACY FUND RESERVE RESERVE RESERVE

15,500 3,000 1,000 1,000

1,000

3,500 2,500 2,000 3,000

14,094 29,631 17,500 2,129 2,910 1,000 3,018 6,400 250,000

14,094

15,500 3,000 1,000

29,631 17,500 2,129 2,910 1,000 3,018 6,400 250,000

3,000 2,800 2,300 1,500

160,000 60,000

30,000 50,000

30,000

1,905 1,708 1,165 3,126 3,200 525,000

1,905 1,708 1,165 3,126

YACHT CLUB KITCHEN AIR CONDITIONING GLASS TABLE TOPS REFRIGERATED WORK TOP FOOD TRUCK AIR CURTAINS MARINA PATIO FURNITURE SOUND PANELS / DECORATIONS AWNINGS TIKI BAR PARTITIONS

15,000 4,770 4,094 55,000 1,200 5,467 17,000 25,000 12,000

MARINA KASCO ICE EATERS WATER LINES ROOF FOR GAS DOCK BLDG

9,883 25,000 9,000

TOTAL

9,883 25,000 9,000 127,255

COUNTRY CLUB UPGRADES ENGINEERING BEACH CLUB HOT DOG ROLLER HEATED DISPLAY CABINET BEER BOTTLE COOLER HORIZONTAL FREEZER MICROS REGISTER RESTROOM RENOVATION

29,631 17,500 2,129 2,910 1,000 3,018 6,400 250,000

160,000 60,000

MARINA KASCO ICE EATERS WATER LINES ROOF FOR GAS DOCK BLDG

75,000

15,500 3,000 1,000

3,000 2,800 2,300 1,500

15,000 4,770 4,094 55,000 1,200 5,467 17,000 25,000 12,000

GOLF MAINT FAIRWAY MOWERS FAIRWAY SPRAYER

14,500 2,000 140,000 17,000 25,000 2,000 1,500 30,000 7,500 26,000 45,000 70,000

3,000 2,800 2,300 1,500

AQUATICS AQUA CYCLE BIKES FURNITURE - ALL POOLS POOL SLIDE LIFEGUARD STANDS LAPTOPS FOR POOLS POOL VACUUM CAT CONTROLLER HANDICAP CHAIR SC POOL & DECK RESURFACE GOLF PRO SHOP RADIOS RANGE BALL DISPENSER GOLF SHOP FIXTURES RANGE PICKER REELS

GENERAL HISTORICAL ROADS LEGACY FUND RESERVE RESERVE RESERVE

1,000

167

425,000

14,500 8,000 2,000 1,000 1,800 1,000

15,500 3,000 1,000 1,000

YACHT CLUB KITCHEN AIR CONDITIONING GLASS TABLE TOPS REFRIGERATED WORK TOP FOOD TRUCK AIR CURTAINS MARINA PATIO FURNITURE SOUND PANELS / DECORATIONS AWNINGS TIKI BAR PARTITIONS

TOTAL

7,000 2,000

11,500 4,000 1,500 75,000 34,000 7,700 3,500 12,000 14,500 2,000 140,000 17,000 25,000 2,000 1,500 30,000 7,500 26,000 45,000 70,000

PICKLEBALL AWNINGS FENCE GUARDS WINDSCREENS TABLES/CHAIRS/UMBRELLAS

550,000 61,000 81,000 65,000 70,000 14,000 5,000 10,000 2,000

PLATFORM TENNIS RESURFACE COURTS PICNIC TABLES / BENCHES UMBRELLAS / BASES WINDSCREENS

2,000 1,000 1,800 1,000

3,490,800

3,200

4,094 55,000 1,200 5,467

50,000

525,000 15,000 4,770

17,000 25,000 12,000 9,883 25,000 9,000

127,255

1,738,545

550,000 1,075,000

Capital expenditure project list approved as part of the 2016-17 Ocean Pines Association budget adopted Feb. 25.

OCEAN PINES BUDGET

March 2016 Ocean Pines PROGRESS

Approved 2016-17 budget authorizes $3.49 million in capital spending

The capital budget includes $550,000 in scheduled road improvements that will be funded out of the roads reserve, which is composed of revenues from the OPA’s of local impact funds related to operations at the Casino at Ocean Downs. Significant items that appear in the authorized list of projects include $250,000 in telephone and phone improvements and various vehicles for the Public Works Department costing roughly $300,000 in the aggregate. Recreation and racquet sports capital items include $140,000 in Swim and Racquet Club tennis court resurfacing, $42,000 in Huntington Park playground and field improvements, $30,000 in new RecTrac software for the Parks and Recreation Department, $45,000 in South Gate pond erosion control improvements, $70,000 for a new gymnasium floor in the Community Center, $26,000 for new sheds at the Manklin Meadows tennis complex, $14,500 for repainting the Har-Tru tennis courts, and $15,000 for resurfacing platform tennis courts.

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By TOM STAUSS Publisher he adopted 2016-17 Ocean Pines Association budget includes $3.49 million in capital spending. Of that, $127,255 is considered new capital and would be funded directly from next year’s assessment. Another $1.73 million in items are defined as replacement and would be funded out of the historic reserve. Another $1.07 million are defined as “major projects” and would be funded from the heritage reserve. Inclusion in the budget does not guarantee that the projects will be funded in 2016-17, as they must be approved individually by the Board of Directors when submitted to the board by General Manager Bob Thompson. The budgeted numbers also tend to represent a ceiling for each authorized expenditure; bids often come in less than budgeted. Occasionally they come in higher, in which case Thompson may not even submit a proposed expenditure for board action.

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March 2016

Board includes $55,000 food truck in 2016-17 capital budget Directors ask Thompson to come back with more detailed cost data about the truck, and its prospects remain uncertain By TOM STAUSS Publisher eneral Manager Bob Thompson’s proposed $55,000 food truck made it into the 2016-17 Ocean Pines Association capital budget, but

Capital spending From Page 7 Aquatics capital spending includes $250,000 for Sports Core pool improvements, $26,631 for new pool furniture, and $17,500 for a replacement slide at the Sports Core pool. Golf-related capital items include $160,000 in fairway mowers, $60,000 for a fairway sprayer, $30,00-0 in cosmetic improvements at the Country Club, and $50,000 to update a 2011 study on the condition of the Country Club. Yacht Club capital items include $15,000 for new kitchen air conditioning, $4,770 in glass table tops, $5,467 in furniture for a new early morning café serving marina customers, $17,000 for sound panels and decorations, $25,000 for tike bar awnings, $12,000 for partitions in the downstairs dining room, $1200 for air curtains (for mosquito control), and $55,000 for a food truck. The capital budget includes $525,000 for renovating or replacing the Beach Club bathrooms. Marina capital items include $9,883 for new ice-eaters, $25,000 in water line improvements, and $9000 in a new roof for the gas dock building.

just barely, and its approval on a 4-3 Board of Directors’ vote does not mean for certain that it will be up and running this summer as Thompson hopes. The 4-3 vote keeping the food truck in the capital budget occurred during the board’s final budget review meeting Feb. 19, with directors Pat Renaud, Tom Terry, Bill Cordwell and Cheryl Jacobs in favor. Directors Jack Collins, Dave Stevens and Tom Herrick voted in opposition to including it. Terry’s proposal to include the $55,000 capital item in the budget came with a caveat: Thompson will have to come back to the board with “additional information” about costs associated with the food truck, including items such as licensing, associated equipment costs, and depreciation, before the board would authorize Thompson to follow through with a purchase. Following the meeting, Terry said he agreed with the impression that the vote approving the food truck came with an asterisk, acknowledging that its inclusion in the budget did not come with a presumption that the $55,000 would be spent. He acknowledged that every budgeted capital expenditure above the general manager’s approval threshold must come to the board for a vote, but in the case of the food truck Thompson will have a heavier burden to prove to a board majority that Ocean Pines will benefit from it and that Thompson’s cost estimates are realistic , Terry told the Progress.

8 Ocean Pines PROGRESS

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Food truck From Page 8 Thompson began the discussion of the proposed food truck at the Feb. 19 meeting by repeating earlier assertions that it would only increase the OPA lot assessment by $1 after operating profits are factored in. Since the purchase is considered new as opposed to replacement capital, it would be funded out of next year’s assessment rather than reserves. Stevens questioned the accuracy of the predicted $1 impact and said he was “dissatisfied” with Thompson’s supporting rationale for the food truck. Terry acknowledged that there has been a lot of opposition to the food truck in the community – the “public clearly wants it out,” he said – but he contended that critics have “totally misrepresented” Thompson’s proposal. There’s “a reasonably solid idea behind it,” Terry said, suggesting that it was not so much Thompson but Yacht Club manager Jerry Lewis who was “behind it” from the beginning. Terry said that in addition to offering supplemental food service to the outside deck and swimming pool at the Yacht Club, the food truck, according to plans, will also be parked at the nearby Mumford’s Landing pool during lunch hours. Additional venues for the food truck would be the weekend farmer’s market,

March 2016 Ocean Pines PROGRESS concerts in the park, and other events sponsored by the OPA. Director Bill Cordwell was perhaps the most vocal defender of the food truck idea. Cordwell said it’s been opposed “by the same people who oppose anything” in Ocean Pines, the “same ten people.” He referenced Thompson’s Java Bay Café in the old Yacht Club as an effort that was roundly criticized by a few people “but nobody can say the Java Bay lost money.” He added that the Budget and Finance Advisory Committee “thought it was a good idea” and so does the Clubs Advisory Committee. On the other side, Herrick said he opposed the purchase of a food truck because of price, contending that it was not clear that Thompson’s $55,000 estimate included licensing fees, insurance, equipment costs, depreciation and other costs. He said it seemed to him that the cost estimate is “a ridiculously low number.” Jacobs, like Cordwell a strong supporter of the food truck, pressed Herrick on whether he could support the truck if Thompson produced the additional information that Herrick had requested. He hedged, initially answering “probably” but then suggesting that as an alternative to a purchase a lease option could be considered to test the idea. “I’m not sure it will be profitable,” Herrick added.

Jacobs said the idea had been met with “an avalanche of negativity” and even Terry acknowledged that he initially had some doubts about whether the truck could be obtained for a cost of $55,000. Jacobs said the truck would have value because it would be available for use at “various events” in addition to the Yacht Club and Mumford’s Landing. Stevens took exception to Thompson and Lewis’ revenue numbers, noting that the proposal was based on 16 weeks of summer usage rather than the 15 weeks that fall between Memorial Day and Labor Day. He said the $55,000

did not include licensing, insurance or depreciation costs. Responding to Cordwell’s comments about the Java Bay Café, Stevens said that no one can show it made money and that “we never will be able to get numbers for the Java Bay.” “Knowing that, I can’t vote for” the food truck, he said. The food truck issue was pushed to the Feb. 19 meeting because, at another in a series of budget review sessions on Feb. 5, the board had not taken an official vote on the proposed capital item.

OCEAN PINES BUDGET

10 Ocean Pines PROGRESS

OCEAN PINES BUDGET

March 2016

Food truck From Page 9 Despite a flurry of nasty emails to the OPA and negative feedback on the oceanpinesforum.com Web site, Thompson was able to push back against the notion that the food truck was little more than a hot dog truck and will be a waste of money, doomed to failure in much the way the Java Bay Café in the old Yacht Club was perceived to be by many of its critics. Aware that the Java Bay café was criticized in part because its business rationale was lacking in specificity and never did produce much financial data to show whether it made money for the OPA, or lost a lot of it, as critics believe, Thompson offered a specific business rationale for the food truck in the budget book he delivered to the board for review in early January. He vigorously defended that rationale in meetings with the Budget and Finance Advisory Committee, the board and finally in a budget town meeting Jan. 30. Thompson’s business plan includes a precise forecast of profitability in the first year sufficient to pay for the $55,000 purchase cost of the food truck. His budget, part of his budget for the Yacht Club next year, predicts $162,400

in revenue for the truck, $56,840 in cost of sales, and labor of $31,516, for a net profit of $74,044. He subsequently hedged a bit on whether the truck would pay for itself the first year, telling board members that full payback Bill Cordwell might extend into the second year of operation. Contrary to initial reports that the truck would be parked exclusively at the Yacht Club, Thompson said it would be in much wider circulation. Tom Herrick It will be parked at the Mumford’s Landing pool during lunch hours this summer. Menu items will include wings, cheese steak egg rolls, fresh garden salads, lettuce wraps, crab cake sliders, and Cuban paninis, ranging in price from $7 to $9. Hot dogs, mozzarella sticks, fried fish baskets, hot dogs and cheeseburgers for kids will

range in price from $3 to $6. It will then be shifted to the Yacht Club, where it will be easily accessible to the outdoor deck in late afternoon and early evening. The menu will include coconut shrimp for $10, a fried seafood basket with shrimp, clam strips, calamari and fish for $12, a Hebrew National hot dog for $5, a pit beef sandwich for $12, a grilled sausage sandwich for $7, and a Cuban Panini with pork, Swiss cheese, mustard and pickles for $9. The kids menu presumably will also be available. The truck also will also be open for business at White Horse Park, with breakfast items at the weekend Farmer’s Market, and snack fare during Monday movie nights and Thursday Concerts at the Park. There is even talk that the food truck will be open for business on the Ocean Pines Beach Club parking lot during parade events in Ocean City, assuming that the necessary permits can be obtained from resort officials. The general manager said initial coverage about the food truck in the media was sensationalistic and misleading, calling it a “hot dog” truck when in fact the menu to be offered is far more extensive. Thompson told the budget commit-

tee and directors that the truck idea grew out of notification from the county health department that it could no longer grill on the Yacht Club decking for safety and health reasons, at least without expensive modifications and the creation of a more permanent food service facility including refrigeration. The solution seemed to be a food truck that could be moved around at will, he said. OPA Directors heard from mostly negative Ocean Pines residents when word surfaced about the proposed food truck in the media. OPA President Pat Renaud, during board discussion in late January, said he had been told by members of the local Kiwanis Club that they weren’t pleased about the competition the OPA truck would pose to its hot dog sales at many local events. Thompson said that while he is aware of the service by Kiwanis, the OPA food truck will be going places the Kiwanis Dawg Squad does not serve, during hours it is not realistic to expect volunteers to work. At a public hearing on the budget in late January, Thompson poked fun at the critics by posting in his PowerPoint presentation a picture of a real hot dog truck, in a sausage-like shape, which he said was totally unlike the truck that the OPA would buy if the board approves it.

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OCEAN PINES BUDGET

Only four directors vote for 2016-17 OPA budget

Lot assessment remains at $921; no changes in amenity fees adopted board at the Feb. 19 meeting, had not “changed” at all from what had been discussed and voted on by the board up to that point. He said he had “no idea” what Stevens was looking for other than that “Carmine hasn’t something correctly” in his calculations on the impact of the board’s budgetary changes on the lot assessment. “I just don’t know how many times we have to review something” before

voting on it, he said. After Herrick said it was reasonable to ask for a couple more days to review the final version of the budget, Terry responded that he said the directors had agreed to vote on Feb. 25, adding that to extend that deadline would send the wrong message to property owners that the directors “didn’t have all the information it needed” to cast a final budget vote. “I see no reason to delay,” he added.

Herrick said in particular he had not seen the specific number for a decrease in the contribution to the legacy reserve that enabled the base lot assessment to remain at $921. Without that reduction, which turned out to be $234,036, the assessment would have increased at least $22. Terry said it would be unfortunate for the board not to approve the budget when all seven directors had worked cooperatively to forge a compromise that avoided an assessment increase. “I won’t table it,” he said of his motion. Collins then accused Terry of “put-

By TOM STAUSS Publisher espite forging an eleventh hour compromise that kept the base lot assessment at $921 for the 2016-17 fiscal year, in the end only four of the Ocean Pines Association directors voted affirmatively for the budget that they labored over for at least 45 hours in budget review meetings that occurred throughout January and not concluding until a special meeting on Feb. 19. Various amenity fees also were left untouched by the directors. In action taken during the board’s Feb. 25 regular monthly meeting on a motion offered by OPA Treasurer Tom Terry, directors Pat Renaud, Cherl Jacobs, Bill Cordwell and Terry voted for the budget, with Director Dave Stevens in opposition. Abstaining were directors Jack Collins and Tom Herrick. Stevens wanted the board to delay a final vote on the budget until the following Monday, allowing him the weekend to review final budget documents that he had not seen prior to the meeting. Collins and Herrick voted in solidarity with Stevens, arguing that Stevens’ colleagues as a matter of courtesy should have given him time to review the final budget documents. After Terry offered his motion to approve a budget with total revenues of $11,179,372 and operating expenses and transfers to reserves of the same amount, and a capital improvement budget of $3,490,800, Stevens countered with a motion to table Terry’s motion. It was seconded by Collins, who, like Stevens, said he had not had an opportunity to review final budget documents that General Manager Bob Thompson said had been completed the previous day by Controller Art Carmine and made available to directors. Stevens in particular said he wanted to review all the changes in the budget voted on by the board at the Feb. 19 special meeting. He said he didn’t think there would have been a deliberate attempt by Thompson or Carmine to deviate from board decisions but “mistakes happen” and he said he had a fiduciary duty not to vote on a budget whose final iteration he had not yet reviewed. Herrick agreed, telling his colleagues that he had “no problem” with allowing Stevens a few extra days to review the final budget documents. Director Bill Cordwell, who lately has been vocal in expressing frustration with what he regards as delaying tactics by some of his colleagues, objected to any delay in a final budget vote. He said the directors had spent 45 hours at least in reviewing the budget, and that they had agreed to vote on the final budget on Feb. 25 under the assumption that final budget figures would be available at that meeting. Cordwell said that Carmine and Thompson beat that deadline by a day. He said the final budget document, which itemized changes approved by the

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OPCEAN PINES BUDGET

March 2016

DEPARTMENTAL SUMMARY BUDGET 2016-2017

DEPARTMENTS

REVENUE

ADMINISTRATION MANAGER'S OFFICE FINANCE MEMBERSHIP PUBLIC RELATIONS COMPLIANCE-PERMITS GENERAL MAINTENANCE PUBLIC WORKS FIRE / EMS POLICE RECREATION TENNIS PLATFORM TENNIS PICKLEBALL AQUATICS GOLF OPS / FOOD & BEV BEACH CLUB BEACH PARKING YACHT CLUB MARINAS SUB-TOTAL

5,502,265

EXPENSE

490,500 323,265 38,452 16,790 23,870 770,498 1,257,667 334,750 430,830 1,471,660 278,550

511,996 286,291 475,052 105,355 302,860 206,857 498,584 1,355,715 507,521 1,729,824 876,245 54,785 20,426 22,325 820,330 1,391,045 200,649 63,129 1,437,164 118,164

11,179,372

10,984,317

3,000 43,750 138,525 55,000

CAPITAL ADDITIONS SPORTS CORE LOAN PRIN

NET

PPO

4,990,269 (286,291) (475,052) (102,355) (259,110) (68,332) (498,584) (1,300,715) (507,521) (1,239,324) (552,980) (16,333) (3,636) 1,545 (49,832) (133,378) 134,101 367,701 34,496 160,386

590 (34) (56) (12) (31) (8) (59) (154) (60) (147) (65) (2) (0) 0 (6) (16) 16 44 4 19

195,055

(127,255) (67,800)

(15)

NET

(8) 0

DEPARTMENTAL SUMMARY BUDGET 2016-2017

DEPARTMENTS ADMIN / FINANCE / MKTG

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REVENUE

EXPENSE

NET

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PUBLIC WORKS / CPI

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1,257,667

1,391,045

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1,819,106

696,684

GOLF OPERATIONS

SUB-TOTAL

11,179,372

NEW CAPITAL ADDITIONS SPORTS CORE LOAN PRINCIPAL NET

10,984,317

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OCEAN PINES BUDGET OPA budget From Page 11 ting words in people’s mouths” when he said that a delay would send a message to property owners that the board was lacking information needed to finalize the budget. “It’s not sending a message,” he told Terry, adding that he (Collins) was “not accusing anyone of doing anything wrong” by asking for a modest delay in approving the budget. “I object to the impression (given) that we’re sending a message,” he said. Terry said that a delay would do “exactly that” and he advised Renaud “to call the question” on Stevens’ motion to table. “Let Pat run the meeting,” Stevens shot back, and repeated his assertion that he couldn’t vote for something he hadn’t read. “It’s beyond my understanding” why Terry couldn’t accept the need for delaying a final vote a mere four days, Stevens said. Jacobs countered that she had picked up a copy of the final budget documents on her final day of work as a Baltimore prosecuting attorney. “I made the effort to pick up (the documents) and took time to review them,” she said. She suggested that the board take a break for lunch, allowing Stevens to review the documents at that time,

March 2016Ocean Pines PROGRESS with the board reconvening after lunch for a final vote. Stevens demurred, telling Jacobs that he needed more time than a lunch break. He also said he disagreed with Cordwell and Terry’s assertion that there had been a definitive decision to vote for the budget Feb. 25. At that point, Renaud called the question on Stevens’ motion to table. It failed 4-3, with Stevens, Collins and Herrick voting in favor and Terry, Renaud, Jacobs and Cordwell opposed. Terry’s original motion to approve the budget then was voted on, passing on the four affirmative votes of Terry, Renaud, Jacobs and Cordwell. Among the changes approved by the directors in their Feb. 19 meeting were a $15,000 increase in the contract services line item in the Public Works department for geese removal, elimination of a $20,000 scissors lift, and the $234,036 decrease in the contribution to the Legacy reserve. Capital items approved during the Feb. 19 budget included $160,000 for new golf course fairway mowers, $30,000 in exterior cosmetic improvements at the Country Club, $50,000 in engineering studies for renovation or replacement of the Country club, and $525,000 for engineering and renovation of the Beach Club bathrooms or their replacement by a separate building.

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Board decides not to fund new golf carts Directors opt to add $50,000 to golf budget for cart repairs and another $160,000 for fairway mowers not requested by golf course managers By TOM STAUSS able to last another year and the seating Publisher in the Yamaha carts was replaced last he Board of Directors has accept- year, in the hopes of extending the carts’ ed the recommendation of Gener- useful life. al Manager Bob Thompson not to He told the directors that LU has fund the purchase or lease of new golf not produced detailed maintenance logs carts in the 2016-17 budget, despite the for the existing fleet, and that he could recommendation of the golf course man- not in good conscience recommend new agement company, Landscapes Unlimit- carts if he was not sure that LU had ed, and Golf Pro John Malinowski, that done everything possible to maintain 75 new carts are needed. the existing fleet. On that point, direcThe dispute, laid out in detail during tors Bill Cordwell and Tom Terry were a town meeting on the golf course Jan. particularly adamant. Cordwell, Terry, 21 in the Ocean Pines Community Cen- Thompson and OPA President Pat Reter, and debated at length again during naud comprise the four-member OPA a special board meeting on the budget working group that monitors and overFeb. 19, has been resolved in Thomp- sees LU as the company that conducts https://www.facebook.com/sunsetﬂoors21842 son’s favor by a board majority. Thomp- day-to-day operations of managing the son had argued that batteries were re- Ocean Pines golf course. To Page 15 placed three years ago and should be

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OCEAN PINES BUDGET Golf carts From Page 13 Thompson previously had told the directors that he was not comfortable in asking the Ocean Pines Association membership to pay for new carts so soon after the batteries and seating were replaced. After extended debate during the Feb. 19 board meeting, six of the directors agreed with the general manager. Only Dave Stevens voted against a motion offered by Cheryl Jacobs to add $50,000 to the 2016-17 golf operations budget for cart maintenance in lieu of purchasing or leasing a new cart fleet. Jacobs’ motion also called on Landscapes Unlimited to maintain and produce for inspection detailed maintenance logs of the fleet. The apparent lack of such detailed accounting, a practice that LU apparently inherited from the previous course managers, Billy Casper Golf, was a contributing if not motivating factor in the board’s decision not to budget roughly $300,000 for new carts in 2016-17. The lack of budgeted money for new carts won’t prevent LU from asking for supplemental funding to buy at least some new carts should maintenance logs prove definitively that a cart cannot be repaired or that the cost of doing so makes a repair impractical, the directors agreed. But the clear intent of the direc-

March 2016 Ocean Pines PROGRESS 15 tors is that they want LU to manage the existing fleet for another season, while producing detailed logs on each of the carts to show whether they have reached their useful life. The $50,000 additional appropriation is intended to help LU with that endeavor. That action had the effect of increasing LU’s 2016-17 proposed budgeted loss from $83,378 to $133,378, which would result in a significant increase in golf-related losses over what the company expects to bring in this year. While Thompson and Controller Art Carmine’s latest forecast for golf shows a $150,000 loss this year, LU in a business plan made public in January is forecasting a loss of $93,500. In another decision that was not consistent with LU’s budget priorities for 2016-17, the directors decided during their Feb. 19 meeting to fund $160,000 in new fairway mowers to replace those that were cannibalized last summer to keep the mowing schedule on track. Thompson had not included the mowers in his capital budget recommendation for next year, on the premise he was not going to press for an expenditure that LU had not recommended as a priority. Cordwell suggested that LU had made a decision not to request the new fairway mowers out of concern that the company had already asked for enough OPA financial support with the

recommended purchase of new golf carts. Cordwell in effect said that the company had its priorities backward. But he suggested that LU was not going to be unhappy when its top executives learn that the OPA board has funded new mowers. After Thompson said that if LU “can’t show me how you’re maintaining the (existing) fleet, I have no confidence” in the company’s ability to maintain new carts, Stevens seemed to be suggesting that the general manager, who had opposed the replacement of Casper by LU, was unfairly implying that LU was somehow deficient in maintaining the carts. He told Thompson and his board colleagues that he doubted whether Casper had kept detailed maintenance logs of carts or that the general manager had requested copies of them if any existed. Stevens said one option recently offered by LU Regional Manager Scott Nissley as an alternative to a purchase of 75 new carts would have allocated $75,000 in year one to refurbish carts with new seats and windshields, and another $15,000 in the subsequent two years, for an average yearly expenditure of roughly $35,000. After that, he noted, the carts would need replacement. Terry said he favored maintaining the existing fleet this coming year and then, with the evidence of detailed maintenance logs in hand, LU and the OPA could then replace the carts as needed. “We don’t have to buy all new ones in one year.” Terry also suggested that if detailed

logs indicate that certain carts can’t make it through another season, LU is free to request emergency funds for cart replacement this summer. “If we have to take action, (we can) do it this summer,” he said. Replacement carts would be funded out of the OPA’s historic (funded depreciation) reserve, which as of Jan. 30 had $5,471,299 in funds available. The directors kicked around the option of adding $35,000 for cart repairs in the 2016-17 golf operating budget, but Stevens called that a “do nothing” amount. Jacobs’ motion effectively ended the bidding at $50,000, but Stevens was still convinced that the board was making the right decision. “We’re kicking it down the road,” he said. At the Jan. 21 town meeting, Nissley offered an explanation for why LU had recommended a new cart. He said the batteries replaced “about three years ago” were of the type that only last three years and contain older technology. He said that cart manufacturers, who three years ago were still powering carts with six eight-volt batteries, have moved to carts that contain four 12-volt batteries that last four years. Nissley also said that the Ocean Pines fleet, purchased back in 2009, requires expensive mechanical and cosmetic repairs just to keep them operational. But he said the fleet might be able to make it through another summer.

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18 Ocean Pines PROGRESS

March 2016

“It makes no sense at all,” he said of a new building. “It would add a lot of unnecessary expense to a project” The Pine’eer Craft Club of that should be possible to do for under Ocean Pines selected Luz $500,000.” Castillo as the “Crafter of the He also said building a new bathMonth” for February. She room/locker room building could result has been doing crafts since in a loss of parking spaces at the Beach her early childhood, inspired Club, which often turns away cars on by her father who did a lot busy summer weekends. of projects that involved Steen recently asked Don Smith of carpentry. She does mosaics, Sens, Inc., a Berlin-based construction beaded flowers, paints, and company that came up with an estienjoys building shelving. mated renovation cost that in turn was Much of the shelving units incorporated into the capital budget, to in the Craft Store were made offer his assessment of the two options by her. The shop is now open under consideration. year-round on Saturdays from Smith checked with Ocean City plan9 a.m.-3 p.m. and Sundays ning and permitting officials to deterfrom 10 a.m. -3 p.m.. The mine the obstacles of building separate shop is located in White bathrooms/locker rooms on the site. Horse Park near the CommuThose obstacles are formidable, nity Center. Steen said, so much so that he said that the OPA should abandon consideration of a new, separate building. ing weeks and months pursuing the new In a Feb. 26 letter to Steen, Smith Cover Story building option. responded to a recent assertion by CordFrom Page 1 Collins’ ally in pushing for a Beach well, the OPA director, that a renovation tions, though he did not abandon his Club lower level renovation, Ocean of the lower level might require the enclear preference for renovation over a Pines builder/developer Marvin Steen, tire building to be brought up to code, separate building. in a recent interview said that he be- including the possibility that an elevaIndeed, he expressed concern in a lieves it’s a waste of money and a dila- tor would have to be added to provide subsequent conversation with the Prog- tory tactic to pursue the option of a new ADA-access to all three levels. ADA reress that the additional $25,000 alloca- building. fers to the Americans with Disabilities tion will add complexity and delay to a Steen last fall appeared before the Act, federal law enforced at the local project that he suspects could begin as board to press for a Beach Club renova- level. early as this fall if Thompson works dili- tion, with Collins then carrying the ball Citing the Sens, Inc., letter, Steen gently to make it happen, without devot- for the project at the board level. said that so long as the cost of the renovations don’t exceed 50 percent of the current value of the building, the entire building would not have to be brought PIZZA and up to current code requirements. A MOVIE 11073 Cathell Road He said there’s no question that New at Mama Della’s Ocean Pines, MD an oceanfront commercial building in DVD/BLURAY Ocean City is worth far more than a $1 Rentals Carry-Out million, meaning that it would not have or Delivery One FREE Rental to be brought up to code if renovations for Signing Up! can be kept below a half million dollars. Ask*About Our Titles New Release Steen said that Sens’ research indiavailable 28 days before Daily Dessert cates that Ocean City permitting offiRedbox and Netﬂix cials won’t require structural drawings DINNER SPECIALS if the existing structure isn’t being alMONDAY tered.NIGHT Only architectural and MEP (meMonday ~ 1/2 Cheesesteak & Fries $7.50 chanical, electrical, plumbing) drawings would be required, he said. 99 Tuesday ~ 1/2 Cheeseburger & Fries $7.50 “The cost of the building permit

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COVER STORY would be $7,401.60, the fire marshal fee would be $1,480,32, and the (Ocean City) impact fee would be six additional fixtures at $346 each, or $2,076,” according to the Sens letter to Steen. Combined, the permits would cost the OPA $10,957.92, “and the drawing process would be approximately three weeks and the permit process” would also take about three weeks, according to Sens. Although the Sens letter to Steen did not itemize permitting costs for a separate building, a new building is clearly far more permit-intensive than a renovation, Steen said. “The construction of a new building would require civil drawings for the area disturbed and storm-water management would be included,” the Sens letter indicates. Steen said that in his opinion stormwater management requirements are in themselves a deal-breaker for a new building on the Beach Club complex. He said that Thompson has first hand knowledge about how much additional cost and complexity stormwater management concerns introduce to a project, given massive cost overruns related to stormwater management at the Manklin Meadows racquet sport complex. The Sens letter indicates that full architectural, structural and MEP drawings would be required for a new building, hardly a surprise. But for Steen another deal-breaker is that for a new building, since it would be located “East of Coastal Highway, pilings would be required for the foundation,” according to the Sens letter. Steen said driving pilings for a bathroom/locker room facility would be prohibitively expensive and would be a poor use of OPA resources. He said Ocean Pines would be “laughed at on the beach” for spending its property owners’ assessment dollars in such an “obviously stupid way.” According to the Sens letter, the process of producing various design drawings for a new building would take much longer than renovation. The drawing process would take six to eight weeks, as would the permitting process, the letter says.

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OCEAN PINES

March 2016

OCEAN PINES BRIEFS Sandpiper to host March 10 meeting on natural gas conversion process

andpiper Energy, the Ocean Pines propane/natural gas supplier, will host an information meeting on Thursday, March 10, on plans for converting its propane customers from propane to natural gas service via the company’s Ocean Pines underground pipeline network. The meeting will be held at the Ocean Pines Community Center beginning at 6 p.m. The forum will feature information stations for residents to get details and ask questions regarding billing, customer service, safety, and learn more about the conversion and connection processes. Sandpiper and the Ocean Pines Association in December finalized an agreement that allows Sandpiper to bring natural gas to the community. The conversion process has begun on a limited basis for those residents adjacent to Beauchamp Road and St. Martins Lane as well as areas within the Newport section of Ocean Pines. Postcards will be sent to the residents who are next in line to be converted. The postcards will highlight the week when technicians will be in a neighborhood to answer questions, perform appliance evaluations, and set a temporary propane tank pending the availability of natural gas delivered by the existing pipeline. It also includes the phone number, 1-855-290-9628, that can be called if there should be any questions or if the residents are unavailable that week to meet with the technicians. A map depicting the preliminary order for the areas to be converted is available on the Sandpiper Update section of the Ocean Pines Association’s Web site. Sandpiper Energy is a subsidiary of Chesapeake Utilities and distributes natural gas and propane to approximately 11,000 residential, commercial and industrial customers in Worcester County. In the last two years, more than 2,400 Berlin and West Ocean City customers have converted their homes and businesses to natural gas. For more information regarding Sandpiper, including Frequently Asked Questions, please access its Web site at www.sandpiper-energy.com.

Thompson to host March 8 town meeting

Ocean Pines Association General Manager Bob Thompson will host a town hall meeting on Tuesday, March 8, at 6 p.m. in the Ocean Pines Community Center. The meeting is open to the public. Thompson will use the meeting as an opportunity to address comments and questions posed by Ocean Pines residents and property owners, who are encouraged to participate and share feedback. Questions may be submitted in advance via email to info@oceanpines. org.

Those unable to attend the meeting may view it live at OceanPines.org or on Mediacom channel 78. It also will be posted on the Ocean Pines website and will air on channel 78 afterward. Topics likely to be covered include the just-completed OPA budget process for the 2016-17 fiscal year and the process of converting Sandpiper Energy’s pipeline network from a propane-delivery system to natural gas.

OPA offers first Residents’ Academy

A Resident’s Academy designed to enhance Ocean Pines Association property owners and residents’ understanding of the community will begin within the next 60 days. OPA General Manager Bob Thompson told the Board of Directors during a Feb. 25 meeting that 25 members have registered for the first 7-week academy. “This should be a very positive good learning experience for our members,” he said. Directors asked how participants were selected and if the academy is open to only OPA property owners or renters as well. Thompson responded that the target audience is the OPA membership. “This is to help our membership become more educated about their association,” he said, advising the board that the idea for the academy came from Public Relations Director Teresa Travatello. He said participants were registered based on their expressing interest in the academy. He said the academy is not open to walk-ins but the OPA plans to hold more sessions in the future. Additionally, Thompson said he is considering videotaping the academy in order to make it available to a wider audience.

County approves design contract for ops center

The Worcester County Commissioners on March 2 awarded a contract for the design of a new operations building at the Ocean Pines Wastewater treatment plan. The county received six proposals but awarded the contract based on the low bid of $30,850 from George, Miles and Buhr of Salisbury. County Engineer John Tustin said George, Miles and Buhr is very familiar with the Ocean Pines wastewater treatment plant and the operational needs in that facility as they were the design engineers for the most recent plant expansion. Additionally the firm recently completed a design contract for replacement of the sludge drying greenhouses and assisted in conceptual development of the operations center floor plan in 2010. Tustin said the proposal submitted by GMB displayed a significant amount of experience in wastewater operations buildings and in general building con-

struction. “Their staff is highly qualified and they have the experience needed to complete this project successfully,” he said. The project will consist of designing a new free standing, single-story structure of approximately 2,200 square feet in size. It will house offices, laboratory, training room, break room and support areas to replace the existing outdated facility. Funding for the building design is available in the proceeds of a 2014 bond issue. Worcester County is also seeking bids for upgrades at two pumping stations, A and F, located within the Ocean Pines Service Area. The total estimated project cost is $800,000 and funding for the work was included in the 2014 bond issue.

Rec Department hosting March-April bus trips

Area residents can catch a show and let Ocean Pines do the driving with bus trips offered by the Recreation and Parks Department during March and April. The schedule includes the Philadel-

phia Flower Show on Saturday, March 12, celebrating the natural beauty of national parks. The cost is $70 per person, including transportation and show admission. The Dutch Apple Dinner Theatre in Lancaster, Pa., is staging “Menopause the Musical” on Saturday, April 9, with parodies of songs from the 60s. The cost is $90 per person, including show tickets, a buffet lunch and transportation. On Sunday, April 24 head south to Norfolk, Va. and watch The Virginia International Tattoo at the Scope Arena in Norfolk, Va., on Sunday, April 24, will feature over 1,500 military and civilian performers from eight nations who will share music and dance culture. The cost is $85 per person, including transportation and show ticket. The buses for these trips will depart from the Ocean Pines Community Center. Reservations are required. Refunds will not be issued for cancelations unless vacant seats can be filled. To register, call the Ocean Pines Recreation and Parks Department at 410641-7052.

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OCEAN PINES

March 2016 Ocean Pines PROGRESS

County commissioners endorse Route 589 commercial rezoning By ROTA L. KNOTT Contributing Writer ore commercial development could one day come to Route 589 near Ocean Pines. Following a public hearing on March 1, the Worcester County Commissioners approved a rezoning of 11.5 acres of agriculturallyzoned land north of Gum Point Road for commercial use.

The property, fronting directly on Route 589 immediately west of property owned by Steen Associates, is controlled by the Estate of Mildred L. Parsons and currently is in use as tilled cropland. It was given an A-1 Agricultural District zoning classification at the time zoning was first established in the mid1960s and that classification was retained in both the 1992 and 2009 com-

OPA soliciting bids for repairs to Parkway, Clubhouse bridges

By ROTA L. KNOTT Contributing Writer ith concerns about the location of utilities now resolved, the Ocean Pines Association is circulating a request for proposals to repair the Ocean Parkway and Clubhouse bridges. Proposals are due to engineers Davis, Bowen and Friedel of Salisbury, on behalf of the OPA, by March 30. Interested bidders are encouraged to attend a pre-bid meeting to be held at 10 a.m. on March 16 at the Ocean Pines Association administration building. In his Feb. 25 general manager’s report, General Manager Bob Thompson said all of the issues related to utility location on or near the bridge have been worked out. He said the OPA held off on releasing the RFP until utility locations could be addressed because that can change part of the engineering design for the bridges based on how those utilities will be attached. In response to questions from the Board of Directors, Thompson said the RFP is only for repairs to the bridges,

not their replacement or raising of the bridge height. “There’s no raising. This is only a repair to the bridges,” he said. OPA President Pat Renaud asked if Worcester County representatives were involved in planning for the repairs. “No this is ours,” Thompson said, adding that the county is not involved because the project only involves bridge repairs. However, the OPA has worked with the county on issues related to the eventual replacement of both bridges as well. “Hallelujah. Because I’m so happy that we’re finally moving forward on this,” Director Cheryl Jacobs said. The estimated cost for the repairs is $243,100 per bridge. The structures will be able to remain open while the repairs are being made. Meanwhile. the OPA is moving forward with plans for the ultimate replacement of the two aging bridges in the community, but it doesn’t yet know who is going to cover the more than $1.2 million estimated cost. Thompson said both bridges, which are part of the Worcester County roads inventory, at some point will need to be replaced. While the OPA is planning for their replacement, it will be the county that decides when that work will be

Issues related to location of utilities have been resolved, Thompson says

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prehensive rezonings. However, attorney Hugh Cropper argued that the existing classification was inappropriate and amounts to “spot zoning” because the property is abutted on three sides by commercially zoned land along Route 589 and residentially zoned property on the fourth side. As the basis for the rezoning request Cropper contended that there has been a substantial change in the character of the neighborhood since the last comprehensive rezoning, adopted by the County Commissioners in 2009. He said the property immediately to the north of the Parsons property was rezoned from agricultural to commercial in 2012. That rezoning left the petitioned area as an island of agricultural zoning that represents spot zoning. He said the planned development of the adjacent property owned by developer Marvin Steen to the east into a residential subdivision is a change, due in large part to the granting of Atlantic Coastal Bays Critical Area growth allocation by the commissioners and the

state’s Critical Area Commission that enabled the subdivision to occur. Cropper also cited the opening of the Casino at Ocean Downs and amendments to the county’s master water and sewer plan and extension of public wastewater service to the Casino. Cropper acknowledged that a commercial classification on the petitioned area would result in a greater traffic impact than does the existing agricultural district but the traffic study done for the commercial rezoning of the adjacent Burbage property indicated that traffic would still be at level of service C on Route 589. He said that is an acceptable level and contended that because the Burbage commercial rezoning was upheld in court, it is only equitable to give the petitioned area the same zoning. As it pertains to wastewater disposal and the provision of potable water, the petitioned area is not within an area which receives public sewer or water service at the present time. Consultants for the property owner said the site is well-elevated and there are no tidal or nontidal wetlands on the petitioned area so it is suitable for onsite septic disposal. However they said the preferred method of wastewater disposal on the property would be via connection to the Ocean Pines Service Area.

24 Ocean Pines PROGRESS

OCEAN PINES

March 2016

Site work drives up cost of Manklin Meadows project Thompson looks to cut costs by bringing in-house work to reconfigure gardens, playground and parking

necessary to do the work in the Community Gardens now before participants begin planting their crops for the year. The garden area will be slightly reconfigured and the fencing moved to provide a different access point. Next will come realignment of the adjacent gravel parking area, followed by moving the playground equipment. The playground equipment will have to be disassembled, new upright supports will be installed and the existing salvageable equipment will be reassembled on the new site. The playground was constructed by volunteers more than a decade ago following a massive fund-raising effort. Dozens of volunteers toiled to prepare the site and erect the equipment for the OPA’s only community-built playground in October 2003, but now the playground needs to move to make way for the growing number of members playing racquet sports. “It’s our intent to take those three in order,” Thompson said of the gardens, parking and playground components of the project, adding “they’re relatively small parts of the project.” The Manklin Meadows master plan design was approved by the board more than a year ago to guide additions and

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changes to the recreation facilities at the complex, including the addition of two paddle ball courts now and two more in the future, relocation of the playground, realignment of the parking lots and the addition of eight pickle ball courts. But when a request for proposals for the total project was solicited, the

OPA only received one response, from Harkins Construction for $748,000. That was more than double the amount budgeted by the OPA for the project at $273,550. Thompson said the project cost was driven up by the type of stormwater

By ROTA L. KNOTT Contributing Writer ith the lone bid for redevelopment of the Manklin Meadows Recreation Complex with additional racquet sports courts coming in at more than twice the amount budgeted, the Ocean Pines Association general manager is opting to complete the project in phases. Initial work on the Community Gardens and community-built playground will be done in-house to make way for new pickleball and platform tennis courts. General Manager Bob Thompson during his Feb. 25 report to the Board of Directors said staff has regrouped and is looking at alternate ways to complete the project, including having OPA crews do some of the work and revising the plans for stormwater management. Thompson said the first phase of the work will include a slight reconfiguration of the Community Gardens, moving the playground equipment and shifting some parking spaces. He said the OPA is seeking bids from contractors to complete the earthwork necessary to accomplish these project components. With spring planting season just around the corner, Thompson said it is

Bridge repairs

practical to spend the extras money now and replace the structures instead of reFrom Page 23 pairing them. done and how to pay for it, he said. Thompson acknowledged that earBoth bridges have fallen below the ly estimates for replacing the bridges minimum level of 50 on the state’s was in the range of $800,000 each, but bridge safety rating system, allowing for said that figure didn’t include the cost their replacement if the OPA and county of mobilization and ancillary work that can find a way to cover the cost. Thomp- pushes the replacement figure closer to son said there are two primary funding $1.3 million per bridge. Because of that mechanisms for bridge replacement – escalating cost, the OPA opted to “put all state grants and federal grants. of our energy into repair work” at this During the public comments section time, Thompson said. of the board meeting, two property ownSlobodan Trendic also asked the ers encouraged the board to move for- board to revisit the issue of bridges ward with planning for replacement of from a replacement standpoint rather the bridges, not just repairs. than just making repairs. He said it is Tom Janasek called for the OPA to not just an issue of funding but rather consider replacing the bridges, depend- a question of safety, given the condition ing on the bids that are submitted in of the bridges in an engineering report response to the RFP. He said he heard from several years ago. theComplete cost to Home replace the bridges wasNEW about He said that report recommended re1508 Improvement Handout with our type_Layout 1 2/3/15 1:22 PM Page 1 $800,000 each and that it may be more placement, not repairs.

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March 2016 Ocean Pines PROGRESS

OPA seeks more than $1.23 million in county grants

Manklin Meadows From Page 24 management proposed for the site. He said plans called for a bioretention basin, but the association is now working with engineers and county planners to investigate the possibility of using a less costly wetland pond instead. “We’re going down that process now,” Thompson said. Jim Freeman, president of the platform tennis association, spoke up during the public comments section of the board

It’s an issue of fairness and equal treatment when compared with other communities in Worcester County, Thompson says in letter to Worcester County commissioners for fiscal year 2016-17 budget to the commissioners. The request includes $625,000 for public safety, $10,000 for tourism, $295,00 for roads and bridges, $200,00 for recreation and parks, $50,000 in a restricted fire grant and another $56,767 in street grants. In a recent letter to the commissioners, OPA General Manager Bob Thompson argued that Ocean Pines contains meeting and pleaded with directors to proceed with building the new racquet sports courts at Manklin Meadows. He said the number of platform tennis members continues to grow and the program is crunched for space. He encouraged the board to proceed with plans to add more courts as proposed in the new Manklin Creek complex project. Apparently that won’t happen until and unless Thomson and the county are able to work out a solution to stormwater management issues.

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more than 7,700 homes and according to the 2010 census data, a year-round population of 11,700 residents or 23 percent of the county’s residents. “Despite having the largest yearround population in Worcester County, we continue to receive the minimum level of funding compared to the amount of funding received by the other communities in the County. The minimum amount we receive is surprising when you compare the per capita dollars allocated,” he said. For several the years, the county has awarded a grant to the OPA to help cover the cost of providing police services within Ocean Pines and surrounding communities. “We appreciate the financial support given to us by the commissioners and trust that you will be able to continue this extremely valuable and much needed support for our police services during the coming fiscal year,” Thompson said. Last year OPPD handled more than 10,507 calls for service, directly assisted the Worcester County Sheriff ’s Depart-

ment, Maryland State Police and other allied police agencies with over 205 calls for service in the areas surrounding Ocean Pines. “Continued growth on the Route 589 corridor places has increased demands on our 15 sworn member police agency. We have seen a dramatic increase in calls for service in the past five years and anticipate future growth in public safety demands to keep pace with development,” Thompson said. He cited examples of cooperative efforts to reduce demands on the county and the state police, including the OPA’s agreement to assume all public safety calls for service on Manklin Creek Road. In addition, the OPPD is participating in the Worcester County Criminal Enforcement Task Force to help combat the distribution of drugs in Worcester County. “While we do not object to being called upon to support the residents outside of Ocean Pines, it does put additional strain on our already stretched resources,” Thompson said. The total budgeted cost to Ocean Pines to operate the police department during the 201617 fiscal year exceeds $1.7 million dollars. To assist the OPA in meeting the current and increasing demands for

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By ROTA L. KNOTT Contributing Writer he Ocean Pines Association has asked Worcester County for more than $1.23 million in funds to support its police department, roads and bridges maintenance, tourism and recreation and parks programs during fiscal year 2016-17. Arguing that the OPA provides services that support the county’s largest year-round population, as well as non-residents of Ocean Pines, the Board of Directors submitted a request to the Worcester County Commissioners for funding to help cover the cost of its services and programs. OPA representatives on March 1 presented the OPA’s requests for funding

26 Ocean Pines PROGRESS

OCEAN PINES

March 2016

County grants From Page 25

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police service, the association asked the county for funding of at least $625,000. The OPA acknowledged that the county’s loss of liquid fuel funding that has restricted its ability to provide Ocean Pines needed road maintenance dollars for paving, drainage, bridges and similar projects. Before state budget cuts, the county provided funding in the average amount of $500,000 annually. “To ensure our bridges and roadways remain safe for those living, working and visiting one of the largest communities in Worcester County we have budgeted to spend over $425,000 on bridge repairs alone in the next fiscal year. These repairs have been budgeted to address the areas identified in the county’s inspection of the bridges in the Ocean Pines community. This does not include the $550,000 we have budgeted to keep our roads in good repair,” Thompson said. The OPA argued that safe passage of emergency vehicles, school buses and county waste water vehicles are just a small part of daily activities on the roadways and bridges. To help cover that cost of maintaining them, the OPA requested county funding support of $295,000. The OPA is also seeking $10,000 in funds to assist with the costs associated with its July 4th celebration. The OPA has $15,000 budgeted for this year’s event, but asked the county to consider sharing in the costs. Since the event is one of the biggest holidays of the year and the community swells beyond 25,000 people at that time. Thompson said the event serves not only serves the Ocean Pines residents, but is attended by residents, guests and visitors from all over the northern end of the county. Many of the attendees prefer not to travel into Ocean City in order to

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avoid the traffic congestion, he said. “We understand tourism is of vital importance here in Worcester County. Our continued efforts to provide amenities such as our boat ramps, marinas, pools, parks, recreation activities including summer camps, bus trips, Yacht Club, Robert Trent Jones Golf Course, Worcester County Veterans Memorial and Beach Club in Ocean City all contribute and add value to the tourism industry in Worcester County. We would appreciate your consideration of a small portion of the county’s tourism funding to help us in our efforts to provide amenities and programs that highlight the benefits of visiting Worcester County,” Thompson said. Arguing that Ocean Pines supports various activities with participants of all ages who reside in and out of Ocean Pines, the OPA asked the county for $200,000 to support its recreation and parks programs. The OPA’s annual budget for recreation and parks is in excess of $875,000. With the additional of the aquatics department’s budget of $820,000, the annual expenditures for recreational activities exceeds $1.6 million dollars for activities and programs that meet the recreational needs of both residents and non-residents. Thompson said the recreation and parks department is open seven days a week to meet the needs of all residents, visitors and tourists in Worcester County. The OPA offers many free amenities and activities including concerts in the park, tennis facilities, fireworks display, marinas, boat ramps, basketball courts, soccer fields, playgrounds, walking trails and so much more that are open to the public. “The programs of the OPA are not something we simply choose to pay for as an Association. They are in fact, in some ways, our commitment to Worcester County,” Thompson said. He argued that efforts are made to eliminate duplication of programming within the county. He said the programs provide an essential service to many Worcester County residents and yet the vast majority of those expenses are paid by our OPA membership, despite the fact that more than 35 percent of program participants are not Ocean Pines residents. “We understand the very difficult task of selecting where and how to allocate financial resources with so many competing elements,” Thompson said. He added that even if the county were to approve the OPA’s request, the per capita rate of funding is still the lowest of all the major communities in the county and remains less than half of what the next closest comparable community receives. He said it is time the county recognize the largest population center and normalize the levels of county support. “Our OPA Worcester County citizens deserve the same level of respect as those who live in other parts of the county,” he said.

BOARD OF DIRECTORS

March 2016 Ocean Pines PROGRESS

Directors seem daunted by contents of reserve study

Thompson asks for input on report’s findings but directors appear reluctant to supply questions this as a very detailed complex document,” she said, adding that she does not feel comfortable asking questions about it until the board can meet with DMA to discuss and gain a better understanding of it. Thompson barely mentioned the reserve study in his February general manager’s report, simply noting that since he gave the draft to directors last month he has not received any comments or questions about it. His goal was to provide a summary of questions and concerns to DMA for consideration prior to a face-to-face meeting with the board. Thompson said once the OPA budget was finalized for fiscal year 2016-17 in late February, all included capital projects would also be added to the reserve study. Then the board can meet with the consultants to continue the planning process, he said. During the board’s Feb. 25 monthly meeting, Director Jack Collins said he believed the board would be meeting with DMA “in a vacuum” and suggested the board meet the “volunteer group” that helped develop the reserve study. He said he thought that Thomp-

son, other OPA staff, the treasurer and assistant treasurer had worked with DMA on the reserve study. “I thought it might be useful for board to meet with those people” to discuss the process used to gather the information included in the document, Collins said. He added that would give the board a better understanding of the document. “It’s not that complicated,” Thompson said, added that he was “not being smart” but that there was no volunteer group or collective meetings with DMA. “The document you have. All it covers is the assets that we have on our books,” he said, adding that totals about 1,500 assets on a list that is reviewed and updated regularly by the OPA’s outside auditor. “So that’s where the information came from.” He said DMA simply reviewed and then listed and grouped the existing assets; the consultants did not change or adapt the information that was provided to them by the OPA. Based on that information, the consultants simply added the life expectancy of the assets based on their current condition as determined during a physical inspection. “That’s where we are right now,”

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Thompson said. “It’s a list of assets right now.” Director Tom Terry, who serves as OPA treasurer and participated in the meeting via conference call, said neither he nor the assistant treasurer has met with DMA. He said there has been no “connection” or “working with them behind the scenes” on the reserve study. Thompson corrected Terry and said assistant treasurer Pete Gomsak did participate in one conference call with the consultants regarding categorization of the assets. He said Gomsak happened to be in OPA Comptroller Art Carmine’s office when it was time for the call so he was asked to participate. Terry said he was unaware of that participation by Gomsak, whose presence on any Thompson working group is regarded with suspicion by board members who were not in favor of his appointment as assistant treasurer last summer. While no one doubts Gomsak’s financial acumen, he can be a lightning rod because of what some regard as his outsized behind-the-scenes influence in influencing Thompson and certain board members. Gomsak is a former OPA director who is credited, or criticized as the case may be, as being a prime mover behind the creation of the five-year-plan of suppleq

By ROTA L. KNOTT Contributing Writer lthough they approved moving forward with a reserve study many months ago, several members of the Board of Directors now say they are not knowledgeable enough about the purpose or content of a reserve study of the Ocean Pines Association’s capital assets to even ask questions about the draft document. Director Dave Stevens said he has numerous questions and concerns about the study provided to the board last month by General Manager Bob Thompson. It would be “fruitless to ask that number of questions without being able to talk to them face to face,’ he said of the consultants who drafted the document. The reserve study, which reviewed all of the OPA’s existing facilities and the association’s ability to fund their maintenance, was conducted by consultants Design Management Associates Inc. of Richmond, Va. The OPA hired DMA to perform an interactive reserve analysis that when complete will detail how long the components of various facilities will last, where in that life cycle they are and the cost to replace them. Director Carol Jacobs, often at odds with Stevens over issues under consideration by the board, agreed with him regarding the reserve study. “I for one see

28 Ocean Pines PROGRESS

By ROTA L. KNOTT Contributing Writer t was to do their business or get off the pot when it comes to constructing new bathrooms in White Horse Park, some members of the Ocean Pines Association Board of Directors said during a Feb. 25 discussion of the project. Others argued that they didn’t have adequate time to review the proposal before being asked to vote on awarding a contract for the work. Ultimately, directors opted to wait until March 3 so everyone could look over the bid packages and vote on the project via email. The project ultimately was adopted by the board that way, 5-2, with Director Dave Stevens in opposition and Jack Collins abstaining. During the Feb. 25 board meeting, Director Cheryl Jacobs offered the motion to award a contract for the work. Stevens followed shortly thereafter with a motion to table that superseded her motion. Following extensive discussion on the timing and need for the project, a majority of directors agreed to wait to give everyone time to read the full project package before voting. Stevens amended his motion to delay approval until March 3. Only Jacobs objected and Director Tom Terry, who participated via conference call, abstained. General Manager Bob Thompson presented the White Horse Park bathroom project to the board during his general manager’s report, saying he had just received the final bids a day earlier. Five contractors responded to the OPA’s cost solicitations -- there was no formal request for proposals (RFP), according to Stevens -- and the staff recommendation was to award the contract to the low bidder, Beach Construction, at a cost of $86,000. Thompson also suggested add-

Reserve study From Page 27

BOARD OF DIRECTORS

March 2016

mental assessment increases designed to finance major capital projects in Ocean Pines. Now called the Heritage reserve, what began as the five-year-funding plan is in its seventh year of existence, and it’s not well regarded by a minority of directors – Collins and Stevens particularly – who would like to see it eliminated or substantially reduced. They were successful in having the projected assessment contribution of $1.1 million cut in the 2016-17 budget by roughly $234,000, enough to enable the lot assessment to be kept at $921. A full contribution of $1.1 million, strenuously advocated by Thompson with the presumed support of Gomsak, would have resulted in a $22 increase in the assessment. Thompson said the next step in the reserve study process is for the board to decide what capital projects it plans to move forward with so DMA can ensure their inclusion in the reserve study. “Because in the end they need to be able to give us an assessment of our reserve status,” he said. Terry said it is up to the board to give

After short delay, Board OKs White Horse Park bathrooms Stevens still votes against bathrooms after he wins vote tabling proposal for several days ing a 15 percent project contingency to the cost for any water and wastewater improvements necessary to accommodate the project, bringing the total estimated cost to $98,900. He said that is below the budgeted project cost of more than $100,000. Thompson said the new bathrooms will replace those that are part of the Pine’eer Craft Club building in the center of the White Horse Park driveway and will be built on the east side of the park near the existing pavilion and will include storage on the backside. “That actually kills two birds with one stone,” he said, adding that it eliminates the need for construction of a separate storage shed in the area. He said the project was approved and included in the budget last year. “I’m moving forward with an approved project,” he said. Stevens disagreed, saying it was put in the budget by staff as a placeholder and was expected to be brought back to the board for consideration. He said there was never any discussion among the board members about constructing bathrooms for White Horse Park. He said video tapes of the earlier board meetings will show that to be true. “Mr. Stevens, I know you’re against this,” Thompson responded. He said he didn’t go back and look at discussions about the project on video. “I didn’t

think I needed to do that.” Stevens said he was just pointing out the project was never discussed and yet the board was being asked to vote on a contract to build the bathrooms. “Showing us a plan that doesn’t’ answer any of the questions I have,” he said, adding that he’s not necessarily opposed to the project but is “against not having an adequate idea of what we’re talking about.” Thompson said he wasn’t necessarily asking for board approval at the Feb. 25 meeting but simply presented the project and bid recommendation for consideration by directors. “This is the work I’ve completed. It was wrapped up yesterday,” he said. Stevens wasn’t happy. “This is an unacceptable way of presenting a proposal to the board,” he said. Thompson responded that he couldn’t argue Stevens’ “perspective.” Stevens accused the general manager of trying to slide the project by the board. “This is being slipped under the water,” he told Thompson “There’s nothing slipped under the water when it’s a budgeted item,” Thompson replied. “If you don’t want to do it, don’t do it.” Director Jack Collins, who gave a second to Stevens’ motion to table approval of the project, asked if the OPA is making the most of the opportunity to build new facilities in the park.

DMA a sense of what the future as it relates to the OPA’s capital investments. That could take more than a single meeting with the consultants, he added, Stevens said the board never even met to discuss what questions it wants answered as part of the reserve study. He said the draft document includes assumptions that are “far from having been agreed on by the board.” Thompson said future projects are included in the reserve study but acknowledged that the board ultimately issues final approval of them during the budget process. He said he asked for board input so he could provide it to DMA prior to a meeting with the board. The draft report “can be extremely misleading,” Stevens said, adding, “the sooner we get to this the better off we are.” Jacobs called out Thompson for “casting in a negative light” why board members didn’t provide him with any input. She said one of the reasons directors have not submitted questions is because they don’t know what questions to ask of the consultants at this point. OPA President Pat Renaud agreed. “I have a little bit of discomfort a reviewing the study without knowing what questions to ask,” he said.

Director Bill Cordwell seemed frustrated at his colleague’s varying difficulties in comprehending the contents of the reserve study’s first draft. “We’re all saying the same thing,” he said. He encouraged his fellow directors to “pass the budget and then meet with these people” to have their questions answered. The reserve study is part of the OPA’s three-pronged approach to planning for improvements in Ocean Pines that includes developing a reserve study, a comprehensive plan and finally a capital improvement plan. The reserve study, essentially a snapshot of facility conditions, will give the CIP critical information while the comprehensive plan will direct the CIP in the long term. The CIP itself is a more operationally based document that will be used day-today to make facility improvements. Shortly after Thompson gave copies of the DMA study to the directors in late January, Stevens expressed concern about something in it that caught his eye and that he speculated had been inserted in the study by Gomsak. It was a calculation called an “an annual component cost” that seemed to suggest that the OPA should have more than $14 million in replacement reserves

Thompson responded that the proposal was based on the original project budget. But if the board wants a larger structure he can revisit the project. He said between the Community Center bathrooms and the new park bathrooms, those in the Craft Club building will no longer be needed. That will improve safety in the park because people will no longer have to cross the parking lot to use the restrooms, he said, adding that the board will have to decide what it wants to do with the existing Craft Club building. He said he provided several options, including using that facility for storage, as part of his proposed capital plan. He has suggested moving the craft club shop to the Community Center’s East Room. Still, Stevens said, “I do not feel that I have had all the questions answered.” He said he does not know exactly where the facility will be built, if it meets stormwater management requirements or what will happen to the Craft Club building once the new bathrooms are available. “I want this information,” he said. “I think this is basically a terrible way to present this to the board.” That didn’t stop Jacobs from making her motion to proceed with the proposed plans for the restrooms. Stevens then immediately made a motion to table her motion for approval, with Collins giving the second. Director Tom Herrick said he supports the project but had no problem delaying approval to allow other directors the time they feel they need to review the project before voting on a motion. Jacobs wasn’t happy about the motion to table. She said the project will To Page 30 to pay for needed capital improvements. “We’re $11 million short of that,” he said, so some people could infer that the OPA is underfunding its reserves by that amount, a notion he said is incorrect. That particular number is not relevant to a rational analysis of what actually is needed in annual assessments to fund the reserves, Stevens said, suggesting that a more accurate barometer would be what actually has been spent from the replacement reserves in recent years. He called it “sheer unadulterated garbage” to tie the “annual component cost” calculation to a debate on the proper level of reserve funding, which in turn is one of the main drivers of the annual OPA lot assessment. “Whether deliberate or not, this misinformation will lead the average OPA member to draw conclusions which are best misleading,” Stevens said in a memo to his board colleagues, also criticizing the leak of this information to a “selected” local weekly that he said was likely to misconstrue its relevance. In his memo to his colleagues, Stevens said the leak occurred “without consulting or gaining approval of the board’ and that it was “disruptive to an objective and reasoned review process.”

March 2016Ocean Pines PROGRESS

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March 2016

Sports Core pool improvements approved by board for summer By ROTA L. KNOTT Contributing Writer he Sports Core swimming pool will be closed this summer so the Ocean Pines Association can make improvements to the pool and decking while all of the seasonal aquatics facilities are open and available for use by property owners. The Board of Directors during a Feb. 25 meeting approved $255,634 in contracts for the project, including $196,866 to Pearl Pools for pool improvements and $58,768 to Pools and Spas for pool decking. The contractors are scheduled start construction by July 10 with work to be completed by Sept. 10. “All the (other) pools should be up and running at that point,” OPA General Manager Bob Thompson said. He said bids were received from four different companies for portions of the overall project to make improvements to the T-shaped swimming pool. Thompson said while Atlantic Aquatech offered what may have seemed to be the most cost-effective proposal for the pool improvements, the costs estimated did not seem to be in proportion

to the complexity and scope of repairs described. Pearl Pools offered a reasonable cost and demonstrated a good understanding of the complexity and risks in their approach to accomplishing pool improvements, he said. Atlantic’s costs for both pool repairs and technology insertions seemed inflated and were not competitive with

Pearl Pools in those areas, Thompson said. The best value for the deck improvements was with the rubberized surfacing offered by Pools & Spas, Thompson said. He said an equivalent product that was offered by another company was more expensive. The pool expansion and improve-

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even put on the agenda,” Stevens said. “There are ways that you do these things. This isn’t even close to being the standard.” Cordwell said the general manager just got the information the day before so he couldn’t have given it to the board any sooner. “I suggest he finished it last night because we would be put in exactly this position right now,” Stevens responded. Cordwell said it was inappropriate to make such allegations against an OPA employee. When asked by OPA President Pat Renaud what happens if the board tables consideration of the project, Thompson responded that nothing would be done.

From Page 28

address both safety and convenience concerns for residents and should be moved forward. “This is an item that’s been in the budget for a couple years. This is an item that’s overdue. This to me is another example of delay, delay, delay,” she said. Collins said he isn’t opposed to the project and had he received the information a few days prior to the meeting, he would have been prepared to discuss it. Director Bill Cordwell said the board knew the project was coming. Stevens disagreed. “It was slipped in this morning, not

ments include replacement of all 12 skimmers, tile work, depth markers, lining and demarcation and installing new Diamond-Brite plaster. The project will enlarge the pool in the shallow area by about 114 square feet, with a stepped entry; and will install a new handicapped chair lift and safety rails between the deep end and enlarged area in the deep end. Deck improvements include installing a rubber chip surface around the pool area and the entrance area to the pool. Thompson said filter replacement wasn’t originally included in the proq

30 Ocean Pines PROGRESS

“We’re making a simple issue more challenging unnecessarily,” he said, and reminded directors that he was not asking for a vote on the project. He suggested tabling consideration for a week and then having the board take a vote via email. “Instead we go into full attack mode and say it wasn’t done right,” he said. Terry, participating via conference call, suggested the March 3 date for an email vote. “The procedural attacks, which happen quite often, were out of place,” he said. “It’s something we did know about.” Stevens agreed to amend his motion to table a vote until March 3. The motion passed 5-1-1, with Terry abstaining and Jacobs opposed.

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March 2016Ocean Pines PROGRESS

Thompson forecasts a $87,242 surplus for 2015-16 fiscal year By TOM STAUSS Publisher t the half-way mark into the 201516 fiscal year three months ago, General Manager Bob Thompson forecast a $346,679 operating surplus for the year that ends April 30. Fast forward to the Feb. 25 meeting of the Board of Directors. There, Thompson delivered a new end-of-year forecast that differs little from the one at the half way mark. The new forecast is for a $349,724 operating surplus, which suggests the general manager and Controller Art Carmine foresee a slight uptick in the Ocean Pines Association’s finances for the remaining three months of the fiscal year. If the numbers come in as forecast,

Aquatics’ projected deficit is lowered again to $40,000, but it’s conceivable that the department will achieve break-even given its $72,000 cumulative surplus nine months into the fiscal year the OPA will have exceeded the originally budgeted operating surplus approved in February of last by $47,242. New capital additions, funded directly from the current year’s lot assessments rather than allocated reserves, are projected to take a $195,818 bite out of the operating surplus. The Sports Core loan reduces it by another $66,664, leaving a current projected net for the year of $87,242. The net had initially been forecast for

break-even . There were two notable differences in the latest forecast over the approved budget and what had been forecast at the half-way mark. Aquatics, budgeted initially to lose $113,000, now has been revised to lose only $40,000. At the half-way mark, Thompson and Carmine had predicted a $54,000 loss for the year, so the new projected loss is $15,000 better than their forecast delivered half way into the fiscal year. Aquatics performed right on budget for January, losing $23,200 and outperforming its budgeted loss by $512. Through January, Aquatics had a $71,943 surplus for the year, and that’s $94,710 ahead of budget and a $154,262 year-over-year improvement in the bottom line. Should Aquatics manage to keep its average monthly losses in February, March and April to the January loss of $23,200, the department would actually make a slight profit for the year.

Break-even or near break-even would be a milestone in recent OPA financial performance. The Yacht Club, originally budgeted for a $62,132 surplus, has been revised downward with a projected $50,000 loss, on net revenues of $1,250,000 and expenses of $1,300,000. At the half-way mark, the Yacht Club had been projected to break-even. The forecast for golf operations and golf-related food and beverage is unchanged from where it was at the halfway mark, when Thompson and Carmine predicted a $150,000 loss for the fiscal year. That happens to be more than $30,000 worse than the golf course did in 2014-15. Thompson, who has said the golf deficit won’t be that large if the golf course records a good March and April of outside play, did not explain his relative pessimism about golf operations in the current fiscal year. The original budget for the year called for a $100,000 loss in golf this year. Landscapes Unlimited is far more optimistic in its end-of-year forecast. In its business plan submitted as part of its prepared budget in early January, LU projected a deficit of roughly $93,500.

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From Page 30

posal but state officials recommended their replacement during their review of the project. That addition increased the project cost by about $9,000, he said. Director Jack Collins asked about the pool slide, which the RFP indicated was to be removed from the pool. Thompson said contractors will remove the slide but OPA Public Works staff will install a new one once after the larger project is completed. He said slide replacement was a separate budgeted item. “It will be replaced,” he said. It’s an approved capital item in the 2016-17 capital budget, with an estimated cost of $17,500. Aquatics Committee Chairman Kathy Grimes addressed the board during the public comments segment of the Feb. 25 meeting and encouraged directors to approve moving forward with the project. She said both staff and the committee have spent many months re-

searching the options for improvements to the pool. Last year the OPA opted to postpone refinishing the Sports Core swimming pool after receiving just two bids with vastly different prices for the work. Due to the low number of bids, coupled with a potential for other improvements to the pool, Thompson recommended putting off the project until fiscal year 2016-17. The approved project does not include funding for salt-generated chlorination or ultra-violet disinfection system, which have aquatics committee objectives for many years. Aquatics Committee chair Colby Phillips has been looking into a system that substitutes hydrogen peroxide as the primary chemical for disinfection, along with UV, with minimal chlorination still part of the mix. The Clear Comfort system has installations on the West Coast but has yet migrated to the East Coast. Aquatics committee members have expressed interest in the Clear Comfort system.

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32 Ocean Pines PROGRESS

OPA FINANCES

March 2016

Yacht Club loses $53,438 in January, misses monthly target by $12,000 Golf operations lose $52,882 for the month, but beat budget by $15,860 By TOM STAUSS Publisher n the depth of the cold-weather season, Ocean Pines’ major amenities all lost money in January. Two per-

formed better than budget – golf operations and Aquatics – while the Yacht Club not only produced a deficit in excess of $50,000 but missed its budgeted loss by more than $12,000.

Golf reversed a poor December by recording a $15,860 positive variance to budget despite losing $52,882 for the month. For the year so far, golf is in the red by $38,582, and that represents a

Renaud holds off on naming Medical Center task force

Ocean Pines residents volunteering to serve on a task force if and when it is created. Gillis met with the Board of Directors during a special Feb. 5 session and presented a request for access via an interior connection from Ocean Parkway, but instead directors are pushing for improvements to the existing “right-in- right-out” only access point on Route 589. They want the state to approve creation of a full movement intersection, perhaps with a traffic signal if that won’t impede traffic flow on the much-traveled highway. Following an extensive discussion before a packed house of property owners, the board asked Gillis to put his request in writing for consideration. OPA President Pat Renaud then solicited volunteers for a task force to help the board develop a formal response to Gillis.

The developer embraced the idea of task force. Gillis, along with a contingent of representatives from the State Highway Administration and Peninsula Regional Medical Center, met with directors to discuss the challenges with the sole access point to the medical complex, an existing “right in and right out” only that empties directly onto northbound Route 589. In response to complaints from both OPA property owners and patrons of the medical complex about the safety and convenience of that access point, Gillis asked the OPA to consider alternatives that will help address those woes. While his proposal was to construct an access road from Ocean Parkway just inside the North Gate to the medical complex, he said he was open to other

By TOM STAUSS Publisher uggesting a hardening in the Board of Directors’ position toward a proposal by developer Palmer Gillis for an interior Ocean Pines entrance to the medical complex he is developing off Route 589 adjacent to the North Gate, Ocean Pines Association President Pat Renaud said that he is “not going to create a task force” to help the board decide how to respond to Gillis’ proposal. During the Feb. 25 regular monthly meeting of the board, Renaud said that Gillis had not sent a formal request in writing regarding interior access to the medical complex, which already includes one building and another to break ground this year. Until there’s a formal request, there’s no reason to appoint a task force, Renaud said, adding that there had been a few emails from

$40,195 negative variance to budget. Golf operations under Landscapes Unlimited Management is $4,731 ahead of Billy Casper Golf ’s cumulative numbers year over year through January. Aquatics performed right on budget for January, losing $23,200 and outperforming the budgeted loss by $512. Through January, Aquatics has a $71,943 surplus for the year, and that’s $94,710 ahead of budget and a $154,262 year-over-year improvement in the bottom line. The $48,000 in Beach Club parking pass revenue allocated to Aquatics accounts for roughly a third of that improved performance, with higher-than-budgeted revenues and lower-than-budgeted expenses accounting for the rest. Should Aquatics manage to keep its average monthly losses in February, March and April to the January loss of $23,200, the department would actually make a slight profit for the year. That hasn’t occurred since the Sports Core pool was enclosed almost ten years ago. The Yacht Club produced a $12,069 negative variance to budget on a loss of $53,438. Through January, the Yacht Club has generated a $75,119 surplus while falling behind budget by $67,805. Year over year, the improvement is $145,883. The Yacht Club is likely to experience deficits for the remaining three months of the fiscal year. General Manager Bob Thompson’s most recent forecast for the year has the Yacht Club losing $50,000. Thompson has touted this year’s financial performance at the Yacht Club, citing the year-over-year improvement in the bottom line. What he doesn’t say is that gross revenues year-over-year are down in 201617 over the prior fiscal year. Through January of last year, revenues were $1,727,473, compared to $1,664,730 through January of this year. Apparently because of cost controls on food and beverage wholesale purchases, net revenues were virtually identical year over year -- $1,140,504 through January of this year and $1,137,499 last year. Balance sheet: According to the Jan. 30 balance sheet, the OPA has assets valued at $31.14 million, a drop of roughly $1 million from a month earlier, against liabilities of $1.487 million and owner equity of $29.65 million. The January balance sheet indicates that the OPA had $1.591 million in operating cash as of Jan. 30, compared to $1.738 million a year prior. Short term investments were valued at $5.53 million as of Jan. 30, compared to $3.019 million a year earlier. Reserves: The reserve summary released as part of the January financials indicates that the OPA’s total allocated reserve balance stood at $6.114 million, roughly $200,000 less than December’s balance of $6.36 million. The major maintenance and replacement reserve had a balance of $4,266,641 million, composed of $5,471,229 in the historical (funded depreciation) reserve and a negative $1,204,588 in the legacy (major capital projects) reserve.

OPA FINANCES By TOM STAUSS Publisher bout four months after the board voted to accept a proposal from the Budget and Finance Advisory Committee to revise the Ocean Pines Association’s F-01 investment guideline policy, the committee is back again with another proposed rewrite. It was added to the agenda on the day of the board’s Jan. 25 monthly meeting at the request of Tom Terry, the OPA treasurer and board of directors’ liaison to the committee, with no three-day notice to the OPA membership that it was coming. It was withdrawn on first reading, because some of the directors had not even read it or understood its significance. It also had not been submitted to the Budget and Resolutions Advisory Committee for review and comment. The latter omission was taken care of by Terry, who brought the revised policy back up for board consideration at the directors’ Feb. 25 regular monthly meeting. This time, the proposed revision passed on first reading, 5-2, with directors Dave Stevens and Jack Collins in opposition, Stevens especially so. The resolution as approved on first reading seems to slightly liberalize the OPA’s investment policy, allowing investments in government-backed or collateralized securities other than certificates of deposit or their cousins, CDARS (certificate of deposit account register service). That slight liberalization in investment policy, if indeed it is embedded in the draft F-01 language, was not mentioned directly by Collins and Stevens in their objections to the draft. Collins launched a board debate over the proposed language by asking Terry to explain the “mindset” of committee members who want to change F-01 so soon after the board revised the resolution less than six months ago. “Why are they doing it?” Collins said. Terry acknowledged the earlier revision but said that at the time committee members had agreed that they would “continue working on a much more thorough revision” of the resolution. He didn’t explain what the purpose of a more thorough revision would be, but it appears to be designed to slightly liberalize the OPA’s current investment policy of investing in financial instruments that preserve OPA capital with minimal to no risk of loss of loss of principle. For years, the budget and finance committee has made unsuccessful attempts to add language to F-01 that would allow the OPA to invest in securities that improve yield without appreciably increasing risk to the OPA’s investment capital. The committee essentially abandoned that effort last year when it became apparent that the board majority at the time, including former Director Marty Clarke, was resistant to any change. Instead, the panel and the board opted for a watered-down rewrite that removed any reference to financial institutions that might provide investment advice or

March 2016Ocean Pines PROGRESS

Budget and Finance panel’s investment policy rewrite approved on first reading Stevens and Collins in minority in 5-2 vote, with Stevens calling proposed F-01 ‘totally unacceptable’ as a first draft management service. The theory was that since the OPA was not going to invest in anything other than FDIC-insured certificates of deposits or their cousins, CDARS, there was no need to have any professional management on hand to assist in the investing. Perhaps with the view that a new board absent Clarke might be more receptive to the committee’s objectives of obtaining higher yields, the committee tried again to come up with language that might pass board muster. Stevens took exception to the notion that the proposed F-01 draft is in any way “a much more thorough” rewrite of investment options. “I don’t find that to be true,” Stevens said, adding that it has “a lot more words, but not necessary words,” and that the committee, in presenting the proposed rewrite to the board for review and adoption, had not offered any rationale for why it undertook the task. Terry responded that he would ask the committee’s chairman for an explanation of the rewrite, which prompted Stevens to say that that question “should have been asked already.” He went on to say that the draft “was poorly written and poorly organized,” noting that a reference to government-backed collateralization was “already in” the current iteration of F-01. General Manager Bob Thompson suggested that any board member with questions about the proposed draft could attend the next meeting of the budget and finance committee for explanations, but Stevens wasn’t receptive. He insisted that the proposed F-01 was “unacceptable as a first draft” and “didn’t add anything” that is not already addressed in the current version. The current policy says that the purpose of F-01 is to establish guidelines for the investment of funds in excess of the balance needed for day-to-operations. “These guidelines take precedence to and are in addition to those contained” in the two financial management manuals, according to language in F-01. The new F-01 purpose makes reference for “changing investment strategies” depending on the particular interest rate environment. “It is understood that in a normal rate environment intermediate term investments should be rewarded with higher yields,” the proposed draft reads. “During low interest rate periods little benefit may be gained from longer terms which may not be practical.”

The reference to “higher yields” suggests that, when interest rates begin to rise and return to more normal levels when measured by historic standards, the OPA will want to seek out investment vehicles that have higher yields and may want to retain financial management professionals to help in finding appropriate instruments. Currently, the yield on CDS and CDARs is less than 1 percent, a rate that some committee members feel is too low even in the current low interest rate environment. The proposed new F-01 retains language that says the goal is to promote and assure “the preservation of principal of all liquid assets,” which usually are generally defined as those that can be converted into cash in a few months’ time. The proposed F-01 lists eight separate categories of “acceptable” liquid asset investment categories. The first is bank or financial institution deposits, including checking accounts, savings accounts, money market accounts and CDs in amounts not to exceed FDIC (Federal Deposit Insurance Corporation) insurance coverage. Deposits that may be in excess of FDIC insurance coverage are the second listed category. The proposed F-1 says such deposits “must be collateralized specifically by securities in the bank’s U.S. Governments or Agencies portfolio in an amount that exceeds the uninsured deposit amount by at least five percent.” CDARS, which are covered by FDIC insurance, are the third listed category. The fourth category include individual short and intermediate term general obligation U.S. government bonds, bills, notes and U.S. government agency securities in investment grade as defined by Moody’s or Standard and Poor’s”. This would appear to be a change in policy, as current policy more or less restricts investments to CD or CDARs with no allowance for U.S. government agency securities. Clarke said relying on these two company’s investment ratings for guidance in judging the safety of potential investments is problematical. The remaining four investment categories oddly enough aren’t investment vehicles at all, but rather are admonitions or limitations on investments. According to item five, the proposed guidelines say that all securities must be purchased with the intent to hold to maturity.

When investing in individual U.S. government agency securities, the “duration period of the security, as well as the reinvestment policy for prepaid principle, must be identified and considered,” according to item six. Item 7 says the maturities on investment should not exceed five years, and item 8 says “at no time will derivatives of complex structured securities” be purchased, including those derived from government securities. The proposed F-1 then proceeds to list “guiding principles” for investment performance, with a reference to funds required for liquidity and those that aren’t. The language is opaque at best. Funds not needed for immediate use can be invested to produce higher yield, but “invested in an appropriate manner for yield while simultaneously adhering to the principles association with credit risks and interest rate risks,” the proposed policy states. In a significant departure from the current F-01, the proposed new resolution refers to the hiring of “financial institutions providing general banking and/or investment services” to the OPA. They would be retained only by “written resolution” of the Board of Directors and would be subject to annual review by the Budget and Finance Committee, with findings reportable to the board. In a related matter involving the committee, the board adopted on first reading a proposed rewrite of C-03, a policy resolution governing the purpose and function of the panel. The proposed changes passed on first reading, 6-1, with Stevens raising similar arguments against the proposed rewrite as he did against F-01. “What are the differences?” he asked, again expressing frustration over the apparent lack of rationale behind the offered rewrite. “Maybe no one told them” that a written rationale would have been appropriate, he added. Terry said he didn’t want to argue that issue and other directors didn’t seem interested in taking up Stevens’ objections. Before the proposed new C-03 can be adopted, however, it must pass the board on second reading.

Med Center From Page 32 ideas as well, including widening the outgoing lane of the North Gate bridge. Still, he argued in favor of creating an interior access point, saying that it will be safer and more convenient for Ocean Pines residents if they do not have to go out onto Route 589 to reach the medical facility. He said medical facilities make good transitional uses from commercialized highways to residential communities. Gillis said he had never officially requested the loop road to Ocean Parkway previously but it was presented as an option during the planning for the medical complex some six years ago. “But we are now asking this board and the neighborhoods to consider a request to allow access,” he said.

34 Ocean Pines PROGRESS

March 2016

Tuesday, March 8 OPA General Manager Bob Thompson, town hall meeting, 6 p.m., Ocean Pines Community Center, Assateague Room. Comments and questions posed by Ocean Pines residents and property owners. Questions may be submitted in advance via email to info@oceanpines.org. Live streaming at OceanPines.org or on Mediacom channel 78, also on the Ocean Pines Web site and on channel 78 afterward. First night of three-day Maryland basic boating course, U.S. Coast Guard Auxiliary, Ocean Pines library, 6-9 p.m. $15 per person. Meets the requirements of the Maryland Boating Safety Education Act. Discussions of local water knowledge, piloting, knots, boat terms, trailering, maintenance, boating safely, legal requirements and more. Additional sessions to begin April 19, May 10, June 7 and July 12. Fee includes course materials. Registration, Barry Cohen, 410-935-4807 or email CGAUXOC@ gmail.com. Wednesday, March 9 Ocean Pines Chamber of Commerce Business Expo, Ocean Pines Yacht Club, 4-7 p.m. Networking opportunity for local business people. Complimentary beer, wine and food. Exhibitor spaces and sponsorship opportunities are available. Sponsored by the Ocean Pines Chamber of Commerce, 410-6415306. Thursday, March 10 Sandpiper Energy information meeting, conversion of Ocean Pines propane pipeline to natural gas, Ocean Pines Community Center, 6 p.m. on March 10, 2016. The forum will feature information stations for residents to get details and ask questions regarding billing, customer service, safety, and learn more about the conversion and connec-

HAPPENINGS tion processes. Friday, March 11 Youth Dance for 5th and 6th graders, 6:30-8:30 p.m., Ocean Pines Community Center, $8 residents/$9 guests, Dj music, snacks. Chaperones. Sponsored by Ocean Pines Parks and Recreation Department. Tuesday, March 15 Genealogy Group, monthly meeting, 10:30 a.m.-noon, Ocean Pines Library. Short presentation on “Genealogy Websites” followed by open discussion. Everyone welcome. Bring questions. Moderated by Tom Dempsey, past Vice President, SCGS, and life-long researcher. Wednesday, March 16 Maryland Coastal Bays Program and Volunteer Fair and Social, 5-7 p.m., Ocean Pines Yacht Club. Learn about area non-profit organizations and volunteer opportunities. This year’s line up includes MCBP, the Ocean Pines Environment and Natural Assets Advisory Committee, Ocean Pines Neighborhood Watch, Worcester County Garden Club, Eastern Shore International Mountain Biking Association (IMBA), Assateague Coastal Trust, Master’s Gardeners and Berlin Library Garden Project, Lower Shore Land Trust, Ocean Pines Farmers Market, Ocean City Surf Club, Atlantic General Hospital Auxiliary, Diakonia, Telamon Corp, Assateague Island Alliance, and Town Cats. Friday, March 11 Youth dance, for fifth and six graders, Ocean Pines Community Center, 6:30-8:30 p.m. Chaperoned by the Ocean Pines Recreation and Parks De-

partment. Snacks, $8 for Ocean Pines residents and $9 for non-residents. Registration not required. Parents are requested to arrive and pick up their children inside the community center by 8:15 p.m. 410-641-7052. Saturday, March 12 Ocean Pines Anglers Club, monthly meeting, 9:30 a.m., Ocean Pines Library. Guest speaker, Bob Cooke, certified Coast Guard Auxiliary and DNR Police Instructor. Topic: maintaining and preparing a trailer, boat, engine and yourself for the spring boating season. All welcome. Friday, March 18 Easter egg dive and pool party, family fun night, 5:30-8 p.m., Sports Core Pool, 11143 Cathell Road, Ocean Pines. Children ages 12 and under, diving for treasure-filled eggs in the indoor pool and open swim time between dives. $6 for swimmers and $3 for those not swimming. Pre-register by calling the Ocean Pines Aquatics Department, 410641-5255. Sunday, March 20 Mid-Atlantic Symphony Orchestra spring concert, 3 p.m., Community Church of Ocean Pines, $38 per person. Featuring Jean Ferrandis playing Mozart’s “Flute Concerto in G Major.” Also Faure’s “Fantasy,” Poulenc’s “Deux marches et un intermede” and Mozart’s “Symphony No. 39.” 1-888-846-8600 or www.midatlanticsymphony.org. Monday, March 21 Low-impact barre-style water exercise class, Sports Core pool, 5 p.m., also March 28 at 5 p.m. Focus on strengthening the entire body through

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the use of ballet-inspired movements, 45 minutes. $5 swim member, $6 residents, $7 non –residents. Sign-up at the Sports Core pool. Thursday, March 24 Ocean Pines Association, Board of Directors, monthly meeting, Ocean Pines Community Center, Assateague Room, 9 a.m. Meeting agenda and board packet posted one to three days before meeting on oceanpines.org. General manager’s report and public comments. Live streaming on oceanpines.org and Mediacom Channel 78. Saturday, March 26 Ocean Pines Easter/Spring Celebration, 11 a.m.-2 p.m., White Horse Park, located at 235 Ocean Parkway, free and open to the public. Egg hunts, entertainment by magician Wild Willy Woo Woo, carnival games, moon bounces, face painting, arts and crafts, Easter egg hunts for children up to age 9: 11:30 a.m. for ages 0-2, 12 p.m. for ages 3-4, 1 p.m. for ages 5-6 and 1:30 p.m. for ages 7-9. Easter bonnet parade and contest, open to children up to age 10, 12:30 p.m. Volunteers and candy donations needed, contact the Ocean Pines Recreation and Parks Department at 410-641-7052. Friday, April 1 Kiwanis “Touch of Class” wine tasting and auction, 4-7 p.m., Ocean Pines Community Center, Assateague Room. $15, RSVP 443-547-4865 for tickets, walk-ins until space is filled. Benefits the local Kiwanis Club’s Scholarship Foundation. Thursday, April 7 Women’s Club of Ocean Pines, card and game party fundraiser, 10 a.m.-2 p.m., Restaurant at Lighthouse Sound. Pat Addy, 410-208-0171 or gorpataddy@aol.com. Friday, April 8 Worcester County Historical Society, annual spring dinner, Pocomoke Community Center, Market and 14th Streets, doors open 5:30 p.m., dinner 6:30 p.m. Guest speaker Gordon E. Katz, on “Exploring West Ocean City: The other Side of the Bay.” Also a photo presentation of the relocation of the Mt. Zion one-room school from Snow Hill to its new location in Furnace Town. Tickets $22 per person, available by sending a check to Robert Fisher, WCHS Treasurer, 230 South Washington St., Snow Hill, MD 21863. Deadline for reservations April 1. Saturday, April 16 Spring “Spruce-Up” workshop, Home Depot, Route 50, 11408 Ocean Gateway, across from Glen Riddle subdivision, 10 a.m. to noon, sponsored by the Women’s Commission of Worcester County. Home Depot’s Neil O’Callaghan talking about household to-do’s using tools and gardening tips. Registration, 410-208-2569 or email mcgrawdb@mchsi.com. Light refreshments, space limited, no charge for this workshop.

March 2016Ocean Pines PROGRESS

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March 2016Ocean Pines PROGRESS

Cove board to meet March 19, Aqua to give utility update Directors likely to hold the assessment at $1200 for 2016-17, Hearn says By TOM STAUSS Publisher he Captain’s Cove property owners association’s Board of Directors will meet March 19 in the Marina Club banquet room to discuss the just completed 2015 audit report. Also on the agenda will be an update from Aqua Virginia on the status of the Cove water and wastewater collection and treatment system. Cove President Tim Hearn said there will also be some preliminary discussion of an early draft of the Cove budget for 2016-17. Because various departments in the current year are “performing well,” according to Hearn, he said he thinks “it’s doable” to draft a budget that won’t require an increase in the Cove’s $1200 lot assessment. Unlike Ocean Pines, which recently adopted a $921 base lot assessment for 2016-17, the Cove includes amenity membership in its assessments. Assessments cover unlimited greens fees on

the Cove golf course, access to all three Cove swimming pools and the tennis courts. Golf cart fees are extra. Capital projects -- Hearn told the Progress that some bigger ticket capital projects have been completed or soon will be in Captain’s Cove. The bulkheading needed to control erosion along the first hole’s cart path has been successful checked off the to-do list; it cost the Cove POA $50,000. Contractors are getting ready to replace the roof at the Town Center for $30,000 and to completely redo the tennis courts in the Town Center complex, Hearn said. Cove property tax checks -- As of a March 3 interview with the Progress, Captain’s Cove property owner association President Tim Hearn says that despite a recent post on the Captain’s Cove message board, it is not true that Accomack County Treasurer Dana Bundick has cashed property tax checks paid to the county last year by the Cove POA.

Hearn said that while it may very be true that Bundick showed a Cove property owner a check or checks from Captain’s Cove, that does not mean the check or checks were deposited. Captain’s Cove association attorneys, Pender and Coward of Virginia Beach, met with the county supervisors in mid-February in the hopes of persuading them to lean on the county treasurer to deposit Cove POA-issued checks totaling $37,000 from county taxes from last year and that had been dispute. That effort failed. The Cove attorneys were no more successful in persuading the supervisors to intervene than they were in attempting to persuade Bundick to deposit the checks, Hearn said. In the meantime, the Circuit Court of Accomack County has set a deadline of March 17 for the county to file a response to Captain Cove Group Note’s suit to force the county to impose taxes using valuations more consistent with actual sales in Captain’s Cove.

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Hearn previously has said the Cove POA, which originally had sided with the developer in attempting to reduce assessed valuations on unimproved lots in Captain’s Cove from the traditional $4,000 to closer to $1,000, had decided to pay property taxes on Cove-owned lots on the county’s “full evaluation.” In addition to lots with little value, the Cove and the county also were at odds over the valuation of lots in buildable sections. Hearn said the Cove POA changed its stance last year in reaction to criticism from some within the Cove’s year-round residential population that the Cove, in disputing higher lot valuations and declining to pay taxes on POA-owned lots based on those higher valuations, were in effect tax deadbeats, costing everyone else in the county more for government services as a result. Under those circumstances, he said it remains perplexing that Bundick, as of March 3, still had not deposited the Cove checks. John Ward sues POA -- Hearn has disclosed that Cove property owner John Ward has sued the Cove POA to recover a month’s worth of golf-related cart fees associated with his suspension from the golf course last year. Hearn said it appears that Ward will be representing himself in court while the Cove POA will be represented by legal counsel.

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38 Ocean Pines PROGRESS

OPINION

March 2016

COMMENTARY

OPA fritters away Yacht Club’s summer surplus controlled this year than last – roughly $129,000 under budget and about $87,000 lower year-over-year. Lewis has been effective in managing other expenses as well, particularly labor, reducing $1,208,263 in “other” expenses through January of last year to $1,127,896 this year. These expenses include services/supplies, maintenance and utility costs in addition to labor. Given the Yacht Club’s $53,438 loss for January, the forecast of a $50,000 loss seems reasonable. If February and March produce losses in the neighborhood of $50,000 each, the Yacht Club would be entering April, the final month of the fiscal year, about $25,000 in the red. If April’s loss could be contained to about $25,000, the loss for the year would come in at roughly $50,000. If it’s closer to another $50,000 loss, well, do the math. Thompson and the Yacht Club’s fervent cheerleaders would no doubt celebrate a $50,000 loss. But let’s forgo the champagne, because the budgeting will have been way off, as it typically is, year after year. For the record, the Yacht Club’s budgeted surplus is $62,132 for the year. Less than exemplary budgetary performance isn’t even the most pressing matter at hand. Another way of looking at the Yacht Club bottom line is that the OPA’s major restaurant amenity could be a significant surplus-producer for the OPA. This could be readily accomplished if a policy decision were made to close the Yacht Club during the colder months, or at least operate it with a mostly on-call staff who be called in to handle the occasional banquet during the winter months. Last September was the final month in the current fiscal year when the Yacht Club made money. The surplus of $8,119 that month contributed toward a $217,123 cumulative surplus. Through October of last year, when the Yacht Club lost $4,895 for the month, the amenity still had a $212,228 cumulative surplus for the year. Through November, when the Yacht Club lost $46,355, the

amenity still had a $165,873 cumulative surplus. It lost $37,315 in December, reducing the cumulative surplus to $128,557. January’s numbers continue the downward trend. The numbers don’t lie. Were the OPA simply to manage the Yacht Club as many restaurateurs do in Ocean City, working long profitable hours in the summer when the crowds are here, and taking a well-deserved rest when the crowds depart, the summer surpluses would not be frittered away in very large cooler- and cold-weather losses. It would be an entirely different matter if Ocean Pines were not an island surrounded by an ocean of dining options during the off-season. Those restaurateurs that remain open during the colder months reportedly do so to keep staff on board and many do not make large profits, if any at all. But they manage to cater to a loyal, local customer base in ways that the Ocean Pines Association simply has not been able to replicate over many decades of operating a Yacht Club. Granted, there are those who are similarly loyal to the Yacht Club, year-round, but they are so sparse in number that it simply is poor management to open the doors to serve them. Given the many dining choices available in the immediately vicinity, any inconvenience to OPA members would be inconsequential were the Yacht Club to close from sometime in October until, let’s say, mid-April or early May. The OPA obviously operates other amenities year-round to serve its membership, with a year-round enclosed swimming pool a notable example. The difference here, of course, is that a year-round swimming pool is more or less a monopoly service, an amenity not available elsewhere in the area. The same could be said for tennis courts, paddle ball courts and the like, less so a golf course, but that’s a topic for another day.

eneral Manager Bob Thompson can’t exactly be faulted for emphasizing the positive when it comes to ongoing operations at the Ocean Pines Yacht Club. It is certainly worth noting, as he does regularly at monthly meetings of the Board of Directors, that the new Yacht Club has been performing substantially better this year than it did last year, in its first year of operation. Through January, the last month for which financial data is available, the year-over-year improvement is a tad less than $146,000. The operating surplus through that same period is about $75,000. All this is a tribute to the management skills of Yacht Club manager Jerry Lewis, and – let’s be fair about it – to Thompson, who had the good judgment to hire someone of Lewis’s experience to run the Ocean Pines Association’s primary restaurant. To those who sometimes accuse of Thompson of ignoring some of the Ocean Pines Association’s less positive financial data, the general manager has been forthright in admitting that the Yacht Club, despite its robust year-over-year performance, is still well behind budget for the year. The negative variance to budget is about $68,000 through January, and the OPA has given up on meeting its budget for the fiscal year that ends April 30. Indeed, the latest forecast has the Yacht Club losing $50,000 for the year, which would put it roughly $112,132 behind budget if the forecast proves to be accurate. Digging into the year-to-date numbers suggest that all is not well despite Thompson’s positive spin. The Yacht Club actually has produced less revenue to date in 2015-16 then it did the prior fiscal year. Gross revenues were $1,726,473 through January of 2015, but were only $1,664,730 through January of this year. Net revenues were more or less the same year-over-year -- $1,137,499 through January of 2015 and $1,140,504 through January of this year. The financials indicate that food costs have been much better

The Ocean Pines Progress, a journal of news and commentary, is published monthly throughout the year. It is circulated in Ocean Pines, Berlin, Ocean City, and Captain’s Cove, Va. Letters and other editorial submissions: Please submit via email only. Letters should be original and exclusive to the Progress. Include phone number for verification. 127 Nottingham Lane Ocean Pines, MD 21811

PUBLISHER/EDITOR Tom Stauss tstauss1@mchsi.com 443-359-7527

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OPINION

March 2016Ocean Pines PROGRESS

Sanity breaks out in board budget compromise

ed to believe by some media reports that the Ocean Pines Association budget for 2016-17 would include a $22 increase in the base lot assessment, OPA members were pleasantly surprised when, in the final throes of a Jan. 19 budget review session, the Board of Directors decided to keep the assessment at $921. It was, by all accounts, a compromise between a $22 increase in General Manager Bob Thompson’s original draft budget proposal and a substantial decrease, somewhere in the neighborhood of $65, supported by a determined board minority comprised of Dave Stevens, Jack Collins and Tom Herrick. In the end, it passed on a 6-1 vote, with only Bill Cordwell in opposition. Cheryl Jacobs seemed inclined to vote with Cordwell initially, but as the votes were being counted it seemed that she wanted to change her vote during the Feb. 19 meeting when the compromise was struck. OPA Treasurer and Director Tom Terry proposed the compromise, even before Cordwell offered a motion that would have raised the assessment $22 to $943. Terry voted for the Cordwell motion, joined by Cordwell and Jacobs, but it failed 4-3 when OPA President Pat Renaud decided the “compromise” was the better way to go. It was, in one sense, a declaration of independence by Renaud, who ordinarily votes with Terry on anything remotely “energetic” or controversial. Terry gave his ally an out on the assessment vote by crafting the compromise, and it seems doubtful that it was spontaneous. Terry and Renaud probably had a discussion about it prior to the meeting, and it all unfolder according to plan. Even if it was premeditated, the Terry compromise had the effect of creating a moment of comity – arguably, some long overdue sanity -- on the board riven by factional division on some, but certainly not all, issues of importance. To be sure, Stevens, Collins and Herrick all believe the assessment could have been reduced substantially, simply by reducing the amount of supplemental

LIFE IN THE LIFE INPINES THE PINES

Even if it was

An excursion through the curious cul-de-sacs An excursion through theby-ways curious and by-ways and cul-de-sacspremeditated, the of Worcester County’s most densely populated community. of Worcester County’s most densely populated community. Terry compromise had By TOM STAUSS/ By TOM Publisher STAUSS/Publisher the effect of creating funding related to major capital projects that will be extracted from property owners in 2016-17. Funded depreciation will collect roughly $1.55 million in assessment dollars for replacement reserves next year, and a $22 increase in the assessment would have helped provide another $1.1 million in supplemental “major project” reserve funding. By eliminating the proposed increase, the supplemental replacement reserve funding will be reduced by roughly $186,000, from $1.1 million to about $914,000. Will anyone even notice? Doubtful. The number of OPA members who look at the monthly reserve summary probably can be counted on one hand. The projected reserve balance at the end of 2016-17 will be reduced by that same amount, trivial in the context of a $6 million-plus total reserve balance but nonetheless of importance because the incessant march to a $1000 assessment has been stopped in its tracks, at least for the time being.

Collins a likely board candidate

Collins is a likely candidate for re-election to the OPA board this summer. If he’s successful, and there’s no reason to think he won’t be, the Stevens-Collins-Herrick triumvirate would need only one like-minded director to replace Cordwell (reportedly not running for reelection) to “flip” the board into a aggressive cost-and-assessment-cutting majority. With three vacancies to be filled – Terry is term-limited and can’t run for a third term -- Stevens and Herrick are well positioned to gain at least two like-minded directors on the board to assist in an agenda that Terry, Cordwell, Jacobs and for the most part Renaud

have resisted since the current board was reorganized last August. The factional divisions on the board recently have emerged over golf operations, the budget (especially Thompson’s proposed $22 assessment increase), a Thompson proposal for a new public safety (police, OPA administration, Southside firehouse) building on Route 589, and a Herrick proposal to form a task force to look at the possibility of an outside management firm as an alternative to Thompson continuing to manage the day-to-day affairs of the OPA. The latter proposal especially revealed some deep divisions on the board when it was unveiled in the form of a motion at the directors’ monthly meeting in January. Although it failed on a 4-3 vote, the motion indicated that Stevens, Collins and Herrick are like-minded in their opposition to Thompson’s apparent if not stated preference for building new buildings to replace the OPA’s aging building inventory. Although Thompson’s recently released draft of a revised capital improvement plan has not yet been publicly debated by the directors, the Stevens-Collins-Herrick triumvirate has indicated reservations about much of it. Stevens regards it as little more than a Thompson wish list with very little of substance behind it. Collins and Herrick more or less agree with that assessment and believe that, if the OPA is willing to spend the resources needed to better maintain OPA assets, the time when buildings must be replaced can be pushed well into the future. Their preference is generally for renovations over replacement, while Thompson and his board allies generally prefer replacement over renovation. The biases allow for exceptions and compro-

a moment of comity – arguably, some long overdue sanity – on the board riven by factional division on some, but certainly not all, issues of importance. mise, but make no mistake that the preferences are real. Collins, assuming he will throw his hat in the ring for re-election, will no doubt tout his support for renovating the Beach Club bathrooms as one reason OPA members should support his re-election bid. He certainly won’t hide the fact that he supported a substantial assessment decrease this year. He no doubt won’t be shy in letting voters know that he supports Cheryl Jacobs’s recent motion to move aggressively on renovating or replacing the Country Club, though Collins has indicated privately that he is much more in the renovation camp, on the theory that renovation in the end would be less expensive than replacement. Jacobs in her public comments to date hasn’t indicated that she is leaning one way or other, in much the same way that she is open to hearing details about Thompson’s proposed public safety building. The budget and assessment votes, along with the Herrick proposal for a task force to look at an alternative to Thompson, establish a context for this summer’s board election. The choices will be stark and could very well lead to a new direction for Ocean Pines.

Commentary From Page 38 The Yacht Club, in contrast, faces stiff competition in the area – from downtown Berlin, West Ocean City, and Ocean City. The Yacht Club can hold its own and then some in the summer, but come October the customers are drifing away. Ocean Pines has a large year-round population, of course, but for a variety of reasons the Yacht Club is simply not a destination of choice for most of these year-round residents when the cooler breezes blow. Another option, often promoted on these pages, would be to lease out the Yacht Club bar/restaurant operation to a private entrepreneur, who could be encouraged to keep the amenity open if he or she is able to create demand during the colder months. Someone with the expertise to do it right might decide that the downstairs needs a robust remodeling and re-imagining, something the OPA could do as well, to entice customers during the colder months. A much larger bar area and better management of big screen televisions, among other ideas, has been suggested by Yacht Club critics, but so far there is little indication that the OPA is inclined in this direction. The profit motive is probably needed to make year-around operational feasible. Until then, banking a $200,000-plus surplus is the OPA’s better option. It would be a sound business decision that would affect only a relatively small number of OPA members– Tom Stauss

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40 Ocean Pines PROGRESS

March 2016

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