Bailey removes Yacht Club ‘pirate ship’ playground One “legacy” landmark erected during the relatively brief Brett Hill era, controversial “pirate ship” playground equipment installed on the Yacht Club outdoor deck roughly halfway between the building and the Oasis swimming pool, was removed by General Manager John Bailey, Hill’s successor as GM, during the middle of the week of Feb. 18. Bailey confirmed the equipment’s removal during the Board of Directors’ Feb. 25 monthly meeting, saying he had made the decision for what he said were safety reasons.
~ Page 6
Engineering firm nears completion of Country Club specs In an update delivered to the Board of Directors during its Feb. 25 monthly meeting, General Manager John Bailey said that the firm hired to do engineering drawings for the renovation of the Country Club’s second floor was 90 percent complete in the design work. Bailey said the engineering firm, Davis, Bowen and Fridel of Salisbury, would have the designs completed shortly, after which the board will be asked to approve the plans and a request for proposals from contractors.
~ Page 8
OPA issues RFP for forensic audit Less than a week after the Board of Directors voted to solicit proposals for a forensic audit of potential fraud and embezzlement in Ocean Pines Association departments, starting with food and beverage operations, the OPA posted a notice on its Web site for that purpose. The vote was 6-1 in favor of the audit. ~ Page 18
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CONTROVERSY OVER OPA FINANCES Hill rebuts board timeline, affirms $200,000 in possible losses from theft and fraud
OPA members rally, urge board to outsource OPA management
Former acting general manager renews charge of inaction by last year’s directors
Meeting facilitator vows to organize petition drive if board majority fails to act
By TOM STAUSS Publisher war of words over how much fraud and theft has occurred in Ocean Pines Associations departments in recent years and whether last year’s board was too eager to keep incidents of theft and fraud under wraps continues to roil Ocean Pines. Former Acting General Manager Brett Hill continues to take issue with the current board over financial corruption issues, while two directors, Cheryl Jacobs and Slobodan Trendic, have pushed back hard against some of Hill’s assertions. Other directors were less confrontational, but a majority seems to believe there’s no foundation to Hill’s assertions of $200,000 in possible losses from theft and fraud. Trendic acknowledges that Hill’s revelations, initially published in the Progress’ February edition, were a primary factor in pushing the board to act favorably on Trendic’s proposal for a forensic audit of OPA departments, action taken during a Feb. 25 board meeting. But Trendic said Hill’s version of events last summer overlook a key fact. According to Trendic, Hill, as acting general manager with two strong director allies, effectively controlled the board last summer and could have taken stronger action against incidents of theft and fraud that occurred. More specifically, he said a board majority could have responded to his push for a forensic audit and
By TOM STAUSS Publisher oncerned about recent disclosures of theft and fraud that former acting general manager Brett Hill has said could have cost property owners up to $200,000 in losses, a crowd of about 85 people attending a meeting inthe Assateague Room of the Community Center March 10 coalesced around a remedy proposed by meeting facilitator Esther Diller. Also of concern is an estimated $2 million operating loss in 2017-18, which critics say the Board of Directors has done little to address. The solution to what ails Ocean Pines, she said, is for the board to seek proposals for the management of the OPA from homeowner association management firms, such as Legum and Norman that runs the Parke homeowner association in South Ocean Pines. The solution, not a new one, is essentially to replace in-house management of the OPA with an out-source model, but one that still would have an on-site general manager who would report to the OPA board of directors and executives of the management company. This outsourcing model was explained by Diller, a non-resident Ocean Pines property owners who owns multiple businesses in the Philadelphia area, in a telephone interview with the Progress March 7 and repeated during the March 10 meeting. The meeting was promoted on oceanpinesforum.com and was also mentioned by OPA Director Tom Herrick briefly during
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OCEAN PINES
March 2018 Ocean Pines PROGRESS
OCEAN PINES BRIEFS Pine’eer Craft Club lobbies for gift shop renovation The Pine’eer Craft Club’s Ida Laynor appeared before the Board of Directors’ Feb. 25 monthly meeting to lobby for a modest renovation of the club’s gift shop in White Horse Park, a project that is funded for up to $75,000 in the just approved 2018-19 budget. She invited the directors who haven’t stepped into the craft shop lately to do so, and then went on to oppose a recent proposal by Director Ted Moroney that in lieu of repairing the building for the use of the craft club, the Ocean Pines Association instead should tear the building down, with the club moving its gift shop operations into one of the meeting rooms inside the nearby Community Center. She said the gift shop, which is open on weekends, may not be a good fit for the Community Center because it often is not open on Sundays. She also suggested that the location of the shop is ideal, and that moving it inside the Community Center will result in lost visibility and less ability of the club to contin-
ue to make donations to the Ocean Pines Community with proceeds generated by its activities. She also asked if the directors had thought about who would pay for the cost of moving the shop into the Community Center. “You have to think about these things,” she advised the board, adding that the board should perhaps regard the club as something other than “little old ladies who knit.” During a Feb. 5 budget review meeting, Moroney told his board colleagues that he expects this Ocean Pines landmark, which has fallen into a state of disrepair because of all-too-typical neglect, will need lots of other repairs in the coming years. “I definitely want them to have a space,” he said, adding that he doesn’t want the OPA to build the club a new building for the club. He said he just wanted “to throw out the idea (moving the club to Community Center)” as food for thought. OPA President Doug Parks responded that the money should be left in the budget “for now,” a less than definitive statement that has To Page 4
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OCEAN PINES BRIEFS From Page 3
generated some concern among club members about the extent of board commitment to renovation.
Funds for 50th anniversary preserved in budget
While there remains a hope and even an expectation that the 50th Anniversary celebration in Ocean Pines will generate excess funds through sponsorships and other revenue-generating activities, the Board of Directors nonetheless is acquiescing in a request from the 50th Anniversary committee to include $15,000 for various committee-sponsored activities in the just approved 2018-19 budget. Early in the budget review process, the directors were considering a $5,000 allocation to the committee. At the Feb. 25 board meeting, the committee’s board liaison, Cheryl Jacobs, asked for an additional $10,000, seemingly more as an insurance policy than anything else. She said that expenses continue to be an “unknown,” but that the committee still expects to “return to Ocean Pines” any excess funds gen-
erated by anniversary events. She noted that a previous anniversary committee generated a surplus that was then used to create the Veterans Memorial at Ocean Pines. After Director Tom Herrick was given assurances that the additional $10,000 won’t result in a higher assessment for Ocean Pines Association members than the $30 already baked in the mix, the directors voted 7-0 to include the additional funding.
Ocean Pines avoids flush tax yet again
For the 13th consecutive year, the Maryland Department of the Environment has exempted residents in the Ocean Pines Sanitary Service Area from paying the $5 monthly charge, commonly called the flush tax, into the Chesapeake Bay Restoration Fund, resulting in an annual savings of $60 per household. The bay restoration fund is financed by residents and businesses served by wastewater treatment plants throughout Maryland. The fee was signed into law in 2004 with Senate Bill 320, and the first fees were charged in 2005. BRF funds are used to upgrade publicly-owned
treatment plants throughout Maryland, with enhanced nutrient removal technology to reduce nutrient discharges to the state’s waterways. The BRF began at $2.50 per month per household, or per equivalent dwelling unit (EDU), starting on July 1, 2005 and increased to $5.00 per month on July 1, 2012. Onsite septic system users throughout the state began paying a similar $5.00 fee per month in 2012 as well, with funds used to upgrade failing septic systems in the Critical Areas with Best Available Technology for nutrient reduction. “I want to personally thank Deputy Director John Ross for his leadership role and Ocean Pines Chief Plant Operator Dominic Ross and his staff for their outstanding work efforts to continually achieve this exemption for the Ocean Pines ratepayers over the last 12 years,” Worcester County Public Works Director John Tustin said. The Ocean Pines WWTP is equipped with technology, meeting the criteria for the fee exemption, which requires a maximum effluent concentration of 3 milligrams per liter (mg/l) of total nitrogen and 0.3 mg/l total phosphorous, and setting
the standard throughout the state for environmental stewardship. “The Ocean Pines WWTP has met the criteria for exemption each year since the BRF was enacted in 2005, resulting in an overall savings of roughly $540 per household and a total savings of $4.4 million to the Ocean Pines SSA residents and businesses since inception of the fee,” Enterprise Fund Controller Jessica Wilson said.
Board tables mosquito control contract
Prepare to be eaten alive by mosquitos this summer. Apparently thinking mosquito season doesn’t start until fall, the Board of Directors on Feb. 25 delayed approval of a $19,000 contract with the Maryland Department of the Environment for mosquito control. The annual contract, part of an overall program implemented county-wide for years, provides spraying for mosquitos within Ocean Pines. General Manager John Bailey presented the contract for board approval, but didn’t seem to know what it was really for or why it was treated as a capital purchase every q
4 Ocean Pines PROGRESS
OCEAN PINES OCEAN PINES BRIEFS From Page 5
treated as a capital purchase every year. He said it “doesn’t make sense to me,” but because that’s what has always been done he “just added it.” Doug Parks, OPA president, said he doesn’t know anything about it either. Clearly not realizing the mosquito control is a state-run operation that only MDE can provide, Director Slobodan Trendic wanted to know when the service would commence and suggested putting it out for bid. Parks asked if it is required or just a service that is available. “I don’t really understand this one at all,” Bailey said. Director Ted Moroney suggested if the program is something that occurs in the fall, then the board should delay action on the contract. The board will revisit it in March, when perhaps everyone will be a little more knowledgeable about it.
Boards acts on CPI violations
The Board of Directors on Feb. 25 voted unanimously to forward two violations of the Ocean Pines Association’s restrictive covenants to legal counsel for resolution. At 7 Clubhouse Drive in Ocean Pines, the property owners have installed solar panels on the roof of the home without acquiring permits necessary to do so, John Bailey, OPA general manager, said. The installation of solar panels in covered under the additions and alterations to a home section of the declaration of restrictions. Bailey said the initial letters seeking compliance was sent to the
March 2018 Ocean Pines PROGRESS property owners in August 2017. When no permit had been applied for by November, the Compliance, Permits, and Inspections office forwarded the violation to the Architectural Review Committee for consideration. The property owners are also $1,794.35 in arrears on their annual OPA property assessments, Bailey said. Based on the ARC recommendation, Director Ted Moroney offered a motion to find the property in continuing violation of the restrictive covenants and to send the matter to legal counsel for action. The board voted unanimously in favor of the motion. The second property under review was 13 Bridgewater Road, which Bailey classified as “rather run down.” He said the property has been cited for maintenance violations that present a threat to public health, safety, and welfare. Initial inspections and letters were sent to the owner of record by CPI in November and December, 2017. CPI found mold on the house, damage to the roof and facia, and blistering paint on the foundation. A final certified letter was sent following ARC review in January. OPA President Doug Parks noted that property is owned by U.S. Bank Trust, which has a mailing address in Oklahoma. Assessments are paid up for the property. Moroney again made a motion to find the property in continuing violation of the restrictive covenants based on the ARC recommendation and to forward the violation to the association’s legal counsel. The board voted unanimously in favor of the motion.
Donation for literacy
5
The Republican Women of Worcester County recently donated $3000 to the Friends of the Worcester County Commission for Women in support of the Commission’s McGuffey Bookworm Project. Each year, as part of the RWWC’s focus on literacy programs in Worcester County, an annual donation is made to support the McGuffey program for younger readers in the county. Shown are Liz Mumford, RWWC literacy chair; Eloise Henry-Gordy, Friends of the Worcester County Commission for Women chair; and Michelle Bankert, Worcester County Commission for Women chair.
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OCEAN PINES
March 2018
Yacht Club playground equipment removed by Bailey for ‘safety reasons’ Hill legacy landmark disappears, with the board in tacit acquiesence By TOM STAUSS Publisher ormer Ocean Pines Association general managers, like Rodney Dangerfield, don’t get no respect. They often are reviled, ignored, and blamed when a scapegoat is needed and even when one isn’t. Ask Bob Thompson, who lost his job in late summer of 2016. Ask Brett Hill, who resigned as acting general manager (and as an OPA director) roughly a year later. And sometimes their policy achievements, such as they are, are reversed by those who come after. One “legacy” landmark erected during the relatively brief Hill era, controversial “pirate ship” playground equipment installed on the Yacht Club outdoor deck roughly halfway between the building and the Oasis swimming pool, was removed by General Manager John
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Bailey, Hill’s successor, during the middle of the week of Feb. 18. Bailey confirmed the equipment’s removal during the Board of Directors’ Feb. 25 monthly meeting, saying he had made the decision for what he said were safety reasons. In a follow-up interview with the Progress, Bailey said the equipment is currently being stored at the OPA’s Public Works facility, and no decision has been made on a new home for it, at least as of Feb. 26. But he said a decision on where to relocate the equipment was “imminent.” He did not return phone calls during the week of March 5. In the earlier interview, he seemed to be leaning against moving the equipment to the OPA’s Manklin Meadows recreational complex off Manklin Creek Road, which is already well equipped with a new playground installed last year. “There may be a better place
somewhere,” he said, without naming any possibilities. He specifically excluded the area between the Yacht Club and the nearby Mumford’s Landing pool, which some opponents last year had recommended as an alternative. Bailey said he had been made aware of issues related to the pirate-themed Yacht Club equipment not long after arriving in Ocean Pines. Saying he had not been pressured by any directors or opponents in the community, Bailey said he independently reviewed the site and decided that it posed safety hazards, specifically the close proximity of the equipment with the fence that surrounds it. He did not claim, as some have, that the equipment interfered with the nearby “Oasis” pool, at one-time an adults-only amenity that last year was converted into a pool open
to all ages. There is a movement afoot to make the pool less family-friendly with new rules that seem to have a disparate impact on families with kids under 18 [see separate article in this edition of the Progress for details.] Bailey’s decision to remove the playground equipment, which was not voted on by the board of directors in a public session, was noted during the board’s Feb. 25 meeting during the Public Comments segment, with one property owner saying that the Yacht Club had always been the wrong place for it. But Tom Janasek, another property owner and a one-time candidate for the Board of Directors, disagreed, conceding that he he knew his opinion would not be appreciated by many in the room. But he said that contrary to the view of those who say that playground equipment is incompatible with a food and beverage operation that serves alcohol, Janasek cited several Ocean City full service bars and restaurants that have installed elaborate and expensive playgrounds for kids.
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To Page 7
OCEAN PINES Pirate ship playground From Page 6
He said the success of these restaurants, as opposed to less successful operations at the Yacht Club, prove that playground equipment is compatible with restaurants where alcohol is available. More than a year ago, what initially seemed to be a non-controversial, mom- and-apple-pie proposal for playground equipment to be donated and installed at minimal cost at the Ocean Pines Yacht Club evolved into one of those classic Ocean Pines kerfuffles. It revealed erosion in the tight camaraderie of a board coalition that formed after the 2016 Board of Directors election, in which Hill and Slobodan Trendic were both elected after running in an informal coalition. The placement of the equipment at the Yacht Club triggered what turned out to be almost a year of contentious relations between Hill and Trendic, often involving disputes over process. Evidence of some community op-
March 2018 Ocean Pines PROGRESS position to the pirate-themed playground equipment for the Yacht Club disclosed by Hill in December of 2016 during a board meeting first emerged on oceanpinesforum.com. The objections focused mostly on the proposed location of the equipment on the outdoor decking east of the building, roughly proximate to where bands set up to perform on balmy summer evenings. The concern by opponents was that playground equipment would be set up in close proximity to three separate bar areas serving alcohol – the outdoor tiki bar, the original bar set in a corner of the building, and the new Tuffy’s Tavern. Trendic, in memos to board colleagues, suggested that Hill exceeded his authority in accepting the donation of playground equipment from Tim McMullen, current chairman of the OPA’s Parks and Recreation Committee, and his family, in memory of his late wife, Mary, the founder of Ocean Pines’ summer youth program decades ago. Trendic said it should have been a collective board decision to accept the gift and where to locate it, with
‘Pirate ship’ donor not offended by removal of gift from YC
T
he donor of the “pirate ship” playground equipment installed on the Yacht Club deck in January of 2017 and removed in mid-February of this year says he’s OK with the decision by General Manager John Bailey to find a new home for the equipment. Tim McMullen, the donor, who’s also chairman of the Ocean Pines Association’s Parks and Recreation Advisory Committee, says that contrary to media reports at the time, he never insisted that the donation made by him and his family foundation be located at the Yacht Club. Several months ago, he said that Recreation and Aquatics Director Colby Phillips and the board liaison to the parks and recreation committee, Colette Horn, asked him whether he would mind if the equipment would be relocated to a more appropriate place. McMullen said he didn’t mind. “The foundation had never requested that it be part of the Yacht Club,” he said. “I have full confidence in Colby Phillips and Colette Horn” in finding a new home for his family’s donation.
community input part of the process. When Hill made the disclosure of the playground equipment donation at the December 2016 board meeting, there really was no reaction by board members, at least nothing too
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overt. Community reaction in emails was swift and mostly negative. But Hill and a board majority went ahead and agreed with the location as proposed by Hill.
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8 Ocean PROGRESS March 2018 al staff uses Pines for aquatics-related program-
closure for cleaning and water reming. placement in late August or September. A New-England based company, Struc- He envisions a two-week closure, with tures Unlimited, built the Sports Core Ocean Pines’ four outdoor pools availpool enclosure roughly ten years ago for able for use during that period. a little over $1 million. Hill said he and During initial phases of construction his staff are determining whether the of the addition, the pool would not need addition would require the same compa- to be closed, Hill said. Once the addition Construction timeline stillbetween very much ny to do the expansion, or whether some is completed, the wall the ex- in limbo other contractor isting Bailey enclosure and the new structure OPA members in previous meetings. By TOM STAUSScan accomplish it. cost,” said. He said the goal is to accomplish the will be removed. “Forproject safety will reasons, Publisher At a board special meeting on A timeline for the also work this summer, at the same time the this final phase will require the pool to Jan. 12 when the board awarded a n an update delivered to the take shape once bids are reviewed, pool would be closed for its semi-annu- be closed,” he said.
Davis, Bowen and Friedel almost done with Country Club design drawings
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Board of Directors during its Feb. he later told the Progress. He de25 monthly meeting, General clined to commit to a project comManager John Bailey said that the pletion date of late June, in time for firm hired to do engineering draw- a 50th anniversary golf tournament ings for the renovation of the Coun- near and dear to the heart of Cherdicttry lossClub’s of membership feethe structure second floorrevenue was 90 from per- two-tier yl Jacobs, board’s liaison to the cent complete the design hoc committee. General ManageinBrett Hill in work. his draft 50th needsAnniversary two weeks of ad constant 60-degree budget in of January. It’swere $100available for indi- weather to said do the work. The hopedesign is that Copies the plans Bailey that the latest vidual resident and property owners of April weather will cooperate, he said. for review during that meeting. relocates the bar area to another s Ocean Pines andthe $175 for families. firm, wall Meanwhile, remains to to be sepaseen Bailey said engineering and adds ita “half wall” - Davis, The drop-in rate for play at the Comwhether the board decision to levy dropBowen and Fridel of Salis- rate a small dining area from a largf bury, munitywould Centerhave gymnasium is $3 forcomres- er in meeting fees on top of membership fees will the designs room. d idents and $5 for those who don’t live or affect membership, as pickleball club ofpleted shortly, after which the board He said the latest plans also res own property in Ocean Pines. ficers predict. would be asked to approve the plans duce the size of one of the meeting d As of the first week March, the pickClub officers have suggested that the and a request for proposals from rooms to create space leball courts planned for the Manklin board update boardstorage resolution M-02for to Oncesports that complex occurs, the and chairs will fee-based be used e contractors. Meadows racquet are tables list pickleball as anthat annual will be sent out to area contrac- from time to time depending on cost the n RFP not yet ready for play. amenity. M-02 states the capital andtold posted on line. that the con- event. a torsHill the Progress for amenities, such as the Community “Oncethat bidsis are returned, will Center, He said three were e tractor restriping twowe tennis are these born by all changes OPA members g know courts for American Tennis, howpickleball, much this project will in response to comments made by
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oor, outdoor fees for pickleball players
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2017-18 OPA BUDGET
March 2017
Hill, Aquatics staff one step away from Sports Core pool addition If the bids exceed the budgeted amount, or for any other reason, the directors are not obligated to authorize the project’s go-ahead. Hill said he is hopeful the board will authorize the Sports Core expansion. The addition is to include a new party/ training room and enclosed space for possible future expansion of the existing pool, but in the short term some of the space will be used to store equipment such as aqua bikes, trampolines and other equipment that Phillips and her
Hill anticipates two-week closure in late summer for project’s final phase
By TOM STAUSS Publisher ith the inclusion of $225,000 in the 2017-18 capital budget for an addition to the indoor Sports Core swimming pool enclosure, Acting General Manager Brett Hill and the Aquatics Department are a step closer to making the project a reality. Aquatics Director Colby Phillips persuaded Acting General Manager Brett Hill to include the proposed addition in his draft budget, and Hill in turn was able to defend the project in budget review discussions in January and February. No director raised objections against the proposal, and the proposed expenditure made it into the final capital budget approved by the board in February. In Ocean Pines’ two-step process for capital expenditures, budgetary approval simply gives the general manager the authority to solicit bid proposals for various projects. Once staff recommends a particular proposal from among the minimum of three bids that are supposed to be obtained, the board has final authority over whether to authorize the spending.
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Club members predict loss of membership revenue from two-tier fee structure
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needs two weeks of constant 60-degree weather to do the work. The hope is that April weather will cooperate, he said. Meanwhile, it remains to be seen whether the board decision to levy dropin fees on top of membership fees will affect membership, as pickleball club officers predict. Club officers have suggested that the board update board resolution M-02 to list pickleball as an annual fee-based amenity. M-02 states the capital cost for amenities, such as the Community Center, are born by all OPA members
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General Manage Brett Hill in his draft budget in January. It’s $100 for individual resident and property owners of Ocean Pines and $175 for families. The drop-in rate for play at the Community Center gymnasium is $3 for residents and $5 for those who don’t live or own property in Ocean Pines. As of the first week March, the pickleball courts planned for the Manklin Meadows racquet sports complex are not yet ready for play. Hill told the Progress that the contractor that is restriping two tennis courts for pickleball, American Tennis,
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al closure for cleaning and water replacement in late August or September. He envisions a two-week closure, with Ocean Pines’ four outdoor pools available for use during that period. During initial phases of construction of the addition, the pool would not need to be closed, Hill said. Once the addition is completed, the wall between the existing enclosure and the new structure will be removed. “For safety reasons, this final phase will require the pool to be closed,” he said.
Board okays indoor, outdoor fees for pickleball players By TOM STAUSS Publisher ith pickleball club members predicting a loss of membership revenue, the Board of Directors has approved a two-tiered system for assessing pickleball players for the privilege of playing their favored sport in Ocean Pines. Annual memberships that cover the use of pickleball courts at the Manklin Meadows complex were set during a board meeting Feb. 23 and were the same as had been proposed by Acting
of BARGAINS the MONTH
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staff uses for aquatics-related programming. A New-England based company, Structures Unlimited, built the Sports Core pool enclosure roughly ten years ago for a little over $1 million. Hill said he and his staff are determining whether the addition would require the same company to do the expansion, or whether some other contractor can accomplish it. He said the goal is to accomplish the work this summer, at the same time the pool would be closed for its semi-annu-
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contract to DBF to draft final construction drawings, representatives from the from the firm said it would take about six weeks to complete the drawings. They more or less met that deadline, but the board had not approved an RFP by the deadline for this edition of the Progress. Assuming that an RFP is issued by mid-March and a 30-day turnaround for bid submissions, the board could be ready to award a contract on or about April 15. How soon the approved contractor could begin work on the project once a contract is issued remains to be seen, but just on the face of it a June 30 completion date seems like it would be quite a push to accomplish. The contract award calls for a fee to DBF not to exceed $40,000. The design drawings are for the first phase of a three-phase project. During the Feb. 25 board meeting, Director Tom Herrick said he objected to the board approving the latest iteration of plans without a full public airing of changes. Jacobs said the new changes are not “material” and were in response to member comments the previous month. She said she was totally in favor of the latest set of plans. Director Slobodan Trendic said he continued to have serious concerns about the design, primarily because of the kitchen and bar on the upper level. “We’re expanding food and beverage operations when we’re struggling with what we have,” he said, questioning what he said was the lack of a business plan regarding golf banquets that supposedly will take place there once renovations are complete. “Who do we hold accountable (if golf banquets don’t materialize),” he said. Director Ted Moroney voiced support for the latest changes, and countered Trendic’s comments about the kitchen. He said that Bailey has made clear that the kitchen will be a “warming” kitchen only, with food preparation done elsewhere, and
OCEAN PINES that there will be no sit-down dinners on the second floor, only buffet-style events. OPA President Doug Parks said if he thought as Trendic suggested that the second floor would be a fullfledged food and beverage operation, he too would want a business plan. He also said that the latest plan hasn’t “changed anything materially” from the previous iteration. Jacobs also pushed back against the need for a business plan. She said the second floor contains meeting rooms and multi-purpose space with a modest dining component. Herrick said that while he never has objected to the basic concept of the second floor, he’s not a fan of the latest plan. He doesn’t like the fact that there are now four meeting rooms and “there are sliding doors everywhere.” He said the OPA membership should have the right to comment on the latest plans before they’re sent out for bids. Trendic said he would prefer that golf-related banquets be “brought over” to the Yacht Club, an idea that Herrick, as a golfer, said wouldn’t be acceptable to most golfers participating in a tournament. They don’t want to drive over to the Yacht Club for a banquet after a round of golf, he said. Parks agreed, and reminded his colleagues that the board wasn’t creating new space but was simply reconfiguring and repurposing it. In the end, the directors voted 7-0 in favor of the latest plan, authorizing Bailey to proceed with the RFP phase. As it has from the first iteration of plans, the renovated second floor will include a large board room/bar area with seating in the center of the second floor, with a cathedral ceiling. On the side of the building facing the first teebox, there will be a second room with movable partitions, which will be collapsible to create a single room if needed. A wall with two doors has been added to separate the entrance vestibule from the second floor space. A stairwell to the third floor office would be removed. The handicap lift will remain during this first phase. An elevator may replace the lift in a later phase. that may also reconfigure the front entry foyer. Two of the existing columns in the room will be removed, with three remaining to support the roof and first floor.
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March 2018 Ocean Pines PROGRESS 9 Page 29
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OCEAN PINES
March 2018
New rules at Yacht Club ‘Oasis’ pool attempt to straddle generational divide Regulations would prohibit throwing of balls, intentional splashing, back floats, bubbles, rings, one-sided flotation devices (noodles are permitted), jumping into the pool and conversations and other noises that aren’t ‘kept at a quiet level’ By TOM STAUSS Publisher he Ocean Pines Association, faced with a potential backlash from some Aquatics members used to a decades-only adults-only policy at the Yacht Club’s Oasis swimming pool abruptly ended last summer, has come up with new usage rules that it hopes will persuade those members to renew their memberships this spring and summer. At the same time, the OPA’s Aquatics Department knows that it has to comply with federal and state rules that forbid discrimination against pool users on the basis of age. It was an opinion by OPA lawyer Jeremy Tucker last year that led to the Board of Directors to re-
T
voke the adults-only status of the Yacht Club that had been in place for decades, well before the advent of Federal Housing Administration age-discrimination rules. The revocation of adults-only policy at the pool resulted in a backlash against the policy and threats of cancelled or non-renewed aquatics memberhip by some members. With kids under 18 allowed in the pool last summer, there were reported incidents of friction between some parents and some pool users who felt their quiet pool Oasis had been infringed upon by younger users. Comparing the Yacht Club pool rules with the rules in place for the OPA’s four other pools, the new Yacht Club pool rules prohibit throwing of
balls, intentional splashing, back floats, bubbles, rings, one-sided flotation devices (noodles are permitted), jumping into the pool and conversations and other noises that aren’t “kept at a quiet level.” The rules require users to enter the pool using ladders or by the stepped entry. Splashing that occurs during lap swimming will be considered unintentional. Quiet level is not defined in the rules, nor is it clear at what point conversations and noise level exceed what will be deemed to be permissible. An earlier draft of the rules by the Aquatics Department made no reference to noise levels. The language defining the Yacht Club pool as a “quiet oasis pool” and a requirement that “conversations
and other noises must be kept at “a quiet level” appears to have been a late addition. The rules do not specify how the staff is to determine noise level, and there is no provision in the just approved 2018-19 new capital budget for a noise meter. The rules don’t spell out any penalities for those deemed to have violated the noise level rules. One proposal offered by a group of residents led by Ocean Pines resident Gary Miller was to impose “time-outs” on violators, but it’s not clear whether the Aquatics Department staff will implement this enforcement mechanism this summer. The Miller group in a written report to the board also called on the Aquatics staff to hire more “adult” staff to enforce these new regulations, on the grounds that the mostly teenaged staff will be unable or unwilling to enforce rules that parents of kids under 18 decline to follow. Aquatics Director Colby Phillips said recently that she believes her staff will be able to handle any enforcement issues that arise at the
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10 Ocean Pines PROGRESS
March 2018 Ocean Pines PROGRESS 11
OCEAN PINES Oasis pool From Page 10
Yacht Club, without the need to expressly hire more senior employees. OPA President Doug Parks, liaison to the Aquatics Advisory Committee, said during the Feb. 25 meeting of the Board of Directors where he announced the new rules that they had been vetted and revised by Tucker and reviewed by the Aquatics Advisory Committee. Posted minutes of the Feb. 12 meeting of the committee indicates that members met with several members of Miller’s group, reviewed what were then proposed rules and offered suggestions for revisions. The minutes do not say what those suggestions were or, if they were made to the committee’s satisfaction, whether the panel would then endorse the changes. In his comments at the board meeting, Parks did not represent that the committee had endorsed the Tucker-revised rules, only that they had been reviewed. OPA Director Tom Herrick recently responded to concerns that the noise provisions would be diffi-
cult if not impossible to enforce. “In an attempt to appease the users, Colby and her staff tried their best to put in rules that would lessen the impact of this major change in use,” Herrick said in an email. “The borderline violations are hard to enforce, but the concept is being outlined in the rules and hopefully most will comply.” Herrick said he believes the rules won’t be “strictly construed” or enforced “but excessive violations should be addressed. “Please understand this is not a perfect scenario but an attempt at a compromise,” Herrick said. In a follow-up email, Herrick ackowledged that these rules “are not cut and dry. One must determine, at times, if a violation has in fact occurred. That is why they must not be strictly construed but reasonably applied. “When it is reasonably apparent that a violation has taken place, a verbal reminder may be necessary. The guidelines are put in place to provide a level of expectation of conduct from those using our pool. The measure of excessive rests on the determination of who enforces the
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rule, in this instance a lifeguard. Proper training will provide the basis for action,” he said. Herrick also attempted to address concerns that the new rules will have a “disparate impact” on families with kids under 18. “That is true of any rule or law if the enforcement is based on bias,” he said, adding that the rules as proposed are better “in my opinion, than no rules at all.” He said that if the Aquatics committee has suggestions for revisions
to the rules as proposed “I would be in favor of listening to their additional input.” Director Slobodan Trendic recently suggested that Tucker should be asked to render his judgement on the rules’ enforceability in writing before the rules are adopted by the board. He said Tucker should be asked whether the rules as proposed would have an impermissible “disparate impact” on families with kids 18 or younger.
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OCEAN PINES
March 2018
OPA message board to be replaced with Q&A format General manager says he’s discussed proposed changes with OPA president By TOM STAUSS Publisher cean Pines Association General Manager John Bailey says the realoceanpinesforum message board recently taken down from the OPA’s Web site for lack of interest by property owners will be refashioned into a question-answer format and reintroduced in the near future if approved by the Board of Directors. Bailey said the idea for a question-answer section on the site as an alternative to a more free-wheeling message board has been informally broached in email to the board and discussed with OPA President Doug Parks. Bailey said the new format will be presented formally in a future meeting for approval. He didn’t say when that would be. Bailey had told the Progress in a Dec. 5 telephone interview that Marketing and Public Relations Director Denise Sawyer had completed a report suggesting ways to improve the little used OPA message board in November. It turns out that her proposal was not so much a way to improve the
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OCEAN PINES
March 2018 Ocean Pines PROGRESS
Message board From Page 12
message board but to replace it altogether. A question-answer format would seemingly allow the OPA to draft questions about topics of current interest that could then be answered by staff. In addition, the format probably would allow property owners to submit questions. Back in October of last year, Bailey had said he had expected he would present a proposal for board review and action at the monthly board meeting Nov. 30, within a 60-day deadline given to him by the board in September. That didn’t happen. It didn’t happen during board meetings in January or February either. At the Sept. 22 board meeting, during which one director was prepared to eliminate the site while another was gung-ho in preserving and improving it, Parks had struck a compromise between the two approaches. Parks and the board gave Bailey
60 days to come up with a recommendation on what to do with it. He came close to meeting that deadline. Unveiled during the previous presidency of Director Tom Herrick and by former Acting General Manager Brett Hill, realoceanpinesforum was designed as a site where OPA members could go to get official answers to their questions. During a board orientation meeting Sept. 22, Herrick was the director who seemed most favorably disposed to preserving the site. He suggested that the OPA do “a bit better� in promoting it so more members would use it for its intended purpose. When Parks opened a discussion about the OPA’s official message board, Director Slobodan Trendic told his colleagues that they should “do away with it.� He said there’s little indication that members are visiting the site and the privately owned oceanpinesforum.com fulfills the function intended by the OPA’s message board. After Herrick reminded the board of the message board’s original pur-
pose, he asked Bailey his impression so far of how well it fulfills that purpose. Bailey’s take was that “regular communication� such as press releases, e-mail blasts, or personal e-mail is the way that most OPA members get answers to their questions. “It rarely gets used,� he said of realoceanpinesforum. “We should either promote it or let it go by the wayside.� He said he and his staff could “do some data digging� to determine the actual number of posts by those seeking answers to questions compared to the number of posts uploaded to the site by OPA staff. He said staff posts are generally disseminated to the membership by other means. Herrick said the advantage of the message board is that information that might be disseminated only to someone asking a question gets posted online and thereby is available to more people. “It’s an answer that other people might see,� he said.
At that point in the discussion, Parks suggested that Bailey get back to the board in 60 to 90 days with a formal recommendation. Bailey, whose management experience before coming to Ocean Pines was concentrated in Virginia, said the commonwealth’s homeowner association law requires “member to member� communication on HOA Web sites. He said he wanted to check into whether there is a similar requirement in Maryland. The OPA message board does not currently allow for direct member-to-member communication unfiltered through the OPA. Parks suggested that Bailey, in developing his recommendation to the board on the fate of realoceanpinesforum, should consult with the OPA’s Communications Advisory Committee. The committee was not asked to comment on the message board before Hill introduced it earlier last year, having previously expressed reservations about the idea when former General Manager Bob Thompson had considered the idea.
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OCEAN PINES
March 2018
Bailey says software upgrades to be delayed to after summer season Back office outsourcing still possible even with new director of finance in place By TOM STAUSS Publisher earing that an attempt to implement comprehensive changes to the Ocean Pines Association’s back office and departmental accounting systems would unacceptably interfere with OPA operations this summer, General Manager John Bailey told the Board of Directors in late February that installation of the new software would be delayed until sometime after the summer season. In brief remarks delivered during his General Manager’s report, Bailey did not indicate that there would be any delay in sending out an request for proposals from software vendors. The RFP currently is being drafted by the recently resurrected Information Technology working group, now being chaired by former OPA President and Director Tom Terry, after months of sluggish progress.
F
OPA Director Slobodan Trendic recently told the Progress he’s been unhappy with the slow pace of developing an RFP for software upgrades, which he said should also include solicitation of proposals from companies interesting in assuming control over OPA’s back office financial operations, including installation and maintenance of new financial management software. Done correctly, Trendic said that software upgrades needn’t involve the expenditure of hundreds of thousands of dollars for hardware in today’s Cloud-based environment. Trendic also criticized Parks for unilaterally appointing Terry as chairman of the IT working group, which essentially is an ad hoc committee. Trendic said that committee members can be appointed by the OPA president but with the concur-
rence of the board in a formal vote, and that the chairman of the committee is selected by the committee and recommended to the president and board for appointment. The process spelled out in OPA bylaws was not followed with respect to the appointment of Terry and some committee members grumbled about the process used, Trendic said, adding that his board colleagues seem unconcerned with Parks’s seeming indifference to following approved appointment protocol. However long it takes the committee to generate an RFP for new software, or the board to authorize its release, Bailey said it was possible that it could include an invitation to accept proposals from vendors to assume control over many back office accounting functions. “It’s not what we’re looking for
that currently, but it’s not that we couldn’t go that path,” he told the Progress during a Feb. 26 telephone interview. That he didn’t seem all that enthusiastic about that possibility will not necessarily be dispositive. Last summer, the board was a single vote short of approving a proposal by former Acting General Manager Brett Hill for an accounting package to be administered by Legum and Norman, a regional homeowner association management company with an office in Ocean City. It also called for Legum and Norman to take over back office functions. Hill, as reported in an article published in the February edition of the Progress, was very critical of the previous board for not voting to accept his recommendation to hire Legum and Norman to assume direct control over back office accounting functions for the OPA. He said the company would have brought in its own personnel and accounting software to run OPA back office operations. At the time, there was no public disclosure of the fact that Legum and Norman was under considerq
14 Ocean Pines PROGRESS
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OCEAN PINES Software upgrades From Page 14
ation as a replacement for the OPA’s in-house department of finance. Hill acknowledged that publicly, Legum and Norman was only cited as a company that could supply a needed software upgrade for the OPA, not that it would take over back office operations for the OPA, replacing in-house staff. He said he had two votes in support of the outsource solution, director and then OPA President Tom Herrick and former Director Dave Stevens. Hill said that OPA Director and Treasurer Pat Supik had promised her support of the proposal to hire Legum and Norman prior to the meeting. “But on the day of the meeting in July, she screwed me (by voting against Legum and Norman),” Hill said in an telephone interview with the Progress in late January. He said she bought into the argument that a decision to outsource back offiice functions should await the arrival of a new general manager. Subsequently, the board and the new general manager, John Bailey, opted instead to hire a new in-house director of finance, Steve Phillips, who arrived on the job in January. The finance department continues to operate with a skeleten staff, and no decision has been made on new accounting software or replacement hardware, should the OPA go that route rather than switch to cloudbased solutions. Trendic recalls that he opposed the Legum and Norman proposal last July because the OPA had not sought competing bids for back-office functions. “The Legum and Normal proposal was pricey,” he said, “and we had not followed procedures in our bylaws for obtaining competing bids for large contract expenditures.” In principle, Trendic said he favors outsourcing back office functions as an alternative to spending “$400,000 for new hardware and software,” as has been proposed. A copy of the Legum and Norman proposal obtained by the Progress indicates that the company’s proposed management fee was $159,500 annually, partially offset by a net reduction of two individuals in the finance department. The company would have supplied an on-site accounting manager and accounting administrator, with the OPA paying their salaries. The proposal kept open the pos-
March 2018 Ocean Pines PROGRESS sibility that one or both of those individuals could be OPA employees, suggesting that a back office solution would not necessarily result in Phillips losing his job. The company recommended its own employees for those two slots, however. Herrick, in a recent email to the Progress, said he would be open to solicitation of proposals from software and management company vendors to take over back office functions. He said had the board acted affirmatively on Hill’s proposal last summer, the OPA would be “much further along” in solving many of the financial management issues Hill cited in his Progress interview.
15
Donation
The Republican Women of Worcester County recently donated $3000 to the Friends of the Worcester County Commission for Women in support of the Commission’s McGuffey Bookworm Project. Shown are Liz Mumford, RWWC literacy chair; Eloise Henry-Gordy, Friends of the Worcester County Commission for Women chair; and Michelle Bankert, Worcester County Commission for Women chair.
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All prices subject to change
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16 Ocean Pines PROGRESS
OCEAN PINES
March 2018
Some directors begin to grasp Trendic’s concerns about unequal employee benefits Motion to ask employees to pay a portion of individual and family health insurance premiums is withdrawn pending arrival of human resources employee By TOM STAUSS Publisher lthough Director Slobodan Trendic’s efforts to accelerate changes in employee health insurance benefits were not accepted during a Feb. 25 Board of Directors’ meeting, there were indications that his concerns about the unequal application of benefits to favor top executives including department heads were beginning to be understood by some of the directors. Trendic’s motion to require employees to pay 10 percent of their individual health insurance premiums and 20 percent of premiums for family members failed to gain traction among his colleagues during
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the meeting. He withdrew it at the end of a lengthy discussion, with the understanding that he would reintroduce it for more discussion and board action once a new human resources employee is hired to work with employees on the issue of health insurance benefits and employee compensation. That could be happening very soon, as earlier in the meeting the board voted unanimously in favor of a motion by Director Colette Horn to authorize the general manager to hire a human resources employee. Initially, the motion called for the hiring of an HR consultant, but a friendly amendment changed that to employee, which apparently was
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Horn’s intent all along. As if to prove that progress in Ocean Pines is often measured in baby steps, Trendic seemed to be making some headway in making his colleagues understand one of his primary concerns about the Ocean Pines Association’s Cadillac health insurance benefits. He told his colleagues that the OPA is most likely violating federal labor law in its current health benefits package when it pays 100 percent of family premiums for top executives, including department heads, while not offering the same benefit to other employees. He said the disparate availability of benefits is inherently discriminatory, and could place the OPA in some hot water legally should the unequal treatment be challenged through available avenues. His motion to ask all employees to pay 20 percent of family members’ health insurance premiums was designed to equalize employee and employer contributions across the entire organization, with no favoritism given to the general manager or department heads, he said. After reading his motion into the record, which had been amended from an earlier version, Trendic said his motion was intended to bring the OPA into compliance with provisions of the OPA employee handbook and also with federal labor law. Horn responded by saying she wanted to delay consideration of additional changes to the health benefits package pending the arriving of a new human resources employee. Director Cheryl Jacobs reprised her usual testiness towards any proposal by Trendic, reminded him that “we had six days” of budget review meetings and “a recommendation from the budget and finance committee” on the issue of health insurance. She said there was a “general consensus” on the board that “employees need to start contributing” to their health insurance costs, and that a phased-in approach to that
has been incorporated into the 201819 OPA budget. The first phase of that contribution is an adjustment in the OPA’s health reimbursement accounts (HRAs) that is projected to save the OPA about $100,000 in expense next year. The HRAs set up for certain employees cover the cost of insurance deductibles, or medical costs incurred before insurance coverage kicks in. The OPA in some instances have reimbursed employees for 100 percent of their deductible expenses. That will change in 2018-19, as a result of a board decision in the budget review sessions. The result will be that employees will be asked to contribute a co-pay within the deductible. This change won’t affect every employee, only those with a medical expense and claim against the HRA. Trendic later said that this change really shouldn’t be considered a first phase because it’s “long-hanging fruit” and a “no-brainer” that the OPA should have eliminated long before now. He contended that more significant savings will come when the OPA asks employees to pay a share of health insurance premiums, which he said is common in almost every organization that offers health insurance in the United States. He said asking employees to pay a percentage of insurance expenses should begin in 2018-19, not the following year, which seemed to be the board consensus during the budget review meetings. Director Ted Moroney defended the approach favored by the board to date by saying that “this is the first board to have made any cut” in health insurance benefits, a reference to adjustment in the HRAs. He said health insurance premium contributions would be introduced to employees “in conjunction with (employee) pay” in 2019-20. Moroney said his difference with Trendic was not “conceptual” but rather a matter of timing. Trendic pushed back against the idea that the OPA could wait a year before asking employees to pay a modest share of their individual and family premium costs. “My intent is to bring conformity” into the treatment of top executives and lower echelon employees in 2018-19 with respect to premium support, he said, adding that “we need to achieve savings” over To Page 18
March 2018 Ocean Pines PROGRESS
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18 Ocean Pines PROGRESS
OCEAN PINES
March 2018
OPA issues request for forensic audit proposals within a week of board OK Trendic finally receives board support for a long-standing objective By TOM STAUSS Publisher ess than a week after the Board of Directors voted to solicit proposals for a forensic audit of potential fraud and embezzlement in Ocean Pines Association departments, starting with food and beverage operations, the OPA posted a notice on its Web site for that purpose. The vote was 6-1 in favor of the audit, after extended discussion at the board’s Feb. 25 board meeting. Only Director Tom Herrick voted no, not because he disagreed with the idea of a forensic audit. On the contrary, he wanted the motion for the audit that had been offered by Director Slobodan Trendic to explicitly target all OPA departments, something that Trendic was not prepared to do. But the request for forensic audit proposals makes it clear that with, under the direction of the auditors, it’s highly unlikely that the audit will stop at food and beverage. Any department with any suggestion of corruption attached to it, or that handles cash or inventory, is a likely target for scrutiny, sooner or later. That probably would include any OPA operation mentioned by former Acting General Manager Brett Hill in the revelations he made in an article published in the February Progress. Highest on the list of de-
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partments to be targeted would be food and beverage operations and Public Works. By only mentioning food and beverage in his motion, Trendic was being intentionally vague. His motion came in for some criticism on oceanpinesforum.com because it seemed to suggest something less than a comprehensive audit of all OPA departments would take place. It still could, but Trendic later said the intent was to let the audit go where the evidence and the auditors want to take it, without necessarily tipping off potential wrong-doers in advance on the scope and timing of auditing activity. Trendic said he doubted that the Ocean Pines Police or Aquatics departments would be high on the list of target departments. He also said he could not in good conscience advocate spending OPA member dollars in auditing departments without a hint of corruption, such as the OPPD. In a cover page announcing the audit, the OPA explicitly indicated that the audit would not stop at food and beverage. “The purpose of this Request for Proposal is to obtain proposals from qualified entities to provide forensic auditing services. It is anticipated that the forensic audit will have more than one phase. As dis-
cussed in greater detail in the Scope of Work section, phase one will cover the Food and Beverage Department. The [OPA] intends to continue to conduct a forensic audit of multiple departments. After meeting with the selected proposer, it will be determined if these additional department audits are carried out concurrently or sequentially,” the notice said. That was an explicit indication that the audit would probably not stop at food and beverage or Public Works. “Multiple departments” and the reference to concurrent or sequential audits leaves the timing
Employee benefits From Page 16
and above those related to HRAs in 2018-19, especially in light of the huge operating deficit projected for the current fiscal year. Even with the HRA adjustments, the OPA is “way too generous” when it pays 100 percent of premiums for individuals and 100 percent for family members of top executives, Trendic said. “At minimum, we should at least make sure” that department heads and top executives “pay the same” as lower level employees for family coverage, he said. “Every employee
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and extent of auditing intentionally vague. In an earlier draft of his motion, Trendic had called for a fraud audit, but he subsequently opted for the term forensic, his initial inclination. “The key difference between a fraud audit and forensic audit is that a forensic audit involves the investigation and evaluation of company’s financial transactions and information for use as evidence in court. A forensic audit is more appropriate in situations where a company plans to prosecute if it finds evident of fraud and embezzlement,” Trendic said in an explanatory email to the Progress. He said the intent is to uncover evidence that could lead to criminal prosecution, as well as civil proceedings aimed at obtaining restitution. The RFP said that auditors will To Page 20
should pay the same percentage.” Currently, lower level employees pay 16 percent of family premiums, Trendic said. His motion would raise that to 20 percent across the board. He went on to hammer home the point that to treat lower level employees differently from department heads would be a “violation of federal labor law” and must be stopped immediately. At that point, OPA President Doug Parks may have had an epiphany, suggesting that it might make sense to “delay” Trendic’s motion rather than defeat it, as a board majority probably would have voted to do. Parks suggested a “friendly amendment” to delay the motion until such time as a human resources employee is on board and, perhaps even more significantly, “a legal opinion” on Trendic’s concerns about disparate treatment of department heads and lower-level employees is obtained. Moroney also seemed somewhat swayed by Trendic’s arguments, suggesting that if changes in health insurance premiums were instituted in 2018-19, rather than a year later, the result in operations “would only go to the positive.” Horn didn’t seem particularly impressed, saying that she would “just as soon” defeat Trendic’s motion. Rather than accept a friendly amendment for delay, Trendic said he would withdraw his motion until such time as an HR employee is on board, “for purposes of keeping it in the queue” for later consideration.
March 2018 Ocean Pines PROGRESS
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20 Ocean Pines PROGRESS Forensic audit From Page 18
need to be available as expert witnesses in any court proceeding. The approved motion instructed General Manager John Bailey to: • Issue a Request For Proposals before March 1 with responses due by March 16 for forensic auditing services • Focus initial scope of work on the Food and Beverage operations • Provide his selection recommendation and obtain board’s approval including funding by March 23, and • Begin the initial forensic audit work by April 16 or earlier. By any measure, that’s an aggressive schedule. The first deadline of March 1 was essentially met, but only because Trendic himself prepared the first draft, with only minor changes by his board colleagues and legal counsel. The posted cover page says that the OPA is seeking a firm with CFE (certified fraud examiners) resourc conducting a forensic es capable of accounting investigation. To be considered for award, firms submitting
a proposal must be able to conduct investigations of potential fraudulent activity and support subsequent legal action, if required, on behalf” of the OPA. The notice said that the OPA “prefers not to engage with any firms it used in the past for audit work. The [OPA] does not intend to engage with a firm that could, in any way, be interpreted as having a conflict of interest.” Trendic told the Progress that this reference was included in the RFP in part because one of his colleagues, OPA Treasurer Pat Supik, had suggested that the OPA’s current auditing firm as a potential bidder for the work. Trendic said he responded that that would be inappropriate, and that the only companies that should be considered would be firms with national reach and with well established CFE divisions. “And no company that has ever worked for us before,” Trendic said. The decision by the board to solicit proposals for a forensic audit was a political victory of sorts for Trendic, who had initially proposed one last year as allegations of cor-
ruption first surfaced. But his efforts were resisted, and indeed even now some directors apparently believe allegations of fraud are overblown. Director Cheryl Jacobs characterized the environment which prompted the board to act as one of “hysteria,” and she said she was angry that one individual, Hill, had gone to the media, the Progress, to promote a narrative which she said unfairly blamed last year’s board for sweeping allegations of fraud and theft under the rug. She did not name Hill or the Progress in her statement, but the references were unmistakable. OPA Director Tom Herrick, a political ally of Hill’s last summer, pushed back hard against Jacobs’s criticisms of Hill. [See separate article in this edition of the Progress for details.] Jacobs also let it be known that she thought the audit should be focused on the OPA’s point of sale systems, but none of her colleagues seemed interested in such a limited focus. There is as yet no firm estimate on the cost of the audit.
A motion offered later in the meeting by Director Ted Moroney to divert money that initially had been budgeted for the roads reserve could potentially free up more than $200,000 for that purpose. Trendic said he hopes it doesn’t go that high. The board discussion that led to the decision to authorize the RFP began with comments by Herrick referring to “alarming revelations” and “not just in food and beverage.” He noted police department investigations of missing cash and also of fake invoices by a fictitious company billed to the Public Works Department and apparently paid by the OPA. “We need to send a message that we’re addressing the problems,” Herrick said. OPA President Doug Parks said he agreed, adding that while Trendic’s motion referenced starting with food and beverage, the audit won’t stop there. Parks also said the audit contract would not be for a fixed rate, since the audit envisioned is so open-ended in scope and duration, but would q
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“be billed on an hourly basis. “We don’t want to limit (the auditors),” Parks added. “Whatever it takes (we will do). If there is a perception that (fraud and theft) has been going on year after year, that spread could be significant.” He said the forensic audit is necessary so that “future boards don’t have to worry” that corruption is continuing. Parks said that there are rules in place that are supposed to prevent fraud and theft but that the OPA didn’t have a permanent director of finance in place when much of the allegations of corruption occurred. Parks said he hoped the audit wouldn’t “cost us an arm and leg” but he estimated a range of anywhere from $75,000 to $300,000. “We have to be committed,” he said.”It could cost us a lot of money.” Supik, the OPA’s treasurer who had been resistant to a forensic audit last year, said the cost could be as high as $100,000. She urged the board to allocate at least that amount in the 2018-19 budget. Herrick repeated that he thought the audit should not exclude any department. To pay for the audit, he said the board could “put less in the reserves” next year. He insisted that the cost of the audit should not be passed on to property owners in higher lot assessments. Trendic, addressing Herrick’s point, said the audit wouldn’t “stop at one department” but that decisions to move from one department to the next will be made “spontaneously” based on what’s discovered and on the recommendation of the auditors. He said his aggressive timetable was based on a desire to get started in the current fiscal year but with the work likely to push into 2018-19. “You follow leads,” he said of the actual conduct of an audit. “We need a reason to go to other departments. Some departments have no cash operations. You begin where most of the cash is, where we have tons of vendors.” He said the audit will be done carefully under the supervision of experts, “rather than go out on a fishing expedition.” Moroney also gave his full support to the audit, suggesting that Public Works would be the next department after food and beverage to
March 2018 Ocean Pines PROGRESS undergo scrutiny. Trendic reminded his colleagues that there never is “a perfect time “ for audits and that the forensic audit he was proposing should be done at the same time that the annual financial 2017-18 audit is being conducted. There should be “firewall between the two audits,” Trendic said, adding that Bailey should let the board know if there are any logistical issues between them.
He also pushed back against Herrick’s suggestion to use reserve money to pay for the forensic audit. Trendic’s idea was to find savings elsewhere in the budget so the cost wouldn’t be shifted to OPA members. Supik predicted that the audit wouldn’t uncover anything close to $1 million in fraud or theft and all the board really was doing was issuing an RFP for services. One firm she said she had talked
to couldn’t start it until May 1 because it was in the middle of income tax season. Trendic said that national firms that conduct forensic audits aren’t on the same timetables as smaller firms whose business is tied to the mid-April filing date. In the end, the vote to authorize the issuance of an RFP sailed through, with only Herrick voting against it because he said it didn’t go far enough.
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OCEAN PINES
March 2018
Matt Ortt companies, OPA close to signing management contract Ocean City-based restaurateur to run operations at Yacht Club, Beach Club
training and scheduling would be out of the hands of the OPA. While labor costs would be passed through to the OPA for payment, Bailey told the Progress, the relationship with Ortt “is the next closest thing to a lease,” without its primary disadvantage.
cent experience with a former OPA food and beverage manager, whose early contract termination cost the OPA a six-figure buy-out resulting in a $160,000 loss at the Yacht Club in January, when the facility was closed. Reinhart told the Progress recently that he would have been prepared to establish an limited liability corporation (LLC) to facilitate a move back to the Yacht Club, but
Under a standard lease arrangement, Bailey said the OPA wouldn’t be able to participate in any surpluses that he believes the Ortt organization will be able to generate once Ocean Pines residents come to appreciate the quality food and service that he believes the company will be able to deliver with consistency. Also during the Feb. 25 meeting, Bailey said that 12 representatives To Page 26
By TOM STAUSS Publisher he Ocean Pines Association and the Matt Ortt organization are close to executing a management contract that transfers day-to-day food and beverage operations at the Yacht Club and Beach Club to the locally owned company. The objective will be to have both venues open in May, with May 1 the target date for the Yacht Club and the Beach Club Memorial Day weekend. During the Feb. 25 of the Board of Directors, Ocean Pines Association General Manager John Bailey confirmed that the Matt Ortt companies was his and the board’s preferred choice among the two finalists, which also included a team that included former food and beverage manager Joe Reinhart. Bailey said that Reinhart was unable to meet one condition important to the board, which the Progress has learned was his preference for a management contract as an employee of the OPA. Bailey said it’s a new board policy not to enter into such agreements. That’s probably especially true given the re-
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that there wasn’t enough time to do that and still take care of all the other myriad details needed to open the Yacht Club by May 1. Bailey also told the board and property owners during the Feb. 25 meeting that the Ortt companies had agreed to an OPA proposal that all staff at the two restaurant and bar venues would be employees of the Ortt organization. That essentially means that all hiring decisions,
Tern Grille expanded hours to end March 11
T
he experimental three-day extended hours at the Tern Grille introduced in early January will be ending March 11, General Manager John Bailey has announced, about a week before regular daily service at the grill will reopen. The extended hours were Friday nights, with a prime rib special, and Saturdays, from 4 to 9 p.m., and Sundays, 9 a.m. to 9 p.m., including a brunch buffet. Bailey said the idea to open up Tern Grille for extended hours was
a good one, and that for the duration of its operations he expects it to essentially break even. He said the experiment had it challenges, mainly in that he and his staff “didn’t manage expectations very well.” He said patrons expected sitdown table service with a wait staff, and that was never the plan. “Some wanted us to do a trivia night, others wanted live entertainment,” Bailey said. “They were expecting us to be a temporary Yacht Club,” which had closed down in
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early January because of mold issues and a hemorrhaging operating deficit. The Friday night prime rib special was well received, Bailey said, despite the fact that the staff on hand to accommodate customers was not prepared to handle table service. “To some extent we were a victim of our own success,” with the staff simply unable to accommodate everyone who showed up for the prime rib special, Bailey said. It essentially was first come, first served, with orders placed at the bar. The problem with Saturday and Sunday seemed to be that too few people showed up on those days, resulting in losses that the Friday night surpluses were able to offset, Bailey said The result was a very slight loss overall, in the hundreds of dollars, essentially break even. Bailey summed up the experience as a good idea that in the end “wasn’t very practical.” He said that while operating hours may have been listed as 4 to 9 p.m. on Fridays and Saturdays, and 9 a.m. to 9 p.m. on Sundays for the brunch buffet, staff had to come in earlier to prepare and stay later to clean up, resulting in 22 hours of labor over the three days. “All that adds up over time,” Bailey said. With the extended hours closing as March 11, the Tern Grille will reopen for the spring season on March 18, seven days a week, from 6 to 11 a.m. and then from 3 to 6 p.m.
March 2018 Ocean Pines PROGRESS
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24 Ocean Pines PROGRESS
March 2018
March 2018 Ocean Pines PROGRESS
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BOARD OF DIRECTORS
March 2018
Elections Committee chair resigns, announces candidacy for OPA board Steve Tuttle opposes $30 assessment increase, is open to outside management proposals By TOM STAUSS Publisher teve Tuttle, chairman of the Ocean Pines Association’s Elections committee this past year, has announced his resignation from the committee and his candidacy for the Board of Directors in this summer’s annual OPA election. Tuttle becomes the first to announce his candidacy publicly. There are three seats on the board that will be contested this summer. Two are for three-year terms, currently occupied by Cheryl Jacobs and Tom Herrick. A third seat, currently occupied by appointed director Ted Moroney, is for the last year of a three-year term. As chairman of the Elections Committee, Tuttle led a joint effort by his committee and the Bylaws and Resolutions Advisory Committee to open up the meeting in which ballots in the annual OPA elections are counted. Last year, in the interests of transparency, OPA members were allowed in to observe the count. At the Feb. 25 board meeting, the directors voted to allow the committee to announce election results at the vote count meeting, rather than wait a day to announce them at the annual meeting of the OPA membership. Tuttle said the give-and-take over the vote count transparency issue helped him gain insight into the inner workings of the OPA and board of directors. “And it was a very good outcome,” he said, in particular thanking di-
S
rector Colette Horn for taking the extra time to seek out B&R member Jim Trummel for his views on the open meeting requirements of the Maryland H o m e o w n e r s Steve Tuttle Association Act. Tuttle said his experience on the Elections committee and recent revelations about financial mismanagement within the OPA convinced him to file as a board candidate.
Expressing concerns about incidents of fraud and theft disclosed by former acting general manager Brett Hill, Tuttle said the board needs to follow through on reforms recommended in last year’s financial audits. Tuttle said he also believes the board needs to improve its operational transparency, avoiding closed meetings or adding topics to closed meetings that really should be discussed in open session available to the membership. “Of course some subjects should be discussed in private, but the predisposition ought to be for transparency and openness,” he said. “I don’t
Ortt contract
Bailey said the tour of the two buildings revealed “what’s working and what isn’t,” a list of furnishings such as tables and chairs, an introduction to the OPA’s point of sale system, and “interior things” like painting that the managing partner will want done prior to re-opening. The Ortt company operates the well-regarded Rare and Rye restaurant attached to the La Quinta Hotel in Ocean City on 22nd Street.
From Page 23
from the Ortt group had recently toured both restaurant venues and began talking about details of the management take-over, even before the contract had been reviewed by what Bailey called the “legal beagles” from both organizations. With the two sides agreed on all the important points, it was a matter of incorporating the agreed-upon provisions in a contract that would pass muster with the attorneys. Anticipating that the contract would be finalized within two weeks of the Feb. 25 board meeting, Bailey said it made sense to begin preparations for the take-over. “We didn’t want to lose any more time in getting ready for the season,” he said.
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According to the firm’s Web site, the managing and founding partners of the firm are Matthew Ortt and Ralph DeAngelus, experienced restaurateurs in the Ocean City area. They were hired last year by the family that owns the La Quita Hotel to open and manage the Rare and Rye. They also operate Hooters
feel it is as open as it should be.” Tuttle said he misses the previous format of board work sessions, when topics could be aired out with participation allowed by OPA members. “The board needs to hear voices in the community of people who live here,” he said. “Sometimes you get the impression that some directors only pretend to listen to the membership. It certainly isn’t the level of listening that it needs to be.” Tuttle said that if he had been a board member voting on the 201819 OPA budget on Feb. 25, he would have been opposed to it because of the $30 assessment increase it contained. “I feel the assessment increase was unnecessary, given that the board did not fully tackle employee health insurance, but only took a preliminary first step in reining in q
26 Ocean Pines PROGRESS
restaurants in Ocean City. Key among the issues was the nature of incentives should Ortt do better than the $107,000 loss budgeted for the Yacht Club next year, or whether those incentives would only apply if the amenity breaks even or generates a surplus. Other issues to be negotiated would include a management fee, length of the contract, the months the Yacht Club would be open, and a termination clause. While the board is on board with the hiring of the Ortt group, it’s not unanimous. Director Slobodan Trendic prefers a more conventional lease arrangement as a way of guaranteeing that the Yacht Club will no longer lose money. As for the Beach Club, he favored rehiring a former manager, Linda Huettner.
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Board OKs same-day announcement of election results Revisions to M-06 pass 5-2, with Herrick and Jacobs in opposition
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Steve Tuttle From Page 26
costs,” Tuttle said, aligning himself with Trendic on this issue. Tuttle said that the OPA should be moving immediately to ask all employees to pay a portion of health insurance costs on an 80-20 basis that he said is common in the working world. “We should not be asking our owners to pay more in assessments while we’re not asking our employees to pay a fair share of their own health insurance costs,” Tuttle said. He also said he was “not opposed” to consideration of having an outside management company, such as Legum and Norman (the company that manages the Parke subdivision within Ocean Pines), take over management of the entire OPA, including back office financial operations. He said it wouldn’t necessarily mean that new general manager, John Bailey, and the new director of finance, Steve Phillips, would lose their jobs. “Depending on circumstances, many if not most employees would continue in their current positions,” Tuttle said. “Legum and Norman would be a very good company for this,” Tuttle said, suggesting that a request for proposals should be issued for outside management firms. “At the very least, the board should consider this. We’re a long way from the early days of Ocean Pines when we could run a very small operation. Lately, we’ve proven that we don’t have the capability that a company like Legum and Norman could bring to the table.” He said that perhaps a combina-
nounced as soon as the count is completed. Only Directors Cheryl Jacobs and Tom Herrick voted in opposition to the measure, arguing that it conflicts with a preference in OPA bylaws for announcing election results at the annual meeting of the OPA one day after the votes are counted. The board held a second reading of the revised resolution at its January meeting, but postponed a vote until the Elections Committee could receive feedback on the proposed language from the Bylaws and Resolutions Committee. Trendic said that was done, after which the com-
mittee maintained its recommendation for adoption of the revised resolution. “During the OPA’s 2016 and 2017 elections, the committee members identified several areas where improvements to resolution M-06 are desirable. Elections Committee’s recommendations are supported by the Bylaws and Resolutions Committee. The opinion received from OPA’s legal counsel states that announcing the vote at OPA’s annual meeting is not required,” Trendic said in making his motion. He argued the purpose and in-
tent is to improve transparency in the election process, something called into question during the last few years’ voting, by providing the result results as soon as ballots are counted. Jacobs, however, was adamant that, while the opinion from OPA legal counsel says the announcement of election results is not required at the annual meeting of the association in August, it also does not say the results are required to be released immediately following the completion of ballot counting.
tion of an in-house manager and an outside management company overseeing operations could be a solution to current management woes. In announcing his candidacy, Tuttle said in a written statement that hard work, diligence, faithfulness to the goals and integrity are characteristics of his life. He and his wife have been married nearly 50 years, have three children and four grandchildren. The Tuttles bought their home in Ocean Pines in 2014 and took up full-time
residency in 2015. His work career started while in high school when he started a lawn mowing service and garbage route. Born into a farm family in Maine, working was a way of life. He earned a BS in Civil Engineering from Northeastern University, a masters in Christian education from Bethel Seminary and completed graduate work in engineering at the University of Minnesota. His career included 15 years in civil engineering, specializing in geo-
technical and hydrology. He received a registration as a professional engineer in Minnesota and practiced engineering in Minnesota, Illinois, Metro DC and Maine. He also oversaw projects in several other states. At the age of 40, he began a 21year stint in college campus ministry, followed by five years as director of operations for a youth program in Camden, NJ., and four years as building and facilities manager for a program serving children and adults with moderate to severe disabilities.
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By ROTA L. KNOTT Contributing Writer he Board of Directors has finally decided to allow the announcement of annual Ocean Pines Association election results immediately following the counting of ballots. During a Feb. 25 meeting, the board adopted revisions to resolution M-06, which specifies election and referendum procedures, in a 5-2 vote. Director Slobodan Trendic made the motion to approve the revisions, which includes language specifying that election results will be an-
BOARD OF DIRECTORS
March 2018
Election results From Page 27
“Call me old school…,” she said, adding her feeling was that the procedure for release of election results should remain the same and be announced at the annual meeting. Herrick said the board had spent an inordinate amount of time reviewing this issue during the last year. He noted that members of the Elections Committee of two years ago were adamantly opposed to released elections results as soon as the ballots were counted. In fact, he
said, every member of the committee resigned as a result of discussions on the issue. Herrick, who was the board liaison to the Elections Committee at that time, said a compromise was reached last year on the matter by allowing individuals to witness the ballots counting. Now, the committee is composed of members who favor announcing the election results at the close of the counting process and they are pushing for the change, Herrick said. But, he said, it goes against the OPA’s bylaws. “I still believe it’s the
intent of the bylaws (to announce election results) at the annual meeting.” He said the bylaws take precedent over a board resolution and, therefore, the announcement should be made at the annual membership meeting. “A board resolution should not supersede the bylaws,” he said. Herrick said he is not necessarily opposed to the change to allow election results to be announced prior to the annual meeting. However, the bylaws should be revised in order to allow that to happen. “I’m not against changing it, but do it properly. Revise the bylaws as the attorney
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suggested,” he said. “As the resolution is written, it conflicts with the bylaws. I can’t go along with that change,” he said. Trendic disagreed with Herrick’s interpretation of the bylaws. He argued that the bylaws simply call for certification of the election to take place at the annual meeting of the OPA membership. “That has nothing to do with announcing the results of the overall election,” he said, telling Herrick and his colleagues that the Election Committee would not recommend anything in conflict with the bylaws. OPA President Doug Parks voices support for Trendic’s motion but wanted to know how the change will address the potential for a recount of election ballots. Currently, he said the bylaws provide an opportunity for candidates for the Board of Directors to request a recount. However, he said, there is no procedure in place for requesting and conducting a recount if one is requested. “If the results of the election is close enough to warrant a recount what does candidate have to do?” he asked. He said a protocol needs to be in place for requesting, holding, and reporting the results of a recount. Further, Parks said the bylaws only call for the validation of election outcomes at the annual meeting, not the release of the results. “The announcement of the results is different than the validation of the results.” He said the announcement is simply sharing information garnered from counting of the ballots. The validation process is officially mandated at the annual meeting. Director Collette Horn supported the motion, saying not releasing the election results to the people present for the ballot counting and others who are interested would be in violation of open meetings laws. Director Ted Moroney said one of the primary reasons for announcing the outcome of the board elections at the annual meeting was to increase attendance and activity. “Let’s not kid ourselves here,” he said. From that standpoint announcing the results the day of the annual meeting is a good thing because it encourages people to attend, but it does present a conflict with open meetings requirements, he added. With regard to recounts, Moroney said the language in the bylaws is vague. He said it really leaves it to the board to determine how recounts are handled. He said the board may need to develop a recount procedure. q
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BOARD OF DIRECTORS
March 2018Ocean Pines PROGRESS
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Bailey rebuffed on Beach Club sprinkler system request Board wants GM to obtain additional bids General Manager John Bailey told the Board of Directors during a Feb. 25 meeting. He recommended replacing the system before the Beach Club opens for the summer season and presented a $100,000 contract for approval. But the board wasn’t prepared to act on the sole source bid received
for the work and sent Bailey back for more bids. Recalling the term of ousted general manager Bob Thompson, who often brought contracts to the board for consideration without the benefit of multiple bids, directors said the OPA needs to follow its procurement policy and try to secure a mini-
Election results
developed and voted on and passed that say when you get to ask for a recount,” Jacobs said. Regarding the Elections Committee, she added that it “nice they have a backup plan,” but there needs to be “specific procedures to go along with that.” Horn agreed, but said that needed to be discussed separately from the revisions to resolution M-06 before the board for consideration. Moroney offered an amendment to the resolution regarding how the information will be disseminated. The resolution called for releasing the results to all present at the
balloting counting, by email to the board of directors and posting on the Ocean Pines Web site. Moroney suggested adding language that the election results will be provided live on the OPA Internet stream and/or TV and emailed to all candidates. Trendic said that Elections committee members agreed with Moroney’s proposed amendment, and so did Trendic. The board ultimately approved both the amendment and the motion in 5-2 votes, with Herrick and Jacobs opposed.
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From Page 28
Trendic said the Elections Committee has already created a recount procedure. He said the procedure was created not for when a candidate requests a recount, but in case of equipment failure and a manual recount is needed. However, he said the same procedure can be applied if a candidate requests a recount. “That’s all well and good but there ought to be specific procedures
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mum of three bids for all contractual work. “We are again presented with a difficult decision between doing the right thing fiduciary speaking, and then realizing that we potentially have an operational issue on our hands,” Director Slobodan Trendic said. OPA President Doug Parks shared Trendic’s frustration with not receiving information about the faulty sprinkler system sooner. He said the board should have gotten information on the proposal well in advance of the meeting, but it did not. “We just can’t operate with this 11th hour, hair on fire, running around, this kind of non-proactive approach to this,” Parks said. Bailey said the sprinkler system was repaired in September 2017 so it could remain operational through the end of last season and the Beach Club could stay open through Sun-
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By ROTA L. KNOTT Contributing Writer elaying much-needed replacement of the fire suppression system at the Ocean Pines Association’s Beach Club could jeopardize the amenity’s ability to produce income for six weeks if it fails during the busy summer season,
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BOARD OF DIRECTORS
March 2018
Horn motion on ‘immediate’ hiring of HR employee approved By ROTA L. KNOTT Contributing Writer he Ocean Pines Association will soon have a new staff member who is dedicated to all matters related to human resources. During its Feb. 25 monthly meeting, the Board of Directors unanimously approved a motion by Collette Horn to authorize the hiring of a human resources employee at a cost of $5,000 through April 30, the end of the current fiscal year. The position is also included in the OPA’s fiscal year 2019 budget proposal. “Ocean Pines Association needs an HR consultant to guide them in the immediate process of reviewing employee benefits, conducting a salary survey, updating job descrip-
tions, and updating the employee handbook, all in the service of an urgent need to ensure that our compensation package is fiscally responsible and also consistent with local standards,” Horn said in making the motion. Director Pat Supik gave a second to the motion, saying she fully supports the proposal for hiring a human resources specialist. “We as a board have talked about the importance of HR and the lack of a presence of a specific HR position.” While the position is included in next year’s budget, that fiscal year doesn’t begin until May 1. In order to fill the position before the start of FY 2018-19, the board had to specifically authorize the expenditure through April 30.
“This is a long overdue and welcome move by the board,” Director Slobodan Trendic said. However, he questioned language in Horn’s motion as originally stated because it referenced a “consultant.” He asked for clarification regarding the hiring of a consultant or an employee. Horn responded that the position would be a staff member, not a consultant for which the OPA would need to solicit proposals before proceeding further. She agreed to an amendment to her motion posed by Trendic to clarify that the human resources specialist will be an OPA employee. OPA President Dough Parks supported the amendment, saying it would make clear the position is a staff member in case there are any
questions about it in the future. “Later if somebody questions it, at least it’s been memorialized properly,” he said. Director Tom Herrick asked for clarification that the motion simply approves creating the position, not the hiring of a specific person. Horn responded that it was. Director Cheryl Jacobs asked to whom the new employee will report. She was concerned that the individual would not be able to impartially review any human resources complaints that may be filed against the general manager if that person is the supervisor. She wanted to know how such cases would be handled. “They have to operate independently” and not be placed in a position where they have a conflict of interest, Jacobs said. Horn replied that the human resources specialist will report to the general manager. Complaints that involve the general manager. will be brought directly to the president of the association, she said.
Sprinkler system
to not making money at the Beach Club.” He urged the board to move forward with the project, saying the system was scheduled for replacement in the next few years anyway. “This does all of it now and gets it done so that we don’t have a risk of losing operations during the summer months,” he said. Delaying contract approval will likely mean the work isn’t completed for a May 1 opening, Bailey said. But, directors didn’t seem overly concerned about being open on time; they wanted to see more bids for the work. Director Tom Herrick said the sole contractor to submit a bid for the project is the same company that last inspected the sprinkler system. “They’re putting a gun to our head and saying it has to get done right away” and not giving the OPA enough time to get additional bids, he said of the contractor. He said the OPA is required to get a minimum three bids for any contract. In this particular instance, doing so would eliminate appearance of the OPA giving a sole source contract to a favored vendor, he added. Trendic shared Herrick’s concerns and said if OPA management knew about the condition of the sprinkler system in September the work should have been done much sooner in the offseason.
He said it seems not a good business practice on many levels. Now, the board is being pressured for a decision at the 11th hour, he complained. He suggested hiring an independent engineering fire to inspect the existing fire suppression system. “And let’s find out how serious the problem is. How likely is the system to fail?” Trendic said is doesn’t take long to circulate a request for proposals. He said the OPA should have learned a lesson from its problems at the Country Club, which called for an around the clock fire watch until the sprinkler system was replaced. “We’re kinda pressed at the 11th hour to come up with a decision that has a certain risk factor if we don’t do it,” Parks concurred. He said it is a no win situation for the board. Either it ignores its procurement policy and awards the contract, or it risks losing valuable time to address the problem during the very important summer months. “It’s a dilemma. I wish I had an answer. I wish I could predict and know we’re OK,” Parks added. Director Collette Horn supported Trendic’s suggestion for an independent engineering study of the system. She also suggested the board hold a special meeting to consider awarding a contract once that study
is completed. Director Ted Moroney said Public Works staff last fall was not proactive in addressing the problem and getting the information necessary to the board. “I also recognize that we’re up against the wall,” he said, adding if the fire suppression system fails during the summer the Beach Club could be closed all season. He said the OPA should have the system inspected and open later in the season, instead of May 1, if necessary to ensure system replacement is completed. “That way we’ll know,” he said. Trendic suggested the fire department could inspect the system for the OPA. Director Pat Supik asked if replacing the sprinkler system is the only option at this time or if there is “any other fix that would get us from here to September.” Bailey couldn’t answer Supik’s question. “I think there were a lot of things up in the air in the fall that precluded moving forward,” he said, adding “not that it should have, but I think that got in everybody’s mindset.” Having heard the board’s comments, Bailey said staff will regroup, have the fire department inspect the existing sprinkler system, and will develop a request for proposals in order to secure additional bids for the work.
Complaints against GM will go to OPA president for vetting
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From Page 29
fest. He said the OPA could simply make operational that system, the original sprinkler system that was installed in the Beach Club decades ago. However, he cautioned that if it does malfunction, it could take six weeks to repair, effectively shutting down the amenity for an extended period mid-season. The general manager presented a single bid for the work from Sure Fire Protection for $100,000, saying the OPA contacted four potential vendors but only received one proposal. Among the other vendors, he said one couldn’t meet with the OPA until after March 1, another said the job was too big, and the other once simply didn’t respond at all. Sure Fire Protection has installed all of the sprinkler systems in OPA buildings except for the Yacht Club and maintains and inspects all of them, Bailey said. By accepting the one bid that was received, Bailey said the board could ensure the work was completed prior to the start of the season on May 1. He told directors he doesn’t want to lose six weeks of revenue if the Beach Club has to shut down during the season because of a sprinkler system problem. That, he said, would put the OPA “right back
OPA BUDGET
March 2018 Ocean Pines PROGRESS
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Trendic, Herrick vote against 2018-19 budget Board approves $30 increase in base lot assessment By TOM STAUSS Publisher he Board of Directors during its Feb. 25 monthly meeting approved an $11.4 million, 2018-19 Ocean Pines Association budget with a reported $550,000 or so surplus. Directors Slobodan Trendic and Tom Herrick voted against it. The budget includes a $30 increase in the base lot assessment, increasing it from the current $921 to $951. The waterfront lot assessment remains at $1416, a $460 waterfront differential for most bulkheaded property in Ocean Pines. Trendic also objected to the process used in voting for the budget. The agenda for the meeting was arranged in such a way that the board first voted on the budget and the assessments, followed by a series of changes in the budget offered by Trendic in the form of motions. All of Trendic’s motions, ranging from cuts in the golf and public relations/marketing budgets to an increase in drainage, eventually failed or, in one case, was withdrawn for later consideration. Trendic said that his motions should have been considered before the board voted on the budget. OPA President Doug Parks didn’t respond directly to Trendic’s point, declaring that what he called Trendic’s “litany” of amendments to the budget would follow approval. Voting for the budget with its $30 increase in the base lot assessment were Parks and directors Pat Supik, Cheryl Jacobs, Colette Horn, and Ted Moroney.
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Herrick in an email to the Progress explained his vote against the budget was based primarily on procedural grounds. “The agenda format listed and requested approval of that budget and, after that, seven different motions to make proposed amendment changes to that budget. I was not comfortable voting to pass a budget without knowing the outcome of the vote on those proposed amendments first,” Herrick said. “My decision to pass, or not pass, the budget needed to be based on the final product. I was not offered that opportunity so I could not commit. My decision (to vote against the budget) was strictly based on the procedure asking for my vote before I knew the outcome of the final product.” Herrick acknowledged that he earlier in the meeting had voted to increase the assessment by $30, which was the same as agreed to by a board majority during the budget process. The directors also approved amenity fees for the new year beginning May 1, relatively unchanged from the current year’s. Pickleball rates are higher, reflecting a return to an annualrate that includes access to the indoor courts at the Community Center’s gymnasium. Also approved is a new $150 rate for Beach Club parking that is not bundled with any pool passes. Bundled options in place last summer will also be available this summer. On a motion by Moroney, the board voted unanimously to divert $26.50 in the assessment that had been earmarked for the roads re-
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serve to be used instead for a forensic fraud and theft audit that the board also approved during the Feb. 25 meeting. The $11.4 million budget, down from the $12 million budget that General Manager John Bailey unveiled in early January, incorporated roughly $550,000 in reductions to proposed spending by both the Budget and Finance Advisory Committee and the board in six days of budget review meetings. According to Bailey, the budgetary savings have produced a budget with a $550,000 surplus. If that or any surplus materializes at the end of the fiscal year on April 30, 2019, the OPA’s substantial operating fund deficit will be reduced by that same amount. Contrary to claims made throughout the budget process, however, previous year deficits will not be paid back or recovered, nor will any surplus be “applied” to the cumulative operating fund deficit.
Should a surplus materialize, hardly a guaranteed result given recent OPA budgetary performance, it simply will show up in a reduced operating fund deficit, nothing more or nothing less, despite the inexact language used by some OPA officials. Should the OPA break even or lose money in 2018-19, then there will be no improvement in the operating fund deficit. All that’s been done so far by approving a budget with an surplus is to project a reduction in the operating fund deficit, with those results by no means guaranteed. As of the close of business on Friday, March 9, the OPA did not have a copy of the approved budget posted on its Web site. It still had Bailey’s proposed $12 million budget, with revenue and expenses in balance, available for viewing. The Progress was unable to confirm that the $11.4 million budget that the board approved contains a surplus or in fact is in balance.
Trendic only vote against assessment increase Director says board colleagues penalize property owners for mistakes of board and management By TOM STAUSS Publisher cean Pines Association Director Slobodan Trendic was the only one of the seven members of the Board of Directors to vote against the $30 increase in the base lot assessment included as part of the 2018-19 OPA budget approved by the board Feb. 25.At the end of the nearly five hour meeting, OPA Treasurer Pat Supik offered a motion to increase the base lot assessment by $30, in effect confirming the increase that had been included in the budget approved earlier in the meeting. Trendic was the only director to vote against approving the budget. He also was the only director to oppose the increase in the assessment. He alluded to what he called “many poor management decisions” over this past year along with “disappointing board oversight,” which he was leading up “to what is now projecting to be a disastrous year-end deficit,” Trendic said the board is “now challenging itself and the General Manager to first address the deficit (in the operating fund) by implementing long overdue cost-saving and budget-cutting measures,” with the intent of improving “financial performance in a fiscally responsible way, before asking the homeowners to pay for our deficit problem.” He said he didn’t agree that an assessment increase was necessary and that from the outset his goal “was to avoid it, to practice frugality, and not to ask property owners to pay for mistakes of management and the board last year.” His colleagues apparently disagreed. Supik’s motion carried 6-1. A subsequent motion by Trendic to effectively rescind the $30 increase failed to obtain a second.
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By TOM STAUSS Publisher ith most amenity membership rates not changing in the just approved 2018-19 Ocean Pines Association budget, the apparently modest changes adopted by the Board of Directors may prove to have outsized significance this summer, especially to those who buy passes to park at the OPA’s Beach Club in Ocean City. Warned by General Manager John and Aquatics Director Colby Phillips that they would risk reducing the revenue stream from bundled Beach Club parking and pool passes if they tried to decouple them, directors backed off during a Feb. 6 budget work session and instead seemed to support a more modest tweak designed to address a complaint heard last summer’s from some users of the beachfront amenity. The directors, in the 2018-19 budget approved by the board Feb. 25, accepted a suggestion by Phillips to create a new beach parking pass this summer without any bundled pool debit cards. Her suggestion was for a $150 nofrills parking pass that would be in addition to the pool passes available last summer, one usable at all Ocean Pines pools and another with photo ID good only at the Beach Club pool. For non-OPA members, the nofrills pass would be $225. The new no-frills pass is a response to complaints cited by OPA President Doug Parks from OPA members last summer who resented what they regarded as the “forced buy” of pool passes they weren’t interested in using. Some directors, particularly Parks and appointed Director Ted Moroney, had pressed for completely decoupling beach parking from Aquatics, eliminating the sharing of revenue from the bundled sale of parking and pool passes. Phillips said she would have been OK with a complete unbundling, provided that access to the popular Beach Club pool would not have been possible from “free” pool passes distributed with parking passes, an old system eliminated by the OPA last summer because of abuses that deprived Aquatics of revenues. While she said that a Beach Club pool completely untethered from parking passes would produce a healthy stream of revenue to her department, she said that both beach parking and Aquatics would suffer revenue losses because some people really like the opportunity to pur-
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OPA BUDGET
March 2018
Board OKs no frills pass for Beach Club parking Daily, seasonal, bundled passes remain in place; daily passes to be sold to non-OPA members chase bundled passes. Phillips said a conversation about parking and pool passes that occurred during a Feb. 5 budget work session was “disheartening” because to her it seemed that some directors were suggesting that Aquatics favored bundling only because it padded the department’s bottom line. She rejected that perception of her intentions and actions, telling the directors that she and her department were only trying to obtain an equitable share of proceeds from a bundled product. If the board decides to unbundle the passes “we won’t make as much, and neither will beach parking,” she said. Director Tom Herrick said that while he wouldn’t be opposed to decoupling, he suggested keeping the various passes and options from last summer while adding a “parking only” pass, which is precisely what Bailey and Phillips were recommending and the board then approved. Among the new options available last summer was a Realtor/renters pass, which she said produced roughly $40,000 in revenue, one innovation by last year’s board that was a success. That along with the other two pool passes available for $120 last summer will be available for purchase this summer as well. In addition, the board seems to have accepted, perhaps without fully realizing it, a proposal by Bailey to make daily parking passes available to OPA non-members. Aware that its status as a 501(c) (4) tax-exempt “social welfare” organization requires its amenities to be open to the general public, OPA directors had been grappling with the fact that their attorney, Jeremy Tucker, told them that some OPA practices might impede public access to the Beach Club amenity and needed to be changed to avoid risk to the OPA’s tax-exempt status. Of particular concern to Tucker was the fact that outsiders can’t purchase daily parking passes at the Beach Club, an option that is available to property owners and residents of Ocean Pines. During a Feb. 6 budget work ses-
sion, the directors had seemed to settle on the elimination of daily parking passes at the amenity, for Ocean Pines property owners and residents and those who neither live nor own property in Ocean Pines. The idea seemed to be that by eliminating the daily parking passes, available for purchase only at the administration building in Ocean Pines, the OPA could not be accused
of treating outsiders any differently from property owners and residents. But at the board meeting Feb. 25, the daily pool passes for both OPA members and Ocean Pines renters were preserved in the approved amenities package, and the option of buying these passes for outsiders was added. Bailey told the Progress in a Feb. 26 telephone interview that he continues to work on ways and means to allow non-members and members to purchase daily parking passes onsite. He also said there needs to be a way to issue refunds to those who purchase daily passes at the administration building but discover, upon arrival at the Beach Club, that there are no parking spaces available.
Board resists Trendic proposals to make cuts to PR, golf budgets Directors also vote down motion to increase drainage expenditures by $100,000 By TOM STAUSS Publisher pparently satisfied that they had done enough to slash spending in the golf and public relations/marketing departments, Ocean Pines directors rebuffed motions offered by their colleague, Slobodan Trendic, to make additional cuts in these areas as part of the 2018-19 Ocean Pines Association budget. The Board of Directors also voted against a Trendic proposal to add $100,000 in the budget to address drainage issues in Ocean Pines, the subject of intensifying complaints among homeowners at recent OPA meetings. The votes were taken during the Feb. 25 meeting of the board, after the board had already voted 6-1 in favor of the 2018-19 OPA budget. Trendic’s original motion pertaining to cost cuts in the public relations-marketing department called for $125,000 in cuts from General Manager John Bailey’s original budget request. It was subsequently clarified that Trendic was actually only calling for $65,000 in additional cuts, as $60,000 in trims had already been made in earlier budget review meetings. Trendic said he wanted to divert the $65,000 in additional cuts to pay for a forensic audit of OPA departments, telling his colleagues that he had identified roughly $50,000 in television and radio advertising that could be slashed to produce the savings. “These savings should be shifted to the forensic audit to avoid asking our members” to pay for the audit with higher assessments, Trendic said. After OPA President Doug Parks asked whether Trendic would accept a friendly amendment that would ask for $65,000 in additional marketing cuts, directors voiced reservations, with varying degrees of intensity. Director Ted Moroney suggested that he thought cuts of that magnitude would be counter-productive if they resulted in less business to the OPA.
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32 Ocean Pines PROGRESS
OPA BUDGET Marketing, golf budgets From Page 32
But he also expressed some degree of doubt about what the OPA should be spending on marketing. Colette Horn said additional cuts might not be a good idea as the OPA prepares to make significant changes to its food and beverage operation. “We don’t want to cut too much,” she said. Trendic responded to the pushback by saying that “Ocean Pines won’t go out of business” by one year of cuts in media, such as radio, television and magazines, where the return on investment is difficult to measure. He said he was not proposing cuts in local community newspaper advertising, which he said provide a valuable informational service to the Ocean Pines community. He also said that in just a few years, the marketing and public relations budget has grown from about $160,000 to $300,000 with no way to measure the return on the additional spending. Somewhat more receptive to possible additional cuts than some of his colleagues, Moroney asked General Manager John Bailey whether he could support the additional cuts proposed by Trendic. Bailey said that a total of 35 percent in cuts would be too draconian, adding that “if you want to go deeper” than cuts made so far, “we can make it work.” But Directors Pat Supik and Cheryl Jacobs were adamant in their opposition to any more cuts. They both expressed resentment towards the fact that Trendic was even suggesting additional cuts at this stage in the budget process. Supik said that the effectiveness of advertising is difficult to measure, but one way to do is to ask whether people want to move into Ocean Pines and be part of a wonderful community. Trendic responded that Ocean Pines is a fully built-out community and doesn’t need to spend hundreds of thousands of promotional dollars as if were a community building “500 new homes a year.” Parks tried to straddle the divide by suggesting that while the budget might call for a certain amount of spending for marketing, Bailey was authorized and capable of spending less, especially if, during the course of the year, other parts of the budget under-perform.
March 2018 Ocean Pines PROGRESS After Jacobs reminded Trendic that the budget and finance committee and the board had spent six days reviewing the budget, and that Trendic usually insists that the board follow the advice of its advisory committees, she added that she didn’t like these proposed cuts “thrown at me” so late in the process. Trendic told Jacobs that she should respect his right to disagree with the board consensus in the same way that he respects her right to “remain strong” in some of her beliefs. “Just because we had three days of discussion doesn’t mean we can’t revisit,” he said. Indeed, most years,
that’s fairly typical of the board. The friendly amendment proposed by Parks passed 5-2, with Parks, Trendic, Tom Herrick, and Moroney in favor, and Supik and Jacobs opposed. The underlying motion failed 5-2, with only Trendic and Herrick in favor. Another motion offered by Trendic, to cut an additional $60,000 out of the golf operations budget, failed in a 6-1 vote. Moroney noted that the board had already cut about $40,000 from the budget, reducing the projected deficit to about $150,000, and that cutting another $60,000 might result
in a “problem” that would affect the quality of golf course maintenance. Trendic, citing national benchmarks for golf course maintenance, said Ocean Pines’s maintenance costs “are way out of line. I look at the data, and I’m asking for a more aggressive approach” to cost cutting. In another proposal rejected 6-1 by the board, this time a Trendic proposal to increase spending for drainage improvements by $100,000, Trendic later expressed dismay and frustration with the outcome. “This was the one that was the most surprising,” he said. “I thought it would be a no-brainer, easily approved.”
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34 Ocean Pines PROGRESS
OPA FINANCES
March 2018
OPA cash, short term investments on Jan. 13 exceeded amounts on hand same time last year Yacht Club in the red by $160,000 during month when it was closed By TOM STAUSS Publisher espite all the gloom and doom and trash talk about the Ocean Pines Association’s financial situation, with an operating deficit projected somewhere in the range of $1.5 million to $1.8 million million for the current fiscal year, the OPA’s balance sheet and cash and short term investments tell a somewhat different story. At the same time, the OPA is in the somewhat embarrassing situation of showing a $160,000 loss in the Yacht Club in a month, January, when it was closed. OPA officials grudgingly acknowledge that the shortfall was caused by a one-time payout to the former OPA food and beverage manager, Brian Townsend, who was laid off with the rest of the Yacht Club staff shortly after New Year’s Eve. He had been given a contract by the former acting general manager guaranteeing him a very attractive salary for a period of years even in the event of early termination. Reportedly fortified with legal counsel, Townsend made sure that the OPA made good on its contract. The payout showed up in the January financials for the Yacht Club. General Manager John Bailey confirmed for the Progress that the $140,000 in payroll and benefits expense in January was the result of the payout to Townsend and vacation and related adjustments to two other employees that had been laid off at the end of December. According to the January financial statement issued by Director of Finance Steve Phillips, the OPA’s cash and short term investments on hand as of Jan. 31 totaled $8.3 million. It was comprised of $5.1 million and $637,567 in two separate money market accounts with the Bank of Ocean City, along with another $2 million in CDARs and $576,058 in “other operating accounts.” This matches the number that appears on the Jan. 31 sheet for operating cash and short term investments. Somewhat ironically, the Jan. 31
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numbers for 2018 are actually better than for the same month last year, when operating cash was listed at $1.6 million and short-term investments were listed at $6.6 million. That means that the OPA’s cash and short-term investments are $100,000 ahead of last year despite the operating deficit that looms for the current fiscal year. In her financial report delivered during the Feb. 25 meeting of the Board of Directors, OPA Treasurer Pat Supik said that the association’s held cash and short-term investments totaling $7,822,306 as of Feb. 23. Phillips’s financial report for January indicates that the OPA recorded a negative operating fund balance for the month of $165,539, with revenues under budget by $9,489, expenses over budget by $1564,126 and new capital expenditures over budget by $1,924. The negative operating fund variance for the year through January is $1.2 million. The revenue shortfall is $772,981, while expenses are over budget by $310,813. New capital is over budget by $134,194. The $1.2 million negative operating fund variance through January compares to the $1.053 million negative variance at the end of December. The trend clearly isn’t a positive one. According to Phillips’s report, the Yacht Club was the primary driver for the month’s financial performance. It lost $162,389 in January, missing its budget by $133,130. Year-to-date, the Yacht Club is $541,070 in the red and $567,497 under budget. Golf operations, while losing $31,525 in January, actually performed $11,700 better than budget. Through January, golf remains in the black for the year, by $33,689, but behind budget by $54,155. Aquatics continues to perform well for the year, while losing $38,816 in January and missing budget by $13,910. For the year through January, Aquatics is in the black by $241,531, but it has slipped behind budget by
$14,088 for the year so far. Aquatics is still on track to record a surplus for 2017-18, however. All three racquet sports were close to break-even for the month and close to budget. Also notable in the January results, the Recreation and Parks Department, while in deficit for the month, beat its budget forecast by $8,307, virtually the same result as December’s. The department has a positive variance to budget for the year of $45,610. Reserve summary -- The OPA through Jan. 31 had $8.13 million in reserves, a slight reduction from the Dec. 31 balance of $8.15 million in December and the Nov. 30 balance of $8,161,085. The replacement reserve carried a balance of $5,054,015, little
changed from the previous month. The bulkhead reserve has grown from $1,815,219 at the end of April to $2,571,795 as of Jan. 31, reflecting $822,367 in waterfront differential revenues contributed at the beginning of the fiscal year. That was little changed from the previous month. But it represents roughly three years of spending that routinely occurred when the OPA had a multiyear bulkhead replacement program in place. No such program has been approved by the board, although Bailey presented a plan for a resumption of planned bulkhead repair and replacement at the Jan. 27 meeting of the Board of Directors. The roads reserve remained virtually unchanged in January with a balance of $511,037. Capital summary – A schedule in the financial report indicates that capital spending through Jan. 31 of $927,096 is substantially more than the budgeted $390,384. The variance is $536,112. Balance sheet – The Jan. 31 balance sheet shows total OPA assets of $33,428,462, up from $32,943,215 a year ago.
Moroney offers motion to use road money for forensic audit
O
cean Pines Director Ted Moroney’s “friendly amendment” to Slobodan Trendic’s motion to rescind $26.50 in assessment dollars for allocation to the roads reserve resolved a sticky problem for the directors, how to fund a forensic audit of Ocean Pines Association finances. The “friendly” amendment by Moroney amounted to a significant change in Trendic’s motion. Trendic wanted to finance the forensic audit with other savings in the 2018-19 OPA budget, while eliminating the $26.50 in road depreciation funding and returning it to property owners in the form of lower assessments. Had Trendic’s original motion been approved by the board without Moroney’s change, the $30 increase in the assessment approved earlier by the board would have been largely offset. But Moroney and the directors other than Trendic had no interest in keeping the assessment at $921. Accordingly, all the directors, including Trendic, accepted Moroney’s amendment. Trendic did so reluctantly. “I like the idea in principle (of paying for the forensic audit), but it defeats the principle of relieving property owners” of having to pay a higher assessment,” Trendic said, adding that, while he liked the amendment “from the financial standpoint,” Moroney was “still asking property owners to pay” for the audit with higher assessments. Moroney made no effort to refute Trendic nor defend his preference for higher assessments. He said only that his amendment would pay for the audit in its entirety. That was enough for the rest of his colleagues, who jumped on his proposed funding solution without dissent and little discussion.
March 2018 Ocean Pines PROGRESS
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COVER STORY
Ocean Pines PROGRESS March 2018
Hill vs. OPA board From Page 1
to issue a request for proposals from financial management firms to outsource back office functions including bookeeping and cash management that, then as now, are handled in-house. Trendic said that three directors insisted on “sole sourcing” that effort instead of following OPA protocols for solicitation of competing proposals. Hill denies that he was in a position to do much more than he did, calling himself an acting general manager without power, who was fending off attempts to remove him as acting GM led by Trendic and Jacobs. He also has cited a failed motion to hire an accounting management firm, Legum and Norman, to take over back office functions while bringing in modern software and possibly equipment upgrades to replace the OPA’s antiquated systems. That effort failed in a 3-4 vote in late July of last year, with Trendic voting against it because he said it was a sole source contract. Hill’s two most reliable board allies, Herrick and then director Dave Stevens, voted with Hill to hire Legum and Norman. But Hill last month said that Pat Supik, the OPA treasurer and chief financial officer then and now, broke her word to him and voted against the Legum and Norman proposal. Trendic also was fighting off attempts to have him removed from the board, an effort led by Hill, Herrick, and Stevens. Neither removal effort succeeded, but efforts to deal with issues of financial wrong-doing clearly were overshadowed by board infighting last summer. There was no public airing of dirty financial linen last year. It remained that way until it was announced late in the year that the Worcester County Bureau of Investigation had been brought in to investigate theft allegations, but even then details were sparse, with an on-going investigation used as an excuse for lack of detail. Hill’s revelations in the February Progress was the first comprehensive airing of events involving fraud and theft that occurred last year, both before and after the announcement of the WBOI investigation. Jacobs’s counter-punch essentially characterized Hill’s revelations as fomenting what she called “hysteria” in the community over allegations of fraud and theft. During the Feb. 25 meeting, she took issue with
Hill’s claims that up to $200,000 in stolen or fraudulent are at issue, characterizing herself as “angry” over exaggerated claims. Other current directors were less emotional about it, with Supik suggesting that she doubted a forensic audit would uncover that much fraud and theft. [See article elsewhere in this edition of the Progress for details of a contentious exchange between Jacobs and Herrick on Jacobs’s hysteria claims.] OPA President Doug Parks also took issue with some of his Hill’s assertions. In a timeline of events that he unveiled during the Feb. 25 monthly board meeting, he recapped what he regarded as the main relevant events. His presentation was dominated by dates for the coming and going of key personnel and was devoid of specific dollar amounts attached to specific incidents, with one exception, which he said involved an amount that was less than $10,000. The impression given by Parks’s timeline, intentionally or not isn’t really clear, was that not much theft and fraud had occurred. He expressed frustration with his inability to be more forthcoming with details because of “attorney-client confidentiality,” the nature of which and relevancy he didn’t explain. Parks’ presentation didn’t offer much was new or revelatory about allegations of fraud and theft. A letter to Hill from the board drafted in a closed meeting of the board sometime in late February, further framed the board’s differences with Hill. “It is with some surprise that we find ourselves writing this letter to you. We understand that a number of media sources have attributed comments to you, whereby you stated that, as a matter of fact, in 2016, there was theft from the Yacht Club that exceeded six figures, which went unaddressed by the Board. There were a number of aspects of these comments that materially differ from the Board’s recollection of the facts and we are asking for your assistance. “First, in January 2017, in your capacity as Acting General Manager, you reported the potential theft of Yacht Club funds by a certain employee to the Board of Directors. The Board then based its decision how to handle the situation on the facts that you provided and, in part, on your recommendations. In particular, the Board relied on the information you provided about the employee’s situation and the amount of money that
you believed was missing. “The total amount you reported was under $10,000, and was reportedly confirmed by the respected other individuals with whom you had reviewed the issue. Stated another way, the other Board members participating in the conversation with you about this matter have a materially different recollection of the information that you provided in the closed session on January 13, 2017 compared to the statements that are now being attributed to you. “Second, based on all accounts, in your capacity as an Ocean Pines director, you voted in favor of the decision of how to handle the situation. These approved steps included terminating the employee and retaining the Association’s auditing firm to conduct a “deep dive” into the Yacht Club’ s records to determine other irregularities and to assess the financial controls. “Third, there is no record that you conveyed to the Board of Directors concerning any continued specific concerns that you may have had about theft at the Yacht Club beyond the amount you reported in January 2017, or that you presented any additional evidence to support such a concern. It is unclear to us why, as a member of the Board of Directors and the Acting General Manager, if you had the specific concerns and supporting facts, you did not convey them to the Board over the course of the year?” Challenged by the board in that letter to him, Hill repeated previous estimates of up to $200,000 in lost or missing revenues, which he said could only be verified by a “complete audit” of OPA departments over at least two years. In a lengthy statement issued to local media March 1 and first published on oceanpinesforum.com, Hill also stood by his previous assertions that last year’s board downplayed and covered up the incidents of corruption that Hill brought to the board. Hill suggested that the current board seems to be suffering from amnesia in its recollection of what occurred last summer. “First and foremost, I must correct the time-line that you posted publicly in the board meeting on Feb. 25. In your letter to me, you reference a board discussion on January 13, 2017, regarding theft at the Yacht Club, which is true, and also reflects discussion to back up an email to all directors on December 30, 2016. So, in fact, the correct time-line for
the start of the theft incidents was December 2016, not July 2017 as you stated to the membership,” Hill wrote. He also said the board letter “incorrectly reported the resignation of John Viola, which occurred one week after my resignation as a board member in September 2017. I believe both of those elements to be materially important.” Hill said he first began seeing evidence of criminality in early September of 2016 after a weekend of activity at the Yacht Club. “In reviewing receipts, I could not get any of the reports from the Micros point of sale system to match with financials posted by the accounting department. This prompted me to provide Micros point of sale reports to the board in the monthly packets which started on September 24, 2016, so the actual register receipts could be viewed alongside the comptroller’s report. This continued monthly, following September 2016,” Hill wrote. He said over the next several months he continued to follow the finances of the Yacht Club closely, and in December of 2016 started making personnel changes. On Dec. 30, 2016, he said he provided the board with details of some of those changes. “On Jan. 2, 2017, I met in person with Director Jacobs and explained the entirety of the situation. When the entire board met to discuss, in closed session, on January 13, 2017, amounts were discussed. Your amount of under $10,000 was correct, as to what was taken at one time,” Hill said. But in direct contradiction of the assertion that only modest dollar amounts were at issue, Hill said he told the directors at the time “that the problem was much larger, and possibly totaled between $100,000 and $200,000, but a complete audit of the last two years financials would be required. As the problems involved cash handling, the ability to track missing cash would be difficult.” According to Hill, Supik provided an estimate “of up $200,000 for a detailed forensic audit which may or may not have resulted enough evidence to pursue, and in a civil suit, it was believed that the party did not have assets to provide restitution. With the cost of the audit, and the slim probability of receiving restitution, I did support the course of a deeper audit, to fix the problems,” he said. q
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COVER STORY Hill vs. OPA board From Page 36
Hill said that on Jan. 4 of last year, then director of finance Mary Bosack provided a summary that was shared with the board on the “numerous problems with cash handling in the operations and the changes we implemented to prevent further occurrences. Additionally, we declined to pursue criminal charges not by choice, but because of the fact that the party in question provided a confession to an officer of the law without being read their Miranda rights, making the confession inadmissible, and greatly hampering our case against them.” That latter assertion triggered a push-back from Ocean Pines Chief of Police Dave Massey, who said that Hill misstated what actually occurred in that incident. [See article elsewhere in this edition for details.] Hill said that on Jan. 18 the board was provided with details of the theft noted from multiple parties, with a time- line of events. Shortly after that, he said he uploaded a series of reports from the Yacht Club’s point of sale system, “detailing inconsistencies in the reporting of sales. The largest issue noted was the disappearance of beverage sales in the spring of 2016 from the daily deposit reports. This was tested against individual consumer receipts, where the beverages were reported.” In preparation for the annual audit, Hill wrote that he began looking at other departments, and especially as the fiscal year was closing, validating purchasing that deviated from budget. “In this analysis, I found purchase orders and payments that raised concerns. After I questioned certain directors about the purchases, I took the information I gathered to Mary Bosack, as the most senior employee of the association. On May 11, 2017, Mary and I had a lengthy conversation, where I presented concerns over purchasing, as well as HR issues involving sexual and racial harassment,” Hill said. Hill said that Bosack implemented procurement changes to help curtail the issues identified at the time. Then, at a board meeting on May 26 of last year, Hill said “the board very quickly moved from addressing financial issues to a call for my resignation.” The meeting “concluded with an agreement from me to carry the title of AGM in title only, and for the board to be involved in all HR and operational decisions going for-
March 2018 Ocean Pines PROGRESS ward. The purchasing issues were never addressed again,” he said. With his powers as acting general manager eclipsed by board action, Hill said that as a board member he proposed actions to address financial issues, first at a July 9 special meeting and then again at the July 28 regular board meeting. “The first action was my motion at both the July 9, 2017, and July 28, 2017, meetings to appoint a consultant to review both the operational as well as financial procedures of the food and beverage operations. My recommendations, which adhered to Ocean Pines Procurement procedures, were not accepted at either meeting,” he said. Subsequently, at the July 28, 2017 meeting, Hill said he attempted to get public accountability of the OPA finances through an accounting transparency motion. Citing minutes from the meeting, he said his motion was intended “to set a policy for transparency in the accounting records of the Ocean Pines Association. This policy would include publishing to all directors, and where legally permissible, publicly, the detailed monthly financial statements, the monthly log of all purchase orders, and the monthly check register for all Ocean Pines operating accounts.” Herrick seconded the motion, while Jacobs amended it to remove “set policy” and change that to “direct staff to make the reports available in electronic version.” Trendic seconded the amendment, all directors voted in favor of it, and all directors voted in favor of the amended motion. According to Hill, this adopted reporting procedure “to this day, has not been followed once,” a fault he did not lay at the feet of any particular director. Hill then detailed the failed effort to outsource back office functions to Legum and Norman. “In the weeks prior (to the July 28 meeting) the comptroller, and multiple other board members evaluated options for better reporting and fiscal management. Legum and Norman provided a proposal for management that was not only more cost effective than the software procurement options presented” by the OPA’s technology working group, “but also provided staffing support included in their fees, an area which has been cited as a deficiency in the OPA accounting department for many years in the audit management letter.”
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Easter egg hunt
Dozens of kids age 11 and under are expected to wade into the indoor heated Sports Core pool in Ocean Pines on Friday, March 23, from 5:30 to 8 p.m. to collect plastic Easter eggs and prizes during the community’s annual Easter dive and pool party. The event will feature a DY spinning tunes, a jelly bean counting contest and Easter themed coloring pages. Swimmers will be divided into different age groups to ensure everyone has a chance to collect eggs. Children under age 6 must have an adult in the water with them. Life jackets are available at no charge. The cost of the special event is $6 per swimmer and $3 for non-swimmers.
Finally, Hill cited an incident on Aug. 16 of last year in which “approximately 27 deposits that were logged as received from amenities to the accounting department were not in fact deposited into OPA bank accounts. Such an occurrence was shocking, to say the least, as the cash was under video surveillance during all presumed activities from receipt to deposit, outside of sealed and locked containers.” Hill said that in consultation with then Director of Finance John Viola, “it was agreed that WCBI would be asked to investigate, as a neutral, third party, and that Parks (as the new elected board president) would notify the board” of that action. “More disturbing in this whole episode,” Hill wrote, “was that a prior board member informed both myself and others involved that a very similar incident had occurred a few years prior, and at that time, the entire board was not notified and the issue was handled internally to avoid any bad press. In fact, the same auditor from the prior event was engaged because of their experience with this type of situation,” Hill said. He summed up his rebuttal of the board’s letter’s to him by contending “it is perfectly clear that the board was notified on multiple occasions of multiple issues, which is exactly what was stated publicly by me. Further, the board did not take ac-
tion, as I stated, on several of these issues. “After more than six months, purchasing logs and detailed financials still are not being shared publicly, and investigation involving large sums of money that should be on camera is not closed, and the board is pretending that the issues don’t exist,” Hill charged, adding that “this is evidenced by the presentation of a timeline/list of events, that is seven months different from a letter you sent to me just two days after that presentation.” Hill also asserted that the board, in approving the forensic audit on Feb. 25, improperly focused on starting the audit with food and beverage operations, when “it would only be logical to start an audit in the back office, since all monies flow through there, and then see where that leads. You are spending money in an area that has more than one year in process review already, and was the root of the focus of the deep dive. The fact that only one director would consider amending the motion to include anything beyond Food and Beverage is disgusting, and further validates my statement that the board is not taking action.” Hill closed his response to the board by wondering how directors came to have “a different recollection of any of these events.” He said he would be sending copies of his letter to the local media.
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COVER STORY STORY COVER
Ocean Pines PROGRESS March 2018
OPA members’ rally From Page 1 a Feb. 25 board meeting. Diller told the Progress that it has become abundantly clear to her and others that the OPA has been unable to manage its affairs effectively and needs expert management from the outside to do so. She cited operating losses in the current fiscal year, which have been estimated in a range of $1.5 million to $1.8 million, Hill’s revelations of theft and fraud, and what she was the failure of last year’s and this year’s board to address problems even after they were readily apparent. She was highly critical of the current board’s decision to raise assessments rather than find ways to cut costs or to pass savings from budget cuts that were approved onto property owners. She said that her preferred approach was to work with the current board in the hopes that a board majority will agree to issue a request for proposals from outside management companies. But failing that, she said she is prepared to launch a petition drive that would force a referendum on the outsource remedy. “I really would prefer to work with the board to avoid the costly and time-consuming petition and referendum process,” she said. “I’ve been told that the current board is likely to resist outsourcing, but I think you at least have to give it a chance. You won’t know unless you try.” Two sitting OPA directors, Herrick and Slobodan Trendic, have already signaled their support for the approach outlined by Diller. She said she thinks that Directors Collette Horn and Doug Parks, the OPA president, could be persuaded to support the issuance of an RFP, with appointed Director Ted Moroney another possibility. She said she had concerns that Directors Cheryl Jacobs or Pat Supik would be open-minded enough to consider outsourcing. Trendic ran for the board on the outsourcing proposal two summers ago, and he’s been an advocate ever since. Herrick was one of three directors who, last July, voted for a more modest outsourcing of back office financial operations to Legum and Norman. It was a solution that had been offered by Hill, who also served as an OPA director until his resignation in late summer. Hill had the support director
Herrick, Jacobs spar over claims of ‘hysteria’
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irectors Cheryl Jacobs and Tom Herrick were at opposite ends of a contentious debate over whether the claims of former Acting General Manager Brett Hill on the extent of financial problems within the Ocean Pines Association were overblown. The debate occurred during the Feb. 25 meeting of the Board of Directors. The directors were considering a motion by Director Slobodan Trendic to issue a request for proposals before March 1 for forensic auditing services, with responses from vendors due no later than March 16 and the audit to begin no later than April 16. In remarks that suggested that she was not really supportive of a forensic audit, other than perhaps “point of sale” systems in place at OPA restaurants, Jacobs made it clear that she rejected most if not all of what Hill had to say about financial irregularities initially reported in the Progress’s February 2018 edition. She said Hill’s reported comments had made her “so angry,” and that ill-temper was evident to anyone present in the room or watching the meeting video. After asserting that any forensic audit would have to be paid for by higher lot assessments, she slammed what she called the “hysteria” generated in Ocean Pines by Hill’s assertions that $200,000 or more had been stolen from the OPA in recent years. She said this hysteria had been created by the “outrageous” statements by “people going to the press,” a not to reference to Hill, whom she criticized for contending that last year’s board had “covered up” incidents of theft and missing cash. She said the forensic audit that she knew the board would approve was the result of “hysteria created by one person.” Herrick, a close ally of Hill when he (Herrick) served as OPA president last summer, pushed back against the idea that Hill had created “hysteria” over corruption within the OPA. He said that Hill simply was bringing to the attention of property owners matters that even he, as OPA president, was unaware. “We’ve hard two criminal investigations (that I knew about),” Herrick said. “I didn’t even know about the third (one).” He said it was unfair of Jacobs to “put it all off” on Hill when all the former general manager was trying to do was to make the membership aware in much greater detail of financial irregularities within the OPA. He said Jacobs was “not doing justice” to the situation, but he stopped short of accusing Jacobs in her angry remarks of fomenting the same sort of hysteria she accused Hill of creating. His demeanor was calm. Herrick criticised Jacobs’s proposal for a forensic audit of the OPA’s point of sale system, contending that the audit needed to be much more comprehensive, touching all OPA departments. Indeed, when the board eventually voted on Trendic’s motion for an forensic audit RFP, with the initial scope of work to focus on food and beverage operations, Herrick was the only director to vote against it, on the grounds that he wanted the motion to call for an audit of every OPA department.
Dave Stevens in addition to Herrick and thought he had the support of OPA Director and Treasurer Pat Supik going into a meeting in July of last year, but she bailed on him unexpectedly. Trendic, who at the time was engaged in bitter infighting with the Hill-Herrick-Stevens alliance, didn’t support the Legum and Norman proposal, because he regarded it as a sole source contract that had not resulted from a formal RFP (request for proposals) process. Hill, who has gotten behind the Diller initiative, and spoke in favor of it during the March 10 organizational meeting, said that while the Legum and Norman proposal was not the result of a formal RFP process, he had solicited proposals from three other management firms. Legum and Norman, he said, was the only company seriously interested in assuming control of OPA’s back office financial operations. One of the companies he contacted, a
firm that manages back office functions for Captain’s Cove, Va., even recommended Legum and Norman, Hill said. This time around, Hill said he is fully prepared to get behind a formal RFP process that he said would expand upon last year’s proposal to include management oversight of all OPA departments, not just the finance department. He said outsourcing does not presume the wholesale termination of OPA staff, including relatively new hirees John Bailey, the general manager, or Steve Phillips, the director of finance. Department heads, too, would presumably be retained by the new management company, Hill said. But job descriptions and specific duties could change depending on circumstances. All staff most likely would become employees of the new management company, with costs passed through to the OPA. But Hill said that the
change would end up costing the OPA less than it does now, because a company like Legum and Norman would be able to pass on savings. One area where savings could be derived would be from a less expensive health insurance plan, Hill suggested. Similarly, he said a company like Legum and Norman would be able to obtain better prices for inventory ranging from food at OPA restaurants to golf course and swimming pool supplies. Hill said a company like Legum and Norman could even work with the Matt Ortt Companies, which has been negotiating details of a management contract with the OPA to take over operations at the Yacht Club and Beach Club beginning in May. Hill said that the Ortt companies might even welcome the arrival of a company like Legum and Norman, because of the software and point of sale and other upgrades that it would bring to the table.
March 2018 Ocean Pines PROGRESS
Police chief, former GM clash over Yacht Club theft details Massey rebuts Hill ‘impression’ that police officer erred in failing to read suspect his Miranda rights By TOM STAUSS Publisher ormer Acting General Manager Brett Hill or Chief of Police Dave Massey have different recollections of a sequence of events in an investigation of theft at the Ocean Pines Yacht Club. In a rhetorical shoot-out that took place on oceanpinesforum.com, the former colleagues engaged in an airing of dirty linen that was unprecedented. It perhaps is an indication of how politicized allegations of financial fraud and theft have become since Hill went public with details last month. There’s been lots of finger-pointing. Hill accused last year’s board, of which five members are members of the current board, of sweeping allegations of fraud and theft under the rug. At least one director, Cheryl Jacobs, and another one, Pat Supik, have with varying degrees of intensity accused Hill of exaggerating the extent of financial wrong-doing. Jacobs in particular has fought back against the idea that the board has been trying to downplay financial mismanagement. So perhaps in that context, the fact that Massey, heretofore about as non-political as a department head that can be found in Ocean Pines, entered the political fray isn’t too surprising. Clearly, though, he has taken to cyberspace to defend the honor of his department, or at least the competency of one of his police officers. Hill since then has attempted to reconcile competing versions of events, and now says he can’t be sure of details of a key meeting with Massey. In a recent letter to the OPA board, Hill wrote with regard to prosecution of theft at the Yacht Club that the OPA had “declined to pursue criminal charges not by choice, but because of the fact that the party in question provided a confession to an officer of the law without being read their Miranda rights, making the confession inadmissible, and greatly hampering our case against them.” That statement upset Massey. In his response posted on the forum, Massey said that “Police Departments deal in facts, not wild
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speculation, not grounded in facts. As Mr. Hill has left the impression that a prosecution for theft was not undertaken at the Yacht Club because we failed to advise the suspect of his rights, I state the facts. “After an audit by our Finance Department uncovered suspected theft at the Yacht Club, the police department was approached to assist in the investigation. As the Association was the victim of this theft, prior to any interview, I personally asked Mr. Hill if he wanted us to proceed as a criminal investigation or an internal investigation (civil). I told him that if we handled it internally, without criminal prosecution, that nothing in our interview could be utilized in a criminal proceeding. Mr. Hill was adamant that he did NOT want us to proceed with a criminal interview and that the matter would be handled strictly internally, without criminal prosecution.” Massey went on to say that “in an internal investigation, not a criminal investigation, the employee can be compelled to answer questions that can be utilized to determine employment status. Failure to
answer questions narrowly related to the theft can be utilized as a basis for employment decisions. Naturally, the police department would have preferred a criminal investigation, but since Mr. Hill, as Acting General Manager adamantly stated he did not want a criminal investigation into this matter, we proceeded as directed. I cannot let the false impression that we were the cause of non-prosecution stand. Unlike some people, we accept full responsibility for our actions.” In a response to Massey, Hill attempted to walk back any impression given that he had faulted a police officer investigating the crime. That, he said, had not been his intent. “To clarify, my exact statement was that the party in question provided a confession to an officer of the law without being read their Miranda rights, making the confession inadmissible, and greatly hampering our case against them,” Hill said. “On day one, when the initial discovery of a possible issue was discovered, this interview took place. It was at this time that the party provided the written confession, at the
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direction of the officer, and it was after that written confession was provided, and after the party provided a time-line and relative dollar amounts to the time-line, that I was told it could not be used in criminal prosecution.” In a subsequent post on the forum, Hill said he didn’t want “to speak out of turn, as it was an investigation involving the police department. I will say I was a part of an interview that took place in the general manager’s office at the administration building, and it was not video-taped. The written documentation was taken by the officer, so I would assume the police would have any official report that would be generated, as well as the written documentation from that meeting.” Hill in effect was acknowledging that he was part of the interview in which the suspect who confessed to the theft at the Yacht Club was not read Miranda rights. In According to Massey, Hill was informed in advance of the interview that, if Miranda rights weren’t read, it would be difficult to launch a criminal prosecution based on comments made during that interview. According to Massey, it was Hill who directed that the Miranda not be read, making it difficult if not impossible to proceed with criminal prosecution. In a subsequent email to the Progress, Hill attempted again to q
COVER STORY
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WORCESTER COUNTY
March 2018 Ocean Pines PROGRESS
Taylorville residents seek neighborhood rezoning, could affect Ocean Downs casino Planning commission sends decision to county commissioners By TOM STAUSS Publisher group of neighbors in the Gray’s Corner-Taylorville area across Route 589 from the Ocean Downs Casino are seeking to rezone their properties from A-1 agricultural to C-2 commercial, as a way of combatting declining residential property values caused by their close proximity to the busy casino, which recently expanded to include table games in a 35,000 square foot addition and 100 more slot machines. The group, represented by local attorneys Hugh and Mark Cropper, appeared before the Worcester County Planning Commission March 1. They were seeking a favorable recommendation on their individual rezoning requests from the planning commission, which would then send that recommendation to the Worcester County commissioners for a final determination. That favorable recommendation didn’t happen. Instead, the planning commission essentially punted, neither approving nor rejecting the individual applications. The planners decided to send the issue of whether to approve spot rezoning of individual properties, or a more comprehensive rezoning of the neighborhood including the casino, to the commissioners to resolve. Once that decision is made at the commissioner level, the rezoning issue would return to the planning commission for another round of approval requests, either in the form of spot rezonings or a more comprehensive neighborhood solution. The individual requests for rezoning were opposed by the county’s planning staff, consistent with its long-standing opposition to this kind of rezoning. The bias on the part of staff has been to support comprehensive rezoning throughout the county on a roughly ten-year schedule. But spot rezonings are permitted under county and state law, on the grounds that a mistake was made in the previous comprehensive rezoning or that the character of the
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neighborhood has changed sufficiently to justify a change in the zoning carried by individual properties. The Taylorville residents say both are true in the case of their neighborhood. The Gray’s Corner-Taylorville area across Route 589 from the casino is in an unincorporated area of homes and commercial buildings still known locally as Taylorville. Decades ago, it was a more defined community, with its own church and businesses, but it never was a town with a mayor and a government. Ocean Downs racetrack was part of it. Now part of the Ocean Pines census area, most of Taylorville is zoned A-1 agriculture, with some estate and commercial zoning in the mix. The casino and racetrack property, one of the county’s largest employers and most successful businesses as measured by revenue, somewhat ironically sits on land that is mostly zoned A-1 agricultural. Some parcels within the casino and racetrack property fronting on Route 589 have commercial zoning. Special exceptions to A-1 zoning over the years have allowed non-agricultural activities on the property, beginning with a racetrack that opened in the late 1940s, at roughly the same time that Route 589 was extended south from Beauchamp Road, Ocean Pines’ northern boundary, to Route 50. Steve Machen, one of the Taylorville residential property owners seeking to have his parcel rezoned to C-2, said he was thankful that the planning commission did not reject his and his neighbors’ spot rezoning requests outright. “They kicked it up to the county commissioners to decide whether it makes more sense to rezone the entire neighborhood commercial,” Machen said. “To me, that makes sense,” adding that he has authorized his attorney, Mark Cropper, to support that option when the issue is considered by the county commissioners. Machen is hoping for a decision by the commissioners within the next several months.
That option isn’t without its complications, as Machen said the planning commission had some difficulty accepting the boundaries of the Taylorville neighborhood as defined by the Croppers in their joint presentation. The Taylorville neighborhood was defined in a rezoning case from several years ago as encompassing much of the area on both sides of Route 589 from the southern boundary of Ocean Pines all the way to Route 50, and included both the casino and the commercial-residential hamlet across Route 589 from the casino, including McAllister and Gray’s Corner roads. “Some of the planning commissioners resisted the definition of the neighborhood they used when the Burbage property (a property located just south of Ocean Pines’ Section 10) was rezoned,” Machen said.
Massey vs. Hill From Page 39 reconcile the competing sequence of events. “On the week of Dec. 25, 2016, I received information through staff that someone had taken some money out of a safe at one of the OPA amenities. When I returned from the holiday, I reached out to (former Controller) Art (Carmine)to see what balances were kept in the safe, and then to the police department. At this point, the information was a couple hundred dollars was taken.” Hill said he can’t remember the exact day he met with the chief. “However, at the onset, I had no idea of the scope of the problem. A police officer was assigned to investigate the issue, and upon examination of the safe in question, additional questions arose,” he said. “At this point, I was requested to set up interviews with certain employees, and it was during an interview with an employee that was conducted by a police officer that the full scope of the problem was revealed.” Hill said that “it was only after this interview, where a written
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“Our attorneys basically argued that if the definition of the neighborhood was agreed upon back then, it should still should be good today.” Machen said that recent addition of tables games in the casino, which is open 24 hours a day during the summer and from 8 a.m. to 4 a.m. during the cold months, has changed the entire neighborhood to one that is overwhelmingly commercial in character. “It really isn’t viable as a residential community,” Machen said, citing declining property values and the difficulty of selling a residential property across the road from a racetrack and thriving casino operations. Machen said that in his view it also makes no sense for the county’s largest commercial employers to carry on its businesses on land that is mostly zoned for agriculture. Should the commissioners take a more comprehensive approach to the proposed rezoning and accept the definition of the neighborhood they accepted on the most recent rezoning case in the area, that may no longer be the case. C-2 rezoning everywhere on the casino property would open other options for commercial development on the site. statement was provided to the officer, that I understood what charges could be filed, and I discussed options with the police. “To be clear, prior to the interview, all information I had indicated at most petty theft of a couple hundred dollars, at which point I was just looking to terminate the employee. Since we were talking about a safe that involved over $8,000 per the general ledger, I asked the police to be involved, as a just-incase,” he said. “And only after I was made aware of the entire scope, did I ask for options regarding criminal charges to filed.” And at that point, he recalled, he learned that the absence of a Miranda warning meant that statements made during the interview with the employee could not be used as evidence in a criminal prosecution. Hill said he does “not recall the warning” that Massey’s said he made prior to the interview with the employee about the need for a Miranda warning. That suggests the former acting general manager is not definitely saying that Massey’s version of events is incorrect.
42 Ocean Pines PROGRESS
OPINION
March 2018
Outsourcing: Still the best option for what ails the OPA he salient take-away from the March certainly the Public Works Department, which 10 uprising of Ocean Pines Association seemed to tolerate payments of fake invoices COMMENTARY members, fed up with mismanagementfrom a fake vendor of services never provided,
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out-of-control deficits, and slow-walk responses from the OPA leadership, is that many of us believe it’s time to bring in a competent, expert management company from the outside to oversee all OPA operations. Opponents of the status quo have a point, and plaudits go to an intrepid Ocean Pines property owner, Esther Diller and others of like mind, for organizing the March 10 meeting in the Community Center with a sharp focus on practical solutions. She also is to be commended for recommending that her group, which might operate under the venerable STOP (Stop Taxing Ocean Pines) banner, give the Board of Directors a reasonable amount of time to respond affirmatively to demands that the OPA immediate take steps to seek proposals from management companies. Well aware that a board majority could resist what it might regard as a too radical step, Diller and her allies are fully prepared to launch a petition drive to force a referendum on outsourcing OPA management to a company such as Legum and Norman, a management firm that competently manages the Parke section in South Ocean Pines and plenty of other homeowner associations locally and throughout the mid-Atlantic region. It would appear that there already are two OPA directors receptive to the Diller group’s message -- Slobodan Trendic and Tom Herrick. Whether two other directors can be found to vote for the issuance of a request for proposals (RFP) remains to be seen. This proposal is not nearly as radical as some may think. Were it not for bitter infighting within the ranks of the Board of Directors last summer, there would have been four votes to hire Legum and Norman or perhaps a similar man-
agement company to assume control over back office bookkeeping, cash management and related functions, all areas where the OPA has failed abysmally. It’s not a huge leap from back office to overall management of the OPA. Say you what you want about former Acting General Manager Brett Hill’s part-time management of the OPA last year -- yes, mistakes were made -- but his revelations published in the Progress last month about significant fraud and theft within the OPA made for sobering reading. The knee-jerk response by some within the OPA to downplay and evade did not push the discussion in a meaningful direction. But at the very least these revelations and member concern -- not hysteria, but rational concern and a healthy dose of disgust -- prompted the board last month to authorize a forensic audut of OPA departments, long sought by Trendic. This forensic audit is as much a part of this courageous director’s platform as his consistent calls for outsourcing OPA management. The forensic audit is an important step, but by no means the last step, on the road to meaningful reform. There has been some criticism, including by Herrick, that it was wrong of Trendic to propose that the audit start with food and beverage. Hill himself said in fact it should start in the finance department. These are echoes of the infighting that hobbled constructive engagement last summer among the directors and delayed meaningful reform. The likely approach any forensic auditing firm will take is simply to follow the money, and clearly a money trail will lead to both the finance department and all food and beverage departments that handle cash. How could it not? And
will come in for some needed scrutiny. After that, who knows. Let the auditors follow leads wherever the trail takes them. A company such as Legum and Norman brings in a full array of management software and expertise to run it that the OPA lacks and seems incapable of obtaining on a fast track. The recentword from OPA management is that trying to introduce new systems into the OPA’s back office before the summer season, and during, is not practical, that it’s better to wait for calmer times before upsetting the tried and untrue ways of conducting OPA business. Au contraire, the OPA needs to pick up the pace and immediately issue a revised RFP for both back office functions and overall management of the OPA. Ask Trendic to draft it. He managed to put together a detailed RFP for a forensic audit in two day’s time, with only minor tweaks from the OPA legal counsel and his board colleagues. This is the sort of do-it-now approach that the current situation demands. To those who say that the OPA can’t possibly outsource because it recently hired a new general manager and director of finance, these are not impediments. Both individuals who occupy those roles could very well continue to serve under a company like Legum and Norman. So, too, could the OPA’s new Yacht Club and Beach Club management firm, the Ortt Companies, whose contract with the OPA is close to being signed. There is no reason why most OPA department heads, at least those who have been delivering a quality product to the membership, need fear a company like Legum and Norman. It really is time for the OPA to act. If the board won’t do it, then the OPA membership might have to. -- Tom Stauss
Hell-bent on an assessment increase budget and to share some of the savings with property owners sufficient to avoid an assessment increase. They were not in a sharing mood. In no particular order of importance, Trendic advocated further cuts in the golf budget, a zero net in Yacht Club operations by leasing it out or closing it shortly after the summer season, and a somewhat more aggressive schedule of implementing cuts in the Ocean Pines Association’s cadillac health insurance policies for employees. He would have frozen salaries for a year. He would have postponed a $26 increase in the assessment attributable to an unnecessary funding of road depreciation to be allocated to the roads reserve. Road resurfacing is already adequately funded by the OPA’s share of local casino funds, as well as a modest contribution from the state gasoline tax. This $26 segment of the assessment never should have been included in the budget in its earlier iterations. It’s the equivilent of about $220,000 in assessment
dollars. OPA budgeteers were tempted by this long-hanging fruit because it was easily plucked. In a machavellian move that should have fooled no one, but possibly did, Director Ted Moroney proposed diverting that $26 in unnecessary roads money into the forensic audit that the board authorized during the Feb. 25 meeting. He received some kuddoes from those who really believe the OPA needs to be spending $200,000-plus on a forensic audit. That’s far from obvious, given the plethora of investigations and deep dives that have been undertaken already this past year to ferret out fraud and rank thievery. Trendic’s motion calling for the forensic audit focuses where it should -- food and beverage -- and then will migrate under the advice of the auditors to other departments. No doubt Public Works will receive a fair amount of forensic attention, too, when the time comes, given tose reports of fake invoices submitted by fake q
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hile the 2018-19 budget adopted by the Board of Directors Feb. 25 has its good points, in the end it at best deserves a “gentleman’s C” because of the $30 lot assessment increased embedded in it. This assessment increase was easily avoided, but a board majority sadly decided that one was justified. Indeed, three directors -- Supik, Jacobs and Moroney -- would have been happier to raise it even more. Jacobs, with a coquettish come hither twinkle in her eye, wondered whether any of her colleagues had an “appetite” for another $9, and indeed a couple of them did. What an apt choice of words, as “appetite” connotes a ravenous beast hungering for prey. We should be thankful that a board majority did not succumb to Jacobs’s invitation. When all the votes were cast, only Slobodan Trendic opposed both the budget and the assessment increase it embraced. He urged his colleagues to make even more aggressive cuts in the
OPINION Assessment increase From Page 42
companies this past year. Was this a one-time occurence? Maybe we’ll find out. It remains to be seen how much this forensic audit will cost. Some departments might be spared scrutiny because the opportunity for fraud and theft simply don’t exist, or none have ever been alleged. Trendic preferred finding the money for the audit from budget cuts, not from assessment dollars related to road depreciation that never should have been budgeted to begin with. Moroney’s ploy was a cynical one, an acknowledgment that had he voted for a budget that included additional money for roads not backed up with an identified need, he would been roundly and justly criticized. Now he and other directors can pretend that were it not for a forensic audit, which many believe is long overdue, the assessment increase would not have occurred. Of course, that it is patently untrue. The $30 increase was cooked into the budget ever since the Budget and Finance Advisory Committee whittled it down from $60 as proposed in the general manager’s draft. Had the $30 not gone into the forensic audit, it would have remained and been allocated to the roads reserve or, perhaps, the operating fund. Anything other than giving it back to property owners from whence it came. There’s just no mood for sharing budget savings with this group. Even Tom Herrick, who in a more ideal world would have opposed any assessment increase, seemed to think it’s necessary and fair to property owners. He noted that employees were taking a hit in health insurance costs and that property owners should share in the financial pain, too. Suffice it to say this is not logical thinking. Throughout the budget ordeal, members of the B&F committee and board of directors continued to insist that budget cuts were needed in order to pay back or recover the $2 million or more in operating deficits accumulated over two fiscal years. In essence they were saying that every dollar “recovered” in budget savings had to be “applied” to the cumulative deficit. It was all pretense and smoke, and at its core fraudulent. Only late in the process did Moroney finally admit that there was no deficit recovery afoot and no deficit recovery reserve. Much of the manufactured rhetoric about recovery and paybacks was hot air, used to justify an assessment increase that was not needed but surely desired by a majority of directors. The best that can be said about the $11.4 million budget approved by the board -- and why it doesn’t deserve an F for failed financial management -- is that the $500,000 or so in a budgeted surplus could, if it’s realized, reduce the cumulative operating fund deficit by that amount. This doesn’t pay back or recover deficits recorded in earlier years; those deficits will remain in place no matter what this or any future board does or doesn’t do. In any event, the best that can be said about the board’s approved 2018-19 budget is that, in
March 2018 Ocean Pines PROGRESS theory, it could reduce the operating fund deficit if, by April of 2019, a projected surplus actually materializes. Skepticism is warranted. Lots can happen to a budget. It’s a plan, and plans can change. As the saying goes: People plan, God laughs. In the meantime, though, less than half of that projected surplus could easily have been allocated to keeping the assessment at $921. Additional budget cuts could have been implemented with the same result. For instance, the Yacht Club currently is budgeted for a $107,000 loss. But without a whole lot of sweat or sweat equity, the Yacht Club could easily have been budgeted with a $100,000 surplus, or more, predicated on a closure shortly after Labor Day. History has proven that the Yacht Club can and has generated sizable surpluses over the summer months, only to be dissipated over the winter because -- let’s not sugarcoat it here -- the OPA has insisted on keeping an amenity open
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that too few care to patronize over the winter. The business hasn’t been there to justify keeping it open. Proponents of fiscal irresponsibility whine that it’s an amenity that doesn’t have to make money. So throwing away surpluses during the cold season is OK with them. Just by applying a little bit of common business sense the OPA could achieve a $200,000 or more savings from eliminating Yacht Club subsidies, using that savings to keep the assessment constant. Only Trendic among the seven directors seems to get it. The other six didn’t seem to think that $30 is a big deal. Perhaps not to many who can easily afford it, but to others it looms larger. What a board majority seems to forget is that its mission should be to collect in assessments only what is needed to run the association effectively, and not one penny more. By that standard, this budget and this board -- Trendic is the exception -- falls short. -- Tom Stauss
Forensic audit should target OPA’s own ‘fraud’ against property owners
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he OPA for ten years or more has been “fraudulently” collecting depreciation from golf course greens and drainage improvements, which is why golf-related depreciation is costing property owners roughly $400,000 per year, an excessive amount, roughly a quarter of all the funded depreciation in a year that flows into the Major Maintenance and Replacement Reserve. When added to a projected operating loss of $150,000 next year, and about $189,000 in capital improvements, golf will be costing property owners about $750,000 in 2018-19. At some point, and the time might be rapidly approaching, property owners are going to say enough is enough and demand alternatives. Among them: leasing or selling the golf course to the highest bidder. Or simply shutting it down and converting it into parkland. To be fair, a percentage of drainage and green improvements are depreciable -- some pipes in the ground, for instance. But dirt pushed up in the middle of fairways and sod or impacted dirt on the greens are not. Maybe half of that $400,000 in funded depreciation shouldn’t be collected in any given year. That’s a best guess. If it’s less, then let those who supposedly know better prove it. The OPA, with only the occasional complaint from a property owner incensed by the injustice of it, continues to depreciate the original cost for all of these projects, not the component parts that are properly depreciable. And the OPA continues to collect assessment dollars sufficient to cover that depreciation in any given year. Arguably, no depreciation at all should be funded for greens or drainage, as it is exceedingly unlikely that either greens or the nine holes rebuilt with drainage improvements will ever again need to be rebuilt or renovated. If greens need attention, they at most will re-
quire resodding only, no rebuiding necessary. Essentially, funding depreciation on these assets generates assessments to be spent repairing or renovating other assets. That seems fraudulent, too. Here’s a somewhat facetious idea. To offset the $150,000 projected golf operating loss in 2018-19, the OPA could divert fraudulently collected golf course depreciation, currently allocated to the replacement reserve, into the operating fund and specifically golf operations. At least this way property owners would be hammered only once, rather than twice, for the loss-leader golf amenity. Or, alternatively, the OPA could just stop defrauding property owners and reduce the assessment accordingly. Here’s another great idea. The forensic audit just approved by the Board of Directors should be expanded to include an investigation into alleged fraud perpetrated against property owners by the OPA. The auditors need to check whether depreciation related to the greens and the golf drainage program is accurately calculated. If it isn’t -- and there is every reason to believe that it isn’t -- then the dollars collected from property owners to fund golf-related depreciation need to be adjusted downward. Perhaps the new Yacht Club should be scrutinized similarly. Does the OPA depreciate component assets in the Yacht Club, or the original construction cost of the building? Some property owners might want their money back for all those years of fraudulently levied assessments based on incorrectly calculated depreciation. More realistically, this nasty practice will simply cease and desist, with the powers that be vowing to sin no more and actually meaning it. Wouldn’t that be nice. - Tom Stauss
44 Ocean Pines PROGRESS
OPINION
March 2018
An adults-only Yacht Club pool by stealth and subterfuge The following is an edited version of an email recently sent to the Board of Directors regarding proposed new pool rules at the Yacht Club’s Oasis pool. Directors: I strongly object to the proposed new Yacht Club pool rules in their latest iteration. These new rules would prohibit throwing of balls (and other objects), intentional splashing, back floats, bubbles, rings, one-sided flotation devices (noodles permitted), jumping into the pool or easing into it poolside, and conversations and “other noises” that aren’t kept at a quiet level. These prohibitions are not in effect at Ocean Pines’ four other pools. There are two problems with these new Yacht Club pool rules: 1. They are written in such a way that they would have a “disparate impact” on families with kids under 18. Throwing of balls, intentional splashing, use of the listed flotation devices, jumping into the pool, and conversations that might be regarded as loud or, shall we say, exuberant (kids and their parents having fun), are all the kinds of activities that many people under 18 (and sometimes parents playing with their kids) routinely engage in. They would tend not to be the sort of activities that those advocating a “quiet pool” [the Miller group, which OPA President Doug Parks elevated to “working group” status] are prone to. These rules are a poorly disguised attempt to maintain the “adults-only” character of the Yacht Club pool eliminated last summer under advice of counsel. These new rules are unwelcoming to OPA families with kids 18 and under, and are as likely to cause continued inter-generational friction as they are to heal it. The better way to allow healing to take place is for time to pass. Those whose “adult-only” privileges were taken away last summer need time to adjust to the new reality. That reality could include the realization that kids splashing and having fun can be an enjoyable part of a pool experience. 2. These rules are essentially unenforceable, especially those that pertain to conversations and other noises that aren’t kept at a quiet level. According to a trusted member of
Feb. 25. Suffice it to say thre is no evidence to show An excursion through the curious cul-de-sacs An excursion through theby-ways curious and by-ways and cul-de-sacs that that the committee, the Aquatics director or legal counsel is of Worcester County’s County’s most densely community. of Worcester mostpopulated densely populated community. fully on board with the rules in their By TOM STAUSS/ By TOM Publisher STAUSS/Publisher current iteration, especially as they the Aquatics Advisory Committee, as a quiet “oasis” pool] and #14 [Con- relate to noise levels. Accordingly, Aquatics Director Colby Phillips re- versations and other noises must be these proposed rules should simferred to the “difficulty” in enforcing kept at quiet level] apparently were ply be abandoned, declared void for the noise provision during the com- not part of an earlier draft of the vagueness and unenforceable. Since there is no particular rearules by Phillips but mysteriously mittee’s Feb. 12 meeting. son to believe this recommendation In addition, how could lifeguards appeared after an alleged vetting will be taken seriously or acted on ever be able to force pool users to en- of them by the OPA counsel. This affirmatively by the board -- the fix ter the pool through ladders or the seems somewhat plausible, as why is in! -please be advised that at stepped entryway? These rules pro- would the Aquatics director add least two complaints to the Maryhibit someone from sitting poolside rules she deems difficult to enforce? land Civil Rights Commission have But items #2 and #14 are imperand slipping into the pool from that been submitted, on the grounds that missibly vague. What exactly is a position. Silly! these new rules constitute age disAnd if someone wants to splash “quiet level” and how does one decrimination, with a disparate impact someone else intentionally, or com- termine when the “level” no longer mit some other rules violation, will is quiet? It strains credulity to sup- on families with kids under 18, and a guard pierce the tranquility of a pose that competent legal counsel are an attempt to appease a vocal summer’s afternoon with a shrill would countenance inclusion of such interest group by effecting an illegal vague terminology in a set of rules. adults-only “quiet” pool by stealth blast of a whistle? According to that committee Consequently, they more likely were and subterfuge. The complaint notes that the OPA member and also the posted min- added by someone other than legal is a 501 (c) 4 “social welfare” organiutes from the meeting on the OPA counsel, someone who perhaps is too zation whose amenities are open to sympathetic to the concerns of the Web site: the public. 1. The Aquatics committee did not Miller group, which invented the If the OPA won’t abandon this folvote to accept these rules, nor did it term “quiet pool.” ly on its own, perhaps the state can Further, it’s plausible to suspect endorse them by consensus. Indeed, help it do the right thing. the committee suggested revisions, rules #2 and #14 were added after lenone of which (at least so far) have gal counsel reviewed the rules. This shown up in a revised draft. This seems more likely than presuming committee member is not certain that they were added or vetted by whether Phillips will be returning him. Is there any written opinion by to the committee with a revision. legal counsel on the subject of these The Ocean Pines Progress, a jourThis committee member has a great rules? If so, then let’s produce them nal of news and commentary, is pubdeal of trust in Phllips to make the before the board votes to adopt these lished monthly throughout the year. best of a set of rules that will be dif- rules, assuming any vote occurs. What seems to be true differs sigIt is circulated in Ocean Pines, Berlin, ficult -- essentially impossible -- to nificantly from the “spin” on these Ocean City, and Captain’s Cove, Va. enforce. Letters and other editorial submis2. Rule #2 [This pool is intended rules offered at the board meeting of
LIFE IN THE LIFE INPINES THE PINES
LETTER Hit Ocean Pines in the pocketbook
What would be the downside for all payers of OPA assessments to put their respective assessment payments in a court-administered account instead of going directly to the OPA, where it would probably, mysteriously, disappear? It has become all too obvious that there is a major leak (for once not a journalistic one) that will simply not go away. If you want to get their (OPA) attention, hit them in the pocketbook. With almost 100 percent certainty, when the income stream dries up, changes will be made. A complete (top to bottom) house
cleaning would seem to be in order - no creation of a task force, no internal investigation (more than has already been done). It would seem that the proper authorities have already been notified. Tell them everything and let them collectively do their investigative jobs. Just be prepared for a possible unwanted outcome. It’s one thing to have amenities (or whatever they are called this month) that consistently lose money, but quite another to discover that the loss is due in part to some rogue Ocean Pines employees, most certainly in concert with one another. Alan Blair Ocean Pines
sions: 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
Advertising Sales Frank Bottone 410-430-3660
ART DIRECTOR Rota Knott
CONTRIBUTING WRITER Rota Knott
March 2018 Ocean Pines PROGRESS
FORECLOSURE SALE OF REAL ESTATE IN CAPTAIN’S COVE
April 6, 2018, 10 AM
To be held at the Marina Club in Captain’s Cove Subdivision 3323 Dock Court, Greenbackville, VA 23356
The following properties will be auctioned: Section/Lot: 1-0478, Captain’s Cove Tax Map No. 005A10100047800 Assessed Value: $2,000.00
Section/Lot: 1-0813, Captain’s Cove Tax Map No. 005A10100081300 Assessed Value: $2,000.00
Section/Lot: 6-0086, Captain’s Cove Tax Map No. 005A50200008600 Assessed Value: $2,000.00
Section/Lot: 1-0495, Captain’s Cove Tax Map No. 005A10100049500 Assessed Value: $2,000.00
Section/Lot: 1-0823, Captain’s Cove Tax Map No. 005A10100082300 Assessed Value: $2,000.00
Section/Lot: 7-0089, Captain’s Cove Tax Map No. 005A60100008900 Assessed Value: $2,500.00
Section/Lot: 1-0500, Captain’s Cove Tax Map No. 005A10100050000 Assessed Value: $2,000.00
Section/Lot: 1-0826, Captain’s Cove Tax Map No. 005A10100082600 Assessed Value: $2,000.00
Section/Lot: 7-0120, Captain’s Cove Tax Map No. 005A60100012000 Assessed Value: $2,500.00
Section/Lot: 1-0532, Captain’s Cove Tax Map No. 005A10100053200 Assessed Value: $2,500.00
Section/Lot: 1-0827, Captain’s Cove Tax Map No. 005A10100082700 Assessed Value: $2,000.00
Section/Lot: 7-0131, Captain’s Cove Tax Map No. 005A60100013100 Assessed Value: $2,500.00
Section/Lot: 1-0557, Captain’s Cove Tax Map No. 005A10100055700 Assessed Value: $2,500.00
Section/Lot: 1-0831, Captain’s Cove Tax Map No. 005A10100083100 Assessed Value: $2,000.00
Section/Lot: 7-0168, Captain’s Cove Tax Map No. 005A60100016800 Assessed Value: $2,000.00
Section/Lot: 1-0560, Captain’s Cove Tax Map No. 005A10100056000 Assessed Value: $2,500.00
Section/Lot: 1-0873, Captain’s Cove Tax Map No. 005A10100087300 Assessed Value: $2,000.00
Section/Lot: 7-0171, Captain’s Cove Tax Map No. 005A60100017100 Assessed Value: $2,000.00
Section/Lot: 1-0665, Captain’s Cove Tax Map No. 005A10100066500 Assessed Value: $6,900.00
Section/Lot: 1-0885, Captain’s Cove Tax Map No. 005A10100088500 Assessed Value: $2,000.00
Section/Lot: 7-0174, Captain’s Cove Tax Map No. 005A60100017400 Assessed Value: $2,000.00
Section/Lot: 1-0733, Captain’s Cove Tax Map No. 005A10100073300 Assessed Value: $600.00
Section/Lot: 1-0889, Captain’s Cove Tax Map No. 005A10100088900 Assessed Value: $2,000.00
Section/Lot: 7-0231, Captain’s Cove Tax Map No. 005A60100023100 Assessed Value: $2,500.00
Section/Lot: 1-0745, Captain’s Cove Tax Map No. 005A10100074500 Assessed Value: $12,100.00
Section/Lot: 6-0001, Captain’s Cove Tax Map No. 005A50200000100 Assessed Value: $2,500.00
Section/Lot: 7-0233, Captain’s Cove Tax Map No. 005A60100023300 Assessed Value: $2,500.00
Section/Lot: 1-0746, Captain’s Cove Tax Map No. 005A10100074600 Assessed Value: $12,200.00
Section/Lot: 6-0009, Captain’s Cove Tax Map No. 005A50200000900 Assessed Value: $2,500.00
Section/Lot: 7-0252, Captain’s Cove Tax Map No. 005A60100025200 Assessed Value: $2,500.00
Section/Lot: 1-0756, Captain’s Cove Tax Map No. 005A10100075600 Assessed Value: $13,100.00
Section/Lot: 6-0012, Captain’s Cove Tax Map No. 005A50200001200 Assessed Value: $2,500.00
Section/Lot: 6-0099, Captain’s Cove Tax Map No. 005A50200009900 Assessed Value: $2,000.00
Section/Lot: 1-0810, Captain’s Cove Tax Map No. 005A10100081000 Assessed Value: $2,000.00
Section/Lot: 6-0055, Captain’s Cove Tax Map No. 005A50200005500 Assessed Value: $2,500.00
Section/Lot: 7-0258, Captain’s Cove Tax Map No. 005A60100025800 Assessed Value: $230,800.00
Section/Lot: 1-0811, Captain’s Cove Tax Map No. 005A10100081100 Assessed Value: $2,000.00
Section/Lot: 6-0057, Captain’s Cove Tax Map No. 005A50200005700 Assessed Value: $2,500.00
TERMS: Minimum Bids will be announced prior to the start of the auction on the date of sale. Announcements made at auction time take precedence over any print, electronic, or verbal information, including but not limited to the Minimum Bid. Successful bidder will be required to deposit with Trustee a deposit (non-refundable) in an amount equal to 10% of successful bid in cash or certified funds at time of sale, with the closing to occur within thirty days of the date of said sale. Written one-price bids will be accepted for any of the properties pursuant to the terms set forth in Va. Code § 55-516. There is no warranty relating to right, title, interest, or the like in this disposition. Property is being sold pursuant to Va. Code § 55-516, and title will be conveyed pursuant to statute and subject to all liens or encumbrances as provided in said statute. All information for review by appointment only. Notwithstanding the Minimum Bids announced at the time of sale, the Trustee reserves the right to accept and/or reject all offers. Time is of the essence. Other conditions may be announced at the sale. TRUSTEE: Pender & Coward, P.C., 222 Central Park Ave., Virginia Beach, VA Phone: (757) 490-6261 Email: capcove@pendercoward.com
45
CAPTAIN’S COVE
March 2018
Cove to prospect for companies to provide high speed Internet By TOM STAUSS Publisher lthough Think Big Networks is still very much in the running to provide high speed, fiber optic Internet services in Captain’s Cove, the Board of Directors has decided to expand its efforts to find companies that could do so in the event Think Big can’t find an economical way to start laying cable with a partnering company. The Cove’s Board of Directors during a meeting Feb. 23 voted to hire an engineering firm with expertise in high speed Internet to draft a request for proposals that would solicit other companies to submit offers to serve the 1000-household Captain’s Cove market. ThinkBig, an Internet service provider, would be invited to submit a revised proposal that could allow it to begin the roll-out of high speed service in Captain’s Cove, Cove president Tim Hearn told the Progress recently. Prompting the board action is the fact that to date Think Big has been unable to secure the commitments from 350 homeowners it said it needed to begin installing the infrastructure needed to provide high speed Internet in the Cove. Hearn said the company recently asked the Cove board if the Cove property owners association would be willing to “fill the gap” between the number of commitments it’s been able to secure and the 350 needed to make the project financially viable. Hearn said while a case could be made for some sort of financial aid to help bridge the gap until such time as Think Big is able to sign up 350 households, the Cove property owners association is not in a good enough position financially to be able to do so. He said the only possible source of funding would be the Exhibit X revenue stream provided by formerly delinquent properties that are now paying annual assessments, but that pool of money is currently committed to financing the Marina Club debt service and new road construction. Hearn said the Cove has suggested that perhaps Think Big could target its roll-out in areas of the Cove where the largest number of sub-
A
scribers exist, thereby reducing its upfront costs. Short of that, he said that perhaps companies other than Think Big might be able to submit proposals that would allow them to begin laying cable with a threshold of customer commitments less than 350. He said some companies might be able to assume greater risk on the premise that once fiber optic, high speed Internet is actually available, residents who might have been reluctant to commit to signing up in advance of availability would do so. As Hearn said, there really is no other reliable source of high speed Internet in Captain’s Cove. Some homes without line-of-sight issues are able to contract with Directv or other satellite providers, but even then Internet connectivity is relatively slow compared to speeds offered through fiber optic cable. For the most part, residents in the Cove are relegated to slow dial-up speeds that date back to the earliest days of Internet service in the 1990s. Hearn also provocatively said during the Feb. 24 meeting that any prospective high speed Internet provider would be well advised to be in touch with the Cove’s developer/ declarant entity, Captain’s Cove Group LLC, to see if some sort of partnership arrangement could be devised to jumpstart efforts to bring high speed Internet to the Cove. “If I were in the fiber optics business, that would be my next phone call,” Hearn said, telling the Progress that he had not discussed the matter with Michael Glick, a principle owner in CCG Group, before he made his comment. “Michael doesn’t need me to tell him how to spend his money,” he added, somewhat facetiously. Glick is a member of the Cove’s board of directors and the Cove’s treasurer. He rarely attends Cove board meetings in person, but sometimes listens in by telephone. He chairs monthly finance committee meetings. Jim Silfee, one of the developer representatives on the Cove board, said during the Feb. 23 meeting that high speed Internet availability is very important to the Cove’s future
build-out prospects. He said prospective homeowners, especially those who need high speed Internet for work, want to know that it’s available during weekend visits. Silfee seemed to suggest that some kind of interim support for ThinkBig from the Cove association might be warranted, but Hearn seemed more inclined to regard the developer/declarant as a better source of interim financing. Ambulance service -- Representatives from the Greenbackville
Volunteer Fire Company have offered some encouraging words about prospects for improved ambulance service for the Cove. During the Feb. 23 board meeting, residents were told that the Accomack County Board of Supervisors seems to be prepared to fund two paramedics for the Greenbackville department beginning July 1. Because of the time required to train them, it might not be until November when the paid paramedics will be available to make ambulance calls in the Cove. The two paramedics most likely would work during day-time hours, when volunteers are less likely to be available to make ambulance runs q
46 Ocean Pines PROGRESS
Grand Opening at our New Location in Snow Hill
10% OFFCustomers, - ENTIRE MONTH OF New MARCH To All Our We Invite You to See Our Store!!!
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Or Anything Unique! “I Make House Calls. Call Anytime!” Richard Seaton Jr.
207 Washington Street, Snow Hill
Cell: 443-783-6213 Store: 443-234-5528
CAPTAIN’S COVE Fiber optic From Page 45
because of work commitments. The fire department reps encouraged residents to attend a public hearing on the county’s 2018-19 budget on March 13 to voice support for the paid paramedics. Ambulance responses that originateUnder in Greenbackville are much the Featured Homes: Navigator: faster258into Captain’s Cove because be 3proximity. BR 2.5 BA of theShould close Should be 1773 sq ft If paramedics areRoom unavailable in Add Unfinished Bonus Greenbackville because of staffing 1332ambulances Blackbeard Rd: issues, must be sent Take Out Construction Starting Soon from Add Oak Hall, much further away. open floor plan AsAddminutes can Chincoteague Bay Views matter in life-threatening situations, poor If you need room in the bullet points you could ambulance response time hasFeatured been move the New Construction up beside an issue Homesin forCaptain’s both homes Cove as county support for the Greenbackville Fire Company has been less than consistent over the years. John Ward hearing -- Not unexpectedly, the Cove board rejected a complaint from resident John Ward asking for reimbursement for identity theft insurance costs and an apology because of the recent posting on the Cove’s Web site of Ward’s personal information, including a Social Security number. The posting occurred on the members-only portion of the site and was related to a dispute over how much former board and Environmental Control Committee members were paid by the Cove association prior to 2012. That was the year that Hearn and business allies gained effective control of the Cove board from resident homeowners as the result of a court action and a settlement agreement. Much of the debate during the Feb. 23 focused on whether Ward was a Cove employee or private contractor when he was paid to attend meetings as a Cove director. Hearn insisted that Ward was a private contractor, while Ward, in his complaint, said he was an employee. The distinction apparently is relevant, because employers aren’t supposed to reveal private information about employees. Ward said it doesn’t matter either way, while Hearn said it did. The board agreed with Hearn, voting unanimously to reject Ward’s complaint. He said he will appeal to the Virginia’s homeowner association ombudsman, a frequent recourse for Ward in his ongoing battles with the Cove board.
March 2018 Ocean Pines PROGRESS
47
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PRICES SUBJECT TO CHANGE
CINDY WELSH - REALTOR Berkshire Hathaway HomeServices PenFed Realty 4323 Captain’s Corridor • PO Box 28 Greenbackville, VA. 23356
302-381-6910 (cell) • 757-854-1604 (office) 757-854-1606 (fax) • Email: candhwelsh@aol.com ©2018 BHH Affiliates, LLC. An independently owned and operated franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc.® Equal Housing Opportunity.
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C C In
48 Ocean Pines PROGRESS
March 2018
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