May 2018 progress by Ocean Pines Progress

Country Club work delayed until fall, completion next year As if there was any doubt that the Country Club’s second floor renovation project would not be done by a 50th Anniversary golf touranment in June, the Board of Directors during its April 28 monthly meeting made it official by voting to delay the project until the fall in the hopes of securing better bids for it over the summer. Directors voted unanimously to direct General Manager John Bailey to reissue a request for proposals for the renovation no later than June 1.

~ Page 8

It’s an old name restored at Ocean Pines Yacht Club One of the very first changes implemented at the Ocean Pines Yacht Club by the Matt Ortt Companies was to change its name back to “Ocean Pines Yacht Club” from Mumford’s at Ocean Pines or the Cove at Mumford’s, the two names the bar and restaurant has been called in recent years. The name changes were part of rebranding of the food and beverage venue early in 2017. Now the Ortt Companies has gone back to the traditional name as part of another rebranding.

~ Page 13

Technology group pitches management software upgrades After nearly two years of evaluating the Ocean Pines Association’s outdated technology and reviewing current needs, the Technology Working Group has recommended the purchase of an integrated software package that its members have concluded will improve business operations, enhance staff efficiency, and achieve better services for members.

~ Page 22

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STOP emerges as key player in Ocean Pines political affairs Brett Hill, Esther Diller file as a team for OPA board By TOM STAUSS Publisher n Ocean Pines advocacy group recently resurrected by a former Ocean Pines director with the help of an energetic property owner has taken aim at two political issues that the group says indicate Ocean Pines Association dysfunction and a lack of transparency in conducting its affairs. The advocacy group known as STOP (Stop Taxing Ocean Pines) was recently resurrected by Marty Clarke, a former OPA director who currently serves as a member of the OPA’s Budget and Finance Advisory Committee and as chair of the OPA’s Bylaws and Resolutions Advisory Committee. A founding member of STOP, he appointed Esther Diller, an Ocean Pines homeowner with an active interest in Ocean Pines Association affairs, as the group’s new chairperson last month. She coordinated the group’s participation in the OPA’s recent town hall meeting -- a list of questions to the board prepared by STOP circulated during the meeting -- and she has been giving active consideration to running for the board this summer. She has been assisted all along in her efforts by Brett Hill, a former OPA director and acting general manager who since resigning from the board last Sep-

tember has recently emerged as a critic of the way the OPA has been run, especially in the area of financial management. That Hill is a controversial figure in Ocean Pines is an understatement, but his recent claims of widespread fraud and embezzlement in OPA back office operations contributed to a recent board decision to hire a company to conduct a forensic Esther Diller, STOP fraud of all departments where chairperson misconduct has been alleged. According to a May 10 statement issued by Diller and Hiller, the two will be candidates in this summer’s Board of Directors election, running as a team. They will also be looking to endorse one of the other candidates, in the hopes that one will emerge who is compatible with them on major issues. “We would like to have a To Page 45

Brett Hill, former OPA Director

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OCEAN PINES BRIEFS In response to persistent requests from the Ocean Pines Progress and the OceanPinesForum.com Web site, the Ocean Pines Association has decided to respond to document requests from property owners whenever possible via email. OPA President Doug Parks, in remarks delivered during the April 28 meeting of the Board of Directors, said the electronic transmittal of documents, although not required by the Maryland Homeowner Association Act, would nonetheless be a convenience to the membership. The new “procedural policy,” as Parks called it, will replace the requirement that OPA members make formal requests for documents and obtain copies in person at the administration building. Parks said that many OPA documents are already in a form that can be easily transmitted as an email attachment. Older documents that may not be available electronically will be scanned by Executive Secretary Michelle Bennett into a format that can then be sent electronically,

Parks said. The new procedure does not end all differences between the local media and the OPA over document requests, however. The Progress has requested copies of all written summaries of weekly meetings that have taken place between Parks or Vice-President Cheryl Jacobs with General Manager John Bailey since Bailey arrived in Ocean Pines last September. Recently, Parks told the Progress he was reluctant to release the meeting summaries because they were not official documents of the OPA. The Progress response to that assertion is that the Maryland HOA Act requires disclosure of all HOA documents, with the exception of documents related to non-yet-resolved legal issues or personnel records. The HOA Act makes no distinction between official and unofficial documents of an HOA. These written meeting summaries are readily available to memq

OPA to release documents via email, Parks announces

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bers of the board, keeping them informed of activities and actions by the general manager in the day-today operation of the OPA.

PR department announces Yacht Club entertainment

The Ocean Pines Association’s Marketing and Public Relations Department has announced the live entertainment schedule for the Yacht Club for the month of May. Each performance is from 6 to 10 p.m. “Three on the Tree” will perform Friday, May 18. Joe Smooth will perform Saturday, May 19. The following weekend, Memorial Day weekend, Breakers will perform on Friday, May 25, and Full Circle is scheduled on Saturday, May 26. The Matt Ortt Companies, the newly hired management company for the Yacht and Beach clubs, has finalized a Yacht Club dinner menu with more than 35 items below the price-ceiling of $15, details to be announced closer to the Yacht Club’s

scheduled reopening May 17.

Crafter of the month

Board votes to allow candidate advertising

An effort by Director Slobodan Trendic on behalf of the Elections Committee to ban candidates for the Board of Directors from advertising in OPA publications, particularly the quarterly newsletter sent out during the summer election season, was rebuffed by his colleagues during the April 28 regular meeting of the board. Trendic, who said he agreed with the committee’s recommendation to ban advertising promoting candidates, said the newsletter edition that is mailed out to property owners already includes candidate statements and biographical information. Trendic is the board’s liaison to the Elections Committee. Trendic maintained that OPA publications are subsidized by Ocean Pines property owners, who may not like the fact that their assessment dollars are being use to support candidates whom they might oppose. Trendic did not oppose the inclusion of informational material that is ofq

4 Ocean Pines PROGRESS

The Pine’eer Craft Club has announced JoAnn Stewart as the club’s crafter of the month for May. Originally from New Castle County, Delaware, she moved to Ocean Pines upon retiring in 2003 from the DuPont Company in Wimington. She started making jewelry several years ago for the Ocean City Marlin Club to sell at the club’s annual jewelry show fundraiser. Her creations are available for purchase at the Pine’eer Artisan and Gift Shop in White Horse Park. The shop is open Saturdays, 10 a.m. to 3 p.m., and Sundays, 10 a.m. to 3 p.m.

OCEAN PINES From Page 4

fered free of charge to all candidates, including a 200-word statement. Trendic cited organization documents that say that the OPA should not allow political advertising. His motion, seconded for discussion purposes by OPA President Doug Parks, ran into flack immediate after he offered it. Director Cheryl Jacobs said she disagreed with a ban on candidate advertising, arguing that the OPA benefits from the revenue derived from it. She made a distinction between ads that promote OPA board candidates from those in support of candidates for public office. But she did not seem inclined to ban advertising from any candidate for office. Director Colette Horn agreed with Jacobs, but said the OPA should make it clear that it will accept advertising from any candidate to avoid “confusion” over the OPA’s policy that occurred last summer, when she was a board candidate. Director Pat Supik said she did not believe that the OPA, by accepting candidate advertising, was in any way intervening in the election process. Trendic reasserted his view that OPA elections are inherently political, that political ads are prohibited, and that OPA property owners should not be forced to subsidize views with which they disagree. Jacobs countered that political ads are not subsidized by property owners because they’re paid for by candidates or their supporters. Trendic’s motion failed 1-4, with Trendic in favor, Director Tom Herrick abstaining and Ted Moroney

absent from the meeting.

OPA to ask members for annual meeting input

On a suggestion by Director Slobodan Trendic, the Board of Directors agreed informally during the board’s July 27 monthly meeting to direct General Manager John Bailey and staff to solicit suggestions from property owners for items to be included in the annual meeting of the membership in August. Trendic, who was part of a board majority that voted recently to announce election results on the day of the vote count, one day before the annual meeting, was apparently trying to make sure there will be items of interest included on the annual meeting agenda. Announcement of election results during the meeting traditionally has been the main reason members turn out for the meeting. Trendic and other directors were in favor of making sure there are new, better reasons for attending the annual meeting. Trendic suggested that Bailey and Director of Marketing and Public Relations Denise Sawyer be tasked with issuing a press release encouraging members to submit agenda items. OPA President Doug Parks suggested that the Communications Advisory Committee also be tasked with soliciting member input for the annual meeting.

On the recommendation of the Budget and Finance Advisory Committee, the Board of Directors at its monthly meeting April 28 approved Union Bank as an additional depository. In comments supporting a motion to approve Union Bank as a second bank, OPA Treasurer Pat Supik said that “historically Ocean Pines has engaged a second bank primarily for investments in certificates of deposit” or similar instruments, particularly CDARs. Union Bank was selected by the B&F committee after interviewing officials from several banks. The board unanimously approved Union Bank as the OPA’s second bank.

Board approves a number of budgeted capital items

A month can make a lot of difference. After rejecting a number of General Manager John Bailey’s capital requests in March, the Board of Directors seemed to be in a better mood for spending as they reviewed and then approved a number of capital

requests during ts April 28 monthly meeting. The same items rejected in March sailed through in April, as Bailey had more documentation on hand in support. In particular, he complied with a desire by some directors for information of whether items requested for replacement appear on the OPA’s depreciable asset list, along with data on the extent to which the item has been depreciated. Items approved by the board include a motorized sand rake from Finch Services for $17,000, on a 5-1 vote, Slobodan Trendic in opposition; a Ventrac golf trim mower from Textron Golf for $35,000, approved unanimously; five Cushman gas utility carts, $44,000 total cost, approved unanimously; two Ventrac mowers for Public Works, from Iron Source, for $66,000, approved unanimously; and two Toro Z-master mowers for Public Works by David A. Banks Inc., for a total of $18,000, after trade-in, approved unanimously; and a new golf fuel system, from Fuel System Services, for $17,616,

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Board votes second bank for operating accounts

The Bank of Ocean City is no longer the only bank that handles Ocean Pines Association operating and investment accounts.

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also approved unanimously. Not approved during the meeting was a golf Tri-plex teebox mower, by Textron Golf, for $35,000, after Director Tom Herrick said it appears to have been a new capital item rather than a replacement. The board agreed to obtain a clarification on that point with the likelihood of an e-mail vote or special meeting vote prior to the next regular board meeting in May.

Bay Day set May 20, water collection begins

Ocean Pines Bay Day, hosted by Maryland Coastal Bays Program and the Ocean Pines Association, is set for Sunday, May 20 from 11:30 a.m. to 3:30 p.m. at White Horse Park. The event will showcase food from local vendors, local beer from Burley Oak; nature-inspired artwork from area school children and a save-thebay campaign that aims to improve

the health of waterways that shoulder Ocean Pines. “There will be hand-painted canvas bags handed out to the first 300 individuals who come through the entrance,” said Liz Vander Clute, education coordinator at Maryland Coastal Bays Program. “These “bay-inspired” bags were decorated by students from five different schools in Worcester County.” The event will include boat rides, kayaking, and educational exhibits and talks. Conservation partners from Assateague State Park, Pocomoke River State Park, Chincoteague Bay Field Station, Naturally Sunkissed Farm and Delmarva Discovery Center and Museum will be in attendance. They will offer event participants the opportunity to meet animals like birds, fish, goats, and snakes. The National Aquarium will have a 56-foot inflatable sei whale on display, giving visitors access to walking through the life-size replica. Ocean Pines Bay Day will serve as a catalyst to a year-long campaign to raise awareness and educate res-

idents on environmentally friendly practices that could enhance the quality of local waterways. Beginning on Tuesday, May 1, water sample collection bottles will be available in the lobby of the Ocean Pines Community Center, located at 235 Ocean Parkway. Residents will be able to bring samples of water that were collected from neighborhood waterways to the Ocean Pines Bay Day event to get them tested for nitrates and phosphates, dissolved oxygen, turbidity, salinity, and acidity. “This program ill help us get a de-

tailed snapshot of the health of the St. Martin River,” said Zach Garmore, project manager with Maryland Coastal Bays Program.

Farmers, Artisans Market open two days a week

Known for its lively Saturday market, Ocean Pines Farmers and Artisans Market is launching a Wednesday market starting May 2. The Wednesday market will run from May 2 to Sept. 26 and will be an addition to the Saturday market, which operates from 8 a.m. - 1 p.m. at White Horse Park year-round.

Women’s Club donations

The Women’s Club of Ocean Pines recently announced the award of $1,600 in community donations for 2018. Recipients include the Ocean Pines Volunteer Fire Department (OPVFD), the Ocean Pines Parks and Recreation Department, Coastal Hospice, McGuffey Literacy Program, the Mid-Atlantic Symphony Student Outreach Program, and the Worcester County Veterans Memorial. Donations were raised by the membership during the year through fundraisers. Pictured here (left to right) are officers Donna Potenza and Susann Palamara with David VanGasbeck, the vice-president of the OPVFD, and Mike Birckner, president of the Ladies Auxiliary.

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Country Club renovation delayed until fall; March 2019 completion date anticipated Construction timeline still very much in limbo By TOM STAUSS Publisher s if there was any doubt that the Country Clubâ&#x20AC;&#x2122;s second floor renovation project would not be done by a 50th Anniversary golf touranment in June, the Board of Directors during its April 28 monthly meeting made it official by voting to delay the project until the fall in the hopes of securing better bids for it over the summer. In a motion offered by Director Colette Horn, and amended on a motion by Slobodan Trendic, the directors voted unanimously to direct General Manager John Bailey to

reissue a request for proposals for the renovation no later than June 1. Hornâ&#x20AC;&#x2122;s original motion said the RFP should be issued in May. The rationale for the motion was that the two bids received after the issuance of an RFP were too expensive, with contractors indicating that they either couldnâ&#x20AC;&#x2122;t participate in the bidding because the timeline desired by the OPA had been to ambitious or would be unable to make the OPAâ&#x20AC;&#x2122;s deadline for completion this June. The two bids reportedly were in the range of $800,000 to $1 million. Hornâ&#x20AC;&#x2122;s motion indicates the work

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on the renovation will need to start by Oct. 1 with completition no later than March 8 of next year. Director Tom Herrick began the discussion by suggesting that the current iteration of plans needs to be revisited and that the Ocean Pines Association membership needs to be given an opportunity to weigh in on the plans before theyâ&#x20AC;&#x2122;re sent out for bids. He said a set of plans that had been approved by the board last year and the latest iteration by Davis, Bowen and Fridel of Salisbury need to be compared. Herrick back in February hsaid e thought there are too many meeting rooms â&#x20AC;&#x153;and sliding doors everywhere.â&#x20AC;? Director Slobodan Trendic said the scope of the project needs to revisited and clarified, and both the original and latest plans compared â&#x20AC;&#x153;side by sideâ&#x20AC;? before the board votes to issue a new RFP. He suggested postponing board action for a month to allow that review to take place. OPA President Doug Parks agreed that both sets of plans need to be reviewed and that he was â&#x20AC;&#x153;uncomfortableâ&#x20AC;? with approving a $1 million project just to make a problem â&#x20AC;&#x153;go away.â&#x20AC;? Director Cheryl Jacobs expressed unhappiness with the fact that last yearâ&#x20AC;&#x2122;s deadline for completing the renovation was not met. â&#x20AC;&#x153;We just delay, delay, delay,â&#x20AC;? she said, adding that opening up another plan review to the OPA membership would add even more delay. â&#x20AC;&#x153;You canâ&#x20AC;&#x2122;t have 8452 opinions.â&#x20AC;? she said. Parks said that rebidding the project would have the potential to reduce costs as would a less aggressive time-line that would allow contractors to schedule well in advance. Trendic offered a friendly amendment to Hornâ&#x20AC;&#x2122;s motion changing the date of issuance of the RFP from May to no later than June 1. His amendment called for the RFP to be reviewed by the entire board before it was issued, with a contract award

Steen to submit proposal for Country Club renovation

cean Pines builder/developer Marvin Steen recently said that he would be submitting a proposal for renovating the second floor of the Ocean Pines Country Club that would be considerably less than the $800,000 to $1 million proposals submitted in the initial round of bidding that the Board of Directors rejected as too high. Steen said that when the OPA issues a new request for proposals, presumably by a June 1 deadline set in a motion approved during the boardâ&#x20AC;&#x2122;s April 28 monthly meeting, he would be ready with a proposal that would save the Ocean Pines Association hundreds of thousands of dollars over the two recently rejected bids. He said he would do this by forgoing the usual mark-up charged by a general contractor over the cost of services provided by sub-contractors who do most of the work done in a large-scale renovation. â&#x20AC;&#x153;I wonâ&#x20AC;&#x2122;t be doing this to make money,â&#x20AC;? Steen said. â&#x20AC;&#x153;I will be doing this to help the association and its members.â&#x20AC;? His bid will be based on collecting prices for various components of a renovation from sub-contractors that he uses in building houses. Top priorities including redoing the bathrooms, adding new walls for meeting rooms, removing the old kitchen equipment and creating a new meeting room, adding a wall-based heating and cooling system that allows for better control of room temperatures, and installing an elevator. A small â&#x20AC;&#x153;warming kitchenâ&#x20AC;? that could be used to warm golf banquet food prepared at other locations might be an option, Steen said, depending on the deTo Page 10 sires of the board.

no later than July 30, a start date no later than Oct. 1 and completion by March of 2019.Both the friendly amendment and amended motion passed on 6-0 unanimous votes, with Director Ted Moroney absent.

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10 Ocean Pines PROGRESS

OCEAN PINES

May 2018

Sweet Adelines installation

The Delmarva Chorus of Sweet Adelines held its installation ceremony during a party at a member’s home. The 2018-19 management team (from left) includes Elissa Mulligan, team leader; Jean Beatty, marketing and ublic relations; Char VanVick, membership coordinator; Jeannette Latzo, performance coordinator; Catherine Walker, Chorus events coordinator; Carol Ludwig, director; and Barbara Gau, financial coordinator. Missing from the photo is Debbie Hile, education coordinator. The “duck” displayed in the center represents the “Swim Party In Ocean Pines” which Jeannette Latzo won at the recent Kiwanis Club Wine Tasting auction.

Steen proposal From Page 9

He said he has reviewed the latest set of engineering specifications completed by Davis, Bowen and Fridel of Salisbury several months ago in anticipation of the RFP sent out to contractors earlier this year. He said his base proposal might deviate from these plans in certain areas to save the OPA money. Certain options would be listed that

could boost the final cost over the base, depending on what options the board decides it wants in a final design. Steen insisted that his base price would include the cost of an elevator, which he estimated at a cost of $100,000 that he obtained from a leading supplier of elevators on the Delmarva Peninsula. “The membership shouldn’t have to wait until a phase two for an elevator,” Steen said, adding that any

releveling of the front entrance with an associated lowering of the landscaped area between the building and driving range is a non-starter, because of cost. “We shouldn’t be wasting time and money even looking at that,” Steen said. “Engineering studies cost money better spent on an elevator.” OPA General Manager John Bailey has suggested that a lowering of the front entrance should be looked at by an engineering firm, but the idea

hasn’t gained a lot of traction on the board because of cost. Bailey also said that renovation of the front entrance area should be delayed until a second phase, but Steen says that’s a bad idea. “You really shouldn’t do one without the other,” he said. “And if you do a renovation, you want to make a good first impression. So the front entrance area has to be done along with the second floor, and, of course, the elevator.”

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OCEAN PINES

It’s an old name restored at Ocean Pines Yacht Club

Ortt Companies initiating another rebranding at a venue that needs it By TOM STAUSS Publisher ne of the very first changes implemented at the Ocean Pines Yacht Club by the Matt Ortt Companies was to change its name back to “Ocean Pines Yacht Club” from Mumford’s at Ocean Pines or the Cove at Mumford’s, the two names the bar and restaurant has been called in recent years. The name changes were part of rebranding of the food and beverage venue early in 2017. Now the Ortt Companies, well aware of the poor reputation the venue has earned over the years, has gone back to the traditional name as part of another rebranding. This time, they hope both the name change and a positive first impression of new man-

agement will make this rebranding successful, and the new Yacht Club something they and Ocean Pines residents and property owners will be proud of, and willing to take their friends and relatives to enjoy. If current critiques of the Yacht Club on Trip Adviser is any indication, the Ortt Companies have a huge opportunity to turn the Yacht Club around. After a soft opening earlier in the week, the new refurbished Yacht Club will be reopening after almost a five-month hiatus on May 17, both to Ocean Pines residents and property owners but also anyone who lives outside of Ocean Pines. The target customer base, however, clearly are residents and non-resident property owners with second

and vacation homes in Ocean Pines. In a well-received presentation to the Ocean Pines community at an April 19 town hall meeting, company executives Matt Ortt and Ralph

DeAngelus provided a detailed narrative of what they hope to accomplish at the Yacht Club and how they intend to do it. Ortt told the assembled Ocean Piners that his mother lives in Ocean Pines and that if he and his company don’t make a success of their new venture, he would never “heard the end of it” from his mother. DeAngelus said that he and his partner had weighed taking another new client in lieu of the Ocean Pines To Page 13

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OCEAN PINES

May 2018

Photo by Joe Reynolds

New Yacht Club management

The Matt Ortt Companies at an April 19 town hall meeting introduced its management staff at the Ocean Pines Yacht Club. Left to Right, Yacht Club Executive Chef Joel Blice, Yacht Club General Manager Lewis Sherman and Yacht Club Assistant General Manager Tommy Steele.

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OCEAN PINES Yacht Club From Page 11

Association, but went with the Yacht Club and Beach Club because it offered a challenge and a huge public relations boost if the company is as successful as its executives believe they will be. “We’re going to knock it out of the park,” said DeAngelus. Among some of the initiatives announced at the town hall meeting, the company says it will: • price reasonably, aware that if it tries to replicate the pricing at its high end restaurant in Ocean Pines, Rare and Rye, it would probably price itself right out of the Ocean Pines market • institute happy hour from 3 to 6 p.m. daily, with live bands beginning at 6 p.m. on Friday and Saturday nights • offer daily and lunch specials • bring back Trivia Night, a popular event with a certain demographic • promote the Yacht Club primarily to Ocean Pines residents, which it recognizes as its primary market

May 2018 Ocean Pines PROGRESS • encourage boaters to come into the Yacht Club through the Ocean Pines marina • possibly accept reservations, especially for groups of six or more • emphasize training of staff and exemplary service, with managers walking around and talking to customers. • employ comment cards as well to gauge customer reactions • be open seven days a week through Labor Day, then for three days a week through the fall and winter. • offer a fee-based home delivery service as a way of meeting expenses during the winter months. The downstairs restaurant and bar area have been renovated, with a new side entrance and a changing flow pattern to provide immediate access into the bar. New tables and chairs were acquired at a discount through the Ortt Companies’ contacts, walls were repainted, new wallpaper and lighting added. DeAngelus said the overall affect of the changes is to convert what had been the “cafeteria feel” of the venue into a restaurant.

Bailey finds new home for pirate ship playground By TOM STAUSS Publisher he “pirate ship” playground equipment removed from the Yacht Club outdoor deck in mid-February finally has a new home, announced by General Manager John Bailey during the April 28 meeting of the Board of Directors. The new home is in White Horse Park as part of the playground that has been serving the North side of Ocean Pines for decades. The pirate ship is replacing some older equipment that was worn out, so the actual footprint of the playground does not appear to have changed much by the addition of the pirate ship, which was donated more than a year ago by Ocean Pines property owner Tim McMullen, in honor of his late wife, Mary, who founded the OPA’s summer youth program in the 1970’s. The equipment had been stored at the OPA’s Public Works facilities pending a decision on a new home. Bailey told the Board of Directors at its Feb. 25 monthly meeting that he removed the equipment for safety reasons, specifically that a fencing enclosure was installed too close to the equipment and posed a danger to users in the event of a fall from the equipment. In January of last year, after some community push-back, the board voted 4-3 to ratify the decision of then acting general manager Brett Hill to install the equipment on the Yacht Club deck not far from the outdoor pool, which at the time was an adults-only amenity.

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OCEAN PINES

May 2018

Mediacom contract won’t be rolled over, Parks says Cable television provider to lose exclusivity privileges June 1

distinct possibility. Lawyers are involved in drafting a new agreement which will bring a degree of clarity to the Internet and cable television environment in Ocean Pines. What is absolutely, clear, however, is that beginning June 1 Mediacom no longer will have the exclusive right to be Ocean Pines’ sole cable television provider. The exclusivity provision dates back to the early days of cable television in Ocean Pines, when Triad Cable Television of Whaleyville began offering cable television to Ocean Pines residents. That exclusivity provision was inherited by successor cable television companies over the decades, effectively keeping other providers, such as Comcast, Cox, Charter Communications, and Verizon, out of the Ocean Pines market. “Legally, we can’t enter into a new agreement with Mediacom offering them exclusivity,” Parks said, alluding to a ruling by the Federal Communications Commission (FCC) that such agreements are unenforceable, are anti-competitive, and work to discourage the roll-out of high-speed Internet services.

Actually, that ruling went into effect in 2007, which effectively means that the current contract, if had been challenged by any Mediacom competitor, would have been deemed invalid, at least with respect to the exclusivity provision. None of the big players in the cable television/Internet service provider arena were interested in a head-to-head match-up with Mediacom, however, which is ranked as of the nation’s top five cable television/Internet providers by number of subscribers. At the March 29 meeting of the OPA Board of Directors, Director Cheryl Jacobs said that the OPA Technology Working Group has had discussions with two major players, Comcast and Verizon, about “opportunities” in Ocean Pines. She didn’t specify the nature of those opportunities, but they apparently involved the expiration of the Mediacom contract and its cable television exclusivity provision. Under the current contract, the OPA has the option to buy out Mediacom, at fair market value, but some sort of buy-out agreement is supposed to be in place a year before the contract’s expira-

tion. The window on that has been closed for almost a year. Another option would be for one of the big players to buy out Mediacom, but there’s been no hint of that to date. Parks, at a town hall meeting last month, said that the “opportunities” available to Comcast and Verizon had been effectively ruled out by both companies. Verizon isn’t interested in bringing FIOS, its highspeed Internet service, into Ocean Pines, Parks said, and Comcast also has taken itself out of the mix as a potential Internet service or cable television provider. Comcast had contacted the OPA to explore possibilities. Parks said that Comcast had offered a bulk service option to the OPA, in which every household in Ocean Pines would receive cable television/Internet service through a service contract with the OPA. The OPA would have been responsible for paying a bulk service charge to Comcast on behalf of every resident in Ocean Pines, whether or not the resident wanted the service. q

By TOM STAUSS Publisher lthough no one expects Mediacom, Ocean Pines’ primary television and Internet provider, to leave the community when the current contract expires June 1, it appears both the Ocean Pines Association and the company are preparing for a new era under new rules of the road that are yet to be finalized. In a recent interview with the Progress, OPA President Doug Parks confirmed what some have been assuming for some time: The current contract, which dates back to 1993, and which has been more or less automatically rolled over periodically since then with few changes, won’t be automatically rolled over this year. Parks said the current contract, which was last renewed in 2013 for a period of five years, will expire and won’t be renewed. What it will be replaced with, assuming it will be, is yet to be determined. A new contract awarding Mediacom the right to operate its business using rightsof-way controlled by the OPA is a

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OCEAN PINES From Page 14

The OPA would have been responsible for collecting the annual service charge through the OPA’s annual lot assessment, the effect of which would have been to raise the lot assessment over what it would have been otherwise. Parks said there was an awareness in the Technology Working Group and on the board that no such bulk service option would ever be tolerated in Ocean Pines, with a substantial non-resident base of property owners who own second or vacation homes. While Mediacom is a company that many Pines resident love to hate, it does have a substantial subscriber base, and it’s not planning to leave Ocean Pines anytime soon. “A bulk service option (with Comcast) is not going to happen,” Parks said, adding that he could foresee no circumstances in which Mediacom would be asked to abandon its substantial investment and subscriber base in Ocean Pines. “That’s not going to happen either,” he said, citing numerous home businesses that depend on Internet access for their livelihoods as well as households that rely on the company for television content. Parks said the OPA went back to Comcast with a counter offer of sorts, asking the company whether it would be willing to consider “a minimum number” of subscribers in a modified bulk service agreement. The answer that came back was no; it had to be every home in Ocean Pines or none at all. Parks said there is interest among Technology Working Group and OPA board members in bringing competition in Internet and rogramming services to Ocean Pines. While the current Mediacom contract never gave the company exclusive rights to offer Internet service in Ocean Pines, the expiration of the current contract and its exclusivity provisions eliminates any room for confusion over what other providers can bring into Ocean Pines in competition with Mediacom. Parks said the front burner issue is to finalize a new contract with Mediacom granting it non-exclusive rights to operate within Ocean Pines. Once that is completed, and he said he wasn’t absolutely certain that a new contract would be presented to the board of directors for approval before June 1, then the TWG and the board would work to

finalize an RFP (request for proposals) for community-wide, high-speed Internet services. Mediacom already provides high speed Internet either as a standalone service or bundled with cable television and telephony services. It has been adding high-speed Internet capacity by laying new fiber optic cable and coax-to-fiber converters and related equipment throughout Ocean Pines. With large companies such as Comcast and Verizon apparently are not interested in entering a community with an entrenched, if not beloved, provider already heavily

invested, opportunities nonetheless remain for smaller, dark fiber companies partnering with Internet service providers to offer an alternative to traditional cable television. Internet service providers offer programming options through an ever-expanding array of options such as Hulu, Amazon Prime, Netflix, You-Tube TV, PlayStation Vue, Sling TV, Directv Now (no satellite dish required), and fubotv. These services, offered for much less money than a Mediacom monthly cable subscription, stream programming from many popular channels over the Internet, with rapidly improv-

ing recording capability allowing customers to view programming at a time of their choosing. Four smaller companies, members of the Maryland broadband coalition, responded to a request for information issued by the OPA in March of last year soliciting network connectivity options for the association’s far-flung facilities. The RFI was designed to gather information on the options available to address the network challenges within the OPA. That response suggests some interest by Internet service providers q

Mediacom contract

May 2018 Ocean Pines PROGRESS

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16 Ocean Pines PROGRESS

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Mediacom From Page 15 in serving Ocean Pines, although Parks said offering community-wide high-speed Internet is another matter entirely from OPA networking challenges, requiring a much more substantial level of investment. Among the four companies that submitted proposals for OPA inter-departmental connectivity, one, Think Big Networks in partnership

with FTS Fiber, a dark cable installer partly owned by former OPA director and acting general manager Brett Hill, had indicated it had the willingness and wherewithal to offer high speed Internet services throughout Ocean Pines. Parks made it clear he was not a fan of the ThinkBig-FTS Fiber partnership last year. Judy Morgan, sales manager of Think Big, told the Progress in a May 10 telephone interview, that

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heer company will have to assess its interest in submitting a proposal to serve Ocean Pines once it reviews the RFP. She said she understands that Mediacom has already helped the OPA achieve high speed Internet connectivity among its various departments and venues. Parks confirmed that since that RFI was issued, the OPA has substantially solved its networking issues in-house. Somewhat ironically, Hill told the Progress recently that those networking problems were addressed last year by him working with the OPA’s technology contractor who advises the Technology Work Group, Len Smith. Parks said that Mediacom has also improved its backbone cable systems throughout Ocean Pines in ways that have helped the OPA solve networking issues. “We don’t need to issue a new RFP for our networking challenges,” Parks said. But a new RFP for community-wide high-speed Internet in com-

petition with Mediacom is in draft form. Parks declined to offer a timetable on when it might be completed, reviewed and approved by the board, and then distributed and posted on the OPA Web site and sent out to companies that the OPA believes might be interested in serving Ocean Pines. Hedging his bets, Parks said it could occur before summer or sometime during the summer months. He said he was well aware that there is a lot of pent-up interest among OPA members for an alternative to Mediacom. Parks, who remains a member of the Technology Working Group, said there is a consensus among the working group members that any RFP must make it clear that an Internet service provider and a partnering dark cable company must be able and willing to serve the entire Ocean Pines community, not a segment of it. “There can be no cherry-picking,” Parks said. “It’s has to be all of Ocean Pines or none.”

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May 2018 Ocean Pines PROGRESS

Hill says employment contract did not require one-time pay-out to former Yacht Club manager Former acting general manager defends key hiring decision made during rocky one-year tenure By TOM STAUSS Publisher e’s been out of office for seven months, but former director and acting general manager Brett Hill continues to encounter flak for his rocky, part-time one-year tenure as the chief operating officer of the Ocean Pines Association. He’s knee-deep in Ocean Pines politics today, taking the podium during the Public Comments segment of recent monthly Board of Directors meetings to comment on Ocean Pines issues or to ask uncomfortable questions of General Manager John Bailey and the directors. In an announcement that generated shock waves in Ocean Pines, he filed as a candidate for the Board

of Directors on May 10, the last day possible. He made news several months ago in a Progress interview alleging upwards of $200,000 lost in fraud, abuse and poor financial management. While fending off bad press in a local weekly newspaper that he accuses of “bull-s---, incomplete or inaccurate reporting,” he lends his knowledge and expertise on OPA financial matters to the resurrected STOP organization (Stop Taxing Ocean Pines) that has emerged in recent months to press for greater financial and management accountability in Ocean Pines. STOP leader Esther Diller, also a newly minted candidate for the board, speaks highly of Hill. She

says he’s a victim of vitriol and second-guessing after serving as an unpaid acting general manager for a year. According to Diller and Hill both, he spent his year as acting general manager uncovering and trying to combat systemic financial mismanagement of the OPA along with antiquated software systems that made fixing those problems virtually impossible. He became embroiled in bitter board infighting that put finding consensus on solutions out of reach. He says he was stripped of much of his authority roughly half-way into his tenure, making it difficult to effectively deal with buregeoning deficits at the Yacht Club and Beach

Club food and beverage operations. Even today, with the OPA facing a reported $1.5 million operating deficit in the year that ended this past April 30, Hill says he does not believe all the “exaggerated hype” about operating deficits in 2017-18. He contends that operating losses projected by OPA Treasurer Pat Supik and others for the year just ended are not accurate, little more than scare tactics used by the board this past February to justify a $30 increase in the base lot assessment that Hill says was not necessary. At an April 19 town hall meeting, Hill and his appointed replacement on the board, Ted Moroney, skirmished over food and beverage losses in 2017-18 of roughly $750,000, for which Moroney said Hill was to blame. Then at the April 28 meeting of the board, a property owner railed at Hill for his decision to hire Brian Townsend, the Yacht Club’s former banquet manager, as the OPA food and beverage manager with authority over all OPA restaurant, bar or snackbar venues last year. Townsend was relieved of his duq

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From Page 17

ties in late December/early January when the Yacht Club closed for the winter, in part because of extensive mold issues but also because of heavy operational losses at the Yacht Club that probably will exceed $600,000 in the fiscal year that just ended. Hill was criticized during the April 28 Public Comments segment for allegedly approving a contract for Townsend that resulted in a substantial one-time pay-out that 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. In an April 30 interview with the Progress, Hill rebutted the contention that it was a contract that he approved without board authorization that resulted in a substantial pay-out to Townsend when the Yacht Club closed for the winter in January of this year. Hill said that as acting general manager, he simply did what his predecessor, Bob Thompson, had done previously -- amending Townsend’s employment contract under changed circumstances. According to Hill, the board of directors historically has not involved itself in personnel matters, leaving hiring and firing decisions of department heads to the general manag-

Kiwanis walks for abused children

Sunday, April 22 was the day for the 5th Annual Cricket center Walk on the Ocean City boardwalk.The Cricket Center is Worcester County’s child advocacy center serving abused children. The Ocean Pines-Ocean City Kiwanis Club had a team walking for abused children. Pictured left to right, seated: Dan Peletier, Pat Winkelmayer, Barb Peletier, and Carolyn Dryzga, standing: Tom Southwell, Sue Wineke and Katie and Jeremy Goetzinger. er. Criticizing him for not securing board approval for Townsend’s contract is unfair and revisionist, according to Hill. “Department heads don’t go to the board for approval,” he said. “Our organization docs give that authority to the general manager, not the board. In the case of Townsend, Hill said the contract he executed with the

former food and beverage manager did not require a one-time payout, but in fact was similar to the contract a prior board had in place with Thompson. That contract specified that if Thompson was terminated before the contract expired, without cause, he was to be paid his normal salary and benefits over a period of nine months after the termination date.

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Handling the Townsend termination expense that way would have avoided the one-time hit in January while spreading out termination expenses in equal monthly increments, Hill said. The Townsend contract specified that he was to be paid his normal salary and benefits for a year after termination without cause. “I didn’t decide to pay Brian a one-time pay-out in January, nor was it required by the contract I did with him,” Hill said, adding that he understands that Bailey was not in favor of a one-time pay-out, either. “That decision apparently was made at the board level,” Hill said, in part so that some board members could play politics with it, making Hill a scapegoat for a payout decision he did not make. But another motive for the onetime pay-out probablt was to confine the financial hit for the termination to the fiscal year in which Townsend actually worked for the OPA. Had the cost been spread out over 12 months, as suggested by Hill, that would have added to Yacht Club expenses during months when the facility will be under new management provided by the Matt Ortt Companies. It seems plausible some within the OPA wanted to avoid saddling the Ortt Companies with expenses related to former employees. Hill defended the decision to promote Townsend to the position of food and beverage manager, reportedly after Townsend’s predecessor was fired for alleged financial impropriety. “My choices were limited at the time,” he said. “I took what I thought was a reasonable approach (to the sudden vacancy) and devised what I thought was a reasonable plan to overcome challenges” at the Yacht Club and other food and beverage venues in Ocean Pines. Some of the changes Hill implemented, such as a 20 percent discount that some have blamed for last summer’s substantial operating deficits, didn’t work out. Neither did a plan to open up the Beach Club for evening dining. Hill doesn’t try to spin a narrative that he didn’t make mistakes as acting general manager, or that everything worked out as he planned, just that he did the best he could as an unpaid, part-time general manager who did not have a solid board majority in his corner throughout much of his tenure as acting genenral manager.

OCEAN PINES

May 2018 Ocean Pines PROGRESS

Positions himself as critic of board, OPA ‘dysfunction,’ and record operating losses By TOM STAUSS Publisher he chairman of the Ocean Pines Association’s Strategic Plan Committee has filed as a candidate for the Board of Directors, joining six others who announced prior to the official May 10 deadline. Frank Daly, the stratetic plan committee chair, ran for the board two years ago, falling a bit short in his bid. Other candidates who announced without waiting for the official slate to be disclosed by the OPA include Steve Tuttle, a former Elections Committee chairman who resigned from that position once becoming a candidate; Ted Moroney, an appointed director seeking election to the board for the first time; and Mark Mitchell, a newcomer who disclosed his intentions to run on oceanpinesforum.com in early May. Paula Robertson Gray, a candidate a year ago who dropped out early in the election season, also has

filed, according to reports. Former OPA Director and Acting General Manager Brett Hill has filed, as has STOP chairperson Esther Diller. Daly holds an undergraduate Frank Daly and graduate degrees in engineering and a MBA in finance and marketing. He’s a graduate of the executive development program at the Wharton School of Finance. In a 40-plus year career, he has been employed in the aerospace, interior construction, and building products industries. The companies, and divisions of Fortune 500 Companies, have ranged in size from $4 million to $200 million. He served in senior level management positions in engineering, operations, materials management, product marketing, product development, and

sales. He forged successful business partnerships between my firms and others throughout North America, Europe and Asia. Prior to founding his own company in 2009, Jordan Frank & Associates, he served as a vice-president and division manager in two firms and in four instances served on the executive committee of these companies. He also served on the board of directors of a the Greens at Fairway Hills, part of the Columbia Association. He also served on the board of directors at the Center for the Built Environment at the University of California-Berkeley and at the Alliance for Construction Excellence at Arizona State University. In a statement announcing his candidacy, Daly was sharply critical of current and past performance of the OPA’s board of directors. “During my years in Ocean Pines I have observed a continued failure on the part of the Board of Directors to fulfill their obligations to

work with the General Manager to provide the strategic direction and management oversight required to govern the Association. Over the past two years this situation has gone from bad to worse,” Daly said. “The current Board has presided over record operating losses. Two former board members, one who served as acting general manger, have leveled serious charges of widespread theft, corruption and fraud within the HOA management ranks. We are in the midst of an active criminal theft investigation involving over $25,000 from the Finance Department. A ‘deep dive’ audit, commissioned by the board, indicated that we had weak, ineffectual business practices that were poorly managed,” he continued “The current board has acknowledged an additional theft from the Yacht Club where the admitted thief was terminated without any legal action taken. And we are now in the early stages of a forensic audit that is budgeted for $250,000 to find out how extensive and how far back these actions have occurred. Needq

Daly announces candidacy for OPA board

Expires 5/31/18

20 Ocean Pines PROGRESS

OCEAN PINES

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Daly announces From Page 19

less to say, all of this has resulted in not only increases in our annual assessments but a serious erosion of confidence and trust in the ability of the board and management to effectively run the Association,” he said. Daly is critical of the OPA’s budgeting process, calling it “a mess. If operations are budgeted for a $250,000 loss and, in fact, lose $250,000, that result is considered a success. Bonuses have been paid for achieving these types of results.” He was critical of the board’s decision to raise lot assessments early this year. “One director had the political courage to suggest budget reductions to offset the operating loss rather than to increase the assessment. “That motion did not receive one vote from the six remaining directors. I believe the appropriate approach would have been for the board to direct the GM to prepare a list of budget reductions to offset the operating loss and to discuss, debate, and vote on these reductions in

a working session with homeowner participation before considering any assessment increase,” he said Daly said there is a need for a multi-year plan “developed by the GM and his staff, with input from homeowners, that details his vision for managing the association and the budgeted amounts for implementing his plan.” He suggested that OPA assessments are “artificially high due to the failure of the Association to develop long-term capital plans for infrastructure and facilities. “For example, the 2018/19 budget calls for bulkhead expenditures of $999,732,” he said. Daly said he has requested a long-term plan for bulkheads from Public Works. He’s not happy with what’s been produced thus far. “Their plan calls for expenditures over the same time period of $576,144. Since the assessment is based on the budget the difference between the budget and plan is $423,588 or just about $50 per lot, he said. He’s similarly critical of the way the OPA budgets for road repair. “The budget for road repair is

$500,000; Public Works could not supply a planned number for road repair for this time period. As a Board member I will insist on Capital Planning, rather than year to year guesses that inflate the assessment.” Daly said that any OPA member whose property is bounded by a bulkhead, ditch, or street should be able to call Public Works to find out the schedule for repaving, replacing or cleaning that infrastructure. “Those plans do not exist. And until they do it is unfair that you are paying more than you should be to maintain them,” he said. Another motive in deciding to run for the board is correcting what he regards as inadequate procurement processes. “OPA’s financial management policy manual was last updated in April 2006. It should have been updated by the general manager in 2011 and 2016 and by the Budget and Finance Advisory Committee in 2009, 2012, 2015 and 2018,” he wrote. “The 2006 manual states that purchases of goods or non-professional services for items costing

between $1,000 and $5,000 must be made by three verbal or written bids. Purchases of goods or non-professional services must be made by a formal written competitive bid for all items costing $5,000 or more, and for items required on a frequent recurring basis which in the aggregate will exceed $5,000.” Daly said that by his count at least five bids have been presented to the board over the past year that failed to meet the standard outlined in the manual. He also contended that the board “is nearing a vote on a software package that could exceed $500,000 based on the recommendations of the Technology Work Group.” Daly said the work group has no published charter, has posted no meeting agendas or minutes, has negotiated with vendors in secret and when it meets with the Board, does so in closed session. “All this is occurring when members of the community and at least one board member is asking the board to consider other alternatives, a request that to this point has been futile,” Daley wrote, adding “we To Page 22

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May 2018 Ocean Pines PROGRESS

Technology working group pitches OPA software solution with no out-sourcing Panel, board decline to reveal recommended vendor, citing non-disclosure agreement By ROTA L. KNOTT Contributing Writer fter nearly two years of evaluating the Ocean Pines Association’s outdated technology and reviewing current needs, the Technology Working Group has recommended the purchase of an integrated software package that its members have concluded will improve business operations, enhance staff efficiency, and achieve better services for members. During an April 28 meeting of the Board of Directors, TWG chair Tom Terry and consultant Len Smith presented an overview of the group’s work to date and announced that it is recommendng significant software changes that will complement improvements made last year to the OPA’s technology network. While the TWG members refused to publically disclose the name of the vendor from whom they are recommending the software purchase or the total cost, they did announce that four bids were reviewed in response to a request for information solicited by the OPA. Terry cited a non-disclosure agreement signed as part of the RFI process as the reason for presenting the TWG’s vendor recommendation to the board in

a closed session following the open portion of the meeting. The Progress has learned from independent sources that the recommended vendor is Northstar Technologies, with Membersuite, IBS, Jonas, and Lansa (BDK) having been, or still, in the running. Apparently the original group of five considered by the working group last year has been whittled down to four. The working group is handling negotiations with the Northstar to nail down a cost for the software, with a purchase or leasing option possible. The working group has informed the Board of Directors that the OPA will save roughly $160,000 per year in operating expense if it deploys the recommended software over a benchmark $1 million that is being spent now for technology services and software being used to operate OPA. The non-disclosure agreement has become controversial in the days following the April 28 board meeting. It turns out that no board member signed off on the non-disclosure agreement with Northstar. OPA Director Slobodan Trendic said he has been informed that it was Smith, of the TWG, who did so. A frequent critic of the way in

which the board handles some of its business transactions, Trendic told the Progress that he thinks a decision on new management software should be passed off to the new board, with at least two and possibly three new members, that will take office in August. One retiring board member, Cheryl Jacobs, is urging her colleagues to move quickly to vote on the working group’s recommendation. So is OPA General Manager John Bailey [see separate story in this edition of the Progress for details]. “The overall process was governed by the belief the current status needs to be assessed and compared to proposed potential changes with the belief the change must be cost effective. The TWG’s mission was not to purchase new software; it was to determine what was needed,” the written TWG report states. The TWG is not recommending outsourcing to address any of the OPA’s technology-related needs, and that position also has stirred controversy in Ocean Pines. An advocacy group called STOP (Stop Taxing Ocean Pines) has called for exploration of outsourcing through the issuance of an request for information or request for proposals [See Cover

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story in this edition of the Progress]. An RFP is the preferred choice of retiring Director Tom Herrick, who has no support among his colleagues for one. But a clear board majority said it favored an RFI when the issue was last discussed in March. No action on issuing an RFI was taken, however. Terry said outsourcing probably would not result in fewer people in financial management roles. They would not be directly on the OPA’s payroll, he said. But he said the new software should mean existing staff has time to do “more valuable stuff” rather than, for instance, to make multiple copies of paper invoices. The new system, for example, would allow those types of documents to be attached electronically to the general ledger. “That’s the kind of process redesign that will save time,” he said If the board adopts the TWG’s recommendations for the purchase of software specifically designed for homeowner associations, as opposed to the mish-mash of programs used by various OPA departments for decades, Terry said it could be fully operational by May 2019. He said the software could be implemented later this year, after the summer season, with the association running duplicate systems through April to work out any problems, and go live for the next fiscal year. By implementing the new software, the TWG report says the association will achieve improvements in business operations for nearly every department, reduce frustration for personnel, and improve efficiency. Additionally, by purchasing an integrated homeowners association software solution, the OPA will be “into the 21’’ Century approach to acquiring and utilizing software,” be able to provide monthly financial statements more rapidly, achieve better services for members. All four software proposals submitted to OPA provide a hosted cloud-based service, and include all product maintenance, enhancements, and support for as long as the OPA pays the monthly fees. At the end of the contract, the monthly fee ends and so does access to the system and the software. OPA will not have to provide any additional server equipment, software, or storage. In developing its recommendations, the TWG interviewed OPA deq

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Technology From Page 22 partment heads and key personnel to learn about existing applications and solutions, unmet needs, technical weaknesses, and areas for improvement. Currently, the association uses LANSA custom-built software for its membership and purchasing operations that isn’t integrated with the general ledger accounting software. Both have experienced outages due to network issues over the years, Terry said. “The Ocean Pines network during the winter of 2016-2017 was a patchwork quilt of networks which were fragile and failed frequently,” the TWG report states. Additionally, the TWG found “other department-level applications that were in use were independent islands of automation, with no data sharing either on the input or output side.” The recreation and parks department uses different software, RecWare, which is so old there is no longer any technical support and it will not work with Windows 10, and multiple point-of-sale systems are used throughout the amenities and restaurants, the report says. “The POS systems caused multiple issues for accounting in integration, posting and reconciliation of daily sales and deposits,” the report states. “There are many, many opportunities for process improvement all across the organization,” Terry said. The lack of software integration creates a lack of efficiency and opportunities for errors where data has to be integrated manually by OPA staff. He said the TWG’s ultimate goal was to develop a cost and efficiency effective technology solution, even if it meant staying with what is in place and making no changes. The group conducted onsite demonstrations of the software, developed cost models, and evaluated each of the proposals received. The group developed a baseline cost evaluation model of about $1 million for all the services and software being used today to operate OPA. This estimate shows what the association would spend over the next six years if it did not change anything. In addition to the expenses for software, the cost models reflect members of the TWG’s best profes-

sional estimates of all costs that OPA members will incur in the baseline and each of the four proposals for all of the indicated costs, for the five functions. Those functions are application software, end-user support, network operations, configuration management, and data center operations. Director Horn cites over-crowding on summer The group adjusted the cost model weekends, use by commercial crabbers for each vendor’s proposal to reflect By TOM STAUSS a complete solution, by retaining exPublisher isting pieces of software or adding s has occurred from time to time throughout Ocean Pines’ 50 new pieces to fill in the holes. years of existence, the Board of Directors once again is considerThese cost models achieve useing charging non-members of the Ocean Pines Association when able comparable. they use OPA’s boat ramp in White Horse Park. Terry said installing new softAn idea whose time has never come despite interest by some direcware will be a benefit to the associators and some Ocean Pines residents over the years, this time might be tion, but the OPA must also be willthe charm it’s implemented. The possibility was raised by OPA Presiing to adjust its operational process dent Doug Parks during the April 28 meeting of the Board of Directors. to use the new software, commit to Parks said that since OPA members are subsidizing the boat launch implementation, and be open to adarea including the parking lot with their assessment dollars, perhaps vice on system improvements. the OPA should consider asking non-members to contribute to the cost “You need to do more when you of maintenance through a fee. He made it clear that he was not proposget the software than just buy it or ing banning non-OPA members from using the launch, since under an just install it,” Smith agreed. Issues Internal Revenue Service ruling the OPA must open its amenities to like timely availability of monththose who neither live nor own property in Ocean Pines. ly financial statements need to be He also did not propose charging OPA members for use of the ramp. made a priority and then the assoInitially, Director Tom Herrick said he was not sure there really is ciation has to set deadlines and be a problem of over-crowding at the boat launch or problematic use of accountable for the input required the boat ramp by non-members. But he noted that OPA organizational to get the work done. documents refer to the boat launch in White Horse Park as a fee-based In spring 2017, the OPA made a amenity. If the OPA continues not to impose fees on anyone to use the series of network upgrades and imboat ramp or adjoining parking lot, Herrick suggested that references provements recommended by the to it as fee-based should not be changed in organizational documents. TWG. After Parks asked rhetorically whether there was a real problem or As a result, Smith said the assomore of a “perceive” problem at the boat ramp that a non-member fee ciation now has a network that is could remedy, Director Pat Supik replied that the OPA doesn’t know responsive and available on high whether there is a problem or not. She said on her visits to the launch level. site there didn’t seem to be a problem with overcrowding. Phase 2 of network upgrades will Director Colette Horn disagreed. A boater, she said that “there have follow the software improvements been times” when parking was not available at the site, especially at to ensure redundancy of coverage. heavier use times on summer weekends. In a late-breaking development, She also said she has had to wait on commercial crabbers who probSmith has confirmed that it was he, ably were not members of the OPA but who “were taking up space” and not any member of the TWG, on-site. who negotiated terms with various She suggested a pilot program of having launch users acquire stickvendors concerning the non-discloers at the administration building’s member services area. She said sure agreements referred to during the OPA might have to consider expanding the parking lot if demand the board meeting of April 28. warrants. In a response to an inquiry from “I would like to see us get revenue out of this,” she said. Ocean Pines property owner Frank Director Slobodan Trendic also seemed interested in the revenue Daly, an announced candidate for potential of charging “the public” for use of the ramp. He suggested the OPA Board of Directors, the a pilot program that would begin by gathering data on the amount of OPA said the non-disclosure agreeuse of the ramp and parking lot by OPA members and non-members. ments were signed by Len Smith, an He suggested that the OPA issue a press release or message on its IT advisor working for the OPA. Web site calling for volunteers to help in gathering data which would “Len did not have written perTo Page 25 mission from the Board authorizing him to sign on behalf of the Association nor did he request such perreasonable alternatives have been mission because he was using a con- Daly candidacy considered and three competitive tract form developed by OPA’s law From Page 22 bids have been received.” firm without any modifications,” need sound procurement policies Daly and his wife, Irene, purthe statement said. that assure homeowners that each chased their home in Ocean Pines General Manager John Bailey and every major expenditure and in spring of 2013 and became full “was made fully aware of all the contract is approved by the Board time residents in June of that year NDAs being signed, the statement after Requests for Proposals have after she retired as a Howard Counconcluded. been issued to qualified suppliers, ty public school teacher.

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May 2018 Ocean Pines PROGRESS

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Moroney defends his support for unbudgeted Yacht Club improvements

Moroney explained the apparent contradiction this way. “As part of negotiations with the Ortt company, OPA agreed to some of the recommended upgrades Ted Moroney inclusive of any remodeling and furnishings. In return MOC agreed to a much more favorable graduated bonus structure. We

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Says previous criticisms were mostly of actions taken without board approval

Companies, OPA members were chairs for the inside dining room on By TOM STAUSS told of extensive redecorating that the first floor. Publisher General Manager John Baicean Pines Association Direc- sounded almost exactly like the tor Ted Moroney is defending work the GM previously had pro- ley had previously told the board his support of a recent Board posed be done for $77,000, including this item alone would cost around of Directors decision to spend un- the purchase of all new tables and $28,000. budgeted OPA assessnent dollars on improvements to the Yacht Club, including about $28,000 in new furniture. Moroney, a candidate for a threeyear term on the board this summer, has been a vocal critic of unbudgeted expenditures by the previous board, blaming them as major factors in last year’s estimated operating loss of about $1.5 million. During budget review sessions this past winter, he criticized previous boards for off-budget capital expenditures, especially new capital projects that directly affect the OPA’s operating deficit at the end of a fiscal year. Moroney, in comments posted on oceanpinesforum.com in late April, initially reacted by offering his view of a March 27 post to the forum that was also sent to the Progress by OPA President Doug Parks. “Director Moroney met with GM to provide Board input on contract terms and conditions and to visit the YC to determine needs. He communicated the planned changes to the full Board, along with detailed conEach Unit is 2543 Sq. Ft. Plus 256 Sq. Ft. Patio tract information this past Friday. 30 Feet Open Space - Between Buildings As stated previously, the proposal from the vendor (Matt Ortt ComEnjoy all the Ocean Pines Amenities! panies) was a wish list and not a The Yacht Club & Marina • Golf & Country Club • Tennis Courts requirement for the business operation. Minor alterations, repairs and Beach Club • Four Outdoor Swimming Pools • Indoor Pool painting is required work and would Parks • Community Center and Special Events be done regardless. The overall estimated cost is $3,500 and does not Shopping Center • Medical Center • Post Office • Library require Board approval.” Woods in back of Townhomes Based on Parks’ email, the board r was aware of approximately $3,500 Stop In and Ask crk You Site i P u worth of work GM Bailey proposed o Stop In and Ask Pick Y rede H ee About Our Newest Project Siotm to accomplish with no bids and no m r o e f H About Our Newest Project edre board approval. PreferrP ow! Now! N Like us on Moroney said the Parks stateLike us on ment accurately described the situation at the time of its posting, but in retrospect Moroney said it should Like us on not have been issued. Associates, Inc. “The mistake we made was mak627B Ocean Parkway Ocean Pines, MD 21811 ing any comment at all while nego627B Ocean Ocean Pines, MD 21811 PH: 410-641-7050 CELLParkway ANYTIME: 443-235-2325 tiations were still on-going,” he said. PH: 410-641-7050 CELL ANYTIME: 443-235-2325 “Lesson learned.” Steen@Beachin.net steenhomes.com MHBR 486 At a town hall meeting April 19, Steen@Beachin.net steenhomes.com MHBR 486 during a presentation by Matt Ortt

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Bailey wants board vote on management software at June board meeting General manager declares that the time to consider outsourcing financial management has ‘passed’ for the time being By TOM STAUSS Publisher eneral Manager John Bailey, in a May 9 memo to the Board of Directors, the Budget and Finance Advisory Committee, and the Technology Working Group, has endorsed the working group’s recommendation for new management software. He also joined the TWG in declaring that the time to consider out-sourcing financial management “has, for the time being, passed.” In support of his position, he said a previous board had created the TWG to assess the OPA’s “property management” software and to make recommendations on improvements to the system. In the first half of 2017, the board “did not pursue the development of a Scope of Work nor did we pursue what would have been the follow-on issuance of a Request for Proposals for outsourcing financial management,” Bailey said. The much publicized proposal received from Legum and Norman, a regional homeowner association management firm, “was not a re-

Boat ramp

From Page 22 help the board decide whether to begin charging the public for use of the ramp. Director Cheryl Jacobs agreed there needed to be an effort to “gather data” that the board could evaluate. Horn said that if some sort of sticker program was devised for Ocean Pines property owners and residents, it should be constructed in such a way that volunteers could monitor the degree to which the boat ramp is used by non-residents. Parks said that in addition to community members volunteering for a pilot program, members of the Marine Activities Advisory Committee could be asked to participate in collecting data for the board’s consideration.

sponse to an RFP. What we received from Legum and Norman was not even a formal quote – it was nothing more than information and a budgetary estimate. There was no formal solicitation issued nor any actual, bid proposal received,” according to Bailey. In addition, the budget and finance committee recommended against outsourcing financial operations, Bailey said. With that as a backdrop, Bailey said he recruited and hired a new director of finance, Steve Phillips, and then, working with the TWG, issued a request for proposals for new financial management software. But that procedure has come under fire from an Ocean Pines advocacy group, STOP, which contends that Bailey did not follow procurement procedures mandated in OPA bylaws and resolutions. STOP chairperson Esther Diller said that a procurement process managed by a working group does not comply with OPA bylaws. She said there is no evidence that the OPA posted the software RFP on the OPA’s Web site or issued a press release announcing the release of an RFP. Instead, she said the working group solicited proposals from potential vendors in secret, in meetings that were not announced and thus were closed to the OPA membership. She also was highly critical of the fact that the working group, in an April 29 presentation to the board and the membership, did not disclose the identity of the recommended software vendor because of a non-disclosure agreement. Bailey ignored the STOP criticism in his May 9 memo. “We received responses (to the committee’s RFP), and we conducted presentations and demonstrations with the respective respondents. The budget and finance committee was involved in the vendor demos and the review of the RFP,” Bailey said.

“The TWG has now provided a recommendation to the board on which management software option to pursue in contract negotiations,” Bailey said. Meanwhile, the board has acquired the services of a forensic auditing firm. Bailey then essentially made a case that waiting on acquiring new software while exploring the possibility of outsourcing would be impractical. He drew up a possible timeline for obtaining proposals for outsourcing. “To consider outsourcing now, first the board of directors would need to indicate such interest. The earliest opportunity would be the May 2018 board meeting,” Bailey said. “Secondly, we would have to create a scope of work to be issued as a request for qualifications and/ or request for proposals.” He said that would occur in June and July 2018, with the input of staff and the budget and finance committee. Bailey said the issuance of an outsourcing RFP could not occur until August, with review of proposals in September and narrowing of proposals to two or three for presentations in October. “A recommendation could not be provided to the board, at the earliest, until the November meeting,” Bailey said. “Contract negotiations would take place in December with approval in January.” Bailey then offered reasons for why a quick roll-out of the software would be difficult. “Can we accomplish roll-out in two-months-time with the need to mail out the assessment? Don’t forget the end-of-year audit that needs to take place in May. And then, of course we will be in full seasonal operations, again,” he complained. According to Bailey, “the best-case scenario for the consideration of outsourcing would be to begin debate in a timeframe such that, if it were the path chosen, it would be implemented in the fall of 2019.” Bailey questioned how the OPA

would cope with a timeline in which outsourcing wouldn’t occur until then. “What in the world do we do in the meantime? Just nurse ourselves along with the costs, in monetary terms as well as in functionality terms, of BDK and the LANSA system (the current vendor and software used by the OPA)?” he said. Bailey also said that outsourcing financial management would still “need new software for the operational components of what we do as an association.” While management companies do offer “full-service” software, Bailey said “it is a fact that none offer software that meets all our needs. Such software simply does not exist.” He also said that a summary of the working group’s recommendation and supporting information should be provided to the membership, without offering a timeline for when that would occur. He suggested that the board vote on a contract proposal from the selected vendor and that the system could be rolled out in the fall of this year. He would allow the forensic audit to take its course and “we act on its findings and recommendations.” But outsourcing OPA’s financial management should not be “pursued for the foreseeable future,” Bailey said.

Moroney From Page 24 felt the trade off was reasonable and Ortt was willing to negotiate because they felt strongly the upgrades to décor were necessary for success. ... The final negotiations were not complete until the very last minute of that board meeting.” Moroney then attempted to defend his support for the 11th hour unbudgeted Yacht Club expenditures, which seemed to run counter to his publicly stated opposition to these kind of expenditures. “Let me explain the clear difference between what I was referring to and what we are doing at the YC. In this case the Board authorized the expenditure, and directed the GM to proceed,” Moroney wrote. “In many, many instances I was referencing in the past 18 months, the Board was not aware of the purchase or contract until after it was complete ...there is a difference) if the board takes affirmative action (as opposed to) an individual acting on his or her own. One has board approval, the other does not” he said.

May 2018

26 Ocean Pines PROGRESS

May 2018 Ocean Pines PROGRESS

28 Ocean Pines PROGRESS

OCEAN PINES

May 2018

Bailey undergoes six-month performance review under employment contract

faith finding by Ocean Pines, in its reasonable discretion,” that Bailey has intentionally breached a material provision of is contract after receipt of General manager submits self-analysis two months late John Bailey notice and a reaBy TOM STAUSS He delivered his self-analysis to the OPA president and Bailey agree sonable opportunity to cure; has engaged in disloyalty to Ocean Pines, Publisher the board during the latter half of on a later date. he Board of Directors con- April. A request for a copy of the The review initially was sched- including, fraud, embezzlement, ducted a six-month review of self-analysis by the Progress, which uled for a closed session after the theft, or dishonesty in the course of General Manager John Bai- the OPA probably could legally with- board’s regular meeting April 28, his employment; or has committed a ley’s job performance in a closed ses- hold under the Maryland Homeown- but it was postponed to a special felony or crime of moral turpitude. In the event of a termination for sion May 2, with few details emerg- er Association Act because it could meeting May 2. ing other than reports that not all be considered a personnel record, Bailey’s employment contract, cause, the OPA will be required to directors believe his performance was ignored by Bailey and the board. obtained by the Progress in a some- pay his base salary through the last has been outstanding since his arUnder terms of the contract, Bai- what protracted process, covers a day of employment and will provide rival on the scene last November. ley was to have his initial perfor- three-year period, from September all employee benefits through the end date set forth elsewhere in the There is no particular reason to mance review by the Board of Direc- 5, 2017, to September 4, 2020. believe that his continued tenure as tors within the first six months of His duties under the contract contract or in accordance with the the Ocean Pines Association’s chief employment. include hiring, evaluation, and ter- terms of any applicable employee executive officer is in jeopardy, but Thereafter the reviews will shift mination, as necessary, of all other benefit plans. The board has the sole discretion there are indications that he will be to annual affairs, beginning in April OPA employees; overseeing the exadvised of areas where some direc- of next year. ternal operations of he OPA, such to determine the effective date of tors believe he should improve. According to the contract, the re- as relations with owners; oversee- Bailey’s termination in the event of As of May 11, the board had yet views “will assess performance on ing of OPA financial operations and a termination for cause. The OPA also has the right under to complete a written summary of immediate and long-term goals and the maintenance of its facilities and board evaluations to be delivered to achievements as well as working re- grounds; overseeing all OPA busi- the contract to terminate Bailey’s Bailey. lationships and day-to-day success- ness operations; and assessing the employment at any time “without Ironically, Bailey delivered a es or failures and, for the annual re- effectiveness of various OPA oper- cause” pursuant to the provisions in self-analysis to the board about two view starting in April 2019, whether ations and programs and reporting OPA Bylaws. In the event of a termination of months late under his employment an increase in Mr. Bailey’s compen- his assessments to the board. contract, which specifies that he was sation is appropriate given his perUnder the contract, the OPA has employment without cause, Ocean to deliver it to the board by Feb. 14. formance.” the right to terminate his employ- Pines “shall continue to pay Mr. Additional self-evaluations are to The contract specifies that Bai- ment for cause in accordance with Bailey his then current base salary be delivered by March 15, 2019, and ley’s reviews are to be completed the procedures set forth in OPA by- for the six months following the termination date and shall provide all 2020, assuming he is still employed within one month of the board re- laws. on those dates. ceiving his self-evaluation, unless The term cause means “a good employee benefits through the end date ... or in accordance with the terms of any applicable employee benefit plans.” DON'T WAIT The Board of Directors has the SPRAY NOW! 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May 2018Ocean Pines PROGRESS

It’s back to ‘grab and go’ at Ocean Pines Beach Club Lynda Huettner likely to return to oceanfront venue that she managed many years for the OPA By TOM STAUSS Publisher hen the Ocean Pines Beach Club at 48th and 49th streets in Ocean City reopens for the summer season on Friday, May 25, returning to a Memorial Day weekend tradition, there will be new management operating the place. Last year, the Beach Club opened earlier in the seasonThe Matt Ortt Companies, the Ocean Pines Association’s new food and beverage management company, will be going back to the future by restoring the “grab and go” formula at the venue that historically has made the Beach Club one of the OPA’s most consistent profit centers. Grab and go, said Matt Ortt co-managng partner Ralph DeAngelus at an April 19 town meeting, means that most Beach Club patrons, coming in off the beach or from the Beach Club’s family friendly swimming pool will place their orders at the snack bar, wait for the food and drink to be prepared by staff, and then take it back from whence they came or, perhaps, consume their purchases inside the club or perhaps on the newly refurbished outside deck. Evening table service on the second floor of the Beach Club, tried experimentally last summer without much success, won’t be continued this summer. DeAngelus did say, however, that cocktail servers will take drink orders outside on the deck, and if someone decides to order food to absorb some of the alcohol, his staff will be more willing to take food orders as well. But he didn’t call the wait staff cocktail servers by accident. Alcholic drink orders also can be placed at the rebuilt bar as well. DeAngelus said that patrons will probably notice that the old bar top, in poor condition, has been rebuilt. The outside deck railing, prone to splinters, has been refurbished, sanded down and then resurfaced. The Board of Directors also authorized the replacement of the venue’s sprinkler system earlier. Also, some furniture, tables and chairs, from the Yacht Club replaced by new furnishings recommended

and approved by the Board of Directors in April, has been relocated to the Beach Club. In a recent interview with a local weekly, DeAngelus confirmed that it was likely that Lynda Huettner, the long-time manager of the Beach Club who resigned in the winter of 2017, will probably be returning to

the venue as one of the shift managers. She has been employed by the Ortt Companies’ Rare and Rye restaurant since leaving the employ of the OPA after creative differences with former Acting General Manager Brett Hill last year. DeAngelus said that he his partner Matthew Ortt have received a

lot of positive feedback from members about Huettner and decided to revisit their initial inclination not to bring her back to the Beach Club this summer. DeAngelus said the plan is to have deejay’s at the Beach Club this summer rather than live bands that tended to drive up the operating cost last summer without a lot of return on the investment. He said “sing-along wedding music” will be the genre of choice. That would seem to cover a lot of bases. The Beach Club is scheduled to close Labor Day weekend.

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“inventory numbers are at near re-

DeAngelus is the valued at $13 a voted 6-1 tosaid extend contract for anbottle. Withyears ten without cases change. of Calypso other three rumNew in inventory, said it will take anointed he OPA President Tom years to get thedirector surplustosupHerrick was rid the ofonly vote against extension. One than of the $5 direcply. Mostthe rum costs less a bottle, he said, and are used in rail

ered atpress the Yacht will Club been means Thompson reaphad a generThethat release announcing the purchased from Worcester County decision said only that the contract was ous severance package, including salary liquorfordispensaries. The county got made convenience, meaning that the and benefi ts forwas ninenot months, although out ofmajority the liquor business board alleging in any2016, sort apparently noonlonger willsome bepart eligible of wrong-doing Thompson’s Hill said, he which means ofthat the would have justifi ed a termination for for any bonuses. excess inventory was purchased cause. during the administration of out former Nine months of salary works to The termination for Thompson. convenience General Manager Bob $123,750 for work that need not be permeans thatarticle Thompson will reap a gener“The didn’t quote Matt formed. ous severance package, including salary Ortt, because what he said didn’t and benefi for deliberations nine months, in although The veiltsover closed fit the political narrative that all of

What’s precious to you is precious to us. What’s precious to What’s precious to

company makesthe $100,000 a manhe was expecting board toin move in a agement fee, hardly much of a renew direction. ward for tackling Yacht Club operThompson serveda six years as generation with aand “broken that the al manager, that’sbrand” well within the average time of service fortomanagers of company is determined fix. A recent article in a local week-

apparently he no longer will be eligible this for anyoccurred bonuses. on Brett’s watch,” he said. “An article this is blatantNine months of like salary works out to ly political, and I’m out for $123,750 for work thatcalling need notit be perthe “bulls---” it is.” formed. Hillveil saidover in February of last year, The deliberations in SM closed

he discovered a massive supply of

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members as a result of this summer’s segment of a –March 29the meeting OPA election to revisit contractof exthetension, Boardwhether of Directors. Hill to renegotiate it said or terthat afterit,aorreview offorce Ocean Pines minate keep it in as written. Association financial statements The contract specified an Aug.for31 deadline for a decision on the February, he making concluded that OPA

interview that much of the excess

made that “absolutely” there was no inThe date press back releaseyears, announcing the could well before tention or expectation by the board mahis tenure as acting general mandecision said only that the contract was jority of Herrick, Trendic, Stevens and ager,that or convenience, well after he was no longer made for meaning that the Hill Thompson’s contract would be serving asinacting GM.session Aug. 26. terminated the closed board majority was not alleging any sort Hilland noted the article failed He otherthat directors declined an ofemail Thompson’s part that towrong-doing quote Matton Ortt, DeAngelus’ invitation by the Progress topartdiswould haveand justifi edthe aduring termination for ner, how when hewhy said thetotown cuss decision tercause. minate the contract occurred, citing the hall meeting that maybe 20 percent confi dentiality of closed meetings. ofThe excess liquor inventory discovtermination for convenience



Hill vindicated on claims A of excess food, beverage, golf and aquatics chemical inventory

What caught many in Ocean Pines by

Hill that Thompson’s be surprise, however, wascontract the factwould that the OCEAN PINES axe fell as soon as it did. The new board terminated in the closed session Aug. 26. reorganized itself with an election of ofHe and other directors declined an lead paragraph filycesinin its a meeting Aug. 22. H said that email Progress toatdisill’sinvitation motion tobygothe into closed session much of the excess inventory the on Aug. 26 after the open session made cuss how and why the decision to terYacht and Beach clubs “apparently” no mention ofat possible termination. was bought season’s endciting last year, minate the contract occurred, the Trendic told the Progress but dentiality Hill told of the Progress in aseveral recent confi closed meetings. days after the decision to terminate was



Thompson contract terminated

for better-than-budgeted amenity finan- as well as “adjustments already made to their votes as the best deal possible for 30cialOcean Pines PROGRESS May 2018 this year’s budget related to the bonus the OPA given that, at the time, there performance, ended up with a highStevens motion passes 4-3, over Jacobs’ ‘emotional’ objections; Brett Hill named acting GM ly contentious 4-3 vote to terminate the clauses” that would have made it much was a solid majority of pro-Thompson difor Thompson to earn a bonus re- rectors who couldforhave renegotiated the contract and Thompson’s employment easier three options. tors who voted it, Jack Collins, was By TOM STAUSS lated to amenity year. it evenbid more Newly electedperformance director Brettthis Hill, who contract defeatedto in make his election thislucrative summer, with the Ocean Pines Association. Publisher offered the motion to go into closed seswith his contract extension vote a possiHill in his explanation said that the for Thompson. closedBrett meeting Director Hill that was began chosenwith by sion, in prepared remarks explaining his ble contributing factor. the intended purpose of reviewing board an obligation to discuss a Stevens was participating in the the board majority to serve as interim motion“has said that five board members reAlso voting for the extension was General Manager Bob Thomp- more objective measure of bonus calcumeeting via telephone, andonsaid later cently had discovered “many disturbing Dave Stevens, who wasn’t the ballot or acting general manager pending a son’s employment contract, including a notification a (reopened) haveisn’t voted differently had he factors so surrounding the of handling of the he thismight year but known as a Thompson search for director a replacement. what one described as “disturb- lation, GM bonus (for the 2015-15 fiscal year),” fan. Both Collins and Stevens explained contract negotiation would be in the best been at the person to hash out the ingAtfactors” involving a $30,900 bonus a special meeting of the Board as well as “adjustments already made to their votes as the best deal possibledefor for better-than-budgeted amenity finan- interest of all parties to avoid further istails of a renegotiation. ofcialDirectors Aug. 26, the directors votthis year’s budget related to the bonus the OPA given that, at the time, there Former performance, ended up with a high- acting general manager says wasteful sues in future years.” Elections have consequences, and ed 5-2, with directors Renaud and ly contentious 4-3 votePat to terminate the clauses” that would have made it much was a solid majority of pro-Thompson dispending on supplies occurred before and after his tenure A decision to revisit the contract thewho election Hillrenegotiated and Slobodan for Thompson to earn a bonus by re- with rectors could of have the contractJacobs and Thompson’s Cheryl dissenting, employment to go into easier lated to amenity performance this year. contract to make it even more lucrative the Aug. 31 deadline would have opened Trendic it was apparent that Thompson with the Ocean Pines Association. highs, particularly (golf course) “rum and coke” drinks that can be session to discuss Thompson’s cordHill Byclosed TOM STAUSS in his explanation said that the for Thompson. Director Brett Hill was chosen by chemicals aboard two-month for the board and sold no Stevens longer had a solid majority of supandwindow food and beverage.” affordably. Publisher contract, which had been extended for “has an obligation to discuss a was participating in the the board majority to serve as interim At a town hall meeting April 19, Between the two restaurant venThompson to renegotiate, something porters on the board. ssertions of excessive food more objective measure of bonus calcumeeting via telephone, and said later three yearsgeneral on Aprilmanager 28. or acting pending a Ralph DeAngelus, a co-founder and ues, DeAngelus said that roughly and beverage and golf course lation, so a notifiprobably cation of would a (reopened) that Thompson have heIndeed, might have had he therevoted wasdifferently an expectation search for a replacement. Undisclosed at the time the contract co-managing partner of the $400,000 excess inventory will contract negotiation would befirm in thethat best been atcommunity theinperson to hash out the dechemical inventory have welcomed. Back in April, he offered to At a special meeting of the Board in the that, at some point, extension was made public was a prohas a contract to manage the OPA’s be transferred to Ortt Companies interest of all parties to avoid further istails of a renegotiation. been independently confirmed, in of Directors Aug. 26, the directors vot- drop amenity-based bonus incentives in Thompson’s contract probably would be vision allows “new board” –and in Yacht and Beach clubs, said that the books, creating for and the sues in future years.” Elections havea challenge consequences, the of food andthe beverage invenedcase 5-2,that with directors Pat Renaud exchange for atomore predictable incenterminated theofnew board. In stanpubdecision revisit the contract by company with the election Hillindustry and Slobodan Companies discovered ininbyreaching this case, the board that three new Cheryl Jacobs dissenting, to goOrtt into MattA Ortt tory by executives of thehad Matt the Aug. 31the deadline Trendic it was apparent Thompson tive package, butYacht the would board atthat theopened time dards lished accounts, Thompson said at Clubhave was for expenses as that a himself percentage closed session to companies in discuss the of golf ventory members asand a result of case thisThompson’s summer’s a two-month window for the board and no longer had a solid majority of inflated, Thattheinboard turntotranslates contract, which for “completely voted 6-1 to extend the massively contract for inan- of he revenue. was expecting move supin a course chemicals, by been General ManOPA election – tohad revisit theextended contract exThompson to renegotiate, something porters on the board. three years on April 28. flated,” withyears hundreds of bottles of into a challenge for the Ortt Comager John Bailey. other three without change. new direction. tension, whetherattothe renegotiate or ter- liquor that Thompson probably Indeed, there was an expectation Undisclosed the itcontract “you will neverwould use.” have panies to exceed budget and profit Claims of excess time inventory on Newthat anointed President Tom servedthat, six years as generBack inOPA April, he offered to in Thompson the community some point, minate it, orwas keep it inpublic force aswas written. extension made a pro- welcomed. One egregious example of out- targets that result in atperformance hand were made by former Acting drop amenity-based bonus incentives in Thompson’s contract probably would be Herrick was the only director to vote al manager, and that’s well within the vision allowsspecifi the “new –31 in of-control purchases involve an ex- bonuses for the company. The that contract ed anboard” Aug. General Manager and Director Brett exchange for a more predictable incenterminated by the new board. In pubthis case,for themaking board that had three against brand the extension. One of the direcaverage time ofearning service for managersthe of of rum, Calypso, Without bonuses, deadline a decision on new the pensive Hill during the public comments tive package, but the board at thethat time lished accounts, Thompson himself said

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OCEAN PINES Inventory From Page 30

ply of “exotic wines” that had been purchased by former food and beverage manager David McLaughlin for wine tasting events at the Yacht Club that were poorly attended. He also said he uncovered evidence of food originally purchased at the Country Club’s Tern Grille that had been transferred to the Yacht Club and carried on the books “and then got written off,” making the Yacht Club look worse than it should have and the Tern Grille better financially. He said he discovered “20 different flavors of Smirnoff vodka” that never should have been purchased, citing Yacht Club inventory problems as “dating back years. It’s a problem that is way beyond the period” when the Yacht Club was managed by a food and beverage manager, Brian Townsend, that Hill hired. Hill said he tried his best to get a handle on inventory but concedes he may have fallen short, in part because he was a part-time general manager who was also running his

May 2018 Ocean Pines PROGRESS own business. Hill said one of his actions as acting general manager and a director was to ask the board to adopt a policy of publishing purchase order logs, which he said was approved by last year’s board. After he resigned as a director and a new general manager arrived on the scene, the purchase order logs have not been generated by the OPA’s accounting software, Hill said. “It’s a report that can be easily generated,” Hill said. Purchase order logs shine a light on excesses that can occur if “nobody’s watching the store,” Hill said. “Our LANSA system can spit them out with the click of a mouse. The last one I ran was in August, for July purchases.” Hill said that to the best of his knowledge, the Calypso Rum referred to by DeAngelus had been purchased from Worcester County. Hill acknowledged that some of the discoveries reported by DeAngelus at the town meeting and in the newspaper article resulted from poor follow-through and oversight from OPA staff when he was no longer general manager.

DeAngelus told the newspaper that 150 cases of bottled sodas were left at the Beach Club at the end of the summer, subsequently freezing and then exploding after thawing out. The newspaper article also said that 100 cases of “bag in the boxes” flavors for soda fountain drinks worth about $6,500 also had to be thrown away, and that a walk-in cooler in the beach club basement was left on all winter, containing seven cases of oranges covered with mold. DeAngelus also said that 25 gallons of boxed orange juice exploded, and that bottled and kegged beer was left behind and is now unusable. At the Yacht Club, DeAngelus reported that kitchen staff left food that was “unwrapped and unsealed and not properly stored in the walkin,” resulting in hundreds of pounds of food costing thousands of dollars being thrown away. DeAngelus also said that the Yacht Club’s grease trap, which should be emptied every six months, hadn’t been emptied since the building opened. Hill doesn’t dispute that the tran-

Herrick criticizes proposed changes to search committee resolution Director objects to maintenance of ‘confidential’ list of potential candidates By TOM STAUSS Publisher hanges in Board Resolution C-09 governing the activities of the Ocean Pines Association’s candidate search committee hit a snag during the April 28 Board of Directors meeting. After OPA President Doug Parks presented a revised C-09 to the board for first reading, but without reading the text or outlining proposed changes, Director Tom Herrick raised objections to wording in the resolution that allows the committee to maintain a confidential list of potential candidates that can be passed on by the committee from one year to the next. “Their (the committee’s) job is to cast a wide net (for potential candidates,” Herrick said. “Why would a list (of potential candidates) be confidential?” Herrick’s objection focuses on a section of C-09 that does not appear to have been changed in the revised draft.

Accordingly, it seems he is critiquing a section of the resolution that has been in place for years. Parks said he agreed with Herrick’s objection and that, before the revised C-09 is presented for approval on a second reading, that provision should be reviewed by the Bylaws and Resolutions Advisory Committee. Parks skirmished with Ocean Pines Association member Joe Reynolds over whether, as part of a first reading, the proposed changes should be outlined or summarized or actually read into the record. Parks seemed to suggest that members could read the revised C-09 online, on the OPA Web site. The revision is included in the board packet for the April 28 board meeting, but a typical OPA member would be hard pressed to determine the rationale of any of the proposed changes, absent an explanation by Parks or a member of the bylaws and resolution committee. The revised resolution does not

appear to change potentially troubling language in the current C-09 that seems to give the committee some authority to make judgments of the relative merits of candidates. Paragraph 6(c) states that “the committee goal is to cast as broad a net as practical and not form any advance judgments on who may or may not be the best candidate (sic).” The reference to not “forming any advance judgments” could be read to suggest that, at some point in the committee’s activities, members might be in a position to form judgments on who or may not be the best candidate(s). Traditionally, despite wording in C-09, the committee has not asserted the right to vet or screen candidates, in advance or otherwise, or to make judgments on who might make the “best candidate.” The committee’s traditional role has been to cast a broad net in securing the requisite number of candidates, two more than the number of board vacancies to be filled in the

sition between his administration and that of the new general manager, John Bailey, was non-existent. The result: A colossal mess that the Matt Ortt Companies had no choice but to clean up in preparation for the reopening of these venues. Also at the town meeting, Bailey provided support for Hill’s contention that the Ocean Pines golf course bought excessive fertilizer inventory in November of last year. According to Hill, the OPA was sitting on $180,000 of “chemical inventory” according to recent financial statements, in both the golf and aquatics departments. He wanted to know if the OPA had pre-purchased chemicals this year, as has occurred in the past. If so, he questioned whether there were rebates and incentives for the pre-purchases applied to the inventory costs, or elsewhere in the budget. “I don’t know where the list of questions begins on that,” he said. Hill said that “someone needs to take a very hard look at our actual inventory, and make sure it’s actualTo Page 33

election. The committee, despite language in C-09, has not been involved in judging the relative merits of candidates. If a candidate is eligible to run, that is, meets the filing requirements, then the committee’s role, such as it is, as been simply to make sure his or her name is forwarded to the association secretary and appears on the candidate slate. As currently written, C-09 seems to be vague on who actually vets the candidates for eligibility -- that is, whether they have paid their assessments and are eligible to vote in OPA elections. These are the only eligibility requirements for board candidates. Historically, the initial vetting process was handled by the Association’s executive secretary, for many years Phyllis East but more recently Michelle Bennett, and the membership department to determine payment of assessments. And yet C-09 makes a reference to the Association secretary, which might in fact refer to OPA secretary Colette Horn. As such, C-09 in its current form is confusing. The proposed revision appears to perpetuate the confusion. Which “secretary” is meant in C-09 is not clear.

32 Ocean Pines PROGRESS

OCEAN PINES

May 2018

Decision to OK Yacht Club improvements involved profit bonus trade-off, OPA says Board agreed to furnitire, cosmetic improvements in exchange for more favorable incentive terms By TOM STAUSS Publisher he decision by the Board of Directors in April to approve roughly $70,000 in Yacht Club improvements to help nail down an agreement with the Ortt Companies to manage the Yacht Club and Beach Club was done contrary to usual Ocean Pines procurement procedures that require transparency and competitive bidding. The improvements included the purchase of new furniture acquired by the Ortt Companies with the cost passed through to the Ocean Pines Association. Because the furniture purchase was not made directly by the OPA, arguably the requirement for at least three competitive bids for any significant purchase would not apply. Ortt executives said during an April 19 town meeting that they were able to obtain a discounted price for the new funiture because of their contacts in the industry. Other improvements were more aesthetic in nature, and previously had been had proposed on behalf of the Ortt organizaton by General Manager John Bailey but initially rejected by the board. Actually, in disclosing that roughly $70,000 in improvements had been whittled down to roughly $3500, OPA President Doug Parks in early April sprinkled his comments with caveats, employing language that certain improvements had not been approved “at this time.” Though somewhat opaque, not unusual for Parks, the language implied that certain rejected items could be revisited as negotiations with the Ortt Companies continued. That indeed is what occurred and was probably the intent all along. In 11th hour negotiations with the board, the Ortt Companies continued to insist on the improvements, especially the need for new furniture, and the board relented, with members apparently of the opinion that they should listen to the experts within the Ortt organization who know the restaurant business in ways that OPA directors do not. There was also a consensus that, with a new entrance into the first floor restaurant and bar from the

side of the building, other interior reconfiguration needed to be done to facilitate traffic flow. No director thought the improvements were unreasonable or unnecessary. The decision to approve the unbudgeted Yacht Club expenditures was made in a closed meeting of the board. When the board convened in open session to formally adopt the management contract with the Ortt organization in early April, members neglected to mention that the Yacht Club improvements had been agreed to. It took roughly two weeks or so before Parks, in an April 25 press release posted on the OPA Web site, acknowledged that certain previously unbudgeted expenditures had been approved for the Yacht Club. “As part of final contract negotiations with the Matt Ortt Companies, the Board pushed to have a more favorable graduated bonus structure. In return, MOC requested that the facility be upgraded as they had previously recommended. They felt strongly that upgrades to the décor and layout of the bar and dining areas were necessary for success. Given that MOC was willing to negotiate the bonus structure, the Board felt the trade-off was reasonable and unanimously agreed to the remodeling and furnishings that were requested,” the press release said. There is every indication that the remodeling had commenced well before the board and the Ortt Companies reached agreement on the final contract language. In addition, the Progress was told by an informed source that, with respect to bonuses for exceeding budget targets, the directors essentially agreed to the position insisted upon by the Ortt organization. The Progress was told that the Ortt Companies were prepared to “walk,” that is, end negotiations, if the board had not acceded to the Ortt position with respect to budget bonuses. The source told the Progress that the OPA’s position had been that, for purposes of calculating budget bonuses, the Yacht Club and Beach Club should be treated as a combined unit, with a bonus possible only if the Ortts exceeded budget for both venues taken together. The

Ortts insisted on a bonus for each venue separately, making it possible for the company to earn a budget bonus for exceeding budget at, say, the Beach Club while missing budget at the Yacht Club. In the end, the directors agreed to this. The contract specifies that the Ortt Companies will earn 50 percent of what’s earned better than the budgeted profit or loss at each venue. But this potential budget bonus is capped at $50,000 per venue. For instance, if the Ortt Companies exceed the Beach Club’s $100,000 budgeted surplus by $100,000, it earns $50,000. If it exceeds budget by more than $100,000, it can’t receive any more than $50,000 in a budget bonus. Similarly, the Yacht Club, which is budgeted to lose about $100,000 this year, could generate a $50,000 budget bonus if the Ortts manage to break-even. If the company manages to produce an operating surplus, its budget bonus would still be capped at $50,000. Should the company miss its Yacht Club target, there would be no financial penalty for that subtracted from whatever budget bonus might be earned at the Beach Club. Yes, the bonus provisions in the contract are somewhat complex. In addition to the budget bonuses possible at each venue individually, the contract specifies a graduated bonus that could be earned by the Ortt Companies for exceeding a $100,000 combined profit at both venues. Unlike the budget bonus, the profit bonus is calculated with both venues combined in a single unit. So if the Ortts produce a $100,000 net profit at the Beach Club while losing $100,000 at the Yacht Club, it won’t earn a profit bonus. Once the combined net income for both facilities results in a net profit of more than $100,000, then the management company will be entitled to a profit bonus for each dollar in combined net income above the $100,000 benchmark, on a sliding scale. In the first year of the contract, the company will earn a ten percent bonus on combined profits in the range of $100,000 to $125,000. The bonus increases to 20 percent

in the $125,000 to $150,000 range, to 30 percent between $150,001 and $175,000, and 40 percent between $175,001 and $200,000. If the combined net income for both amenities exceeds the $100,000 profit benchmark by $100,000 or more, then the Ortt Companies will be rewarded with 50 percent of every excess dollar earned. The same terms apply to the second year of the contract, but the company is rewarded for exceeding the first year’s net profit and penalized for slipping. Any year-over-year improvement earns a 30 percent bonus, while any year-over-year decline results in a 50 percent penalty on the slippage. In email to Parks and the directors, the Progress challenged the statement in the press release that there had been trade-offs in the final agreement that justified the concession on Yacht Club improvements. Parks did not respond to an inquiry. Director Tom Herrick said he preferred not to comment on negotiations that occurred in a closed session, but he said in a reply email that he had not reviewed the press release or its statement about a trade-off. Finally, Director Slobodan Trendic sent an email to the Progress clarifying that the trade-off referred to in the press release involved the graduated bonus structure for exceeding $100,000 in combined profit, not the bonuses possible for exceeding budget. “The Board was presented with a (profit) bonus structure based on a tiered scale” that was viewed as being overly generous to the Ortt Companies, Trendic said. After back and forth between the parties, “agreement was reached on a new bonus scale, a 25 percent improvement for the Association,” in exchange for performing “their proposed renovations” and authorizing the purchase of new furniture, Trendic said. In a follow-up discussion with the Progress, Trendic acknowledged that the decision to approve the Yacht Club improvements and furniture should have been voted on in public or at least acknowledged when the board convened in open session to approve the contract. He said it was an oversight in the heat of just having completed successful negotiations. He said the board needs to do a better job of complying with OPA bylaws and resolutions when making procurement decisions that spend association members’ money.

OCEAN PINES

May 2018 Ocean Pines PROGRESS

usable. the Matt Ortt Companies had no At the Yacht Club, DeAngelus choice but to clean up in preparation reported that kitchen staff left food for the reopening of these venues. that was “unwrapped and unsealed Also at the town meeting, Bailey and not properly stored in the walk- provided support for Hill’s contenin,” resulting in hundreds of pounds tion that the Ocean Pines golf course of food costing thousands of dollars bought excessive fertilizer inventory being thrown away. in November of last year. AccordDeAngelus also said that the ing to Hill, the OPA was sitting on Yacht Club’s grease trap, which $180,000 of “chemical inventory” should be emptied every six months, according to recent financial statehadn’t been emptied since the build- ments, in both the golf and aquatics departments. ing opened. Change of Watch He wanted to know if its theannual OPA Hill doesn’t the tranOn April 28, the Ocean City Power Squadron, a localdispute unit of that the United States Power Squadrons, held chemicals sition Sands between hisinadministration Change of Watch ceremony at the Golden Hotel Ocean City. Thehad newpre-purchased officers were sworn in bythis D/5 as has occurred in the past. andC.M. thatKohlenberg. of the new general representative, Past District Commander Picturedmanagfrom leftyear, to right are Cdr. Anthony D. Smith, er, John Bailey, non-existent. If so, he Lt/C questioned whether Lt/C Joseph A. Salafia, P/C Morton N. Brown, Lt/C Lindawas M. Hess, Lt/C Neal M. Lookner, Bonnie M. Curro, there 1st Lt result: A colossal mess that were rebates and incentives for the David McAllister, P/C John Hess, and P/D/CThe C.M. Kohlenberg.

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“exotic wines” that had been purchased by former food and beverage manager David McLaughlin for wine tasting events at the Yacht Club that were poorly attended. He also said he uncovered evidence of food originally purchased at the Country Club’s Tern Grille that had been transferred to the Yacht Club and carried on the books “and then got written off,” making the Yacht Club look worse than it should have and the Tern Grille better financially. He said he discovered “20 different flavors of Smirnoff vodka” that never should have been purchased, citing Yacht Club inventory problems as “dating back years. It’s a problem that is way beyond the period” when the Yacht Club was managed by a food and beverage manager, Brian Townsend, that Hill hired. Hill said he tried his best to get a handle on inventory but concedes he may have fallen short, in part because he was a part-time general manager who was also running his own business. Hill said one of his actions as acting general manager and a director was to ask the board to adopt a policy of publishing purchase order logs, which he said was approved by last year’s board. After he resigned as a director and a new general manager arrived on the scene, the purchase order logs have not been generated by the OPA’s accounting software, Hill said. “It’s a report that can be easily generated,” Hill said. Purchase order logs shine a light on excesses that can occur if “nobody’s watching the store,” Hill said. “Our LANSA system can spit them out with the click of a mouse. The last one I ran was in August, for July purchases.” Hill said that to the best of his knowledge, the Calypso Rum referred to by DeAngelus had been purchased from Worcester County. Hill acknowledged that some of the discoveries reported by DeAngelus at the town meeting and in the newspaper article resulted from poor follow-through and oversight from OPA staff when he was no longer general manager. DeAngelus told the newspaper that 150 cases of bottled sodas were left at the Beach Club at the end of the summer, subsequently freezing and then exploding after thawing out. The newspaper article also said that 100 cases of “bag in the box-

34 Ocean Pines PROGRESS

OCEAN PINES

May 2018

Bailey says Sanctuary crabbing pier is beyond repair, needs replacing March motion requires general manager to issue RFP for replacement “if determined desirable’ By TOM STAUSS Publisher he crabbing pier in the Whitetail Sanctuary section of Ocean Pines is beyond repair and needs to be posted as unsafe and then dismantled, General Manager John Bailey announced during comments delivered at an April 28 Board of Directors meeting. But he seemed well aware of community sentiment in favor of the crabbing pier by adding that the OPA should seek proposals from vendors to replace the pier, without actually promising that he would issue a request for proposals to accomplish that. Or when that might happen. No motion to direct Bailey to issue an RFP for a crabbing pier re-

placement was offered at the April 28 meeting, but perhaps none was needed, given board action in March. A motion offered by Director Slobodan Trendic and unanimously approved by the Board of Directors in a March 29 vote improved chances that the Ocean Pines Association will keep the Whitetail Sanctuary’s crabbing pier rather than demolish it without replacement. Although the directors did not vote to either repair or replace the pier during the March 29 meeting, no one seemed inclined to simply demolish it without then replacing it. The March 29 motion offered by Trendic instructed Bailey to conduct an independent inspection of the crabbing pier before any other action is taken, such as demolition.

Association adjusts lunch break policy for hourly employees

he Ocean Pines Association has adjusted its lunch break policy for hourly employees, prompting some critical commentary by one disgruntled employee on oceanpinesforum.com. OPA members, the ones who pay the bills, might be less concerned once they understand the relatively minor change that has been put in place. An informed source with knowledge of the change in the policy said that the old policy gave hourly employees an hour off for lunch, with half of it paid by the OPA. Under the new policy, hourly employees won’t get paid for any portion of the hour they’re given for lunch. “It’s actually a good change because some employees were taking advantage of it,” the Progress was told. The change reportedly came about on the recommendation of the OPA’s new part-time human resources director.

The motion also directed Bailey to solicit homeowners’ feedback about continuing to provide this amenity. Finally, the motion said that, “if determined desirable,” Bailey should “issue a Request for Proposals for its replacement if the pier is

found unsafe for usage and the total replacement is the most cost-effective long-term solution.” The motion seemed aimed at precludng the possibility of demolishing the pier without then replacing it.

OCEAN PINES

May 2018 Ocean Pines PROGRESS

Director of Finance Phillips to be board’s ‘point person’ in forensic audit process Fate of Trendic’s audit team proposal unknown By TOM STAUSS Publisher ith Ocean Pines Association President Doug Parks initially pushing for a small working group to coordinate with the firm that is conducting a forensic fraud audit of OPA departments, and Director Slobodan pushing for an “virtual audit team” alternative that he tried to present at the Board of Directors’ April 28 monthly meeting, the board seems instead to have settled on Director of Finance Steve Phillips as the board’s “point person” in coordinating with the Gross, Mendelson & Associates auditing firm. An update on the forensic audit was included on the April 28 meeting agenda at the behest of Trendic, whose protracted efforts pushing for a forensic fraud audit of OPA departments finally paid off April 5 when the board voted unanimously to award an open-ended contract to Gross, Mendelsohn. It appears that Parks, in attempting to appoint a working group of directors to laise with the audting firm, tried to bypass Trendic in failing to appoint him to the working group. Trendic countered during the April 28 when he introduced the concept of a “virtual audit audit team” and an audit plan, with a PowerPoint chart that he was not allowed to present and explain. It was not initially clear during the meeting who Trendic intended to be on the audit team, but he subsequently said that John Viola, the chair of the Budget and Finance Advisory Committee and an interim OPA director of finance last year, would have been an excellent member. He suggest that the entire board, linked electronically with Gross, Mendelsohn, would ommunicate with this “virtual audit team.” Parks’s proposed group included Phillips, Director Ted Moroney, and a community member, former director Jeff Knepper. Trendic never was able to present his audit plan during the meeting, getting so far as a slide presentation

into a projector with the help of the OPA’s information technology specialist. But he was not allowed to make his pitch for what said would be an inter-active audit plan. Perhaps in an attempt at compromise, Parks indicated that Phillips will be the board’s “point person” in its dealing with the auditors. He did not indicate whether any audit working group would be appointed, so the idea may be dead for now. Parks said that Trendic’s plan for an independent audit committee was “good” in concept, but he then contradicted himself by suggesting that the audit process should be driven by Gross, Mendelsohn, as if the two were mutually exclusive. “We should take direction from them,” he said, as the OPA “is paying them” to conduct the audit, and that the board should allow the firm “to come back to us” with suggestions on how to proceed. Presumably that could include the appointment of an audit working group. “We know that Steve will be our point person, beyond that ...” Parks said, at which point Supik said she

“totally” agreed with Parks and that the OPA should allow Gross, Mendelson to “guide” the process because the firm has 25 to 30 years of experience conducting forensic audits. Perhaps unaware that Trendic actually had in mind Viola as a member of his preferred audit team, Supik said she didn’t think “we have an expert in the community” that could effectively serve on an audit working group. Nor did she reference the fact that Parks had already suggested an audit working group with Moroney and Knepper as members. Supik then said she didn’t see any need for Trendic’s audit team, adding that the board would be given monthly reports from the audit firm that “will be shared with the community.” Parks went on to say that the forensic audit, while starting with food and beverage operations as called for in Trendic’s April 5 motion approved unanimously by the board, wouldn’t be limited to food and beverage. Trendic had never said it would be.

Supik also said that the OPA’s law firm, Lerch, Early, would be “involved” in the process. Trendic responded that he believed “the entire board” should be part of an audit team rather than the “small group” initially proposed by Parks. At that point he suggested that Viola should be a member as well. He said his audit plan envisioned an “interactive” approach, with team members and the auditors in regular communication with one another electronically. But he was given no opportunity to explain his idea. Supik then went on to say that the auditors had agreed to an OPA suggestion during an April 20 entrance interview to allow community members to submit factual information relating to possible financial wrong-doing to the auditors. She said a formal announcement to that effect would be issued soon. “We don’t want scuttlebutt or opinion,” just factual information that can be investigated, Supik said. According to Trendic, the April 20 entrance interview with Gross, Mendelsohn included OPA General Manager John Bailey, Phillips, Parks and Supik. Trendic was not invited. The Board had voted unanimously, with Director Colette Horn absent due to a schedule conflict, at a special board meeting on Thursday, April 5, to award a contract for forensic auditing services to Gross, Mendelsohn.

36 Ocean Pines PROGRESS

May 2018

BOARD OF DIRECTORS

Bailey opts to sign resale docs, delaying property settlements

prominent local Realtor is asserting that the Ocean Pines Association’s general manager is unnecessarily delaying property settlements in Ocean Pines by insisting that he sign resale documents that are part of every real estate transaction. Marlene Ott, a Realtor with Shamrock Realty on Racetrack Road whose office presence in that building dates back to the 1970s, generally is an upbeat, positive person whose mission in life is to turn lemons into lemonade. During real estate downturns, she’s always been someone who’s able to find the silver lining and do well in the face of challenging conditions. She’s also not shy in expressing her opinions on local issues. And she’s involved, currently a member of the Worcester County Planning Commission, previously having served as its chairperson. She’s probably not someone that John Bailey, the OPA’s general manager since September of last year, wants to be on the outs with. Bailey’s new policy of signing resale documents has irritated Ott. “The delay is that Bailey wants to personally sign the docs himself and just delay the pick up process and delivery to buyers a few days. Doesn’t he trust CPI (Department of Compliance, Permits and Inspections) after (it has signing documents) for the last 50 years?” she said in a recent email to the Progress. In a follow-up email to OPA President Doug Parks, with a copy to Bai-

ley, the Progress asked why Bailey had implemented this new policy and whether he didn’t trust CPI to handle document signing. The Progress also asked what benefit that property owners derive from Bailey’s signature on resale documents and whether it was “a good use of Bailey’s time” to be be signing documents that previously were signed by CPI. Neither Parks nor Bailey responded in time for their remarks to be included in this edition of the Progress. Director Slobodan Trendic, however, did respond. He cited Section 12D(c) of the Declaration of Restrictions that says that the OPA “shall upon demand at any furnish a certificate in writing signed by an officer of the Association certifying that the charges on a specific lot have been paid or that certain charges against said lot remain unpaid, as the case may be.” That is the provision in the OPA’s organizational documents that provide a basis for resale documentation, including a report on the status of lot assessments, to be provided to a prospective owner by a seller at or before settlement. Trendic said that under the restrictive covenants, it appears that neither CPI nor Bailey should be responsible for signing off on resale documents because no one within the department is an officers of the OPA. Nor is Bailey. For many years, the OPA general manager has been an assistant

treasurer of the corporation, but that is not the case with Bailey. The two assistant treasurers currently are Director of Finance Steve Phillips and Gene Ringsdorf, a long-time member of the Budget and Finance Advisory Committee. As officers of the corporation, both could sign off on resale documents. So could Administrative Assistant Michelle Bennett, who is an appointed assistant secretary and thereby an officer of the corporation. Others eligible to sign the re-

sale documents are President Doug Parks, Vice-President Cheryl Jacobs, Treasurer Pat Supik, and Secretary Colette Horn, all members of the OPA’s board of directors. “If the DR section I read pertains to these resale docs, then the Association needs to review if the right people are signing these resale certificates. According to the DRs, the Association’s officers are the only ones that can sign,” Trendic said. Oceanpinesforum.com owner and Ocean Pines resident Joe Reynolds told the Progress in email that he had informed Bailey of Ott’s complaints about delays in receiving resale documents. “He wasn’t interested,” Reynolds said of Bailey.

Beach parking rates for non-residents cut

ne month after approving a stiff $2800 annual pass for non-association members to park at the crowded Ocean Pines Beach Club parking lot in Ocean City, the Board of Directors voted to effectively rescind the previous month’s action. In its place, the directors established a $510 annual pass for non-residents. The new, lower cost parking pass for non-OPA members was approved during the board’s April 27 regular monthly meeting, with no dissent, on a motion offered by Director Slobodan Trendic. Trendic said that while a differential between member and non-members rates for Beach Club parking is clearly warranted, the differential can’t be so stark that it would effectively discourage any non-OPA member from using an OPA amenity. He said that Internal Revenue Service rules for 401 (C) 4 social welfare organizations such as the Ocean Pines Association require amenities owned by the OPA to be open to the public. OPA President Doug Parks, who a month earlier had proposed the $2800 fee for non-members, took a different approach at the April 27 meeting, citing an opinion by the OPA’s legal firm, Lerch, Early. While Parks said he had come up with the $2800 fee based on what other parking lots in Ocean City are charging for use of their lots during the summer, legal advice suggests that such a high fee might be “suspect” given the OPA’s status under the internal revenue code.

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OPA FINANCES

May 2018 Ocean Pines PROGRESS

OPA ahead of budget by $27,000 in March, but $1.07 million behind for year In the black by $34,000 for the year through March, OPA’s fiscal results for the year might not be as gloomy as Supik predicts. By TOM STAUSS Publisher cean Pines Association Treasurer Pat Supik is holding fast to her latest prediction that the OPA will lose $1.6 million for the fiscal year ending April 30, but the monthly financial report for March suggests there’s a chance that the results won’t be that bad. Last month, Supik was predicting a loss of $1.5 million. As of March 31, the year-to-date negative variance to budget for the year is $1.08 million. By the end of April, the negative variance to budget normally translates into an actual operating loss for the year. If the OPA’s actual loss in April is in the neighborhood of $500,000 or more, then Supik’s latest guesstimate could hold. But the net operating results for the OPA according to the March financial report released by Director of Finance Steve Phillips indicate that the OPA remains in the black for the year through March, with a $34,103 surplus. This doesn’t include new capital expenditures that always contribute to the bottom line for the year, since they are treated as if they are operating expenses. Since the OPA through 11 months of the fiscal year is slightly in the black, any operating loss for April might translate into the actual loss for the year, not including new capital. If the OPA should generate an actual loss of $500,000 in April, then that would be the actual loss for the year, excluding new capital. That doesn’t seem all that unrealistic, because the OPA’s operating loss for February was $524,545. By this methodology, the OPA conceivably could end up with an operating deficit excluding new capital of roughly $500,000 or so, substantially less than the number predicted by Supik. New capital expenditures through March have totalled $176,653. Additional new capital spending could boost the final number in the range of $200,000, which would result in an actual operating loss for the year of $700,000, less

than half of Supik’s latest prediction. Another way to gauge the possible results for the year ending April 30 is to look at last year’s results through March compared to this year’s. The difference is slightly less than $500,000. If that number holds in April, then conceivably the actual loss for the year would be roughly $850,000, as last year’s deficit came in at around $360,000. The dueling interpretations of numbers to date will be reconciled soon enough. For what it’s worth, a forecast schedule included in the approved 2018-19 budget posted on the OPA Web site in March projects an operating deficit of $1.37 million, with another $217,000 in excess new capital spending, resulting in a projected loss for the year of about $1.5 million. According to Phillips’s March report, the OPA’s positive operating fund variance for the Month of $27,028 was the result of revenues under budget by $88,422, total expenses under by $71,416, and new

capital under budget by $44,034. Through the first 11 months of the 2017-18 fiscal year, the negative operating fund variance is $1.17 million, with revenues under budget by $896,298, total expenses over budget by $179,786, and new capital over budget by $90,868. The March report indicates that every amenity department with the exception of the Yacht Club came in close to budget. The Yacht Club, closed during March, nonetheless lost $19,513, missing budget by $18,703. For the year, the Yacht Club is in the red in the amount of $583,210 and is behind budget by $586,105. Perhaps the best performing department for March was Recreation and Parks, ahead of budget by almost $15,000. Golf operations excluding the Tern Grille out-performed in March, losing $13,873 but ahead of budget by $1,243. The grill operatin lost $7,355 for the month, with a negative variance to budget of $2,522. Aquatics, which will generate a

substantial surplus for the year, lost $28,919 in March and missed its budget by $2,603, hurt by propane expenses that exceeded budget by more than $7,000. Through March, Aquatics has an actual surplus of $192,701, compared to $12,486 through March of last year. All three racquet sports performed close to budget for the month, and all three are in the black for the year. Reserve summary -- The OPA through March 31 had $8.039 million in reserves, a slight reduction from the $8.11 million at the end of February. The replacement reserve carried a balance of $4.96 million, little changed from the previous month. The bulkhead reserve carried a balance of $2.57 million, little changed from February. The roads reserve remained virtually unchanged in March with a balance of $511,70. `Capital summary – A schedule in the financial report indicates that capital spending through March 31 of $994,210 is substantially more than the budgeted 38,856. The negative variance is $555,354. Balance sheet – The March 31 balance sheet shows total OPA assets of $40,767,133, up from $33,100,240 a year ago. Operating cash of $1.09 million is than the $2.57 million in hand in March of last year. But short term investments of $8.06 million compares favorably to last March’s total of $5.56 milliom.

March, OPA Departmental Summary

38 Ocean Pines PROGRESS

OPA FINANCES

May 2018

Response to ‘deep dive’ management critique indicates that OPA will no longer be involved in handling cash at key amenity operations Point of sale and cash responsibility shifting to Ortt Companies at Yacht Club and Beach Club By TOM STAUSS Publisher n annotated version of last year’s “deep dive” of Ocean Pines Association financial operations by Stout, Causey and Horning indicates that the OPA, with the arrival of an outside management company to operate the Yacht Club and Beach Club, will be getting out of the cash management business, at least with respect to these two amenities. Given problems with financial management that have been uncovered by last year’s “deep dive” and revelations of financial mismanagement alleged by former Acting General Manager Brett Hill, this development will probably be seen by many as a positive. Other departments that handle cash with far less controversy, including the golf course, aquatics, and parks and recreation, most likely will continue to handle cash the way they have in the past. But for the two OPA’s two major restaurant and bar amenities, that responsibility will shift to the Matt Ortt Companies, which will be making cash deposits into a new account at the Bank of Ocean City that OPA Director of Finance Steve Phillips and other finance department employees will be able to monitor. Records of cash deposits will be easily accessible electronically. A copy last year’s deep dive audit report, with responses to specific recommendations by SCH offered by the OPA’s finance department, is available on the OPA Web site using the site’s search function. Entering “deep dive audit” in the allotted space for search topics will produce the report. It doesn’t appear to be listed in the forms and documents section of the Web site. The annotated version of the SC&H report complete with OPA management responses is dated April 2 of this year. In response to an SC&H observation that the Yacht Club’s Touch Bistro point of sale and Square payments systems are poorly integrated with the rest of the OPA’s food and beverage operations, OPA management said that the “OPA no longer

with utilizing the Touch Bistro or the Square payment system. Point of Sale and cash receipt responsibility will shift to a management company.” The Progress has learned that the Ortt company plans to revert to the Micros system that predated the more recent introduction of Touch Bistro. Micros is an industry standard software package that the Ortt organization uses at its other restaurants. SC&H in its report said the OPA’s use of “blind drops” in handing cash had caused a variety of issues at various OPA food and beverage venues. “All money from a cash drawer would be placed in a sealed bag and dropped off the police department,” the report said. “The following morning, the payroll manager would be be in charge of reconciling (with) the Touch Bistro/Square system.” The report criticised this procedure as “inefficient, does not hold employees accountable and results in a lag between reconciling the cash drawer and the end of the night as the cash is not reconciled until the following day.” The report goes on to say that the payroll manager is “then responsible for determining and recovering any shortages which takes additional time to review who was working such day, shift, and the manager on duty, manipulation of Touch Bistro/ Square reports, etc.” OPA management said in response to the report’s criticism that blind drops have already been eliminated from food and beverage operations, adding “going forward, OPA will not be responsible for such procedures as they will shift to the management company. While that seems to be true of the Yacht Club and Beach Club, it is not clear whether blind drops from other OPA departments that handle cash have been eliminated. The report recommended that each manager be given separate number codes and passwords to access the POS and Square systems and that the OPA make sure that employees are properly trained to run the systems and generated necessary reports.

The OPA response: “POS and cash receipt responsibility will shfit to a management company.” SC&H recommended that, in the event of an Internet crash, than the Association establish an emergency back-up plan “to have in place if the systems fail during a busy holiday weekend, so that the Association is appropriately prepared to handle routine business transactions at food and beveage locations.” Again the identical OPA response: POS and cash receipt responsibility will shift to a management company. SC&H noted that Touch Bistro/ Square systems worked poorly with the legacy Micros system. The OPA’s response that with the elimination of the Touch Bistro/Square systems “gift cards will now to able to be processed through Micros.” The SC&H report also deals with management of cash receipts from departments other than food and beverage operations at the Yacht Club and Beach to be handled by the Ortt Companies.

Women’s Club officers

“Cash is readily available and subject to error and mishandling,” the report said. “We recommend that effective control over checks, currency and other cash items should begin at the time of the receipt and continue through deposit and disbursement. The report said assessment/membership clerks who open mail should prepare a list of cash items received daily, before cash is routed to the person responsibility for depositing funds. “Such lists should ... be used ... for comparison of the total with deposit slip totals, to determine that all cash has been promptly deposited intact in the Association’s bank accounts. All cash receipts should be deposited daily.” The OPA management response did not seem to be agree with the SC&H recommendation. “OPA has a process in place where all cash receipts are attached to the appropriate incoming documentation received,” the report said. “All receipts are reconciled by the next business day ... The Assessments supervisor reconciles all payments (cash and check) and they are processed through the accounting system. The deposits are prepared and coded and secured internally within the safe to be deposited in the bank by the next business day by the accounting manager.”

The Women’s Club of Ocean Pines has announced new officers for 20182020. Pictured (left to right) are Gail Reese, secretary; Irene Daly, treasurer; Joyce Piatti, first vice-president; Donna McCracken, president; and Kay Hickman, second vice-president. The purpose of the Women’s Club is to promote civic and social activities, including educational and community outreach, to benefit the community. In 2018, the Women’s Club awarded $2,700 in scholarships and donated $1,600 to community organizations. To become a member, call Joyce Piatti on 410-302-0559. The Women’s Club meets the first Thursday of the month, except July and August, at 10 a.m. the Ocean Pines Community Center. Annual dues are $10.

May 2018 Ocean Pines PROGRESS

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OPA FINANCES

Ocean Pines PROGRESS May 2018

OPVFD accounting adjustment reflected in $1.6 million deficit estimate, Bailey says Hill says it will unnecessarily inflate OPA’s losses for year By TOM STAUSS Publisher ormer Ocean Pines General Manager Brett Hill is questioning the way the Ocean Pines Association intends to handle an accounting kerfuffle involving OPA financial support for the Ocean Pines Volunteer Fire Department, one that he thought he had satisfactorily resolved to the OPA’s benefit but which he now thinks his successor, John Bailey, is on a path to undoing. That, Hill says, will end up costing the OPA and its membership money that, according to Hill, the OPVFD isn’t even asking for. It could have the effect of inflating the OPA’s reported operating deficit for 2017-18, Hill said. Hill is a candidate for the Board of Directors in this summer’s OPA elections. He is making OPA financial operations an issue in his campaign. He has said that the latest operating loss for 2017-18 of $1.6 million is inflated, and that he doesn’t trust the accuracy of numbers in monthly financial reports. He thinks that OPA management may be looking for ways to adjust the results for 2017-18 that will be used to justify the $30 increase in the base lot as-

sessment in 2018-19 that he doesn’t think was necessary In a recent email to Bailey, Hill mentioned that at the March monthly Board of Directors meeting, he had asked about the lack of a contribution by the OPA for fire and emergency services in February. “I see now again on the March financials there is a second month with no contribution. I know you weren’t around when the budget was set (for 2017-18),” but Hill told Bailey that $40,000 per month was budgeted to support the OPVFD and should have been included in the February and March financials. He wonders whether the same omission will occur in the April financials, due for release later this month. If it does, Hill is suggesting that conditions will be created for a fire/ EMS departmental adjustment during the annual audit process that will add much more to OPVFD expenses than $120,000 in missing contributions could explain. Hill said $40,000 per month for a total of $480,000 in annual financial support had been agreed to by former Director of Finance Mary Bozack, OPA Director and Treasurer Pat Supik, and the OPVFD’s Billy

Bounds. This $480,000 was then approved by the Board of Directors as part of the 2017-18 budget, Hill said. “There is no reason at all for an adjustment,” he said. He asked Bailey whether the absence of any OPVFD expenses in February and March would lead to “a nice budget surprise for the month of April, or worse through the annual audit an adjustment to pay them back the money that was due from the budgeted agreement?” Bailey responded in a way that Hill found to be less than responsive. “The concern you raise ties back to the matter of recording the proper accounting for the pay down” of an equipment loan, Bailey said in return email. “We are working through the details of the agreement, and yes there will likely be an April adjustment, but not for additional operating funds we owe them (as we only owe them $848 in additional operating funds), but rather to fund the capital reserve and properly record the early payment of the loan.” Bailey said the likely April adjustment “is not a surprise, as we have been referring to a fire department adjustment being included in our FY18 estimated loss of $1.6M that has been disclosed as part

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of the Treasurer’s report at every board meeting since January,” adding that, “we are going to be conservative in whatever we record at year-end, such that, if we do have to make an audit adjustment to the year-end audit, it will be a favorable adjustment.” Bailey’s reference to estimated loss of $1.6 million for the year that just ended on April 30 comports with Supik’s treasurer’s report delivered at monthly board meetings since January. The estimate has actually fluctuated slightly over that period; it was $1.5 million at the March board meeting, and $1.6 million at the April meeting. It was $1.5 million in February. During the latter months of the 2017 calendar year, the estimate was less. The estimate ballooned just as the board was deliberating on an assessment increase for 201819. Hill found that highly suspicious at the time, and nothing since has convinced him otherwise. Contrary to Bailey’s statement, Supik during her treasurer’s reports has not referred to any adjustment for OPVFD expenses that might be necessary to reconcile the books for 2017-18. In the 2018-19 budget document, there is a schedule that bases the $1.5 million loss estimate on roughly $1.3 million in departmental losses and another $200,000 in new capital expenditures, which for budgetary and accounting purposes are treated as operating expenses. There was no reference in the budget documents or in Supik’s public treasurer’s report to a pending OPVFD adjustment. In a reply to Bailey, Hill said that the agreement made with the OPVFD’s Billy Bounds last year over the paydown of equipment loans specified that the OPA “would cease to fund a separate reserve account, and the entire $80,000 of the budgeted reserves would be paid to them, as well as the operational amounts previously designated for the loans.” He told Bailey that “if you compare the FY18 budget to FY17, the amount of funding for the fire department was greatly reduced, primarily because of the utilization of the fire departments reserve to pay off the OPA loans. I would be happy to discuss or explain this further, but not paying what now looks to be $120,000 in operational contributions to the fire department (including April) is a huge mistake.”

May 2018 Ocean Pines PROGRESS Monday, May 14 Balance seminar, presented by Back in Action Physical Therapy, Ocean Pines Community Center, 1011 a.m. Participants will have their balance assessed and learn what factors may be affecting it. Free, advanced registration required, 410641-7052. Tuesday, May 15 Worcester County Republican Candidate Forum/Meet & Greet, Ocean City Marlin Club, 9659 Golf Course Rd, West Ocean City, 5-8 p.m. All Republican primary election candidates for state, county and local positions have been invited to participate. Open to the public, free of charge, light refreshments. Sponsored by the Republican Women of Worcester County. Thursday, May 17 Pine’eer Craft Club, monthly meeting, Ocean Pines Community Center, 10 a.m., refreshments 9:45 a.m. May Project: Preparing for the 50th Anniversary of Ocean Pines. Guests welcome.

HAPPENINGS meeting, 7 p.m., Ocean Pines Community Center, Assateague Room. Agenda, board packet usually posted several days prior to meeting on OPA Web site, oceanpines.org. Comments, questions on any topic accepted during designated Public Comments segment. Republican Women of Worcester County, May luncheon meeting, Dunes Manor Hotel, Ocean City, 11 a.m. Guest speaker, Pastor David Whitney on the Maryland Constitution. $20 per person. Doors open 10:30 am. Reservations, Ann Lutz at annlutz60@gmail.com or at 410-208-9767. Friday, June 1 Star Charities, monthly meeting, Ocean Pines Library, 10 a.m. New members welcome. Anna Foultz, president, 410-641-7667. Saturday, June 2 50th Anniversary parade and community day. Parade 10 a.m.,

Ocean Parkway between Mumford’s Landing Road and St. Martin’s Lane (Ocean Parkway closed to thru-traffic during parade). Reviewing stand at White Horse Park. Community Day, Veterans Memorial Park, 1 p.m. Monday, Tuesday, Wednesday, June 4, 5 and 6 Coast Guard Auxiliary’s Maryland basic boating safety course, Ocean Pines Library, 6-9 p.m. Meets state requirement for all boat operators born after July 1, 1972; certificate awarded after successful completion. Topics include piloting in local waters, tying nautical knots, foul weather tactics, legal issues, marine maintenance and common medical issues. $15 for all three evenings. Registration, Barry Cohen, 410-9354807, or CGAUX1205@gmail.com.

Ongoing

Kiwanis annual duck race tickets, $5 entries. Win up to $3000 if all 1200 ducks are sold by splitting the pot

Saturday, May 19 Holistic Health Fair, Ocean Pines Community Center, 8 a.m. to noon. Free, open to the public. Featuring businesses that focus on holistic health practices. Businesses interested in participating in the event should contact Jarman at 410641-7052 or bjarman@oceanpines. org. Vendor spaces are $20. Sunday, May 20 Ocean Pines Bay Day, hosted by Maryland Coastal Bays Program and the Ocean Pines Association, 11:30 a.m.to 3:30 p.m., White Horse Park. Food from local vendors, nature-inspired artwork from area school children and a save-the-bay campaign that aims to improve the health of waterways that shoulder Ocean Pines. Monday, May 21 Back pain and sciatica seminar, presented by Back in Action Physical Therapy, Ocean Pines Community Center, 10-11 a.m. Participants will learn the many causes of back pain and how it can lead to other conditions such as arthritis and degenerative disc disease. Ways to reduce pain and increase mobility will also be shared. Free, advanced registration required, 410-641-7052. Thursday, May 24 Ocean Pines Association, Board of Directors, monthly

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in half. The race will again be held in August at Frontier Town Lazy River on Rt. 611. Winner does not have to be present. 410-973-1233 for tickets or purchase at Ocean Pines events.. Free pickleball clinics for beginners, sponsored by the Ocean Pines Pickleball Club, Feb. 23 and March 9, 5-6 p.m., Ocean Pines Community Center, free week of drop-in time following the clinic (Friday through Thursday). John Hanberry, Jhanberry@comcast.net or 703-598-6119. Free indoor walking, every Monday and Wednesday, Ocean Pines Community Center gymnasium, 10:45 a.m. to 11:45 a.m. Free platform tennis clinics, Saturdays at noon, Manklin Meadows tennis complex. Bring sneakers. Line dance classes, Monday and Wednesday, 9:30 -10:30 a.m., Ocean Pines Community Center. Beginners welcome. Betty Daugherty, 410-7261818, or bettydau@aol.com. Pinesteppers, square dancing, Wednesdays, 7-9 p.m., Ocean Pines Community Center with caller Dennis O’Neal. Visitors welcome. The group also hosts a dance the fourth Saturday of the month from 7-9:30 p.m., Ocean Pines Community Center. 302436-4033. Pine Tappers free adult tap dance classes, Tuesdays, 2-3:30 p.m., Ocean Pines Community Center. Exercise and have fun with choreographed tap dancing routines. From 2-2:30 p.m., brush up on basic techniques and a review of the routines, then join the regular class from 2:30-3:30 p.m. Every week or drop-in as convenient. Lori, 410-2512162. Ocean Pines Ping Pong Club, Ocean Pines Community Center, Monday, Wednesday and Friday, noon to 2 p.m. 410-208-1794. The Kiwanis Club of Greater Ocean Pines – Ocean City every Wednesday at 8 a.m., Ocean Pines Community Center, 410-641-7330 or kiwanisofopoc.org. Star Charities -- Monthly meetings the first Friday of every month, Ocean Pines Library, 10 a.m. Anna Foultz, 410-641-7667. Sanctioned duplicate bridge games, Ocean Pines Community Center, Mondays noon, Tuesdays 10 a.m. $5 and $6 for special games. Linda Rau, 410-208-4044, for a partner if needed. Non-sanctioned game Friday, 10 a.m. Marian Dore, 410-641-6172, for a partner if needed. Worcester County Democratic Club meeting, fourth Thursday of each month, 7 p.m., Marlin Room of Ocean Pines Community Center. Republican Women of Worcester County, fourth Thursday of each month, 11 a.m. meeting (doors open at 10:30), lunch at noon, local restaurants. Meetings in January through June, and again in September and October. Dinner meeting in November. No meetings July, August and December.

WORCESTER COUNTY

Ocean Pines PROGRESS May 2018

Ocean Pines group spearheading opposition to Showell chicken farm Chair of environmental committee says operation will adversely affect local waterways By ROTA L. KNOTT Contributing Writer group of concerned Ocean Pines residents is backing the Assateague Coastal Trust in its opposition to a large-scale commercial chicken operation slated for development in Showell. Tom Janasek, chairman of the Ocean Pines Association’s Environment and Natural Assets Advisory Committee, during the public comments segment of the April 28 Board of Directors meeting, encouraged community members to express their concerns about the project to the state approving agency. Janasek said the project will have a negative impact on local waterways. The Maryland Department of the Environment has already given its initial approval to the permit application of Ki Suk Kim/Lucky Farm for a 130,000-chicken commercial operation at 10046 Peerless Road in Showell. At the request of Assateague Coastal Trust, MDE held a public hearing on April 24 in Snow Hill on the application for a general water discharge permit for an animal feeding operation for the proposed commercial chicken farm. In addition to the three-house feeding operation, the permit would allow the commercial stockpiling of manure and composting of dead chickens, on temporary unenclosed areas, until permanent structures are built on the 60-acre property. Janasek said the project will include three “600-foot chicken farms” that can be constructed without any regulation of runoff. “So it’s really a bad situation.” He said the project was permitted by MDE under a “old regulation” that allows the developer to use an unlined retention pond for stormwater that will flow into Middle Creek, Shingle Landing Prong and ultimately the St. Martin River, one of the natural boundaries of Ocean Pines. Janasek said a coalition of representatives from communities near the project, including Ocean Pines and River Run, is forming to oppose the commercial poultry operation. He encouraged residents of Ocean Pines to visit the Assateague Coastal Trust’s website and Facebook

page for more information about the project. On a Facebook event page created for the April 24 public hearing, the Coastal Trust cautions anyone who Tom Janasek lives near Route 113 at Peerless Rd, Shingle Landing Rd, and Pitts Rd in Showell, as well as those who live downstream on Shingle Landing Prong in Bishopville, that the operation will inject over 12 tons of ammonia into the air per year, resulting in ammonia deposition to nearby wetlands, Middle Branch and communities.

Arbor Day remembrance

“If you can smell it, you are breathing it,” the page states. Because ammonia can irritate the eyes, nose, throat and lungs, the Coastal Trust says it “is not safe to put industrial facilities that discharge unfiltered emissions in to the air we breathe so close to residential neighborhoods.” The environmental group also says ammonia adds nitrogen into the waterways when dust is distributed through unfiltered exhaust fans in the chicken houses. That dust eventually washes down into the waterways and contributes to algae blooms and degraded water quality. The Coastal Trust also argues that the ‘0’ nutrient discharge per-

mit for the project does not reflect that the site will have stormwater runoff from production surfaces to a retention pond. Neither the state nor the county requires the site to be monitored to ensure that it meets the ‘0’ discharge permit requirements, “so there is no way to know if the permit is in compliance, the Web site says. The Coastal Trust is encouraging residents to “tell MDE if this permit requires a “0” discharge of pollutants (nitrogen, sediment, phosphorous, bacteria) to your nearby waterway, then demand that MDE require water quality monitoring of the discharges.” It also encouraged residents to provide testimony to MDE the unlined stormwater pond is too close to the 100 year flood plain, and ask that live chickens not be allowed in the houses until the manure storage shed, the mortality composting shed, and the cement pads for the chicken houses are built.

Worcester County Commissioner Chip Bertino, Event Organizer Marian Bickerstaff, Ocean Pines Garden Club President Linda Baker, Ocean Pines Association Secretary Colette Horn and Ocean Pines General Manager John Bailey participated in the club’s annual Arbor Day tree planting event in honor of loved ones who passed in the previous year.

WORCESTER COUNTY

May 2018 Ocean Pines PROGRESS

Bunting, Bertino support reducing non-profit funding in county budget Ocean Pines’ representatives tight with taxpayers’ money during May 8 work session By ROTA L. KNOTT Contributing Writer cean Pines’ representatives on the Board of Worcester County Commissioners during a May 8 budget work session lobbied for cuts to funding for nonprofit organizations from the county’s requested fiscal year 2019 operating budget. Jim Bunting and Chip Bertino voted not to provide funding requested by several nonprofits and slashing the amount of money provided to others. In some cases, the duo was able to garner sufficient support for cuts and in others a majority of commissioners voted to continue funding for specific nonprofits. Harold Higgins, county administrator, presented the requested “other recreation and culture” budget within the recreation and parks department, which provides funding for several nonprofits, totaling $127,701. A county budget review committee recommended approving only $85,000 in total funding. “Our approach to that was to flat fund the expenditures,” Higgins told the commissioners. He asked for the commissioners to review of the proposed expenditures line by line, in case the board supported giving funds to some organizations but not others. Bunting has lobbied for eliminating governmental support for charitable organizations several times during annual county budget reviews. He said he doesn’t want to give tax payer dollars to any of the nonprofits. “I think we give away too much money to these organizations,” he said. Bunting pointed out that Wicomico County doesn’t provide funding for charitable organizations. Commissioner Ted Elder agreed, saying “Although all of them are worthy causes, and great things it’s like feeding a stray cat. The next thing you know, you’ve got a hundred of them.” He said if the county votes to give an organization money one time it will be back with its hand out year after year. “There is a limit to how much you expect the taxpayers to put out,” he said, adding tax payers expect the commissioners to be good stewards of their

money. “For us to give away someone else’s money is not charity. Charity comes from the heart, comes from yourself.” Bunting cited the Pocomoke Marketing Partnership and Delmarva Discovery Center as an example of an organization that constantly has its hand out to the county. He said seven years ago representatives for the organization requested from the county $50,000 for each of five years and promised that would be the end of their ask. Last year, they said the same thing. Bunting pointed out that Commissioner Bud Church even said last year was last year would vote for funding for the organization.

While the nonprofit requested $40,000 for FY19, the commissioners ultimately voted to give them just $20,000. Bertino originally made a motion for $10,000 and Bunting gave a second. Both commissioners agreed to increase the amount to $20,000 after Pocomoke Commissioner Merrill Lockfaw argued the center is a tourism attraction. “I know what you’re saying about that and I agree to an extent,” Lockfaw said. He agreed that funding should be reduced by said $10,000 was too little. He said the center is “something for the entire county” and is just as much a part of its tourism as Ocean City, but it happens to be located in Pocomoke City.

Furnace Town, located outside of Snow Hill, also took a hit based on a motion made by Bertino. Again he originally proposed to fund only $10,000 of the organization’s $30,000 request, but that motion failed 3-4. Church then made a motion to fund the full $30,000 request, but that too failed in a 3-4 vote. Finally, Bertino split the difference and made another motion to approve a $20,000 allocation, and the motion carried. Motions to give money to two other Pocomoke organizations, Marva Theater and Pocomoke Little League also slipped through. Funding of $15,000 for the Marva Theater made it into the budget by a 4-3 vote. A one-time allocation for the Pocomoke Little League for field light replacement was budgeted at $10,000 following a 4-3 vote. Organizations getting their funding requested axed by the county were the Art League of Ocean City, Girdletree Foundation, and Lower Eastern Shore Heritage Foundation.

State-of-the-art movie theater to open in West Ocean City Will take over space currently occupied by Michaels

en years after a former movie theater on the same site closed, a new state-of-the-art movie theatre is coming to White Marlin Mall in West Ocean City, according to a joint statement released by Paul Wenger, president of Flagship Premium Cinemas and Matt Mittenthal, vice-president and assistant director of asset management at Greenberg Gibbons Commercial. “It is with honor that Flagship Premium Cinemas reintroduces the cinematic experience to the greater Ocean City community in a whole new way,” Wenger said. “Flagship Premium Cinemas at White Marlin Mall will debut a modern, state of the art theatre unrivaled by any other in the market. The new Flagship Premium Cinemas will provide the latest in upscale amenities that features plush, power-reclining chairs with ottomans and the latest in digital sound and projection. This brand new facility will have ample free parking, reserved seating, and an expanded menu that includes hot food and self-serve soda bar with free refills.” Flagship Premium Cinemas launched its maiden voyage into the movie exhibition industry in 1995 when it opened its first theatre in Falmouth, Maine. Since that time, there have been many new developments within the industry that has made the movie going experience more enjoyable and exciting than ever, according to Wenger. “Adding a high quality movie experience to West Ocean City is a top priority for us,” Wenger said. “We recognized a marketplace that was demanding a higher-end movie-going experience.” To be located in the former Michaels space, Flagship Premium Cinemas will join Marshalls, Ulta Beauty, PetCo and Bed, Bath and Beyond as the anchors for the shopping center. While there are a host of ultra-modern, high-tech amenities, the most notable features of the Flagship Premium Cinemas are the large, fully-reclining seats that are more like La-Z-Boys than standard stadium seating. A 6-foot-tall man can stretch out fully, and still have a foot or two left between his feet and the next seat. A push of a button quietly reclines the back and extends the footrest, another push makes the seat slowly go back to an upright position. Each seat has thick, padded armrests on each side, and each armrest has a cup holder. “The theatrical experience is still the first and the best way to go,” he said. “All of our Flagship Premium Cinemas provide motion pictures in the way they were intended to be shown by the director. The home versions cannot provide a first-run product with the best sight and sound possible.” Michaels will be departing the White Marlin Mall in July for a new location in the area. A firm date for the opening of the new theater has not yet been announced.

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From Page 1 team of three, to maximize our impact if we’re elected,” Diller said. Diller is a business woman who runs seven separate businesses from a home outside Philadelphia. She commutes back and from her home in Ocean Pines. She decided to run after a lot of soul-searching on whether she could devote the time needed to serve effectively as a director. “I decided I had to run, that there are too many areas that need addressing for me not to. It’s not my nature to sit back and complaint. Ocean Pines is at a crossroads. We need to get our house in order,” she said, admitting that both she and Hill decided to run after encouraging each other. “I can be convincing,” she said with a laugh. “I told Brett I would run if he did.” Hill knows that his political opponents will be aiming at him and his controversial one-year tenure as an unpaid, part-time acting general manager. He knows he will be criticised for operational losses as the Yacht Club and Beach Club last year. He says he will be able to defend his performance as acting general manager in public forums where he expects to be questioned. While aware that his tenure as an acting general manager will be relitigated to some extent, Hill and Diller said they believe the election will be decided on how best to manage the OPA going forward. The issues of concern to Diller and Hill involve transparency, with fewer closed meetings and more proactive sharing of OPA documents when they’re requested by OPA members; more effective financial management, including a honest effort to consider outsourcing the finance department; and a desire to reverse this year’s assessment increase, which they contend was unnecessary and based on inaccurate and dishonestly hyped estimates on last year’s operating loss. In a statement of candidacy issued May 10, the two said that over the last several months, “there has been much discussion in the Ocean Pines community regarding transparency and open communications. In some areas, progress has been made, but in others, there is still much work to be done.” They expressed alarm and dismay over a May 9 memo by General Manager John Bailey recommend-

May 2018 Ocean Pines PROGRESS

Clarke appoints Esther Diller chairperson of STOP

arty Clarke, a founding member of S.T.O.P. (Stop Taxing Ocean Pines), has announced the appointment of Esther Diller as the organization’s new chairperson. S.T.O.P has long been recognized as an advocate for good governance in the subdivision of Ocean Pines, Maryland. Based upon the overwhelming response and concern voiced at a March 10 meeting of homeowners, her role in S.T.O.P. will allow better organization and communication of community concerns for action, Clarke said. S.T.O.P. (Stop Taxing Ocean Pines) began as a grassroots civic organization in the Spring of 2004 by Michael Borland and other concerned members for the purpose of compelling the Board of Directors of the Ocean Pines Association, Inc, to abide by the Maryland Homeowner Association Act, and the governing documents of the Association. S.T.O.P. is probably most recognized for its stand against a proposed new community center, in which S.T.O.P initiated a petition drive to force a referendum based on the fact that the cost overruns were over the allowed 20% spending limits spelled out in the governing documents. This petition was ignored by the board, so in January of 2007, S.T.O.P. filed a legal action based on the Board of Directors violation of the Maryland Homeowner Association Act, the Association’s Charter, Declaration of Restrictions and By-Laws. The court agreed and S.T.O.P. was granted a temporary restraining order. On April 16, 2007 the board relented and held a referendum which soundly defeated the community center by over a two to one margin. Ocean Pines Association members who want to become involved with S.T.O.P. are invited to contact he group at www.stop-opa.org, info@stop-opa.org, or 410-928-1124 S.T.O.P., Inc. is a Maryland 501(c)(6) corporation, and contributions to the organization are not deductible for federal income tax purposes as charitable contributions. Clarke and Diller are inviting donations to the group to assist in possible legal action to achieve the organization’s objectives to force the OPA to act more transparently and to support STOP-endorsed candidates in this summer’s board election. Diller and former OPA Director Brett Hill are announced candidates for the board and will run with the support of STOP.

ing that the board vote in June on a proposal by the Technology Working Group for a management software proposal. They vigorously oppose the board deciding this issue without obtaining competing pricing and detailed information on financial management solutions offered by homeowner association management companies. [See separate article elsewhere in this edition for details of Bailey’s May 9 memo.] They have identified with the minority-of-one position on the current board held by Director Tom Herrick, who wants the board to issue a request for proposals including possible outsourcing of financial management before deciding on the TWG’s recommended software vendor. Herrick’s motion to that effect was defeated at the March board meeting, where a board majority indicated it was willing to issue a request of information. Herrick regarded that as little more than lip service that didn’t really address the need for specific proposals. Hill and Diller agree. Now Bailey is in their crosshairs for what they regard as an ill-advised recommendation that place him squarely in an Ocean Pines political kerfuffle. “Unfortunately, closed-door dealings escalated to a new level with the very disappointing {May 9] recommendation from our General Manager to the Board. Based on this action, we have decided that it

is necessary to run for the board, to join other candidates who are supportive of having transparency in community decisions, and sound procedures in procurement, including open RFP cycles for all major projects in accordance with our existing financial guidelines,” their statement read. In other communications with the board and Bailey, Diller has made it clear that should the board take the action in June that the Technology Working Group recommends, STOP will be prepared to seek injunctive relief in the Maryland court system to prevent the OPA from purchasing or leasing management software. They are in effect taking the position that the current board should not be making the decision to commit hundreds of thousands of dollars on software without a thorough exploration of alternatives, including the possible hiring of an outside management company with its own software solutions. “The fact is right now we have a lame duck board. They have taken no action towards any major capital initiatives in the last eight months, but are now using their last three meetings to a make key decisions on a large capital commitment when all options have not been evaluated,” they said in their statement. “Buying software that has not been publicly shared, through a process that was managed by individuals who

have a financial interest in the proposed result, without consideration of alternative options, is a complete neglect of fiduciary duties for all parties involved. Such a significant purchase needs to be both approved and implemented by the same board, that being the new board elected in August, after all options can be presented to them,” they said. In a follow-up interview, Hill and Diller said that they object to a software procurement process that they say has been managed by a paid consultant who could stand to benefit should the software vendor recommended by him and the TWG turn out to be purchased or leased by the OPA. When pressed to explain that benefit, Diller said that the same consultant could be retained by the OPA to help it transition to the new software and could continue to serve in an advisory role as OPA personnel rollout and learn the new software. That possible role would disappear should the OPA decide to outsource its financial operations, Hill said. Both Hill and Diller said that after a properly deployed procurement process, it’s possible that the new board will decide to go along with the recommendation of the paid consultant and the Technology Working Group. q

COVER STORY Diller, Hill

COVER STORY

May 2018

Diller, Hill From Page 45 In their statement, the two candidates said they “look forward to serving the community, and most importantly re-establishing open lines of communication and transparency on where and how our Ocean Pines assessments are spent. Hiding behind attorneys and secret meetings needs to end. The Maryland HOA Act was drafted to protect the homeowners, and we need a board that uses the HOA Act to foster community involvement, not hide board activities.” As an example of where they believe the current board and Bailey have gone astray, they cited the group’s request for copies of meeting notes or summaries from weekly meetings between the OPA President Doug Parks, Vice-president Cheryl Jacobs and Bailey. The Progress last month requested copies of the meeting summaries from September of last year to the present. Bailey denied the request in an email this month, saying that type of documents requested, “notes from operational meetings between the GM and the President and Vice

President of the Board, are not part of the books and records of the Association. Therefore, they do not fall under the language of Maryland Code 11B-112.” The Progress responded to Bailey by commenting that “if a written summary of an operational meeting between the GM and president and vice-president is not a ‘record’ of the association,” it was not clear how Bailey was defining the term. “Clearly these summaries are in written form and are accessible electronically. Directors are able to read the summaries. These summaries contain information about the operation of the association,” the Progress told Bailey. “While you may not be calling these meeting summaries minutes, a reasonable person would probably attach that label to these summaries as that term is commonly understood. Minutes of a meeting are meeting summaries and meeting summaries are often called minutes. To argue otherwise is semantic hair-splitting.” The Progress asked Bailey to obtain a legal opinion from OPA attorney Jermey Tucker on the document request. STOP directors followed up with

their own request for meeting summaries dating back to April of 2017. “It has been brought to our attention that a homeowner has requested certain documents of the Association and that access has been denied. Before turning this matter over to our attorney for further action, STOP wanted to make an official request for the same documents. Specifically, STOP would like to receive copies of the weekly meeting updates between the board liaisons and the general manager. A copy of all of the board update summaries from these meetings from April 2017 – present would be the timeframe requested, essentially the last year. “ The group said that if Bailey continues to reject the document request, it might up the ante to include even more documents. “If you have an issue responding to this request due to terminology or verbiage, the next request will be a copy of all emails sent from the GM and Executive Secretary (Michelle Bennett) to all directors, from April 1, 2017, to May 1, 2018,” the group’s email to Bailey said. Bailey’s response to STOP in denying access to the documents was

identical to the one he sent the Progress, citing 11B-112 of the Maryland Code, a section of the Maryland Homeowners Association Act, triggering another email from STOP. “Since you cite 11B-112, could you please identify specifically what exception from paragraph 2 you are claiming that published meeting summaries to the board of directors fall under? They are not personnel, they are not pending contracts, and they are not legal opinions. Again, STOP would like to work with you, but is fully prepared to take the necessary action to see your office and the board are in compliance with applicable laws,” the email said. Diller said Bailey’s failure to produce the requested documents is an indication of a lack of transparency, which she said is also evident in the OPA’s handling of the long-simmering issue of how the OPA should upgrade its outdated management software, including back office financial applications, and whether the OPA is capable of professionally managing its financial affairs. In a May 8 email and letter to Bailey, Diller called for a halt in what it said appears to be a imminent deci-

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COVER STORY sion by the board to acquire new financial management software costing the OPA hundreds of thousands of dollars without following proper acquisition procedures. Her remarks followed up similar comments she made during an April 19 town hall meeting, when she also vigorously opposed the process used by the OPA to date to acquire management software. [See article elsewhere in this edition of the Progress for details.] “Based on recent press, it appears that the Board of Directors intends on moving forward with an extremely large financial commitment based on a RFP [request for proposals] that was conducted independently of both your office and board under an informal working group in closed conversations,” Diller told Bailey. That was a reference to the technology working group that was initially chaired by Parks when it was established under a previous board but which is now chaired by former OPA President Tom Terry, who was appointed by Parks to the position without a formal vote by the board. “As I am sure you are aware, a competitive offer was made last summer by Legum and Norman [a regional HOA management company] for similar services. From all public information, Legum was not consulted or a part of this most recent process. As the GM, this procurement is certainly a task that you should be directly managing, and STOP is imploring you to perform your duty, and see that all viable options are considered through a proper procurement process,” Diller said, suggesting that a procurement process managed by a working group does not comply with OPA bylaws. “Based on the presentation at the last board member, STOP is officially requesting a copy of the RFP published by the technology working group, a list of vendors contacted (we are aware of Northstar, Membersuite, IBS, Jonas, and Lansa (BDK) ), and the non-confidential information from all proposals. We are aware of the NDA (non-disclosure agreement) issues noted in the [April 28] board meeting, but certainly a large majority of the info related to this process can be shared,” she wrote. Her disclosure of the software vendor candidates that the technology working group has been vetting since last year is more than the group, in a public presentation at the April 28 board meeting, was willing to disclose.

May 2018 Ocean Pines PROGRESS

50th Anniversary donation

Members of the Ocean Pines community accept a check from Peninsula Regional Medical Center representatives. Pictured from left to right are Ocean Pines Area Chamber of Commerce Executive Director Ginger Fleming, 50th Anniversary Committee member Marlene Ott, State Sen. Jim Mathias, 50th Anniversary Committee member Sharyn O’Hare, PRMC Vice President of Strategy and Business Development and Chief Business Officer Christopher Hall, Ocean Pines Association President Doug Parks, PRMC President/CEO Steve Leonard, 50th Anniversary Committee Chair Jennifer Cropper-Rines, Ocean Pines General Manager John Bailey, Delegate Mary Beth Carozza, PRMC Vice President of Ambulatory Services and Corporate Compliance Officer Tim Feist, 50th Anniversary Committee member Carol Ludwig and County Commissioner Chip Bertino.” The group, citing non-disclosure agreements with the vendors, declined to identify the leading candidate for a OPA management software contract, Northstar Technologies, whose Web site indicates that its has a suite of software solutions for the management of homeowner associations available. The Progress has confirmed that Northstar is the vendor that the technology working group prefers after detailed vetting and ranking of the candidates to date, a process that began last year. The technology working group opposed a proposal backed by three OPA directors last summer -- Dave Stevens, Hill and Herrick -- to hire Legum and Norman, which manages the Parke subdivision in Ocean Pines, to manage OPA’s financial operations. L&H has proprietary software that it uses in managing homeowner associations throughout the Mid-Atlantic region. “Please note that STOP is committed to see the board follow through on their fiduciary duties to review all viable options and select the best solution for the association,” Diller wrote in her email to Bailey, clearly with out-sourcing options in mind. “If the Association is not taking the proper steps to review all options, STOP is prepared to take legal action in the courts of

the State of Maryland to make sure due process is followed. We would very much like to work with you, not against you, in this process.” Diller in a follow-up interview with the Progress said that before the board votes to approve a Northstar contract, or with any of the other vendors, it needs to fully consider the outsourcing options advocated by two OPA directors, Herrick and Slobodan Trendic. Diller said she agreed with Herrick that the OPA should issue an RFP for outsourcing options. Trendic is more or less in the same camp as other directors who during the March board meeting indicated support for issuing an RFI -- a request for information -- that might include outsourcing options from companies such as Legum and Norman. Trendic has since said that he believes there are many other companies out there that could be a good fit for the OPA once the OPA develops a detailed strategy going forward for upgrading its technogy. “We don’t have that,” Trendic told the Progress recently. “I’m not comfortable in making any decisions right now without such a wellthought-out strategy.” Trendic opposed last summer’s proposal to hire Legum and Norman because he said it did not result from adherence to OPA purchasing requirements, similar to the ar-

gument that Diller and Hill are is making with respect to the current process. Details differ over where deviation from these requrements occurred. Trendic told the Progress in early May that the difference is that the Legum and Norman proposal emerged in a process that did not include an RFP, while the Northstar recommendation emerged after an opaque RFP process including unauthorized non-disclosure provisions managed by the Technology Working Group and its paid consultant. Trendic said he had problems with both approaches and will probably be a no vote if the working group’s recommendation is voted on in June. He prefers that the new board organized in August after the election decide how to proceed. At least two directors, Pat Supik and Jacobs, are reportedly intent on acting on Bailey’s recommendation for a board vote in June. Herrick is a sure vote for delay, leaving the issue to be decided by Parks, Colette Horn and Ted Moroney. Moroney is a candidate for the board this summer. He is a swing vote who on occasion has found common ground with Trendic. Whether he will in this instance is yet to be determined.

48 Ocean Pines PROGRESS

OPINION

May 2018

COMMENTARY Software purchase process needs more transparency members with some members of the OPA board likely complicit in the secrecy. Apparently it was the committee’s paid consultant who negotiated the non-disclosure agreements with vendors. There was no headsup to the Board of Directors beforehand; and the elected representatives of the OPA membership had no vote in the matter. All in all,this flunks a basic transparency test. Perhaps the consultant and working group members feel that non-disclosure will help in nailing down a deal with the preferred vendor. Who knows. The OPA membership has not been entrusted with the rationale. What perhaps they don’t realize is that trying to keep certain details secret on a false pretext just invalidates the entire process. That means that the recommended solution is also suspect. According to Progress’ reporting elsewhere in this edition, the preferred vendor is a company called Northstar Technlogies. If disclosing this vendor somehow causes this company to not want to do business with the OPA, then perhaps the TWG’s preference for it is misplaced. The more likely result is that the company will little note or care that the OPA membership knows its software solutions is in the running and may even be the leading choice at this snapshot in time. Surely it knows that until a deal is struck, status as a leading contender is no guarantee of a successful outcome. Today’s leading contender is tomorrow’s also-ran. And when it comes to management software, and the best way to handle the OPA’s software needs, there’s much to consider before the board should be ready to make any decisions. For one thing, the directors in March seemed to agree that a request for information from outside management companies should be issued before any decisions are made on the software purchases or leases, whichever option is

chosen. Indeed, leasing versus purchasing is a debate that the board should have in public before spending hundreds of thousands of dollars on software that might be outdated and unsupported in five years. But so, too, should the RFI or FRP be issued to add to the OPA’s knowledge base before a decision of this magnitude is made on behalf of the membership, possibly committing the OPA to hundreds of thousands of dollars in expense. Surely the board is also aware that there is sentiment in the community for hiring an outside management company to supervise OPA financial operations. Given an ongoing forensic audit and problems, some of which are only partially addressed, uncovered by last year’s deep dive audit, outsourcing is an option that remains viable as an alternative to leasing or purchasing management software. If one doubts that this is a viable option, consider that by hiring the Matt Ortt Companies to manage the Yacht Club and Beach Club, the board has embraced the outsourcing model (including the company’s preference for Micros point of sale software) for a major component of its operations. By hiring the Ortt Companies, the OPA is partially getting out of the direct cash handling business, a gratifying byproduct of outsourcing. But for other departments, OPA employees are continuing to handle cash. Not so good. An RFI, since a request for proposals only has the support of one director (Tom Herrick), is the best way for the OPA and the board to gather information about outsourcing possibilities related to OPA financial management. Only when that information is at hand will be the board be in a better place to accept or reject outsourcing financial operations. If this issue carries over to the new board, so be it. That’s only three months away. -- Tom Stauss

LETTER Opposed to Showell chicken house permit

I am opposed to the pending approval by the Maryland Department of the Environment (MDE) of a water discharge permit for the proposed Concentrated Animal Feeding Operation (CAFO) chicken houses at 10046 Peerless Road, Showell, Maryland. This location borders the Middle Branch which is in a Resource Protected Area with Critical Wetlands. Middle Branch feeds into Single Landing Prong and the St. Martin River. I am concerned that levels of pollution above what is allowed would be discharged into these waterways. There will be nearly 1,000 tons of manure produced each year. The pollution that is generated by the manure, that is discharged from the facility, will find its way into the Shingle Landing

Prong and the St. Martin River. These waterways have begun a slow recovery from previous pollution from the (now shut down) Chicken Processing plant in Showell. It is critical that these waterways not receive additional pollution. There will also be pollution put into the air from the unfiltered exhaust fans blowing out ammonia, nitrates and other pollutants. These materials will settle to the ground and be washed into the nearby streams by rain. They also present health risks to the nearby residents. The MDE classifies these CAFOs as no discharge operations, meaning that they are not allowed to discharge any pollution from their sites. I understand that there is no requirement that the discharged water or the water stored in ponds be monitored for pollutants. It is likely that there q

he Ocean Pines Association’s Technlogy Working Group presented a truncated version of a report on the state of the OPA’s antiquated and dysfunctional management software at the Board of Directors’ April 28 monthly meeting. The work of the group to date seems professional and thorough, with paid consultant Len Smith’s expertise evident to anyone who listened carefuly to what he had to say. The same goes for Tom Terry, the former OPA president and director who was appointed to the position of chairman of the working group by OPA President Doug Parks in a way that does not strictly comport with OPA bylaws. The president’s appointment powers are not absolute nor dictatorial. He can suggest and the board then approves. Though perhaps not required in a working group, as opposed to an advisory committee, a better approach would have been to check with committee members to see if someone from their ranks was preferred over Terry. This really isn’t the way it should be done, as Terry surely knows from his years as a director and OPA president. Parks has been in the job long enough to know it, too. As for the presentation, it seemed unobjectionable as far as it went. The problem is it didn’t go far enough, and as others have remarked, it seemed at its core to be a sales pitch on behalf of the committee’s preferred choice of software vendors. It might be a perfectly defensible and logical choice. Clearly the working group has spent a lot of time vetting and ranking the choices from among those companies that submitted proposals in response to an earlier OPA solicitation. So far so good. The problem is that OPA members, if they were paying attention to the presentation rather than fiddling with their smart phones answering email or playing Clash of Clans or Angry Birds (both oddly appropriate as metaphors for many an OPA board meeting), were not trusted with the names of the software vendors who are under consideration. The explanation for this lack of transparency in the process is that non-disclosure agreements prevent the disclosure of these vendors. This is a dubious proposition at best. Non-disclosure agreements are appropriate if entered into to protect certain proprietary information specific to software solutions, but are inappropriate and overblown if invoked to protect the names of vendors or the base price of whatever solution they are offering. Short of written evidence posted on the OPA Web site or made available to the local media that the OPA signed away its right to communicate the names of vendors to its membership, and the base cost of their solutions, the membership should presume this lack of transparency is not the result of the vendors’ insistence. Rather, it’s simply the preference of the committee

OPINION

May 2018 Ocean Pines PROGRESS

Sadly, the GM has really stepped in it, this time

veryone or at least almost everyone agrees that General Manager John Bailey is a nice guy. OK, he stopped returning Progress phone calls a couple of months ago, and he obviously has his favorite go-to weekly for dispensing his pearls of wisdom or his spin on the issue du jour. Early on in his tenure he bragged of his skill at “dancing with the media,” but perhaps he’s lost a step or two in the transition to the Ocean Pines ballroom. None of this means he’s a bad person, or even a bad fit for Ocean Pines. Eight months in, the jury’s still out. In those first eight months on the job, there’s been a disturbing pattern of delivering options to the Board of Directors in a way that appear as “take it or leave it” propositions. If this pattern continues, he’s not going to make it to his projected retirement from the job in 15 years. While the current board seems somewhat tolerant of some on-the-job training, another board might not be. Last fall, it was evident that he was pushing for the Ortt Companies as the preferred vendor for managing the Yacht Club and Beach Club. He waited long enough in presenting his preferred alternative that leasing out the Yacht Club, while managing the Beach Club in-house, was more or less foreclosed as an option. Then it was clear he really didn’t like the proposal by former Yacht Club manager Joe Reinhart and his team to run the Yacht Club, with the excuse that Reinhart wanted a management contract as an

Letter From Page 44

will be polluted water discharged from time to time due to heavy rain events, flooding, or malfunction of the containment systems. The Mission of the Maryland Department of the Environment is (from MDE FY16 Strategic Plan): To protect and restore the environment for the health and well-being of all Marylanders. MDE, here is a chance for you to follow your Mission and take a step forward in preventing further pollution to our local waterways. Do not approve this water discharge permit. Robert Baker, Ocean Pines

He makes this recommendation in a May 8 memo to the board and others without supplying any of An excursion through the curious cul-de-sacs An excursion through theby-ways curious and by-ways and cul-de-sacs the supporting documentation that of Worcester County’s most densely populated community. of Worcester County’s most densely populated community. might convince OPA members that By TOM STAUSS/ By TOM Publisher STAUSS/Publisher this recommendation makes sense. OPA employee, verboten given some it that far, at least without a ringing There’s no cost information providrecent history at that venue that did unfavorable recommendation from ed from the vendors solicited in a not work out well for the OPA. the general manager. secretive RFP process managed not Then there was a $100,000 conBut no, he wanted the board to directly by the general manager, but tract for sprinkler replacement at proceed with granting an $800,000 by a consultant in the employ of the the Beach Club that he offered for contract to a low bidder, a recom- OPA and the technology working a board vote. To their credit, the mendation that the board proper- group. directors reacted as they should ly rejected. Here, too, the directors Moreover, Bailey says exploring have: They rejected the sole source voted to instruct Bailey to rebid the outsourcing model is, in effect, bid and demanded the issuance of a the project over the summer, in the too little, too late: But is it really? new RFP. As a result, the OPA saved hopes that renovation will begin in His own timeline projects that an about $50,000. Some revisionist the fall, at a much more favorable outsourcing model could be implecommentary as part of the vetting cost to the OPA. mented as soon as fall of next year. of proposals on round two by the Not to oversimplify, but Bailey What, pray tell, is so horrible about GM suggested that he and staff had waited to long to issue the RFP and that? grown disenchanted with the earli- to vet the proposals. But he comBailey then descends into a crasser sole source vendor. Perhaps, but pounded that error by failing to rely manipulative pitch that the board that disenchantment didn’t come alize that the board and the Ocean would do well to resist. soon enough to avoid the original Pines community would never ac“What in the world do we do in recommendation. cept a proposed renovation that ex- the meantime? Just nurse ourselves He presented some capital exceeded last summer’s best price by along with the costs, in monetary penditures for the Ocean Pines golf hundreds of thousands of dollars. terms as well as in functionality course -- mowers of various assortMore recently, Bailey rejected re- terms, of BDK and the Lansa sysments -- that the board also saw fit quests for documents from both the tem (the current vendor and softto send back for more detailed sup- Progress and the STOP advocacy ware used by the OPA)?” he asked porting information, including evi- group without bothering to obtain in that May 9 memo. Well, in a word, dence that some of these were actu- a legal opinion from the OPA’s legal yes, that’s exactly what the OPA ally replacement items that could be team before doing so. He cited in an could and should do. Nothing much funded out of the OPA’s replacement inapplicable section of the Maryland catastrophic is going to happen reserve. Homeowner Association Act in supIn his May 9 memo, Bailey has In January, Bailey presented a port of his take-or-leave-it response. stepped in it. That’s sad, for him and proposed 2018-19 budget with a $60 The HOA Act requires release of us. He really needs to up his game, increase in the lot assessment, no HOA records to property owners on if he hopes to be here when he’s 65. doubt knowing it would be trimmed request, and there is no exception in back. It was, to $30, and perhaps he the law for summaries of meetings thought it would be more palatable between the OPA general manager, to the membership relieved it wasn’t president and vice-president. The as bad as it could have been. That’s exceptions under the law are for The Ocean Pines Progress, a journal of typical budget choreography in an certain legal and personnel matters, news and commentary, is published HOA or pretty much any govern- none of which apply to the requested monthly throughout the year. It is cirmental entity. Throw out the worst records. culated in Ocean Pines, Berlin, Ocean case scenario at the get-go and then This kind of response to legitiCity, and Captain’s Cove, Va. scale it back in the hopes of playing mate documents requests are not the hero later. going to win him any friends in the 127 Nottingham Lane But make no mistake: He deliv- OPA membership. The abrupt rejecOcean Pines, MD 21811 ered a budget for 2018-19 with an tion makes one wonder what he and assessment increase assumed. In certain OPA officials have to hide. PUBLISHER/EDITOR this case, a board majority was alSadly, Bailey’s latest recommenTom Stauss ready predisposed that way. The dation that the board proceed with tstauss1@mchsi.com 443-359-7527 membership was not and still isn’t. approving a “secret” proposal for Or at least significant portion of it. management software while shutBoard candidates this summer ting the door on outsourcing the Advertising Sales Frank Bottone who voice strong opposition to this OPA finance department is stagger410-430-3660 year’s unnecessary assessment in- ing in its hubris. crease will do well at the polls. It’s presented as if the Ocean CONTRIBUTING WRITER More recently, Bailey delivered to Pines world would fall apart if the Rota Knott the board two proposals for renovat- technology working group’s preInkwellMedia@comcast.net ing the second floor of the Country ferred vendor, and Bailey’s, is not 443-880-1348 Club that never should have made accepted by the June board meeting.

LIFE IN THE LIFE INPINES THE PINES

May 2018

Another Internet option may soon arrive in the Cove, this one a wireless one

Declaration Networks Group’s Neubeam is not a cable company in the traditional sense, and it doesn’t need coax or fiber optic cable to deliver high speed connectivity By TOM STAUSS Publisher t appears that Captain’s Cove in the not too distant future will have a Internet alternative that could arrive sooner than a separate track that the Captain’s Cove property owner association is exploring. According to a post on the Cove Website’s message board by Cove Director Rosemary Hall, this alternative will probably be added to the options to be explored by a Florida-based Internet consultant that the board may be hiring at its spring meeting, the date yet to be announced. In an April 25 press release, Declaration Networks Group Inc. (DNG)

and Microsoft Corp. announced a new agreement to deliver broadband internet access to approximately 65,000 people on the Eastern Shore of Virginia, including Accomack and Northampton Counties, and Garrett County, Maryland, over the next three years. This partnership is part of Microsoft’s Rural Airband Initiative. It will build on DNG’s NeuBeam’s wireless technology, and will utilize the recent USDA loan secured for Accomack County. These two developments will allow NeuBeam to serve more communities and neighborhoods and connect more Eastern Shore of Virginia residents.

Cindy Welsh 302-381-6910 (cell)

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Neubeam is a brand name of Internet service offered by Declaration Networks, which is already offering Internet services in Northhamption and parts of Accomac County. When the Captain’s Cove Zip Code is plugged into the company’s search feature for Internet available, the site says its services are not yet available in Captain’s Cove, which suggests that at some point they will be. At the northern tip of Accomack County, Captain’s Cove might be the last part of the county that receives high speed Internet service through DNG. But because of its relatively dense population, especially during

CAPTAIN’S COVE the summer months, it might turn out that Captain’s Cove will become Neubeam’s most concentrated customer base. Neubeam is not a cable television company in the traditional sense. It also doesn’t deliver Internet through buried co-ax or fiber optic cable. Instead, it provides its service through wireless technologies, utitlizing socalled “white space,” unused broadcasting frequencies in the wireless spectrum. Television networks leave gaps between channels for buffering purposes, and this space in the wireless spectrum is similar to what is used for 4G cell phone service and so it can be used to deliver broadband Internet. Typical home Wi-Fi can travel through two walls. White Space broadband can travel up to 10 kilometers, through vegetation, trees, buildings, and other obstacles. That capability is particularly relevant in a community like Captain’s Cove, with its dense tree cover that makes satellite line of sight problematic in many areas of the community. q

50 Ocean Pines PROGRESS

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CAPTAIN’S COVE

May 2018 Ocean Pines PROGRESS

Internet alternative From Page 46

Tablets, phones, and computers can all access this wireless Internet using white space through fixed or portable power stations. The actual amounts of spectrum vary by region, but White Space spectrum ranges from 470 MHz to 790 Mhz. The DNG Web site indicates that Neubeam technlogy connects to the Internet from core towers, through so-called community masts, and then through radio receivers installed at each user’s home or place of business. The radio receivers are professionally installed by DNG. The radio receivers connect wirelessly to Wi-fi routers installed in the home or business. These routers connect wirelessly to computers or tablets, or through ethernet cable, if a customers elects to go that way. Once an Internet connection is established on a home device such as a computer, a user can access programming through an expanding array of paid services such as Hulu, Amazon Prime, Netflix, You-Tube TV, PlayStation Vue, Sling TV, Directv Now, and fubotv, among others. With paid services such as these, it’s also possible to access channel Web sites directly for streamed programming. These sites negotiate licensing fees from the same channels found on many cable television and satellite services, although generally not quite as many. According to the Neubeam Website, the company offers three tiers of monthly services, ranging from $55 to $100. For $55, users access download and upload speeds of 5 MBs, not particularly fast in this day and age. For $65, the download speed increases to 10 MBs, with upload speed still at 5 MBs. For $80 per month, the download speed will increase to 20 MBs, with an upload speec of 10 MBs. The top tier for $100 a month offers 30 MBs of download speed and 10 MBs of upload speed. The site lists an equipment charge of $199 and an installation charge of $99. In keeping with the high-tech approach to providing Internet, the company sends out monthly bills via e-mail. It doesn’t offer e-mail accounts or addresses, so users are required to obtain a free gmail or yahoo email address. There are other sites that offer free email service as well.

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