November 2016 ocean pines progress by Ocean Pines Progress

November 2016

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THE OCEAN PINES JOURNAL OF NEWS & COMMENTARY COVER STORY

Directors deny firing of resignation of recreation director An account published in a local weekly in early November suggesting that Sonya Bounds, the director of the Ocean Pines Department of Parks and Recreation had resigned or been fired by Acting General Manager Brett Hill was inaccurate at the time the account was published, the Progress has learned. It’s still possible that Bounds will decide to submit her resignation, but it will be because she decides to do so on her own for personal reasons and not because she is being pressured. ~ Page 7

Herrick, Stevens question lack of timelines in M-01

A view of the Ocean Pines Country Club from the 18th green.

COUNTRY CLUB CUNUNDRUM Board majority leans in favor of repair and renovation option By ROTA L. KNOTT Contributing Writer o build or not to build, that is the question. For decades various incarnations of the Board of Directors have pondered the options for renovating versus rebuilding the Ocean Pines Association’s Country Club. Aside from some cosmetic improvements, little action has ever been taken. But the current board is set to consider the alternatives in December, when Director and Acting General Manager Brett Hill is expected to deliver some detailed options for the board to consider. A least two and perhaps four or five directors are leaning in favor of repair and renovation. Directors Dave Stevens and Slobodan Trendic have been the most explicit, both indicating that they are inclined to support a rebuild of the decades-old amenity over new construction. Hill also has been forthright in suggesting repair and renovation is the better option because he believes a replacement option would fare poorly in a community referendum During a recent discussion about potential future uses for To Page 35

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Hill indicates cart storage could be moved under Country Club But acting general manager implies theory may clash with practical considerations By ROTA L. KNOTT Contributing Writer

ased on the available square footage it is possible to condense the cart storage at the Ocean Pines Association’s golf course into the lower level of a renovated Country Club, according to Brett Hill, acting general manager. Hill told the Board of Directors during an Oct. 17 work session that merging the cart barn with the Country Club may be an option in lieu of having two separate structures. But he acknowledged that he doesn’t know how local and state code requirements may impact such a combined project. “Yes, it theoretically possible; by square footage and To Page 35

Former Ocean Pines President and Director Tom Terry reemerged to discuss a proposed revision to the OPA’s architectural and related guidelines at a board work session Oct. 17, only to have those changes that he had drafted with sitting director Cheryl Jacobs meet with some skepticism and an indication that more work is needed before the revision of board resolution M-01 will be approved on a second and final reading. OPA President Tom Herrick and Vice-president Dave Stevens, objected to portions of Terry and Jacobs’ draft document during the work session. ~ Page 15

Trendic suggests fees may be improperly assessed by OPA Director Slobodan Trendic, during an Oct. 17 Board of Directors work session, launched what at times turned into a testy debate over how the Ocean Pines Association charges property owners who are late in paying their annual assessments. At one point suggesting that the OPA may be improperly charging 20 percent annual interest on delinquent accounts, Trendic posed the question of whether the board should adopt an amnesty policy on collections. ~ Page 26

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Doggie swim

Dogs and their human companions splashed and played while raising money for the Worcester County Humane Society at the Ocean Pines Doggie Swim held Saturday, Sept. 6, from 11 a.m. - 1 p.m. at the Mumford’s Landing Pool in Ocean Pines. The proceeds from this year’s event totaled $1,087, which was donated to the shelter. The cost to participate was $6 per dog. Hosted by the Ocean Pines Aquatics Department for the past several years, the annual swim gives dogs the chance to use the pool before it closes for the season. The Ocean Pines Aquatics Department offers a variety of special events, aquatic fitness classes and swim lessons year-round. More information about Ocean Pines aquatics programs is available at OceanPines.org or by calling the Ocean Pines Aquatics Department at 410-641-5255.

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Board approves new staff for public works, facilities

Four new laborers will be hired by the Ocean Pines Association to help address a backlog of work orders piling up in the Public Works Department. Brett Hill, acting OPA general man-

ager, during an Oct. 22 meeting announced that the Board of Directors has agreed to create the additional positions in order to speed up the process of addressing more than 200 outstanding work orders. Hill said the positions are being advertised and he hopes to fill them as quickly as possible. Hill said that during an earlier closed session meeting the board performed an extensive review of existing personnel, staff workloads, and ways to improve efficiencies and better manage those workloads. The directors decided that additional personnel were required to keep up on maintenance around the community. Additionally, the board authorized hiring another employee to support the facilities department, which is currently a department of one, Facilities Director Jerry Aveta. Hill said the board evaluated how Aveta is spending his time, abilities and expenses related to outsourcing of facilities management activities. As a result, the board authorized one additional employee for that department and is seeking someone with a computer aided design and engineering background. Hill said applications for that position are being reviewed and he hopes to fill it within a few weeks.

Pines to post another RFP for Beach Club bathrooms

Dissatisfied with the initial crop of proposals received for the wholesale renovation or replacement with a free-standing structure of the Beach Club bathrooms, the Ocean Pines Association soon will be posting a new more targeted Request for Proposals. Brett Hill, acting OPA general manager, said he wasn’t even comfortable bringing the proposals received in response to the original RFP to the board

ecause of safety concerns pointed out by the contractor who was hired by the Ocean Pines Association to repair playground equipment at the Manklin Meadows recreational complex in South Ocean Pines, Acting General Manager Brett Hill took the unusual step of ordering the Public Works department to erect temporary fencing around the equipment. On Friday, Nov. 4, Public Works crews were busy erecting the fencing as a way of discouraging parents and grandparents from allowing their kids to use the equipment. Hill told the Progress that he was surprised to learn that the playground equipment was in such bad shape that it’s beyond repair, according to the contractor. Hill said that the contractor in 2014 said the equipment was moderately risky for public use and advised that it should be replaced. Now the condition has advanced to one that represents a clear and present safety hazard requiring complete replacement, Hill said. He suggested that given the 2014 report that posed a moderate risk for users, a decision should have been made by management at that time to either ban or at least discourage use of the equipment at that time. Plans for replacing the equipment will be developed, with a proposal to be brought to the Board of Directors as soon as possible. In the meantime, there is playground equipment available for use in White Horse Park on the North side.

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November 2016 Ocean Pines PROGRESS

From Page 4 for consideration. Instead, he scaled back the project and targeted the new RFP specifically to renovation of the existing bathrooms. Hill called the revised scope of work more in keeping with a “facelift rather than a complete remodel.” He said the proposed scope of work was developed in conjunction with engineers David, Bowen and Friedel after reviewing federal, state and local construction regulations. He said several areas of “attention” were discovered, including the need for meet requirements of the American Disabilities Act. During an Oct. 17 board work session, Hill said the RFP will be released in November and responses are due in December, with an anticipated start date in January. He anticipated that the renovations will take three months to complete. He said that “leaves a good month of buffer” to ensure that the facility is open on time next summer. The renovations will entail modifications to the showers, changing areas, stalls and urinals in the bathrooms. To meet ADA requirements, larger stalls will be provided and in the men’s room urinals will be placed further apart “to give you elbow room,” Hill said. Hill said the RFP will also include an option for renovating the second floor bathrooms as well. Those still contain original 1970s harvest gold and olive green fixtures.

Five ‘good’ candidates emerge for CFO position

Art Carmine’s days as OPA controller appear to be winding down, as “five good candidates” have sent in applications for the position, which some Ocean Pines Association directors are calling chief financial officer, or CFO, Acting General Manager Brett Hill has announced. Whether the CFO appellation will be formally adopted remains to be seen. Hill said during an Oct. 17 work session said the applications will be reviewed by him and Carmine. He didn’t say whether he or the board will make the final decision, but given the broad authority granted to him by the board, it appears that Hill would have the authority to make the decision whom to hire without board approval. As a practical matter, Hill probably won’t be making the decision without at least some involvement by OPA President Tom Herrick, with whom he has developed a strong collaborative relationship.

Board approves $55,000 in Yacht Club furnishings

Acting General Manager and Director Brett Hill offered and the Board of Directors approved a motion to reallocate up to $55,000 budgeted for a food truck to be used instead for new furnishings at the Yacht Club. Initially Hill proposed to reallocate only $25,000 for new furnishings, but he agreed to Director

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Cheryl Jacobs’ amendment to allow him to spend “up to” $55,000. Hill offered his proposal to shift budgeted capital funds during the Oct. 22 regular meeting of the board. He told his colleagues that the food truck won’t be approved by this board but that there is need for additional furnishings in the building “to improve the experience” for customers. The bridal suite is targeted for new furniture and accessories at the request of the banquet manager, Hill said. “We need to get it as good as it can be,” Jacobs said in endorsing Hill’s proposal, adding that suite facility would benefit from bringing in a “professional decorator” to help with the improvements.

Swim Activities on tap at Sports Core Pool

The Ocean Pines Aquatics Department is hosting two special events for kids at the heated indoor Sports Core Pool on Saturday, Nov. 12. A one-time “Learn to Swim Like a Mermaid” class” is designed for those who need to brush up on swimming skills. Fun tails will be available for each child to use during the one-time session set from 10:15 to 11:30 a.m. The cost, which includes goggles and a certificate, is $35 for Ocean Pines swim members and $40 for all others. An additional session of the class will be offered on Dec. 3. The Sports Core pool will also be hosting a dive-in showing of Disney’s

The Little Mermaid movie. Doors open at 6 p.m.; the movie starts by 6:30 p.m. Ariel will be in the pool with guests while the movie plays on a giant inflatable screen. The cost is $3 per person for Ocean Pines swim members, $5 for Ocean Pines residents and $7 for non-residents. Families of more than four can pay a flat rate of $20. Both of these events are open to the public. To register, call Ocean Pines Aquatics at 410-641-5255.

Board ratifies president’s committee appointments

With unanimous consent from the Board of Directors, President Tom Herrick made numerous appointments to Ocean Pines Association advisory committee’s during an Oct. 22 meeting. Appointments were Robert Hillegrass, Bylaws and Resolutions Committee; George Maynard and Paul Bettner, Environment and Natural Assets Committee. Robert Carpenter was reappointed to the Aquatics Committee. Steve Tuttle was appointed chair of the Elections Committee.

Rec department continuing free health seminar series

The Ocean Pines Recreation and Parks Department will continue its series of free health seminars in the month of November. The seminars, which are open to the public, will be held at the

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6 Ocean Pines PROGRESS November 2016 OCEAN PINES BRIEFS From Page 5 Ocean Pines Community Center, located at 235 Ocean Parkway in Ocean Pines. Back in Action Physical Therapy will hold a balance seminar on Monday, Nov. 7, from 12:30-1:30 p.m. The class will teach ways to improve safety in the home and community, strategies to improve balance and the role of strength, flexibility and endurance to help reduce falls. Back in Action will return on Monday, Nov. 14, with Kappes Wellness Centers to present a seminar on the difference between chiropractic and physical therapy. Back in Action will also discuss posture, including negative health effects of poor posture and strategies to improve it, on Monday, Nov. 21. Both seminars will be held from 12:30-1:30 p.m. Although there is no cost to attend these seminars, spaces are limited and advance registration is required. For more information or to register, call the Ocean Pines Recreation and Parks Department at 410-641-7052.

Fall leaf collection begins In Ocean Pines

The Ocean Pines Association has announced leaf collection procedures for its residents this fall. Ocean Pines Public Works and Republic Services will both aid in the collection.

Storm of ’62 video

In 1962, the East Coast and Ocean City was slammed by a storm that the U.S. Geological Survey deemed “one of the most destructive storms ever to affect the Mid-Atlantic states.” The Ash Wednesday Storm was classified a level 5. Ocean City experienced 60 mile per hour winds and 25 foot waves for a period of three days. To mark the 50-year anniversary of the storm the Ocean City Museum Society chronicled the events by recording the experiences of Ocean City locals who lived through this natural disaster. The Museum will present this video at the Ocean Pines Library on Thursday., Nov. 10, at 2 pm. Current Republic Services customers may place up to four bags of leaves curbside for each scheduled pickup. This is in addition to regular trash pickup. Trash collection days for residents south of Route 90 are Tuesdays and Fridays. For residents north of Route 90, the collection days are Mondays and Thursdays. Republic Services will also pick up branches if they are tied in bundles no longer than 4 feet. Leaves and other yard debris bagged in paper bags will also be collected by Ocean Pines Public Works Nov. 21 – Dec. 22. Bags will be picked up on days opposite from Republic Services’ collection days. Only paper bags will be accepted, and there is no limit to the number of bags that residents may place curbside. Thirty-gallon paper bags may be purchased at Public Works for $1 each. Additionally, Public Works will run the vacuum truck through each section to vacuum ditch leaves that have been raked to the street. Yard leaves that

have been raked to the street will not be picked up. These leaves must be placed in paper bags for collection. Ocean Pines residents may also bring leaves and yard debris in bulk or paper bags to the Public Works yard, located at 1 Firehouse Lane near the south station fire department. The yard will be open Monday-Friday, 7:30 a.m. to 3 p.m. and Saturday 8 a.m. to 3 p.m., Nov. 21 – Dec. 22. No contractor dumping or plastic bags will be permitted. There will be no collection or drop-off on Thursday, Nov. 24 or Friday, Nov. 25. Residents with questions about leaf collection should contact Ocean Pines Public Works by calling 410-641-7425 or emailing Linda Martin at lmartin@ oceanpines.org.

Vet memorial foundation to host Nov. 11 ceremony

The Worcester County Veterans Memorial at Ocean Pines Foundation

invites the community in honoring the men and women who have served in our nation’s military services on Veterans Day, Friday, Nov. 11, at the site of the Memorial located at Route 589 and Cathell Road. The ceremony will begin at 11:00 a.m. Some seating is available but attendees should bring a lawn chair for your convenience. The guest speaker will be Ocean Pines resident Nathan Pearson, a member of American Legion Post 166 where he has served as Past Commander and Chaplain among other duties. In the event of inclement weather, the ceremony will be held at the Community Church at Ocean Pines located at 11227 Race Track RD (Rt. 589). Faded or worn American flags may be dropped off before or immediately after the ceremony for disposal at the Flag Retirement Ceremony that will be held at the Veterans Memorial on Saturday, Nov. 19 at 10 a.m.

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Hill, Herrick deny firing or resignation of rec dept. director OPA president calls report in local weekly ‘very unfortunate’

Bob Thompson. There is no chance that she will be fired, sources say. The rumored house-cleaning also has little basis in fact, as three department heads in particular hired by Thompson – Facilities Manager Jerry Aveta, Public Works and Compliance, Permits and Inspections Director Eddie Wells, and Aquatics Director Colby Phillips – are firmly entrenched, well regarded by Hill and the board and relied up for their experience and expertise. Phillips’ name has been circulating on the rumor mill as a potential candidate to take over as director of parks and recreation should Bounds decide to leave, which hardly suggests a purge of Thompson-era employees. Tom Herrick, Ocean Pines Association president, said he thought it was “very unfortunate” that the local weekly reported – inaccurately, he said – that Bounds was no longer employed by the OPA. What’s even worse that the source

By TOM STAUSS Publisher n account published in a local weekly in early November suggesting that Sonya Bounds, the director of the Ocean Pines Department of Parks and Recreation, had resigned or been fired by Acting General Manager Brett Hill was inaccurate at the time the account was published, the Progress has learned. It’s still possible that Bounds will decide to submit her resignation, sources tell the Progress, but it will be because she decides to do so on her own for personal reasons and not because she is being pressured by Hill as part of a general house-cleaning aimed at department heads hired by former General Manager

of the information was neither Hill, Bounds, Herrick or any other OPA official, but a former OPA director “who had no knowledge at all of the situation” and simply substituted speculation and innuendo for accurate information, Herrick said. The former director who was quoted in the article as the source of the incorrect information was Terri Mohr, a three-year member of the board who sought re-election in the summer of 2015 but was soundly defeated. She was generally perceived to be a staunch supporter of Thompson, whose employment contract was terminated by the newly reorganized board this past August. Sources say her motivation for revealing inaccurate information that suggests a housecleaning or “witchhunt” could be that she wants to discredit the new board and create support during next summer’s election that would produce winning candidates more to her

liking or even sympathetic to the idea of bringing Thompson back as general manager. Herrick said that Bounds, who left on a vacation to Disney World on the last Friday in October, did not deserve to have her “many good years with the OPA” sullied by unsubstantiated reports in a local weekly that created controversy unfairly and unnecessarily around her and created the impression that she might have been underperforming in her job. Hill told the Progress that Bounds was the recreation director when she left for vacation in late October. He declined comment on what her status might be when she returned, adding that it was a personnel matter that needed to be discussed in private. Contrary to one rumor, though, he said there has been no decision made to consolidate the role of parks and recreTo Page 10

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Board to hire search firm to find GM candidates Trendic proposes task force to help vet and evaluate

candidates, but directors seem hesitant By TOM STAUSS Publisher lthough the Board of Directors has yet to reach a consensus on a proposal by Slobodan Trendic to select a task force or working group to consider management restructuring, with a companion task of helping to evaluate candidates for general manager, there is an apparent consensus on the merits of hiring a search firm to help generate candidates for the position. It also becoming evident that the board will hire a new general manager in-house rather than an outside management company to run the OPA. During extended discussion in an Oct. 17 work session, the board seemed unwilling to move quickly on Trendic’s proposal for a management restructuring task force, first introduced by him in September. The board put the idea on hold in September when Acting General Manager Brett Hill said he needed more time to consider the idea. When Trendic introduced the concept again at the Oct. 17 work session, Hill still seemed reluctant to move on it. The proposal became co-mingled with

an idea that did seem to gain traction – the option of hiring a search firm to help the board find suitable candidates for the general manager position that Hill is filling temporarily on a volunteer, unpaid basis. The board terminated the contract of former General Manager Bob Thompson this past August. Trendic supported the search firm idea, as did other directors, although no formal vote was taken on the idea, as is customary at work sessions. There was no motion for a search firm on the agenda for the Oct. 22 meeting, but it seems likely that, at some point, the board will formally adopt that approach with an official request for proposals (RFP) posted on the Ocean Pines Association Web site. One firm that has already been mentioned as a company that the board hopes will submit a proposal is the Mercer Group, a nationally known consulting firm that conducts executive searches for clients. “I’m in favor of a search group,” Trendic said at the conclusion of the discussion. “I didn’t say work group or a search group. We can do both.” During much To Page 10

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BOARD OF DIRECTORS

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General manager From Page 8 of the discussion, it did seem as though his idea was construed as an either-or choice. “I’m not sure I did a real good job in explaining what I was proposing,” Trendic later told the Progress in a telephone interview. He said he didn’t interpret the discussion as an outright rejection of his idea, but more a concern about timing. He said his colleagues weren’t ready to move on a task force or working group, pending the hiring of an executive search firm to find GM candidates. He said he thinks a search for general manager candidates by an executive search firm can be done in tandem with a work group looking at possible man-

agement restructuring. He also said that, once a search group produces more good candidates that need vetting, the task force could assist the board in interviewing and evaluating candidates. He said the board as a group could make a choice of a new GM from a few finalists chosen by the working group. In fact, there is a lot of precedence in Ocean Pines for using a task force or search committee to assist in finding candidates, interviewing top choices, and then letting the board decide from among the top two or three candidates. In some cases, the board’s top choice has elected not to accept the job, in which case the second or third “best” candidate is offered the position. “I will bring it (the task force idea)

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up again when the timing is better,” he said, reiterating that the search firm idea could be a good way to expand the number of well-qualified candidates. When he initially brought up the idea for a task force during the Oct. 17 meeting, Trendic said formulating one would be “of great help, looking at other options for third party management.” He said he wanted to know if Hill had had time to consider the idea and, that “if everyone is comfortable” with the idea of a task force, he would prepare a motion to proceed with appointing one at the Oct. 22 regular meeting. Hill initially didn’t answer Trendic directly, but instead said his time on management issues had been devoted to finding a replacement for Art Carmine, who has announced his retirement. Hill

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said the OPA is on a “tight timeline” for finding a chief financial officer to replace Carmine. Trendic said a task force could help with vetting the CFO candidates, or not, depending on the board’s preference. Director Pat Supik asked Trendic if he had individuals chosen for the task force, and he responded that he had “three people in mind who have come forward.” He said he would like to have a “green light” on assembling a group. Director Chery Jacobs said “putting aside the finance position,” she wanted to hear Hill “weigh in” on the merits of a task force. Hill replied that in his “short tenure” as acting general manager, he has been dealing with issues “well beyond” those normally handled by a homeowners association. “We’re well beyond out-sourcing,” he said. “We’re fortunate to have a dedicated staff,” adding that, in certain instances – payroll management and golf course management – some tasks are already out-sourced. Citing the range of employees within the OPA, and the variety of functions, “we’re beyond what (a single) management company can do.” He also that a task force “won’t help us find the candidates we need,” which he later said could only be accomplished by an executive search firm. Director Doug Parks suggested that the variety of activities within the OPA is “probably beyond the skill set” of a

10 Ocean Pines PROGRESS

Recreation director From Page 7 ation director and aquatics director in one individual or to merge the two departments. Prior to the creation of aquatics director roughly eight years ago, the aquatics department – then supervised by the parks and recreation director – was separately accounted for in OPA financial statements, a practice that dates back since the earlier days of the OPA. The position of aquatics director was created about the time the OPA opened a year-round swimming pool at the Sports Core complex in South Ocean Pines. Phillips is the fourth individual to serve in that role. Hill said that Phillips has been assisting the Parks and Recreation Department for more than a month in the preparation on that department’s budget for 2016-17. “She has been helping Sonya better present her budget to the models I am looking for, as I am asking more of staff this year than in the past. Colby had her budget finished early, and given the overlap in classes, etcetera, it made sense for Colby to help copy her models and business plans” to the Parks and Recreation Department. “Outside of the above administrative support, there has been no official consolidation of departments,” Hill said. Herrick declined comment on the possibilities for departmental or positional consolidation.

November 2016Ocean Pines PROGRESS 11

BOARD OF DIRECTORS General manager From Page 10 single management company, but that bringing in a professional search firm – he mentioned the Mercer Group, a nationally known consulting and executive search firm – would be a potential way to fill the general manager position. Trendic responded that he was not suggesting that the board hire a “third party to manage the entire community,” although that idea was on the table earlier this year when OPA Director Tom Herrick proffered a motion, rejected by the then board majority, to consider out-sourcing management as an alternative to extending the contract of former GM Bob Thompson. When Hill said he was “struggling with what the purpose” would be of a restructuring task force, Trendic responded with a series of questions. “How are we going to vet candidates? How are we going to evaluate candidates?” He added that unless Hill felt that the board could “handle the entire process” of vetting and evaluating candidates produced by an executive search firm, there was a definite need for a task force to assist in that process. He said a task force could research how other large HOAs deal with the same sorts of issues that confront the OPA. “Just to rely on our own opinion, not

to go out and make an effort to outreach to other organizations – to see how they handle it – would be an oversight,” he said. “We owe it to ourselves (to do this). A small group would be helpful,” he said. When Supik returned to the idea of hiring the Mercer Group as an executive search firm to find GM candidates, Hill said the OPA should seek formal proposals from three companies, including the Mercer Group. But Director Dave Stevens redirected the discussion back to Trendic’s task force idea. “Slobodan brings up a good point,” Stevens said. “We have to be part of a decision (in hiring a new GM). We have to be in agreement on how we get there.” He said he tended to agree that the finance position could be handled inhouse, by Hill and Carmine, while the executive search firm would search for candidates and offer advice on a salary range for a new GM. The board, Stevens suggested, would make any final hiring decisions related to a new general manager. Trendic repeated that a task force could help the board vet and evaluate candidates unless the board would “turn over everything to the search firm.” Herrick asked Hill to describe the candidates produced by the OPA’s inhouse advertising. Hill responded that the candidates include a bartender, a hotel manager, a bar manager and one HOA manager,” but so far no candidate

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has emerged with experience overseeing a police department. Herrick concluded from that “I think we should go with proposals for a search firm” and Parks said that, starting with the Mercer Group, the OPA should seek proposals from at least two other firms. At that point Trendic emphasized that he, too, favored hiring a search firm, adding that the board could do both – hire a search firm and appoint a task force to help the board to vet and evaluate the candidates produced by the firm. Trendic later told the Progress that it seems clear by the discussion that the board will not be hiring a management firm to run the OPA – that an in-house

general manager hired by the board will be the path forward. He also said, in doing further research, he discovered that Montgomery Village, a comparably sized community near Washington, D.C., has only 45 full-time employees and five departments, while the OPA has nine departments and “a lot more employees.” From that, he concludes that the OPA could find a way to outsource some functions currently done in-house, thereby saving a substantial amount of assessment dollars from reduced payroll costs. He also said the Villages in Florida, where a substantial number of former Ocean Pines residents now live, is run by a private management company.

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November 2016

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sory committee by working directly with and advising BCG and, if necessary, the directors. Herrick said that while there still is a need for a Golf Member Council to organize golf and social events for members, the task of advising the board on golf policy matters should come from a duly constituted board advisory committee. To that end, he offered a motion at the Sept. 24 regular monthly board meeting to resurrect the Golf Advisory Committee by reactivating Board Resolution C-1, which governs the committee’s activities. The board unanimously passed a slightly revised C-1 resolution on first reading during the meeting, with the second and final reading expected in October. In the meantime, the board is seeking a mix of golf members, non-member golfers and even non-golfers to serve on the committee, which Herrick said will be chaired by Ocean Pines property owner and golfer Bob Kessler. Meanwhile, a three-member golf oversight committee consisting of Herrick, OPA Director and Acting General

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BOARD OF DIRECTORS From Page 12 Manager Brett Hill and Kessler met last month with Director of Golf John Malinowski and executives from Landscapes Unlimited, the Ocean Pines golf course management company, for the first time since the oversight group was reconstituted last August. Hill told the directors during a meeting in October that while challenges remain at the course, poorer year-overyear budgetary performance can be attributed entirely to poorer weather this year than last. Rainy weather affects the number of rounds that can be played, green fees and cart revenue, and business in the Tern Grille, the restaurant operation on the lower level of the Country Club that primarily services golfers. Last year, through September, golf operations had generated a surplus of $120,464 for the year, but this year the surplus has dropped off to $26,866, a $93,598 negative year-over-year swing, Citing LU executives for the information, Hill said that had the course been open for play the same number of days this year as last, the bottom line this year would have been comparable to last year. The newly repopulated panel is composed of one community member and two board members under which it operated two years ago under the OPA presidency of Stevens. Under the Pat Renaud presidency

last year, all three members were OPA directors, two of whom (Tom Terry and Bill Cordwell) voted against the hiring of Landscapes Unlimited as a replacement for Billy Casper Golf. Renaud also became a critic of LU during his year on the oversight panel, floating the theory that LU only managed comparatively decent financial performance because it was short-changing course maintenance, something LU executives denied. Herrick said under the new oversight group, harmonious relations with LU, not so evident with the prior board, have been established. In a telephone interview with the Progress, Herrick said that when the oversight group met with LU last month a number of ideas were exchanged for increasing the number of rounds played on the course by Ocean Pines property owners and residents, whether through increasing prepaid annual memberships or promoting more play by those who don’t play enough to justify an annual membership. “We want our residents and property owners, those who may be playing other courses in the area, to return to Ocean Pines,” Herrick said. Herrick, who chairs the oversight committee and will serve as board liaison to the golf advisory committee once it is up and running, said LU has proposed in preliminary form some bundling of amenities to make it easier for former golf members to afford to play golf in Ocean Pines.

Directors reverse previous board’s decision, OK $300,000 in new gas-powered golf carts Stevens hits lease deal approved by former president without board review and approval By ROTA L. KNOTT Contributing Writer ontending that the former Ocean Pines Association president inked a deal for more than two dozen used gas-powered golf carts without its consent, the Board of Directors is buying its way out of the arrangement. Prior to his resignation shortly after the election of a new board in August, former OPA President Pat Renaud signed a lease with Yamaha Financial for 28 golf carts. Leasing golf carts as

opposed to purchasing new ones was approved conceptually as part of the 2016-17 budget back in February, but the actual lease deal still needed to be reviewed and approved by the entire board before it was executed. That, at least, is the view of the current board, which has reversed a number of policies of the former board relating to golf. Perhaps the most notable change is that the new board, through a newly repopulated three-member golf oversight

“We asked that they come back to us with their ideas that are more fleshed out,” Herrick said. “We’ll keep an open mind about whatever it is they want to propose.” In a business plan submitted by LU earlier this year, the company proposed to bundle golf memberships with aquatics memberships, an idea that former General Manager Bob Thompson shot down. The proposed bundling never

made it to the board for consideration, but Herrick said any idea will be given due consideration by the board. Herrick also said he expects LU will have some proposals for how it wants to utilize the Country Club, which the board will be address as part of a pending decision on whether to renovate or tear down and rebuild. A current board majority appears to be solidly leaning toward a renovation.

Golf committee

November 2016 Ocean Pines PROGRESS

Golf carts

BOARD OF DIRECTORS

November 2016

From Page 13 committee, is engaged in a much more harmonious working relationship with Landscapes Unlimited, the OPA’s golf course management company. Members of that committee are OPA President Tom Herrick, OPA Director and Acting General Manager Brett Hill, and Bob Kessler, a long-time golfer, entrepid statistician, and soon-to-be chairman of the reconstituted Golf Advisory Committee. To get out of that lease, which would have left the OPA with near worthless carts at the end of the term, the Board of Directors opted, in a 6-1 vote, to purchase an entirely new fleet of gas-powered golf carts at a cost of more than $300,000. Hill said the previous OPA administration made what he called a bad deal with Yamaha Financial to lease the carts, which came from a golf course that closed its doors, for a total debt of $103,600. That equates to a payment of more than $3,000 per month through October of 2020, with the costs embedded in the golf maintenance budget. By purchasing the carts, as opposing to leasing them, the golf operations budget will avoid that recurring maintenance charge. Hill presented two options at the Oct. 22 regular board meeting. The first was to maintain the lease, and the second was for the OPA to buy its way out of it.

He said the OPA could continue the lease arrangement and keep the cost for the 28 carts on its books through 2020. That would have left the OPA with a mixed fleet of electric and gas-powered golf carts. The second option was to purchase a new fleet of 76 gas-powered carts at a cost of $319,936. “Yamaha has agreed to take back the carts only if we replace the entire fleet,” Hill told the directors. He recommended doing just that since a request for new carts had originally been recommended by LU for inclusion in the 2016-17 capital budget. Because former General Manager Bob Thompson opposed the purchase of new carts, contending that LU had poorly maintained older electric models and the OPA in the not too distant past had approved new batteries for them, the then board majority didn’t include LU’s purchase request in the approved capital budget. Now, however, the situation has changed because the details of the cart lease signed by Renaud show, in the view of Hill and a board majority, that the OPA had executed a poorly drafted lease deal Hill argued that it will be less expensive in the long run to proceed with buying the new carts than to have a mixed fleet that contains aging electric carts. The cost of maintenance including the purchase of batteries for the electric

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carts, coupled with the expense for the lease, would put the price tag just shy of that for buying all new carts, he said. In addition to the cost of the lease, he said the OPA would have had to replace batteries for 40 carts at an estimated cost of $40,000 and make electrical upgrades to the cart barn at another $40,000. But he said if the OPA vacates the existing lease and purchases a new fleet of gas-powered golf carts, the only additional expense will be for another fuel tank at an estimated cost of $10,000. Director Doug Parks offered a motion, which was given a second by Pat Supik, to approve the capital purchase of golf carts with the condition that the OPA terminate the existing lease. The motion passed 6-1 with only Director Cheryl Jacobs opposed. Jacobs was part of the then board majority that tended to accept the recommendations of Thompson on matters involving golf and other policy areas. “How we ended up in this situation is totally beyond me. But we are,” Director Dave Stevens said. He said he understands the urgency to vacate the lease with Yamaha Financial. However, he also pointed out that the board never approved the existing lease arrangement. He said it was “signed unilaterally by our past president.” Stevens said Hill presented a reasonable alternative to maintaining the costly lease obligation. He said the

current board has to “deal with it after the fact” because the lease was signed without board approval, and now the board needs to take steps to change the arrangement and move forward. Director Slobodan Trendic said the lease “doesn’t appear to be a smart financial relationship” for the OPA. But he asked why the OPA wants to purchase gas-powered carts instead of new electric ones. Hill said gas-powered carts require less maintenance generally and are easier to maintain in-house. Jacobs opposed the purchase of a new fleet, saying the board removed it from the budget because directors didn’t think they were necessary. She said some directors questioned whether or not Landscapes Unlimited, the golf management firm, was properly maintaining the existing golf courses. She said there “was a sense that they (LU) just wanted all new carts.” The lease, according to Jacobs, was a way of upgrading the existing fleet without spending money for new carts. Director of Golf John Malinowski from Landscapes Unlimited pushed back against Jacobs’ description of events. He said the lease arrangement was a stop-gap measure implemented after the board rejected the purchase of a new fleet during the FY 2017 budget deliberations. He said LU was intending to request

14 Ocean Pines PROGRESS

BOARD OF DIRECTORS

November 2016 Ocean Pines PROGRESS 15

Herrick, Stevens probe lack of timelines in revised M-01 board resolution Directors ‘accept’ revision of enforcement rules on first reading, but thorny issues remain to be resolved proval was not guaranteed. It never is, in any absolute sense, but acceptance on second reading usually occurs if a revised resolution is accepted on first reading. Trummel suggested that he thought that issues raised during the two October board meetings could be satisfactorily resolved. Stevens indicated he wasn’t so sure, and comments by Herrick, Hill and Slobodan Trendic suggest that some heavy lifting remains. Terry did not attend the meeting on Oct. 22. According to a document provided by Jacobs to board members, and to the Progress after an email request, the proposed revised M-01 gives the board expanded authority, through a super majority of five votes, to authorize clean-up and repair of the “outside” of properties. The proposed revision also retains existing authority to petition Worcester County Circuit Court for removal of personal property – examples include abandoned cars, boats or household debris – if needed to clear a violation. The revision adds for expedited treatment the concept of health and safety issues, which the draft says can be resolved by general manager and Compliance, Permits and Inspections Department staff intervention prior to Architectural Review Committee or board review. The revised M-01 explicitly gives the general manager “pre-authorization” to take action to address health and safety violations and to advise the board of action taken, either electronically through email or at the next board meeting. Currently M-01 requires the general manager to obtain authorization from the board prior to taking action on health and safety issues or any issues, in fact. The proposed revision includes finan-

Golf carts

next season. He said he had but he was unsuccessful on that front. However, the company did reduce its purchase price by $13,000 as an enticement for the OPA to upgrade to all new carts. Hill said it would be more expensive to purchase the golf carts in the spring. Meanwhile, the OPA is escaping from a lease that says all revenue related to carts is encumbered by Yamaham Financial, including golf cart packages.

From Page 14 new carts again in the FY18 budget because it would be more effective than continuing to replace batteries and repair older carts. “It is problematic. There’s no doubt about it,” he said. Jacobs asked Hill if he attempted to negotiate with Yamaha Financial to delay the purchase of a new fleet until

By TOM STAUSS Publisher ormer Ocean Pines President and Director Tom Terry reemerged to discuss a proposed revision to the OPA’s architectural and related guidelines at a board work session Oct. 17, only to have those changes that he had drafted with sitting director Cheryl Jacobs meet with some skepticism and an indication that more work is needed before the revision of board resolution M-01 will be approved on a second and final reading. OPA President Tom Herrick and Vice-president Dave Stevens, both of whom served in the minority with Terry when he was part of a majority bloc on the board – they weren’t part of it -objected to portions of Terry and Jacobs’ draft document during the work session. Terry and Jacobs had begun work on the draft earlier this year, prior to the board turn-over that occurred in election after the annual OPA board election. At the board’s regular meeting on Oct. 22, Acting General Manager and Director Brett Hill continued with the critique, arguing that the revision was not ready for board action and should be referred to the Bylaws and Resolutions Advisory Committee for further revision before additional board action was warranted. But after Jacobs and Jim Trummel, a member of the committee, both argued for the board to take action “accepting” the revised M-01 on first reading, all but Herrick relented. The board voted 6-1 to accept the draft revision on first reading, but with the clear understanding that before a vote would be taken to approve the resolution on second reading, the objections raised by Herrick, Stevens and others would have to be addressed. Stevens even went so far as to suggest that a vote on a second reading might not occur and, if it did, that ap-

Proposed addendum to a revised M-01 resolution under review by the OPA board. That means Yamaha Financials has the “first right” on OPA funds. “That should have never been in (the lease),” he said. “That is the greatest concern.” Hill said that even if the board had wanted to postpone consideration of the purchase, it still would have needed to vote to ratify the lease agreement. “We do have to vote to accept the terms and get that done,” Hill said, add-

ing that not acting would have left the OPA in a vulnerable legal position. Herrick said replacement of the golf cart fleet may not have been a priority for the previous board but it has become one for the current directors. He said Hill’s solution is a “more fiscally responsible move.” He said delaying the purchase could have an impact on play because some of the existing carts “may not make it that far.”

16 Ocean Pines PROGRESS

BOARD OF DIRECTORS

November 2016

Board resolution From Page 15 cial entities that may be in control of a property to the list of property owners involved in a compliance action. Under general procedures, the revised draft adds a requirement for initial inspection of property to be performed within three business days of receipt of violation by staff – this could include a complaint by a property owner either to the office of the general manager or the CPI Department -- and to make an initial determination whether a health and safety violation exists. The draft introduces the concept of repeat violators. These are property owners who are the subject of a complaint, who then cure it but then commit the same or similar offense later within a five-year period. In an addendum A, the revised draft sets out a new procedure for dealing with repeat offenders. Staff is tasked with advising the board, the ARC and legal (the offices of counsel Joseph Moore) of the alleged repeat violation. Staff is supposed to contact the offender by phone and through a certified letter, with a 14-day deadline given for resolving the issue, after which the OPA could take expedited action to deal with the matter. While the board is to be updated on a bi-weekly basis about the status of the issue, no further board action would be required if the issue is unresolved. Instead, the general manager would be authorized to coordinate action with Moore’s office for additional legal action, without board approval. In brief remarks during the Oct. 17 meeting, Terry said that the existing M-01 is deficient in follow-up once a violation has been identified. “We never told the CPI not to go after junk vehicles,” he said, in reaction to a commonly held belief of some in the community that CPI lets abandoned or junk vehicles sit on a lot for months if not years. After Trendic asked Terry where he though the process breaks down, Jacobs jumped in, agreeing with Terry that the problem was lack of follow-through. She said one improvement in the draft M-01 is that multiple certified letters to an offending property owner are eliminated. There will be one certified letter only sent, inviting an alleged violator to attend a meeting of the ARC where the issue will be discussed, she said. “Beyond that, if it’s not fixed, boom, there is board action,” she said, adding that we’re giving “legal action more breadth” to take required action. Terry said the new M-01 moves the ARC to the front of the process and that this change will not allow “six months to do something that could be done in a week.” He said the current process doesn’t “make sense.” He added that the revised draft directs the general manager to give bi-weekly reports on the status of

violations and that “the GM will be responsible for managing the process.” Addendum A clearly differentiates between so-called “normal” or first-time violations and those in the category of repeat violations. Normal or first-time violations require board action to determine a property is in continuing violation, while Addendum A allows staff and legal to bypass the board in the case of a repeat offense. Normal or first-time violations would involve a staff verification of an alleged violation, a referral to the ARC and a phone call to the property owner, with a meeting with the ARC to follow that the property owner can attend. Then, if the issue remains unresolved, the matter can be referred to the board for action and referral to Moore’s office if a continuing violation is determined. Prior to the board meeting, the general manager can elect to make a final phone call to the property owner in an effort to resolve the issue informally. In response to Terry and Jacobs’ remarks, Herrick questioned how much time the revised M-01 gives normal or first-time offenders to cure an alleged violation. Jacobs said the draft doesn’t specify, “but we’ve eliminated an extra step” that currently allows a property owner to delay action in resolving an issue. Herrick took this to mean that the revision eliminates an appeal process. “Why no recourse (for a property owner to appeal a staff or ARC decision)?” he asked, adding that he didn’t see a reference to a 15-day deadline for curing an alleged complaint anywhere in the draft. Indeed, for “normal or first-time” offenders, there is no deadline in Addendum A or anywhere in the text of the revised M-01. The only deadline specified is for repeat offenders, and that is 14 days. Hill said that if a date and timeline isn’t spelled out, “how do I give direction to staff ” on how to deal with alleged violations. Stevens said the current M-01 ”has a timeline. The new one doesn’t,” and Herrick said that was his concern, also. Jacobs said “we can figure out where to put a timeline in” for first-time or normal violations, and Director Pat Supik agreed that the timeline should include a deadline for property owner action for a set number of days after an ARC determination. “Put a timeline in,” Stevens agreed. Herrick was not satisfied merely with a timeline; he expressed a preference for including an explicit appeal for an ARC determination in the compliance process. Trendic agreed. “We need to give homeowners an opportunity to argue (their case if they disagree with the ARC),” he said, alluding to provisions in the Maryland Homeowner Association Act that allow for alternative dispute resolution in the event of an impasse between an HOA and homeowner on a compliance dispute. “I prefer that we follow all the pro-

cesses in the HOA Act and incorporate them into M-01,” Trendic said. Herrick said a reference to a “right of appeal” had been deleted in the revised M-01 resolution. Terry jumped in to say that there is no explicit right of appeal in the current M-01, but he softened his statement to say that “by its nature it’s in there.” He was probably referring to the fact that homeowners, if they disagree with a staff or ARC determination, can ask to be heard at a board meeting prior to board action on an alleged complaint. While that right is rarely exercised, it has occurred over during Ocean Pines’ 48 years of existence. Indeed, at the October regular meeting, the board heard such an appeal from a property owner who disagreed with an ARC decision about a neighbor’s fence. While under founding documents the board has no authority to overturn an ARC decision, it has the right not to enforce it by denying an ARC request for legal action. The effect of such a denial is to allow the alleged violation to continue. “The board can decide not to act on an ARC recommendation,” Stevens said. Jacobs added that if a property owner doesn’t like an ARC decision that the board also has ratified, property owners could take the OPA to court to overturn it. Herrick also found fault with the fact that on health and safety issues, the revision M-01 appears to give the OPA administration the right to enter onto a property without explicit board approval. “It’s been a contentious issue,” he said. Hill seemed to agree, telling his colleagues that if they were giving him that authority, “you’d better define health and safety” issues much more clearly than the revised M-01 does. He also said that property owners should be notified in advance if the OPA is planning to enter onto a property to deal with health and safety issues. Jacobs said the revised M-01 doesn’t eliminate notice to homeowner about health and safety issues, but some directors seemed unconvinced. “We’re letting a health and safety determination to be made by one person,” Herrick said. “It has been a super majority of the board” (in the current M-01). The debate continued during the Oct. 22 regular meeting, with Jacobs urging the board to accept the draft M-01 on first reading. She said the draft had been changed yet again in response to board comments at the work session and that a list of changes had been sent to board members specifying what they were. But Hill said that it was too soon for the board to vote, that the Bylaws and Resolutions committee needed to consider “all the issues” raised by the directors during the work session. Trummel said he had been involved in the latest draft and that, in response to a question from Jacobs, said he believed the draft was in a good enough

shapeto be “accepted” by the board on first reading. Director Doug Parks, weighing in on the issue for the first time, said he didn’t see the urgency to act on first reading, essentially agreeing with Hill. But Director Pat Supik gave support to Jacobs when she said that she didn’t “see the downside” of “approving” it on first reading “unless we don’t want to revise it” at all. Trummel advised the board that accepting a revision on first reading isn’t the same as approving it. “I prefer you not use the word ‘approve’,” he said, suggesting that the directors use the word “accept” when referring to a first reading and “approve” on a second reading. Stevens said he disagreed with Trummel on the significance of a first reading, suggesting that the board shouldn’t vote on a revised text on first reading if it knows there are “significant changes” that need to be made in it. “The purpose of a first reading is to accept policy changes,” he said, adding that the board had not reached a consensus on those policy changes, which he said included timelines and an appeal process. But Trummel insisted that the board isn’t as far apart on language as it might seem. “We’re a long way into a first reading, and almost into a second reading,” he said. Herrick continued to insist that he was not in agreement with the revised draft, while Stevens and Parks both indicated that they could accept Trummel’s assessment. But Hill seemed unconvinced, again telling his colleagues that “they were rushing … I think we’re premature.” Hill also suggested that he wasn’t sure a revised M-01 was even necessary, suggesting that if he received a clear indication from the board that it wanted him to move more aggressively on enforcement, he could do so without a revised M-01. He also said that the new draft seems to inject a greater degree of subjectivity into the process and that “we’re downgrading the ability” of staff to act. Jacobs responded that Hill was an acting general manager and that the revised M-01 is being designed for the general managers that succeed him. Herrick repeated that there “are too many issues that need to be discussed” and that he couldn’t support the revision on first reading. Stevens agreed that while there were many issues that he still didn’t understand, he could vote to accept the draft on first reading. But “we may not have a second reading,” he then warned, bringing him back into general agreement with Hill, Herrick and Trendic. The board then voted to accept the draft on first reading, 6-1, with Herrick opposed. Hill, clearly not convinced that passage on first reading was warranted even though he voted for it, said the revised M-01 would be “going back out” for further review.

BOARD OF DIRECTORS

November 2016 Ocean Pines PROGRESS

Brett Hill: September results the best in ten years By TOM STAUSS Publisher cean Pines Association Acting General Manager Brett Hill recently told the Board of Directors that the Yacht Club just had its best September financially in ten years. While the amenity is considerably off its pace of a year ago through September, or five months into the fiscal year, Hill said the September results show that recent improvements – a new Ocean Pines-friendly menu and cosmetic improvements -- are beginning to have a positive impact. The $17,414 September surplus more than doubled the $8,118 surplus in September of last year and is more than 20 times the $876 surplus in 2014. Every year from 2008 through 2013, the Yacht Club recorded deficits in September, beginning with a negative $31,029 in 2008, a negative $5,873 in 2009, a negative $14,109 in 2010, a negative $17,383 in 2011, a negative $17,135 in 2012, and a negative $20,813 in 2013. Prior to this string of losing Septembers, the amenity last recorded a surplus in 2007. That year, the Yacht was in the black by $9,992. Is this year’s positive September the beginning of a new trend? The jury is still out. Solid results in September need to be followed up with similar results in October and the months that follow. Historically, the cooler months of the year, especially January, February and March, have been significant generators of red ink, with losses in those months offsetting surpluses produced by the warmer months of the year.

Hill recently disclosed that he, like many others before him, believed that the banquet business has been the primary driver of financial performance at the Yacht Club, with sizable banquet surpluses subsidizing losses in regular food and beverage operations. Hill said he is beginning to reassess that assumption after spending days drilling down into the numbers.

The problem is that the OPA’s archaic method of financial reporting does not make it easy to assess how well the banquet business is doing relative to regular food and beverage. Although Hill said that detailed reporting of income and expenses related to banquets is done internally at the Yacht Club, for some reason that detailed breakdown does not show up in the monthly finan-

cial statement for the amenity provided board members and posted on the OPA Web site. While banquet revenues and food and beverage costs appear separately in the Yacht Club financial report, banquet-related expenses for wages and benefits, services/supplies, maintenance and utilities are shown in the aggregate with regular food and beverage expenses. It would appear the problem is the lack of adequate software to manage that task, which is now done manually by Controller Art Carmine using an Excel spreadsheet. To test the long-held assumption that the banquet business is what drives the bottom line at the Yacht Club, the Progress analyzed Yacht Club results for the first five months of the current fiscal year. Banquets’ share of expenses related to wages and benefits, services/supplies,

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BOARD OF DIRECTORS

November 2016

Yacht Club catering From Page 17 maintenance and utilities were allocated based on banquets’ share of net revenues. The extrapolation was a guess, to be sure. Absent software that can almost instantaneously produce the data, the allocation by percentage will have to suffice. The results of the Progress analysis were surprising. Rather than showing the banquet business as the most significant contributor of revenue and profits, the analysis showed that banquets produced 31.94 percent of the five-month Yacht Club surplus generated from May through September. . According to the September financial statement, cumulative gross revenue for the Yacht Club May through September was $1,811,468, of which $194,948 was banquet food revenue and $78,978 was banquet beverage revenue. Total gross banquet revenue was $273,926. According to the financial statement, net revenue at the Yacht Club for the May through September period was $822,314. Banquet food costs were $68,232, beverage costs were $19,744, for total banquet food and beverage costs of $87,976. Net revenues attributed to banquets

were $185,950 ($273,926 - $87,976). The $185,950 in net banquet revenue equaled 22.61 percent of the $822,314 total net revenue at the Yacht Club for the first months of the fiscal year. Using that 22.61 percent as a rough estimate for the percentage of wages/ benefits, service/supplies, maintenance and utilities for the amenity attributable to banquets, the Progress analysis calculated the following based on numbers that appear in the financial statement under expenses: Wages and Benefits, 22.61 percent of $461,337 = $104,308.29 Service/Supplies, 22.61 percent of $155,447 = $35,146.56 Maintenance, 22.61 percent of $2,877 = $650.49 Utilities, 22.61 percent of $61,765 = $13,965.07. Total: $154,070.41 Subtracting banquet expenses of $154,070.41 from net banquet revenues of $185,950 yields a total surplus for banquets of $31,879.59. According to the financial statement, there is cumulative surplus of $99,792 for the Yacht Club through September. The imputed $31,879.50 banquet-related surplus amounts to 31.94 percent of the overall $99,792 surplus. That leaves regular food and beverage operations with roughly 68 percent of the net surplus generated by the Yacht Club through September.

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BOARD OF DIRECTORS

November 2016 Ocean Pines PROGRESS

Acting general manager asks for clarity of current board’s intentions By ROTA L. KNOTT Contributing Writer nsure exactly what the Ocean Pines Association expects its legal counsel to do with violations of the homeowner’s association’s restrictive covenants when it sends those cases to the attorney, Brett Hill, acting general manager, asked for guidance from the Board of Directors. During an Oct. 17 work session, Hill said he is struggling with how to be handle violations. He said has been told by staff with the Compliance, Permits and Inspections department that previous boards have not wanted the restrictions strongly enforced. According to Hill, CPI staff has said the stronger enforcement being encouraged by the sitting board is a change of direction and he isn’t sure how to respond. He said he was under the impression that the covenants were to be strictly enforced by CPI “but somewhere there seems to be a disconnect.” One of the key concerns is the board’s intentions when it votes to send a property violation to legal counsel. Hill said cases are “sitting for months without activity” once that referral is made. Hill asked for clarification regarding the extent of authority the board is granting the attorney in making that referral, just to send a letter to the owner of a property in violation or to pursue action in the courts. Director Dave Stevens said generally the board supports whatever action is recommended by the general manager to prompt resolution to violations of the restrictions. He said the board’s action is to request that the OPA attorney file suit with the courts for an injunction that either directs the property owner to rectify a violation or allows the association to enter onto the property to do so. OPA President Tom Herrick said there is a resolution in place to address these issues and he wanted to know why the OPA wouldn’t follow it. Hill said it’s not always that easy. He cited “junk vehicles” as an example and said in some cases the directive has reportedly been not to follow up on violations. He said there is such a junk vehicle parked along Clubhouse Drive. Because it is parked partially on the street, partially on the owner’s property and partially on golf course property, no one seems sure who has the ability to ask that it be removed. Hill said he was told that the board previously instructed CPI and the Architectural Review Committee not to pursue that case. “I don’t know where this comes from,” Stevens responded. He said he was board liaison to the ARC for a year and during that time the board never dis-

cussed telling anyone not to correct a violation. “I want to hear it from the board officially,” Hill responded. He said he is simply proceeding with an abundance of caution as the acting general manager. “We have standards that we’re supposed to enforce and we need to enforce them. That’s my assumption,” he said. Director Doug Parks said the OPA

has a set of resolutions to follow regarding violations of the restrictions, adding, “There’s no question. There’s no interpretation.” Still, Hill said, cases have lingered for years because of an apparent lack of direction by the board. He said “supposedly some board” told CPI staff to try to mediate disputes with multiple visits from inspectors before issuing a written violation. He said that process shouldn’t

take six months, yet some cases have lingered for years. “We obviously have to stay on top of these things,” Director Carol Jacobs, current ARC liaison, said. She added that the board needs to ensure when any items are sent to legal counsel for resolution that something actually happens. However, Jacobs also advised that the OPA must follow due process and afford property owners the opportunity to take any action necessary to correct violations. Stevens asked what happens when the board sends a violation to legal counsel to pursue. He said the attorney should not just write another letter to the property owner, but should take it to

Hill, board continue debate on just how aggressive CPI enforcement should be

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BOARD OF DIRECTORS

November 2016

CPI enforcement From Page 19 court if necessary. “We want the violation to be corrected,” and expect the judge will issue an injunction when the case makes it to court, he said. If the property owners don’t take action as directed by the judge, then they will be in contempt of court, he added. Jacobs said the board has the ability to direct legal counsel to do whatever it wants but the standard procedure has been to start with a letter from the OPA attorney to property owners telling them they are in violation of the restrictions and directing them to remedy the situation. “I don’t know what happens then after that,” she said. “Do they take the next step automatically?” she asked if the owners don’t comply following a letter from legal counsel. Jacobs said the process should actually begin informally, with CPI inspectors working with property owners to correct problems without actually citing them for a violation. Hill disagreed and said there is supposed to be a process that is followed for every homeowner. He said the process requires documentation of each step. He said during the last quarter of the year there were more than 200 property violations in Ocean Pines and most were resolved as soon as the owners received a letter from CPI notifying them of the

problem. OPA President Tom Herrick also wanted to know what course of action is taken once the board voted to send a property violation to legal counsel for resolution. “We have to discuss what that means,” he said. Stevens agreed and said the board should specify what actions it expects to be taken when it votes to forward a violation to the attorney. Parks also echoed the thought, asking, “What is our expectation?” He said he would like to have an outline of the process. “I want to see something” in writing. Director Pat Supik questioned whether or not the OPA has attorneys handling property violations who know what they are doing. She asked if there are attorneys who specialize in addressing the legal matters associated with restrictive covenants in homeowners association like Ocean Pines. Jacobs responded that it is always best to use local attorneys for matters like these. But Supik wanted to know “do we have the right attorney?” Stevens responded that the OPA has legal representation that has been addressing such matters for some time. The directors asked Hill to determine what process legal counsel follows to pursue resolution to property violations on behalf of the OPA and report back on the matter.

Hill: Process of addressing property violations starts over when a home changes hands Board takes action on eight CPI violations, postpones consideration of one By ROTA L. KNOTT Contributing Writer he Ocean Pines Association has to begin again the process of notifying property owners that a violation exists on their lot if the property is sold to new owners. During an Oct. 22 review of nine properties that have ongoing violations of the OPA restrictive covenants, Acting General Manager Brett Hill said two of the properties have changed hands yet the violations remain. Hill said that means new violations have to be issued for those properties at 44 Harbormist Circle and 65 Boston Drive because the citations do not run with the property but rather are issued to owners. Director Cheryl Jacobs asked if the sellers had an obligation to disclose the violations to the purchasers prior to settlement. She said she would like an opinion on that issue so the OPA knows when considering future cases of property vio-

lations whether or not disclosure is a requirement. She said it seems like there should be such a requirement to disclose any pending violations when a property is sold. Director Dave Stevens echoed Jacobs comments and said he hopes any encumbrances would be made known to those purchasing the property. “We’re an internal process,” Hill responded, so there is no means for property violations to become a stipulation of settlement. Notices are sent directly to the owner and do not run with the property like a lien. Further, when the OPA files for an injunction in a case, it is filed against the individual owner not the property, he said. Hill said he is not aware of any obligation on the part of the seller to disclose OPA violations. He said he believes the problems present new violations once a lot changes hands and the new owners must be

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20 Ocean Pines PROGRESS

BOARD OF DIRECTORS Violations From Page 20 afforded due process. That means starting over with a new notification to the buyers providing them 30 days to remedy the situation. No further action can be taken against the previous owner. At both 44 Harbormist Circle and 65 Boston Drive, the previous owners were both cited for failing to properly maintain their properties. The owner of 44 Harbormist Circle was originally cited in June 2014 for maintenance issues related to a boat on the site but the property changes ownership in August 2016. At 65 Boston Drive, the previous owners were cited in June 2015 for a fence a basketball backboard in disrepair but the home was sold on October 2016. In both cases, the board voted to close out the cases against the previous owners and to have CPI reinitiate the violations process with the new owners. Directors also voted to send numerous other property violations to legal counsel for further action. At 35 Burr Hill Drive, the owner died and the home has been discharged to bankruptcy; there is debris in the yard and a deck that needs screening. The owner of 141 Teal Circle installed a second boat lift without the benefit of an OPA permit. At 30 Falconbridge Road, screening is

November 2016 Ocean Pines PROGRESS needed around a propane tank. A boat located at 8 Juneway needs cleaning. Roof maintenance is needed at 23 Lord Guy Terrace. To address violations at other properties, the board authorized having Public Works crews make the necessary improvements and the OPA will bill the homeowner. Repairs are needed to the gutters, exterior walls and trim, and the house exterior needs to be cleaned at 52 Capetown Road. At 37 Driftwood Lane, crews will remove accumulated debris. More extensive repairs are necessary a 745 Ocean Parkway where there is roof damage. Hill asked for the board’s OK to seek legal advice regarding the extent of repairs Public Works can make to the home. Finally, the board took no action on violations on two properties, 11 Garrett Drive where a shed was installed without a permit and 79 Boston Drive, where a deck was constructed without a permit, for which court hearings have been scheduled on Nov. 18. Directors declined to take action on a property at 2 Capetown where there are fallen limbs and debris in the gutters. They tabled the matter until their November meeting in order to give the property owners additional time to perform the required clean-up.

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BOARD OF DIRECTORS

November 2016

By TOM STAUSS Publisher he Ocean Pines Association is getting closer to finalizing a survey that the Comprehensive Plan Advisory Committee recently completed in draft form for review and possible revision by the Board of Directors before it is sent out to property owners – either through the mail, in electronic form, or some combination is yet to be decided.

OPA President Tom Herrick, during a board work session Oct. 17, invited his colleagues to attend a meeting of the

Board, comp plan committee to discuss 40-question survey Board to meet with panel Nov. 17 to hash out whether 2008 Zogby survey could be incorporated, in part, into new questionnaire committee on Thursday, Nov. 17, in the East Room of the Ocean Pines Community Center, to discuss the survey draft, which is posted in PDF format on the

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OPA Web site among the minutes of committee meetings. “The committee wants to meet with the board to discuss the survey,” Herrick said, and it appears as though the meeting will become, more or less, a special meeting of the board if a quorum of the board shows up. Director Dave Stevens said during discussion that he had met recently with the committee chair, Frank Daly, and suggested to him that some questions in the 2008 survey conducted by the Zogby polling organization could be incorporated in the new survey. The Zogby survey was “very well done, professional,” Stevens said, adding that “it would be useful if some of the Zogby questions were included (in the new survey). It would be interesting to see if any of questions” posed in 2008 would produce different answers in 2016-17, he said. Director Slobodan Trendic agreed that the Zogby questionnaire had “very good questions” and that if answers came back in the new survey similar to what occurred in 2008, those results

would be validated. The Zogby survey results are available for reading on the OPA Web site. Former OPA Director Jeff Knepper, commenting from the audience gallery as has been permitted by Herrick as a way of improving communication with property owners, suggested that if questions are taken from the Zogby survey for use in the new survey, they should be copied “exactly.” Anything less would make any conclusions less definitive, he suggested. Daly, in an email to the Progress, seemed okay with the idea of incorporating some of the Zogby questions. “If the BOD wants Zogby questions, they certainly can add them or replace some of the existing questions. I suspect that will be the essence of the discussions on the 17th,” Daly said. As it currently stands, the survey contains 42 questions. The board will have to decide whether adding questions from the Zogby survey without eliminating some questions that the committee came up with will make the overall package too cumbersome. The board also will have to decide whether to mail the survey out to property owners or employ some other means, such as filling out the survey online, or both, to get the participation the OPA would prefer. During a July board meeting, Daly said that a 15 to 20 percent response would be “expected.” To Page 25

November 2016 Ocean Pines PROGRESS

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BOARD OF DIRECTORS From Page 22 In response to a question from Stevens, Daly said he didn’t have a good handle on the percentage of Ocean Pines property owners who aren’t full-time residents, but he acknowledged the conventional wisdom is that roughly half of the Ocean Pines 8400-plus lots are owned by property owners who don’t live year-round in Ocean Pines. Then OPA president Pat Renaud, then board’s liaison to the committee who has since been replaced by Stevens in that role, introduced Daly as someone who, in his short time as chair after his predecessor was asked to resign, was working hard to make sure the survey was forward-looking. An earlier iteration of the survey developed by a research arm of Salisbury State University was not well received by the board, which came close to abolishing the committee because of its sluggish pace at developing a survey earlier this year. The pace quickened after Daly assumed the chairmanship. A copy of questions approved by the committee so far seems to back up Renaud’s contention that questions are forward-looking. As one example, the survey asks about priorities for capital improvements and whether those improvements should be renovation or replacements. That question was at the heart of an ideological division of the old board of directors, with one faction generally preferring renovation to new replacement buildings. Former OPA General Manager Bob Thompson is for the most part was in the replacement camp, as was a then board majority. But with the reorganization of the board in August following the annual OPA election, that majority opinion has shifted. Four directors – Stevens, Herrick, Brett Hill and Slobodan Trendic – have at various times indicated a preference for renovation over replacement as a general rule. The posted survey lists ten proposed capital projects that it would like survey-takers to rank in order of priority, but lacks information on what each encompasses, which, without further explanation, could make it challenging for property owners not well versed in details. The projects include the Ocean Pines Golf Course complex (not specifically the Country Club, which has been the focus of much recent board discussion), the Beach Club complex, the Yacht Club complex, the Mumford’s Landing complex, the indoor aquatics complex (Sports Core), Swim and Racquet Club complex, the Manklin Meadows/Racquet Sports complex, the Administration and Police headquarters complex, the Community Center complex, and White Horse Park complex. Some of these amenities have already received a lot of OPA investment, such as the Community Center and the Yacht Club, both new within the past five years. New bathrooms for White

Neighbors fence over planter boxes along their Wood Duck property line Neighbor upset with ARC decision ‘appeals’ to OPA Board By ROTA L. KNOTT Contributing Writer alling his neighbors’ planter boxes and fence “ugly,” one long-time Ocean Pines resident wants the Board of Directors to overturn an Architectural Review Committee decision permitting the structures. Earle Moore addressed the board during an Oct. 22 meeting asking directors to have the wooden landscape structures removed. “Do you all live in the Pines? Would you all like somebody to put something like that in your yard next door?” Moore asked members of the Ocean Pines Association’s board. He said ARC approved and his neighbors at 74 Wood Duck Drive installed the structures over his objections. The wooden planter boxes are spaced along the property, abutting the adjoining lot of Moore. Two-foot temporary

fencing is connected to each planter box to create a fully enclosed area in which the neighbors’ pets or visiting grandchildren can play. The fencing can be disconnected and removed, creating free-standing planter boxes, when not in use. Although the record is not entirely clear, it appears that the ARC envisioned that the fencing would be removed when the residents of 74 Wood Duck Drive are not home. Moore asked the board to overrule the ARC’s Oct. 4 decision to allow the structures and make his neighbors get rid of the planters and attached fence. He said such planters are usually reserved for installation in front of “hotels” and not near homes. He called them ugly and said they are already getting moldy. “So what I’m saying is help me out here,” he said. Moore alleged that the property owners originally installed the planters and fence without approval from the ARC. He said told them that they needed permits and he complained to the previous general manager, Bob Thompson, and

then to the Department of Compliance, Permits and Inspections, but no action was ever taken to address the matter. Then last month his neighbors were officially granted approval by the ARC at a meeting he says he wasn’t invited to attend, Moore said. Acting General Manager Brett Hill told the board that the issue was initially addressed on an informal basis through CPI. He said when he assumed management of the OPA, he met with the owner of 74 Wood Duck Drive, who claimed that CPI was “harassing” her and that there were three violations posted against the property. Since then, he said, he had been informed that the matter had been addressed. Hill said ARC considered an application from the property owner for the planters in September and denied it. In October, however, the committee reconsidered and approved a variance allowing the planters to encroach into the side yard setback, putting them closer to

Horse Park are awaiting county permit approval before construction can begin. The board shortly will be considering proposals for renovation or replacement of the Beach Club bathrooms, with the survey unlikely to be completed before the board decides which option to choose. The board and Thompson also have been wrangling over the scope of racquet sport improvements at the Manklin Meadows complex. The survey, if completed by the end

of the year, could give the board some guidance on several capital projects proposed by Thompson but not yet acted upon by either the old or new board. One such project is Thompson’s proposed Public Safety building on OPA property west of the post office and library on Route 589. He had suggested that the new building include space for a new Ocean Pines police department, a new Southside firehouse, and offices for OPA administration departments (GM,

controller, membership and public relations). Another Thompson proposal is for a new indoor pool complex to replace the existing Sports Core pool. The survey questions approved so far by the committee also includes one that attempts to gauge acceptable financial performance for each of the amenities in Ocean Pines, whether they must be profitable or break-even to continue, subsidized by assessments, or offered “free” as part of the annual assessment.

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Trendic suggests OPA may be improperly assessing interest on delinquent accounts Suggests amnesty program as a way of collecting past due assessments inflated by late fees By TOM STAUSS Publisher irector Slobodan Trendic, during an Oct. 17 Board of Directors work session, launched what at times turned into a testy debate over how the Ocean Pines Association charges property owners who are late in paying their annual assessments. At one point suggesting that the OPA may be improperly charging 20 percent annual interest on delinquent accounts

– he later conceded what he thought were interest charges might actually be late fees – Trendic posed the question of whether the board should adopt a new policy on collecting delinquencies, especially those that have risen dramatically because of interest or late fee levies tacked on to actual past due amounts. Buried in the debate was a suggestion, that Trendic didn’t have much opportunity to flesh out because he was meeting some resistance from his col-

leagues, that the board might consider an amnesty of some sort to entice those with delinquencies to clear their accounts. Trendic began by informing the board that since 2010, there has been a tripling of delinquencies recorded on OPA annual audit reports. “It’s an alarming trend,” he said. “Should the board consider a new policy (to reverse that trend)? he asked his colleagues.

Planter boxes

eryone has a different opinion of what is aesthetically pleasing. “They may not be the most attractive thing” but they are allowed, she said of the planters. “They’re perfectly fine according to the regulation.” Director Dave Stevens agreed. “It’s in the eye of the beholder what’s pretty or not? What’s ugly or not?” However, Jacobs said, it appears the property owners are letting the fence up all of the time, instead of removing it as required, and that presents a new violation on the lot. Hill agreed and said it looks like the fencing is permanently attached to the

planters. He said the only language in the OPA’s restrictions related to temporary fencing is for that placed around vegetables and newly planted landscaping. The restriction specifies a maximum height of 24 inches. OPA President Tom Herrick asked for clarification as to why ARC granted the variance to the side yard setback. Director Dave Stevens, a former board liaison to ARC, said the committee frequently allows such variances and agreed with Jacobs that the board has no authority to overrule the decision. Still, Moore said his neighbors don’t even live in Ocean Pines full time. “They

From Page 25 Moore’s home, Hill told the board. Carol Jacobs, board liaison to the ARC, said allowing the variance for installation of the planters within the side yard setback and with the temporary fencing was a compromise to the property owner’s request to ARC. She said such planters are permitted in Ocean Pines and the only reason the owners needed ARC approval was to move them closer to the property line. Jacobs said the OPA board cannot overrule an ARC decision. She said ev-

Trendic said that more than $500,000 of the $1.1 million currently owed the association consists of delinquencies with very high balances, and those very high balances are often inflated because of the late Slobodan Trendic charges imposed on them on a monthly basis. In some cases, he said, “accrued interest is higher than the assessment owed.” Trendic said OPA declaration of restrictions specify that an interest rate q

26 Ocean Pines PROGRESS

don’t live there,” he said. “That is irrelevant sir,” Stevens responded. Hill wondered why Moore wasn’t notified of the ARC’s meeting on the issue prior to issuance of the variance. He said he believes there should be notice provided to neighboring property owners. Jacobs said notice was sent but Moore didn’t show up. Moore, however, disagreed and said he was never notified. Directors asked Jacobs to gather more information, including the rationale for issuing the variance for the planters and whether or not notice was sent to Moore, and report back to the board.

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Delinquent accounts From Page 26 for delinquent accounts should be set every year in February when the budget for the next fiscal year is adopted by the board. He noted there appears to be no record of such an interest rate established by a separate vote of the board in recent years. “If we’re not complying with the DRs, we better put (setting an interest rate for 2016-17) on the agenda for February,” he advised his colleagues. “If I was one of those delinquent, what is my motivation to settle” if the OPA is tacking on fees not authorized by the board. Trendic then suggested some sort of amnesty program – an obvious component could include a waiver of late fees – as a way of reducing the amount owed the OPA. “This is not a reflection on the staff,” he said. “We’re not the only association with a problem.” Actually, the OPA delinquency rate as a percentage of properties in Ocean Pines is relatively low, usually running in the two to three percent range. But because some properties have very high delinquencies, and are often in some stage of foreclosure, collecting what’s owed is very challenging. Director Doug Parks said the topic raised by Trendic had “piqued” his interest. He said of the $1.2 million owed, “it’s

incumbent on us to try to capture some of it” before it is written off as uncollectable. He asked what the OPA is doing to collect the arrearages. It’s a topic that has been debated, off and on, for decades in Ocean Pines. Former Director Marty Clarke, during his years on the board, often clashed with management and some colleagues over what he thought was a less than aggressive collection policy Director and Acting General Manager Brett Hill said the OPA is quick to file liens against properties that are delinquent. In the category of properties in which unpaid assessments date back three or more years, the OPA can wait out a bank foreclosure or a tax sale in the hope of recovering some of the money owed, but often there is little left after other creditors are paid. Parks asked if there is something else the OPA could to improve the amounts recovered. Director Pat Supik answered not much. “I think we’re doing everything we can do,” she said. Hill said once a delinquency is two years old, the OPA can go into small claims courts to try to obtain a judgment against a property owner. Stevens said the best time to take that route is after one year, when “you have the best of chance of recovery.” Hill said there are about 50 home-

owners with delinquencies that are three and a half years old or more, adding that until a house is sold and proceeds distributed, “we’re not going to write it off.” Trendic said there had been a slight reduction in the amount owed from last year to this year – from $1.17 million to $1.15 million. That amounts to a $22,000 decline. At the same time, “we don’t seem to be solving” the big ticket arrearages. Stevens then became somewhat agitated, telling Trendic that “you don’t have any options” to decrease the amounts owed. Trendic politely pushed

back, telling his colleagues “we need to be creative with the interest versus the principle … Be creative with amnesty,” he suggested. Stevens challenged Trendic on whether he thought there was any correlation between the interest rate charged deliquent property owners and collections. Trendic implied that he did, but that in any event the OPA has “created a problem” by charging what he suggested was an excessively high interest rate of 20 percent annually on past due accounts. Bylaws and Resolutions Advisory Committee member Jim Trummel sug-

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OPA FINANCES

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Board approves stripped down budget guidance for 2017-18

Delinquent accounts From Page 27 gested that Supik, the OPA treasurer, and Hill as acting general manager investigate any difference in the collection failure rate between accounts that are a year and two years old. He also said he didn’t believe the OPA actually charges interest on delinquent accounts. “I will be surprised if you see any kind of rolling interest charges on our liens,” he said, adding that what the OPA imposes are late fees. Later he said that the late fee is 1.67 percent per month. He said that if a delinquent property owner believes that the late fee is too high or imposed in a way that runs afoul of the Drs, “someone could sue us.” When it became obvious that no director was publicly inclined to support his idea for some sort of amnesty, Trendic observed that “I seem to be at odds” with his colleagues over the issue. He conceded that he may have confused interest charges with late fees. He did receive a pat on the back for raising the issue from one property owner, however. Joe Reynolds said he appreciated the fact that Trendic had pointed out the fact that previous boards have not been compliant with the DRs in regards to how it imposes interest and/or late fees on past due accounts.

Directors yet to decide issue of funding the Legacy reserve By TOM STAUSS Publisher he Board of Directors has approved a stripped down version of budget guidance for fiscal year 2017-18 as recommended by OPA Director and Treasurer Pat Supik after board discussion in an Oct. 17 work session. The unanimous 7-0 approval occurred during the board’s regular monthly meeting Oct. 22, following a more extended discussion of budget issues during the earlier work session. Nor is the discussion over. The board has scheduled a special meeting on the budget for Monday, Nov. 14, at 2 p.m. in the Assateague Room at the Ocean Pines Community Center. The approved budget guidance as recommended by Supik and approved by the board is what’s left of a more extensive document prepared by the Budget and Finance Advisory Committee and discussed in detail by the board during its Oct. 17 work session. Supik, the board’s liaison to the committee and its former chair, led the discussion. Supik presented a motion for board approval based on the Oct. 17 work session, in which many of the committee recommendations were effectively deleted because Brett Hill, the acting general manager, or the board has already taken separate action on committee recommendations. So the stripped down version offered by Supik represents not so much a rejection of committee suggestions as it does a

recognition that the board sees the Ocean Pines fiscal landscape in a way not dissimilar to the committee’s. For instance, a long-standing committee recommendation on moving on information technology improvements, as well as an IT specialist to help the OPA manage whatever system the board eventually approves, already is in an early stage of implementation. Under the oversight of recently appointed Director Doug Parks, a task force looking at an organization-wide IT solution is in the process of being formulated, with recommendations expected in the not too distant future. The approved recommendation says for presentation and analysis purposes, management should develop a fiscal year “budget report” with categories including the prior year budget, projected year end numbers for the current fiscal year, and the projected budget for next year, with variances and the effect on the lot assessment indicated as well. The approved guidance also says that any departmental revenue or expense increase or decrease of 5 percent or $5,000, whichever is less, should include a needs justification. Hill also has said he intends to ask each department heads to prepare such a justification, including any capital expenditure requests. The budget guidance also urges Hill to use “relevant obSM jective performance metrics” in documenting expenses and revenues, boilerplate language adopted from previous year committee language that can be translated as performance To Page 30

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Budget guidance From Page 28 benchmarks for employees or department-wide financial goals. The budget guidance also includes language asking that the capital budget should be present in a “rolling, multi-year format that includes budgeted but unexpended items from prior years.” The document adds that “realizing the timing and circumstances this current year, this process may need to be formalized during the (next) fiscal year. Requests for new or replacement capital expenditures should include dollars and rationale. There should be a return on investment calculation where applicable.” Finally, the board accepts a committee recommendation for a higher capital threshold, the number in which a capital expenditure is no longer considered an operating expense but rather is a capital expense that can be funded out of reserves or regarded as new capital. The guidance recommends that the threshold should be increased from $1,000 to $2,000. Director Cheryl Jacobs, during brief board discussion at the Oct. 22 regular meeting, reiterated previous statements critical of rolling capital budgets. Her concern is that certain capital projects included in one fiscal year but not undertaken are automatically rolled over

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to the next, without board reauthorization. Supik tried to reassure Jacobs that a “rolling capital budget” is more accurately labeled a “multi-year capital budget” that “doesn’t mean we’re going to roll over unexpended capital funds” from one year to the next. Jacobs said that she still had a problem with the term rolling, after which Director Doug Parks suggested that it be struck from the recommended guidance. It wasn’t clear whether the other directors agreed to remove the word Jacobs didn’t like. No motion to amend Supik’s motion to approve the recommended draft was offered or voted on. Director Dave Stevens said that a multi-year budget would be presented for information purposes only. “We’re not approving expenditures for the out years,” he said. The approved budget guidance does not address one somewhat controversial recommendation of the budget and finance committee. The committee urged the board to keep the entire revenue stream from the so-called legacy component of the Major Maintenance and Replacement Reserve. Some directors, particularly Stevens, are determined to reduce if not eliminate the legacy reserve’s funding, set at $864,724 in assessment dollars. The legacy reserve, once known as the five-year plan but now in its eighth year, was originally

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OPA slips back into fiscal year deficit Aquatics continues to lead other amenities compared to budget By TOM STAUSS Publisher he Ocean Pines Association slipped back into negative territory relative to budget five months into the fiscal year, with a weak September that reversed the trend of the first four months of the fiscal year. According to Controller Art Carmine’s monthly financial report for September, the OPA recorded a negative operating fund variance of $30,043 for the month, with revenues under budget by $75,300 and expenses under budget by $42,969, and new capital under budget by $2,318. Excluding new capital, the net operating variance for the month was a negative $32,361. Through the end of September, which marked the end of the first five month of the 2016-17 fiscal year, the OPA had a negative operating fund variance of $11,621. Revenues were under budget by $243,868 – shortfalls at the Yacht Club and golf operations explain much of that – while total expenses were less than budgeted by $191,406. New capital expenditures are under budget by $40,841. Excluding new capital, the cumulative net operating variance for the year is a negative $52,462. There are essentially three ways to look at financial performance. One is to mea-

30 Ocean Pines PROGRESS

designed to collect supplemental funds for large capital projects. Before that reserve was created, all major replacement projects were funded out of the historical component of the maintenance and replacement reserve. The revenue source for that is funded annualized depreciation of OPA capital assets. Roughly $1.6 million has been collected in funded depreciation in the current year. After Supik introduced the committee’s recommended budget guidance, Stevens said each of the panel’s recommendations needed to be discussed “but the odds of getting the board” to fully agree on them “are pretty slim.” Committee recommendations involving IT, human resources, and consolidating vendor contracts were removed from consideration because of independent actions on each already taken by Hill or the board or both. Jacobs declared she was “not in favor” of item number six on the committee’s list that involved rolling, multi-year capital budgets. Like she did at the Oct. 22 regular meeting, Supik said a multi-year budget requires reauthorization of unexpended capital funds the following year and “that all it means is you have a longrange plan. We already kind of have that,” she said. Jacobs said that year after year some capital expenditures are budgeted “but not done,” and she said the question must be asked the following year whether the expenditure should be included in the budget. Hill said that by next year, he believes the OPA will have a completed long-range operational and capital plan, including a return-on-capital analysis on “every” capital request. Stevens said that not every requested expenditure will have a return on investment, and Hill said that even those items that don’t, such as police cars, will still require some sort of needs justifica-

tion, or business case. Stevens indicated that he was less confident than Hill that a capital improvement plan, or CIP, would be completed and adopted by the board next year. “We haven’t taken one step for a CIP,” he said, adding that so far the OPA hasn’t even started pruning from a list of capital assets those that are fully depreciated or no longer in use. “We didn’t do what we were supposed to,” as recommended in the recently completed reserve study by DMA Associates, Stevens said. The board debated the merits of raising, for budgeting purposes, the capital threshold for when an item is included a capital expense rather than an operational expense. The current threshold is $1,000, and Supik and the committee recommended that it be increased to $2,000 or even $2,500. Supik settled on the $2,000 threshold and the board accepted it. The board also discussed a committee recommendation to include road depreciation as a funding source for road resurfacing. Hill said he didn’t think the administration needed a “directive” on this matter. He said he and his staff were about two months away from knowing whether the existing funding source for road repair and/or resurfacing, local impact funds related to slot machines at the local Ocean Downs casino, will be sufficient for anticipated needs. Jacobs then asked about when individual board members would offer suggestions on what they would like to see included in the budget for next year. “We should have been referring items to the GM before now,” she said. Supik said the existing budget timeline doesn’t allow a lot of time for board input. The Nov. 14 meeting may allow Jacobs and other directors to offer their suggestions.

From Page 30 sure actual results against budget, with either positive or negative variances possible. Another is simply actual results, which can be surpluses or deficits. Both measurements are presented in OPA financial reports for a particular month and cumulatively for the entire fiscal year. The monthly financial reports posted on the OPA Web site under documents also include detailed break-outs for each amenity department, along with yearto-date numbers for the current and previous year, making year-over-year comparisons possible. Year-over-year performance is the third way to measure financial performance. The OPA runs its fiscal year from May 1 through April 30 of the following year. Amenity performance in September was mixed, as it usually is, with all two of three racquet sports, aquatics, golf operations, Beach Club, Beach Club parking and marinas recording losses for the month. Recording surpluses were pickleball ($4,657) and the Yacht Club, which was $17,415 in the black. In the loss column were tennis (-$1,619), aquatics (-$28,157), golf operations (-$10,567), Beach Club (-$6,450), Beach Club parking (-$3,200) and marinas (-$2,595). Compared to budget, Beach Club parking was the top performer for the month, with a $6,102 positive variance, followed by pickleball, with a $4,202 positive variance, and Aquatics, ahead of budget by $2,773. The other two racquet sports, tennis ($900) and platform tennis $594) both had positive variances for the month. Three amenity department missed their budget targets. Golf operations were under budget by $30,262, the Yacht Club missed by $10,078 and the Beach Club, which closed after Labor Day weekend, was behind budget by $5,988. For the first five months of the fiscal year, Aquatics is far and away the best performer compared to budget while the Yacht Club is the worst. Aquatics’s positive variance is $66,883, while the Yacht Club has a negative variance of $179,413 relative to budget. Marinas ($35,240), Beach Club parking ($19,700), Beach Club ($4,799) and pickleball ($1,671) were all ahead of budget through September. In addition to the Yacht Club, behind budget through September were golf operations (-$66,883), tennis (-$4,195) and platform tennis (-$1,557). All amenities were in the black for the first five months of the fiscal year, which is not unusual for this time period. The cooler months of the year tend to take bites out of operating surplus recorded early in the fiscal year. The top three amenities relative to actual net performance were Beach Club parking, marina operations and Aquatics, in that order. Beach Club parking produced a $391,495 surplus through September, a

November 2016 Ocean Pines PROGRESS

Stevens reiterates support for axing Legacy Reserve Director contends that component of OPA replacement reserve has been ‘underspent’ by $500,000 almost every year By Tom Stauss Publisher hen the Board of Directors approved budget guidance for 2016-17 during its Oct. 22 regular meeting, conspicuously absent was a recommendation from the Budget and Finance Advisory Committee to continue almost $900,000 in assessment dollars for the so-called legacy reserve, a component of the Major Maintenance and Replacement Reserve, that at least one director and probably more want to abolish. Retaining the legacy reserve’s revenue streams was one of the committee’s primary recommendations, one with a major impact on the OPA budget and the level of annual assessments collected from property owners. If the legacy reserve, together with its revenue stream, is eliminated or reduced in next year’s budget, as Director Dave Stevens and other directors prefer, then that could result in lower assessments for property owners, absent other pressures for increased spending and assessments. At this point, it’s too early to say with any certainty how the issue will be resolved, but the exclusion from the board’s budget guidance of any reference to fund the legacy at current levels could be a notable omission and an indication of which way the board is leaning. In previous year, boards almost routinely included the committee’s language on continuing the legacy reserve at current funding levels. Two years ago, that level was roughly $1.1 million, but boards have reduced that somewhat since then, to $864,724 in the current

fiscal year. But there never has been any majority in favor of terminating the legacy fund or its funding stream. Even Stevens in previous years supported some level of legacy reserve funding. That current contribution of $864,724, according to the latest OPA reserve summary, would leave the legacy reserve with a projected $343,436 deficit at the end of the year in April of 2017. At that level, it would be easier to merge it with the historical reserve, while defunding it entirely or partially. The result would be to effectively eliminate the legacy reserve from the official roster of OPA allocated reserves. During discussion of budget guidance issues in an Oct. 17 work session, Stevens made the point that for the past ten years or so, the historical reserve component of the Major Maintenance and Replacement Reserve has been “underspent by $500,000” most years, with the exception of the year when the new Yacht Club was paid for. “We dipped that year, but then went right back up (to the historic pattern),” he said. When Assistant Treasurer Gene Ringsdorf said the OPA had done “a miserable job” of getting information out about the reserves – seeming to imply that the legacy reserve and its funding stream needs to be preserved – Stevens pushed back hard. “No, we don’t need to keep the legacy reserve,” he said. “Prove we don’t have enough money” to accomplish what needs to be done to maintain OPA assets, he added. There are essentially two schools

of thought on the funding of reserves. One school, with Stevens as its most articulate and ardent advocate, says the OPA should not be collecting, in advance from property owners in annual assessments, money for Dave Stevens projects not yet approved by the board or property owners in referendum. He has said that without a fully vetted capital improvement plan – something which has not occurred at the board level since at least 2013, and even that is debatable – it is unconscionable of the board to be extracting dollars for projects that may never materialize. Another proponent of this school of thought, former OPA Director Marty Clarke, has called the legacy reserve, once called the five-year plan reserve, a slush fund that encourages boards to find ways to spend the money, sometimes in amounts that are excessive and wasteful. He and Stevens both have said that the allocated reserves, which stood at $5.7 million at the end of the 2015-16 fiscal year this past April, are over-funded for identified capital needs. The competing school of thought says that, on the contrary, OPA reserves are underfunded and should have roughly $14 to $15 million in hand at the end of every fiscal year. The so-called annual

modest improvement over the $384,798 surplus recorded a year ago. Marina operations also had a good summer, recording a $230,047 surplus through September, compared to $218,157 a year ago. Aquatics’ surplus through September was $183,701, up from $173,611 a year ago. The Beach Club food and beverage operation had its usual excellent summer, with a $169,835 surplus through September, up from $164,801 a year ago. Tennis recorded an $11,803 surplus through August, a slight improvement over last year’s $11,101. Pickleball is in the black by $8,047 through September, up from a $6,858 surplus a year ago. Although in the black through August, other amenities aren’t faring quite so well year over year. The Yacht Club was in the black

through September by $99,792, substantially less than is customary entering the cooler months when the amenity traditionally loses money. A year ago the surplus through September was $217,123. That’s an $117,331 negative year over year swing. Golf operations recorded a $26,866 surplus through September, compared to $120,464 last year for the same period. That’s a $93,598 year over year decrease. Platform tennis had a $4,669 surplus for the first five months of the fiscal year, a slight decline from last year’s $6,345. Reserve Summary – The OPA through Sept. 30 had $7.964 million allocated to reserves, a drop from $8.095 at the end of August. The reserve balance was comprised of $5.6 million in the Major Maintenance and Replacement reserve, $1.8 in bulk-

heads and waterways, and $549,667 in roads. The operating recovery reserve was zeroed out in September and may be eliminated. There are two components of the maintenance and replacement reserve. One, the so-called historic reserve, comprised of funded depreciation, had a balance of $5,931,236 as of Sept. 30, while the supplemental legacy reserve, once known as the five-year-plan, carried a negative balance of $343,436. Balance Sheet – As of Sept. 30, the OPA had total assets of $35.965 million, up from $34. 393 million a year previous. The assets were matched by $1.5 million in liabilities and $35.965 million in owner equity. Cash on hand for operating purposes as of Sept. 30 was $2,108,552, with short term investments totaling $9.56 million.

OPA FINANCES September results

32 Ocean Pines PROGRESS

OPA FINANCES

November 2016

Legacy Reserve From Page 31 component cost is a calculation promoted by adherents of this school of thought as a desirable level of funding for the OPA, although it’s difficult to find anyone who thinks this amount of money needs to be collected in a single year. Adherents to this school of thought are comfortable with the idea of collecting in advances for as yet unidentified or unapproved projects, confident in their belief that, in a community pushing age 50, with many buildings dating back to the late 1960s or 1970s, eventually whatever is collected now will need to be spent later on replacement buildings. The Stevens’ school of thought suggests that the era of big-ticket replacement buildings financed through reserves is in the past. Adherents generally are of the belief that Ocean Pines’ capital assets can be preserved with proper maintenance – done consistently – and that new buildings should only be considered as a last resort. Another approach, advocated by newly elected Director Slobodan Trendic – is that there are creative alternatives – such as public-private partnerships – to financing replacement buildings that don’t rely on assessment dollars parked in reserves. The annual-component-cost school has an advocate on the board, newly elected director Pat Supik, who during the board discussion at the Oct. 17 work session alluded to $14 million as a good target for a reserve balance. “That goes to whether we have enough money,” she said. Supik did not engage in debate with Stevens on the issue, however. Seeming to straddle the two competing schools of thought, Director and Acting General Manager Brett Hill said that the board currently doesn’t “have full information on (future) liabilities, on the right amount” for reserves. “Because we don’t have the information, I can’t quantify” reserve funding levels that are needed, he said. “It will take next year’s budget to figure that out,” he added. That seemed to suggest that he wasn’t prepared to push for board budget guidance recommending preservation of the legacy reserve, and its current funding stream. When Supik presented a motion for a stripped down budget guidance document at the board’s Oct. 22 regular meeting, she apparently had gotten the message that a board majority is more sympathetic to the Stevens point of view than to her school of thought in support of the annual component cost as a desirable goal. The issue is hardly resolved, however. At a special meeting of the board scheduled for Monday, Nov. 14, at 2 p.m. in the Assateague Room at the Ocean Pines Community Center, the issue could come in for further debate. Another of the OPA allocated reserve funds, the operating deficit recovery reserve, is already in the process of fading into oblivion. In the September reserve summary published as part of the OPA’s

monthly financial report, this reserve has been zeroed out, with more than $400,000 already transferred to the OPA’s general fund.. It seems just a matter of time before the reserve is eliminated from the summary entirely, now that it carries a zero balance. In a meeting of the Board of Directors and the B&F committee Sept. 21, it was evident that the committee and probably a majority of directors have a different view on the potential impact of eliminating the so-called legacy reserve. The elimination of the legacy reserve, merging it into what’s called the historical reserve, does not necessarily mean the board will defund it. It’s complicated, but that’s the way it could happen as the 2017-18 budget is debated and approved early next year. Indeed, the committee is recommending no reduction in the $864,724 annu-

al infusion of new assessment dollars attributable to the legacy reserve, even while it is okay with eliminating it as a separate reserve in the OPA’s monthly financial reporting and annual audited financial report. Committee members made a case for the preservation of that revenue stream during its Sept. 21 meeting with the board. Essentially they argued that it probably will be needed as the OPA tackles expensive capital projects in the coming years. Committee members said the original purpose of the legacy reserve was to “even out” assessment increases over time, avoiding dramatic fluctuations and special assessments. Committee member Dennis Hudson, who has rejoined the committee after a recent hiatus, argued that a significant decrease in assessments could result in a subsequent need to raise it just as significantly, causing major discord in the

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community if that happens. Eliminating the legacy reserve, while continuing to collect all or most of the assessment dollars that had been flowing into it for eight years, did not sit well with at least two directors who counter punched after committee members made their case. Dave Stevens and Slobodan Trendic effectively said that the OPA’s Major Maintenance and Replacement Reserve, of which the historic and legacy reserves are components, is adequately if not overfunded for OPA’s identified capital needs. Stevens told the committee that over the past ten years the OPA has collected from property owners and placed into the maintenance and replacement reserve assessment dollars that have exceeded spending from those reserves on capital projects and more routine replacement items.

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CAPTAIN’S COVE

November 2016 Ocean Pines PROGRESS

Hearn to serve another year as president By TOM STAUSS Publisher n an election outcome that was entirely predictable and devoid of drama, incumbent director Pat Pelino and newcomer John Costello were elected to the Captain’s Cove property owners association board of directors in results announced at the POA’s annual meeting Nov. 6. Incumbent director Dave Kieffer was elected to a seat as an alternate, which gives him full voting rights in the absence of another director. With two absentee directors rarely attending Cove board meetings, Kieffer is likely to continue to play an active role on the board. He was later re-elected Cove vice-president. Pelino, the board secretary, led the slate with 4,159 votes, followed by Costello with 4,091. They captured as many votes as they did because the Cove developer/declarant CCG Note and

its affiliates cast three votes for them for each developer-owned lot, a practice permitted under community governing documents. Cove president Tim Hearn said that this year might be the last in which CCG Note casts votes using the three-for-one entitlement. Under a 2012 settlement agreement between developer interests and the Cove association, the three-forone arrangement is active only in so far as any of the Cove accounts are operating in the red, Hearn said that this year should be the last in which that occurs, meaning that next year the developer/ declarant should be casting only one vote for every lot it controls. Even that should ensure that CCG Note will be able to effect the outcome it prefers in annual elections, however. Also running for the board but falling short were Arline Curtis, with 214 votes, and Carolyn Finn, with 195. In the race for alternate, Kieffer won

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with 4,147 votes. Also running for alternate were John W. Blake, who captured 133 votes and Costello, with 35. When the new board convened after the annual meeting, Hearn was re-elected president, Kieffer vice-president, Pelino secretary and Michael Glick, treasurer. As is customary at annual meetings and at some regular board meetings, Hearn was called upon to defend the practice of developer interests having such an outsized role in board elections when not much developing is taking place in the Cove after more than 40 years of existence and that which is occurring, such as new road construction, is being funded out of the so-called Exhibit X list of delinquent or formerly delinquent properties. Hearn was also asked to defend the fact that CCG Note and its afiliates don’t pay lot assessments. Characteristically, Hearn was not in

the least bit apologetic about the Cove’s power structure. He said under the 2012 settlement agreement, there can be only three developer representatives on the board. With Hearn no longer a principle or partner in CCG Note or the utility company that owns and operates the Cove water and wastewater treatment system, that requirement is being met, he said. The three-votes-per-lot entitlement dates back to the early days of Captain’s Cove and was inherited by CCG Note and its affiliated companies after former developer Bob Warfield and his partners filed for bankruptcy protection, he said. By its ability to effect the outcome of annual board elections, Hearn said CCG Note is able to ensure directors who share a vision on how the Cove should be managed. That was critical to the board, after the 2012 settlement agreement was enacted, taking action that avoided the Cove POA from falling into insolvency, Hearn said. He reminded residents attending the annual meeting that when he and like-minded colleagues took office, that Cove cash reserves had sunk from a high of about $1.2 million to around $300,000 or $400,000, with obligations the same q

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CAPTAIN’S COVE

November 2016

Cove election From Page 33 or more than cash on hand. Since then, the board has shored up the balance sheet considerably and restored credibility to the POA, Hearn said, not shying away from the fact that higher lot assessments were required to make that happen. This past year, Hearn said, the Cove generated a $200,000 positive variance to budget and a $750,000 in positive net revenue over operating expenses, which makes it possible for the Cove to make needed capital investments important to maintaing the community’s asset

base and quality of life. With respect to Exhibit X, Hearn said that its creation by the board under his presidency has made it possible for the Cove POA to stay current on the Marina Club mortgage and also generate funds that are being used to complete road construction in the Cove. Previously, Hearn has said that lots with direct paved road access have a much higher rate of paying lot assessments on time, which in turn means that other property owners who have been consistently current don’t have to subsidize those who haven’t been. Hearn said under the current pace of new road construction, all sections 1

through 13 should have roads within about five or six years. Once that happens, Exhibit X revenue can be used to accellerate retirement of debt associated with the Marina Club, he said. Hearn and Jim Silfee, one of the developer representatives on the board, told property owners that in the next year or 18 months, the priority will be to complete all roads in Section 1. So far, new roads have been completed in Sections 10, 7 and parts of 9 and 11, in addition to the roads in more developed areas of the Cove that were done years ago. Hearn said that roughly $240,000 per

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COVER STORY

November 2016 Ocean Pines PROGRESS

Country Club From Page 1 the Country Club, Stevens said designated uses for the facility seem to hinge on whether or not the OPA decides to replace the building or carry out renovations over time. He said the OPA has to focus on immediate repairs and then renovate to make it “operationally usable” and functional to serve the entire community. Stevens said any approval to rebuild the structure wouldn’t fall to the board anyway; that would have to be a decision made by property owners in a communitywide referendum vote. “It’s not going to be our choice,” he said. “It’s gonna be everybody’s choice.” He wasn’t optimistic that a referendum would pass because property owners may not like the idea of investing funds in another new building. “I don’t like the chances,” he said and added that the association doesn’t have a good track record of constructing buildings and staying within budget. He said the OPA should renovate what we have and let’s get a plan for doing it.” Trendic said he favors repairing the Country Club. “I think it’s the right thing to do. The fiscally responsible thing to do is to put together a plan to repair it.” “Looking at renovation versus replacement is a critical decision,” Terendic agreed. To be able to make that determination, he said the board needs to “look at the picture as whole.” He said the Board has a fiscal responsibility to all of its homeowners, not just golfers. “Can we continue to carry and subsidize what appears to be a very costly amenity to the community?” Trendic said he favors repairing the existing Country Club as opposed to replacing the building. He argued that

the funding generated by the golf club to support Country Club operations has historically not been attractive. Instead, he called the golf club a “burden” and a “drain” on the OPA’s financial resources. He said the Board must develop a long term solution to address that problem. “I defy anybody to show that correlation. That’s not the issue. The issue here is we have a building, whose components at least, if not the building itself, are demonstrably in need of maintenance because that maintenance has been demonstrably ignored over a significant period of time,” Stevens said. He said the only correlation between golf operations and the Country Club project is the “perception” by property owners that the golf club “is a losing proposition and they don’t want to put any more money in.” The key question is whether or not to replace the building. “That would be my choice, by the way,” he said, but added, however, that he doesn’t think that is feasible. He said it may be more expensive to renovate the existing building over time. When Director Brett Hill, who is the OPA’s acting general manager, informed the board that the Country Club is overall structurally sound despite the need for nearly $100,000 in roof and HVAC replacement, Trendic said he was happy to hear that. He suggested the board determine the cost to renovate the facility over time. As for the ultimate use of the Country Club, Trendic said that is a question of business model. He said the board must determine exactly what the requirements are for the building based on its intended use. Director Pat Supik wasn’t so sure. She said the initial $100,000 to fix the roof and HVAC system is a large expen-

diture. She said once the OPA starts to make repairs there is an implication that it is going to rehab and not rebuild the Country Club. That may be the way to go, but the expenditures “will add up $100,000 at a time” possibly making repairs more costly than constructing a new building. “We’re kind of making decisions on individual pieces in a blind manner.” Supik said she would need more information about the cost of required repairs to the Country Club before making a decision as to how to proceed. She said she “probably would love a replacement,” but agreed with Stevens that a positive referendum outcome would be iffy. Director Doug Parks said the board must factor in the tangible costs of transition and the impact on golf course revenue when considering whether to repair or replace the Country Club. “What do we have to invest right now? And what needs to invest to be operationally efficient?” he asked. Director Cheryl Jacobs said she is concerned that “we’re going little by little towards a big number” by making repairs and renovations to the Country Club. She suggested renting a trailer to house golf operations, pro shop and food and beverage service while the Country Club is rebuilt. That way the OPA would not lose functionality or revenue. Hill responded that the OPA would need trailers for at least three years while the existing building is razed and a new one constructed. That would cost hundreds of thousands of dollars in rental fees. He said he doesn’t have an idea of the impact on operations of replacing the Country Club but it would likely result in a reduction of significant income. If the OPA would opt to put a

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new building elsewhere in the vicinity of the Country Club then it would need to maintain the existing building while the new one is built. “Those are numbers that are not necessarily going to be easy to calculate.” As a result, Hill said a new building would not necessarily be less expensive to build than would renovating the old one.

Cart storage From Page 1 access it is possible,” Hill said in response to a query from Director Cheryl Jacobs. She wanted to know if there was the opportunity to incorporate the cart storage area into a renovated Country Club. While Hill said it is an option, he issued the caveat that doing so would depend on a variety of components that still need to be evaluated. Among those factors are whether or not the OPA’s golf cart fleet is gas-powered or electric because there will be different structural requirements for storing batteries and charging systems versus gasoline. That issue apparently has been resolved, as the board at its Oct. 22 regular meeting voted to approve the purchase of new gas-powered carts to replace aging electric carts. Additionally, he said there could be building code requirements, such as those for firewall separation, which will have an impact on the ability to house the golf carts within the Country Club. Hill said it could save the OPA the $100,000 estimated to construct a new standalone cart barn to add it as part of a renovation of the Country Club. However, the complexity of putting the cart storage under facility space designated for other uses may ultimately make it cost prohibitive, he warned. Parking requirements, traffic flow around the building and providing a staging area for golf carts also have to be assessed, according to Hill. Site work could also be significant expenses as well because the area contained protected wetlands. “These are factors that we need to understand before we can go into these next steps,” he said. The acting general manager said he hopes to have full documentation regarding the condition of the Country Club as well as alternatives for renovation or reconstruction along with cost estimates for the board’s review at a December meeting. That will allow the board to better assess the facility and “discuss what do we want the building to be?” Director Dave Stevens was skeptical about the potential for merging the cart barn with the Country Club. He said any further discussion about the facility needs to take into consideration its intended function, including whether or not cart storage will be located there. Moving the cart storage would necessitate changes to the electrical, plumbing and other building systems, he said. And traffic flow in and around the building would be difficult to design, he said.

36 Ocean Pines PROGRESS

November 2016

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LIFESTYLES Monday, Nov. 7 AARP monthly meeting, 10 a.m., Ocean Pines Community Center, 9:30 a.m. social time, 10 a.m. Renee Fredericksen, AARP executive council, guest speaker. Wednesday, Nov. 9 Bingo, Wine and Dine Fundraiser, 5 p.m. doors open, 6 p.m. games begin, Ocean Pines Yacht Club. $25 in advance, $30 at the door. Sponsored by the Ocean City Lioness Club. Food available for purchase, Chinese auction and door prizes. Special games with a $100 winner every game. Additional game cards available for purchase at the door. For tickets call Bev Topfer, 410-688-4934, or Kris Barron at 443-614-8445. Thursday, Nov. 10 Showing of Storm of 1962 video, Ocean Pines library, 2 p.m., produced by the Ocean City Museum Society, chronicling experiences of Ocean City locals who lived through “one of the most destructive storms ever to affect the Mid-Atlantic states.” The Ash Wednesday Storm was classified a level 5. Ocean City experienced 60 mile per hour winds and 25 foot waves for a period of three days. Nancy Howard, 443-235-4405 or neffiehoward@comcast.net. Friday, Nov. 11 Veterans Day Program, Worcester County Veterans Memorial Park, Rt. 589 and Cathell Road, 11 a.m. to noon, 410-208-0376. Big Daddy Weave’s concert, Ocean City Performing Arts Center, 7 p.m. Contemporary Christian concert featuring nationally known artists – Big Daddy Weave, Plumb, and We Are Messengers. Tickets $20 and $30 at the Convention Center box office, Ticketmaster, 800-5517328 or online at www.ticketmaster.com. Sponsored by the Community Church at Ocean Pines. Saturday, Nov. 12 Ocean Pines Anglers Club, monthly meeting, 9:30 a.m., Ocean Pines Library. Speakers, Dr. Kevin Chu, a 20- year veteran of the NOAA Fisheries Service, who will provide an update on saltwater recreational fisheries policy; and Roman Jesien, chairman of the Coastal Advisory Fisheries Committee for the Maryland Coastal Bays Program, who will share information on oyster restoration in the coastal bays and its benefits. Shepherd’s Nook Christmas Bazaar, 9 a.m. to 2 p.m., Community Church at Ocean Pines, Route 589 and Beauchamp Road. Christmas gifts, decorations, clothing, baked goods and crafts. Monday, Nov. 14 Special meeting, Ocean Pines Association, Board of Directors, Ocean Pines Community Center, Assateague Room, 2 p.m. Discussion of 2017-18 budget issues. Thursday, Nov. 17 Republican Women of Worcester

November 2016 Ocean Pines PROGRESS

HAPPENINGS County dinner meeting, 6 p.m., doors open 5 p.m., Golden Sands Condominium, 10900 Coastal Highway, Ocean City. Speaker, Michael A. Lewis, Sheriff of Wicomico County, on riot situation in Baltimore, the recent heroin epidemic and gun laws. $35 per person with a choice of three entrees, includes a free drink and door prizes. Doors open at 5 pm and dinner will be served at 6 pm. Pat Addy at 410-208-0171 or gorpataddy@aol.com to make reservations. Saturday, Nov. 19 Flag retirement ceremony, 10 a.m., Worcester County Veterans Memorial at Ocean Pines. Faded or worn American flags may be dropped off before or immediately after the Veterans Day Ceremony at the Worcester County Veterans Memorial at Ocean Pines on Friday, Nov. 11, at 11 a.m. Tuesday, Nov. 22 Understanding Diabetes presentation, 10 a.m., Ocean Pines Community Center, John Motsko, an Apple Discount Drugs certified diabetes educator. Q&A session to follow. Free blood glucose testing will be available at the Apple Discount Drugs Berlin location from noon to 2 p.m. following the presentation. No pre-registration is required. 410-749-8401, 5. Monday, Dec. 5 Board of Directors, Ocean Pines Association, work session, 9 a.m., board room, OPA administration building, discussion of agenda items in preparation for regular monthly meeting on Saturday, Sept. 24. Agenda posted on OPA Web site, oceanpines.org, several days prior to meeting.

Friday, Dec. 9 Board of Directors, Ocean Pines Association, regular monthly meeting, 10 a.m., Ocean Pines Community Center. Agenda posted on OPA Web site, oceanpines.org, several days prior to meeting. Ongoing Free platform tennis clinics, Saturdays at noon, Manklin Meadows tennis complex. Bring sneakers, the rest is provided. Annual memberships start at $150. Line dance classes, Monday and Wednesday, 9:30 -10:30 a.m., Ocean Pines Community Center. Beginners welcome. Betty Daugherty, 410-7261818, or bettydau@aol.com Pinesteppers Square Dance Club, Wednesdays, 7-9 p.m., Ocean Pines Community Center with caller Dennis O’Neal. Visitors welcome. The group also hosts a dance the fourth Saturday of the month from 7-9:30 p.m., Ocean Pines Community Center. Guest callers lead the dancers with music and choreography. Mainstream/Plus square dancers welcome to join in. President Arlene Hager, 302-436-4033. Pine Tappers free adult tap dance classes, Tuesdays, 2-3:30 p.m., Ocean Pines Community Center. Exercise and have fun with choreographed tap dancing routines. From 2-2:30 p.m., brush up on basic techniques and a review of the routines, then join the regular class from 2:30-3:30 p.m. Every week or dropin as convenient. Lori at 410-251-2162 or tntandcompany@gmail.com. Ocean Pines Ping Pong Club, Ocean Pines Community Center, Monday, Wednesday and Friday, noon to 2 p.m. All levels welcome. Eric Bowers,

410-208-1794. The Kiwanis Club of Greater Ocean Pines – Ocean City every Wednesday at 8 a.m., Ocean Pines Community Center. 410-641-7330 or kiwanisofopoc.org. Sanctioned duplicate bridge games, Ocean Pines Community Center, Sundays 1 p.m., Mondays noon, Tuesdays 10 a.m. Partners guaranteed. $5, special games $6. Third Sunday of every month is Swiss teams (no partner guaranteed for teams). Felicia Daly, 410208-1272; Pat Kanz, 410-641-8071 The U.S. Coast Guard Auxiliary, Flotilla 12-05, meets the first Monday of each month at 7:30 p.m. in the U.S.C.G. Station, Ocean City. Visitors and new members are welcome. Dennis Kalinowski, 410-208-4147. Web site http:// a0541205.uscgaux.info. Life after loss support group, second and fourth Tuesday of each month at the Community Church at Ocean Pines, 11227 Race Track Road, Berlin, 11 a.m. Help in coping with any type of loss. 410-641-5433. Worcester County Democratic Club meeting, fourth Thursday of each month, 7 p.m., Marlin Room of Ocean Pines Community Center. No December meeting. Club membership is not required. All those interested in Democratic platforms and agendas are welcome. Beach Singles, every Thursday, 4-6 p.m., Castaways, Coastal Hwy. at 64th Street, Ocean City, 45+ singles for socializing and monthly activities, 302436-9577. Republican Women of Worcester County, fourth Thursday of each month, 11 a.m. meeting (doors open at 10:30), lunch at noon, local restaurants. For information, call membership chair Barbara Loffler at 410-208-0890. January through June, and again September and October.

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38 Ocean Pines PROGRESS

OPINION

November 2016

COMMENTARY

Major Country Club rehab is better approach

ithout actually conceding that they’re leaning toward a major rehab of the Country Club rather than a new building, most Ocean Pines Association directors nonetheless are making choices that make a rehab the better, more sensible choice. While a formal decision on new vs. rehab is perhaps a few months away, or as early as a December meeting, the appetite for a new building among our elected leaders is not great. That caution should be reassuring for a wide swath of Ocean Pines property owners. Instead of a new building, the board could simply continue to approve long-deferred maintenance projects step-by-step, beginning with mold remediation, leak repairs, roof and HVAC replacement. That process is already far along, a testament to just how quickly this new board has moved to put its stamp on the direction of the OPA and this long-neglected amenity. Property owners who have longed for a board that fulfills obligations to properly care for OPA assets is finally seeing some concrete evidence that their viewpoints and objectives matter to policy-makers. The next step after that would be to carefully develop and approve a longer-term rehabilitation plan, one that would restore the personality and allure of the original Country Club while recognizing that its earlier role as a banquet and dining facility is no longer necessary. That function has moved, inexorably, to the Yacht Club, by virtue of the way that amenity was planned and built earlier in this decade. What that means is that upper level kitchen at the Country Club is no longer needed. The unused kitchen equipment can be sold for scrap. The kitchen space can be converted into a fitness center or more meeting space or some other need that can’t be accommodated by the Community Center. It really shouldn’t take that long to complete a detailed needs assessment

for the Country Club, but that assessment needs to be done so a rehab of the building can be planned out in an orderly phased process that plays out over three or four years, well within current funding mechanisms and levels. If the Ocean Pines golf course management company, Landscapes Unlimited, has some ideas for the Country Club can be put to better use, policy-makers will be polite enough to listen. There is every indication that this new board is working harmoniously with LU, something that was definitely not true in the previous board term, where much of what LU proposed was met with skepticism if not hostility by certain OPA directors. Whatever renovation plan is chosen for the Country Club, there should be no requirement for a duplicitous five-year plan – a defacto special assessment spread over a number of years – to raise supplemental funds. There is some irony here. Past boards and previous management grievously neglected the Country Club as a matter of policy and choice, in the hopes that its condition would deteriorate to such an extent that future boards and property owners would collectively choose a new building to replace the old, falling-down Country Club. That strategy was not irrational, as it produced successful referendums to replace the old Community Hall and Yacht Clubs over the past ten years. Had past boards risen to its core responsibility to properly maintain OPA assets, millions of dollars could have been saved that instead was spent on expensive new replacement buildings and ego-stroking plaques that note the names of those responsible. The new, implicit strategy at the Country Club borrows somewhat from the old: It intends to establish, by creating the reality of a Country Club that is

in a state of good repair, conditions in which future board will be less tempted to foist on the community a proposal for a new, expensive replacement building, whose costs will be under-estimated for referendum purposes. This is precisely the pattern that unfolded at the new Yacht Club, in which even now OPA officials are having to come up with ways and means of improving upon the defects and deficiencies of the initial design. The new board is creating a new reality at the Country Club, step by step, and that reality is causing some stress among a minority of directors who apparently would prefer a replacement building. OPA President Tom Herrick is playing a solid hand, facilitating Acting General Manager Brett Hill’s robust repair program at the same time telling his minority colleagues that no decision has been made on the rehab vs. replacement issue. Indeed it hasn’t, but that doesn’t mean the writing isn’t on the wall for those who can read the fine print. It makes no sense to spend hundreds of thousands on HVAC and roof repairs if the eventual decision, either formally-rendered or defacto, is to go with a major rehab. Certain directors are already noticing that their argument for a new building is losing a rationale after each step of meaningful and critical repairs are authorized by a board majority. This board can no more bind a future board than the old one could, but that is not to say that the current board can’t inﬂuence future board decisions by spending what is needed now to turn the Country Club into an amenity worthy of Ocean Pines. A good start on that this fiscal year is needed, and that is what this new board is delivering. What a pleasant change from the previous modus operandi.– Tom Stauss

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OPINION OPINION

November 2016 Ocean Pines PROGRESS

‘Cruel irony’ informs a better golf cart decision

ad a certain former general manager presented the board with an unbudgeted $300,000-plus capital expenditure with little or no notice prior to a regular meeting, in defiance of clear board preference for more notice, a well-developed needs rationale and sufficient time to make a thoughtful decision, he would have been subjected to the most heated and even vitriolic criticism by his board critics. Had that former general manager been named Bob Thompson, he probably would have gotten his expenditure through the previous board, but at a heavy cost in board collegiality. Last term, the board was controlled by those who held the former general manager in high esteem. A slim majority, to be sure. The vote in his favor would have been roundly condemned on oceanpinesforum.com and in other anti-Thompson precincts. Dave Stevens would have been unsparing in his criticism. The unbudgeted expenditure would have become fodder as an election issue at the next earliest opportunity. Similarly, had the former general manager come in with a $100,000-plus request for five additional employees six months into the fiscal year, even one with a well-documented rationale, he would have been criticized for failing to identify that need during the budget adoption period. But the general manager who managed to navigate a $300,000-plus unbudgeted request for new gas-powered golf carts and four new Public Works employees through the Board of Directors at an Oct. 23 regular meeting wasn’t Bob Thompson. It was Brett Hill, the acting general manager who replaced Thompson in late summer in an acting capacity, after leading the pack of 11 candidates who competed for board seats this past summer. The personalities and skill sets of these two individuals, as well as a changed dynamic on the board, made all the difference in the world in how these two pro-

The decision to purchase new carts rather than execute a lease on older models also suggests that the stock of Landscapes Unlimited, the golf course An excursion through the curious cul-de-sacs An excursion through theby-ways curious and by-ways and cul-de-sacs management company, has risen under of Worcester County’s County’s most densely community. of Worcester mostpopulated densely populated community. the new board. By TOM STAUSS/ By TOM Publisher STAUSS/Publisher Under Thompson and the old board, relations were sour. Indeed, there was posals were received by the board. Who was that man masquerading as even some talk that the old board might attempt to terminate the LU contract Hill is still ensconced in the honey- Dave Stevens? moon phase as GM, when anything he Same guy, in fact, who lived to give and accept an offer by Thompson to reserves up is likely to be approved by the Thompson a hard time, usually over turn the golf course to in-house managenew board majority if he makes a rea- process but also over the details of poli- ment. That scenario didn’t unfold, but sonably good case for it. In both cases, cy that the former GM had advocated, in he did. There was only one board vote in Stevens’ view, more often than not with- it easily could have had the election turned out differently. opposition, and that was Cheryl Jacobs out much documented rationale. The cart purchase option was advowho was not convinced a purchase of It must said that there is irony in the new golf carts was a prudent choice over new board’s favorable treatment of Hill’s cated by LU during the budget review leasing. She was evidently still vested golf cart and personnel requests versus process for the current fiscal year, but it in the original decision to lease rather the way last term’s minority would have was rejected by Thompson and the old than buy. reacted had Thompson proposed some- board majority who seemed to believe that LU was only advocating a new purThe thing about Hill in the early thing similar. chase primarily because the company weeks of his volunteer stint as acting Why the difference? GM? He’s not hit a sour note yet. His In the case of the golf carts, the case had done a poor job of maintaining the case for the golf carts was a solid one, for buying a new fleet of gas-powered old ones. That seems to have been a bum rap. and the last-minute timing of it justi- gas carts made better financial sense fied, even if a trip into the weeds is re- over the longer-term than following No golf course management company quired to understand the nuances of it. through with a lease proposal unilater- can stop batteries from reaching their The proposal for the four of the five ally executed by the former president, useful life and other components necesnew employees was even more explain- no doubt with Thompson’s concurrence sary for operation from breaking down. The company’s advocacy of buying able, once it became clear that a signifi- if not active advocacy. cant backlog of work orders had accumuWhile the old board explicitly ap- new carts over leasing older one was lated precisely because the OPA had de- proved leasing over new golf carts in the just one area of friction between LU and ferred so much maintenance under the approved budget for the current fiscal the three directors plus Thompson who previous administration. The five new year, the former president and GM still oversaw LU operations in Ocean Pines. The new powers that be seem to rechire, an assistant for Facilities Manager were obligated to bring the specifics of Jerry Aveta, seems reasonable given his the lease deal to the board for approval, ognize that the company’s advice was new stature in the post-Thompson new in much the same they were obligated to sound. Just another example of how a world order. bring the details of Thompson’s contro- single election can change a board and If there’s anything that this board versial financial bonus to the board for change policy for the better. wants to deal with decisively, it’s the review last summer. perception and reality that the OPA In both instances, the powers that hasn’t been keeping up with required were failed a basic test of good govermaintenance in the common areas. To nance – allowing elected directors to see, meet that higher standard, the resourc- reflect and debate the specifics of a proes simply have to be made available to posal. The Ocean Pines Progress, a journal of make it happen. When Hill discovered the failure of news and commentary, is published Stevens weighed in Hill’s unbud- the previous president and GM to dismonthly throughout the year. It is circulatgeted request for the new gas-powered close details of the lease to board memed in Ocean Pines, Berlin, Ocean City, and golf carts, and Stevens’ comments were bers, that gave him an opportunity to Captain’s Cove, Va. offered up in dulcet tones of approval. probe the specifics of the lease deal. Letters and other editorial submissions: What he concluded is that the lease deal Please submit via email only. Letters with Yamaha was a bad one – in part beshould be original and exclusive to the cause, after the conclusion of the lease Progress. Include phone number for verin spring of 2020, the OPA would have ification. been left with aging if not unusable golf carts and no buy-out opportunity. 127 Nottingham Lane Purchasing new gas-powered carts Ocean Pines, MD 21811 will give the OPA a fleet that should last well past 2020, without the need to replace batteries every three or four years. PUBLISHER/EDITOR The costs of purchasing versus leasTom Stauss ing were comparable – or at least close tstauss1@mchsi.com enough to make purchasing the wiser 443-359-7527 investment. By switching away from a batAdvertising Sales tery-powered fleet to a gas-powered Frank Bottone fleet, the OPA should incur much less in 410-430-3660 maintenance costs and will avoid having to replace the aging (if not unsafe) batCONTRIBUTING WRITER tery-charging stations in the cart barn Rota Knott – and that could be a huge savings. It will make the cost of refurbishing the InkwellMedia@comcast.net cart barn much more reasonable. 443-880-1348

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40 Ocean Pines PROGRESS

November 2016

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