Hudson presents Ocean Pines fiscal year budget reviews
OCEAN PINES—In his last action as Chairman of the Ocean Pines Association Budget and Finance Advisory Committee Dennis Hudson presented the Board of Directors with the committee’s annual fiscal year budget review and guidance during a Feb. 3 meeting.
Primarily, the committee seemed to focus on finding ways to give General Manager Bob Thompson and his staff the support needed to enhance the accuracy of development planning and project decision-making. For example, the committee said the OPA needed strong data collection capabilities across all departments and business lines, including the supporting hardware, software and personnel needed to make that happen.
The budget committee concurred with the Comprehensive Plan Advisory Committee’s recommendation to contract with the Business Economic and Community Outreach Network, in the Franklin P. Perdue School of Business at Salisbury University (BEACON).
The program’s expertise would allow the OPA to create a tool to analyze the community’s needs as an effective comprehensive 10-year plan is being developed, the committee advised. “We would like to see the ‘rack & stack’ backed up by solid need analysis with accurate cost estimates,” budget committee members said.
The advisory committee suggested the board consider initiating a comprehensive plan that would help the association better measure its organizational and budget goals.
“This is difficult today due to poor reporting systems, manual calculations and disconnected systems that handicap management,” according to one of the items listed in the budgetary guidance. They added, “This should be paramount in capital planning and be directed and managed by the BOD.”
The committee provided a list of 15 specific operational or capital recommendations, starting with a suggestion discouraging any increase in the annual assessment. The board subsequently approved a $5 assessment decrease in the $914 annual base assessment.
Other recommendations offered by the Budget and Finance Advisory Committee included:
• finding a more effective way of marketing a proposed $25 member’s coupon for use at the new Yacht Club and questioning whether it needed to be funded by a $10 increase in the assessment and whether it was needed at all, given that incentives to use the new Yacht Club would likely be unnecessary when it first opens. Board members suggested the idea might be better received as a gift certificate instead;
• reviewing the Yacht Club’s revenues. The committee estimated given the newness of the facility and significant early banquet bookings, the Yacht Club should have a break-even budget with approximately $98,000 in additional revenue, which should eliminate the need for $5 of the assessment;
• reviewing the documentation used to support budgeted amenities’ costs. Hudson said the committee strongly questioned some of the proposed fee increases and that some of the estimates produced seemed overly optimistic, based on past performance;
• further studying the rationale for increasing membership fees for amenities with declining memberships or sales volume, such as marina services or the golf club;
• waiting for a review by an upcoming drainage taskforce before approving new personnel additions proposed for the Public Works Department. The committee noted that the department’s budget included $35,000 in current overtime expenses while simultaneously requesting four new employees to handle drainage issues. The committee asked the board to consider whether it would be more cost efficient if the additional drainage work could be contracted out instead;
• staffing the previously-approved position for a human resources professional to help manage the OPA workforce, payroll and benefit structure;
• allowing the Golf Club to show that it can break even on its own, using the expertise and course upgrades that have been put in place and implemented from recommendations of management company Billy Casper Golf;
• charging a $250 to $1,000 entry fee during real estate closings for first-time home buyers purchasing in Ocean Pines so the revenue could be used for road improvements in lieu of decreasing casino dollars;
• asking the Worcester County Commissioners to help support OPA’s parks and recreation programs through additional funds since those activities are not restricted to OPA residents and increasing fees for non-residents who use the OPA’s activities, events, and amenities;
• splitting the costs of two major capital projects between budget years, by allocating the funds needed for planning and designing a proposed new $500,000 police station, as well as proposed restrooms in White Horse Park in the 2014–2015 fiscal year , but delaying the actual construction of the two separate projects until the 2015-2016 fiscal year;
• eliminating or postponing a paving project for the Beach Club parking lot until the issue of a possible drainage tax on impervious surfaces in Ocean City has been decided; and
• considering using consultants to review the processes and methods of setting reserve calculations and contributions to cover both replacement and inflation costs.
The committee also encouraged the board to develop a written policy statement that would define what constitutes new capital projects versus replacement spending. The designations would be internal to Ocean Pines and would not need to be dictated by accounting rules or regulations, it said.