(Sept. 29, 2016) While the new board of directors continues to try to find its way in Ocean Pines, the leadership and interim General Manager Brett Hill must also find time to wade through the lengthy process of assembling next year’s budget.
That was the topic of discussion on Sept. 21, when the directors met with the budget and finance committee to review a series of recommendations from that advisory group.
Hill said the new board would like to make some sweeping changes in the way Ocean Pines creates and presents its budget, but he also acknowledged that could prove difficult as the association juggles other responsibilities, including finding a new general manager position.
Committee recommendations included studying full-time equivalent expenses against government statistics, hiring specialists in information technology and human resources, and addressing road depreciation, which the committee report said was “unpredictable” because the only current funding source is casino revenues.
Some of the recommendations, such as presenting the budget against prior year numbers and its effect on assessments, were already being done according to Board Vice President Dave Stevens.
Others, such as consolidating vendor contracts across different departments and amenities, were being pursued, although at one point Hill joked that Ocean Pines couldn’t even decide on a common cola.
“There are six goods and beverage line items spread out across the budget, and, from my brief exposure into our operations, I’ve seen we are dysfunctional to the point of we can’t decide on Coke or Pepsi,” he said. “That is a large hole that needs to be filled and that’s part of looking at what the load is on our current operational staff.”
Committee members and directors hit a snag on the suggestion that the budget be presented “rolling, multiyear formats,” an approach Stevens did not endorse. Perhaps most contentious during the more than two-hour talk was the recommendation that reserve accounts not be diminished in the next fiscal year budget.
Committee Member John Trumpower cautioned that a reduction in reserves could lead to special assessments when large spending projects, such as replacing entire buildings, came up.
“You cannot have a special assessment – OPA cannot have a special assessment,” he said. “If you start getting rid of reserves, you could have a big problem down the road.”
Stevens admitted that had happened in the past, but he took issue with the Design Management Associations (DMA) study on Ocean Pines reserves, saying many of its numbers were either outdated or incorrect.
Committee Chairman John Viola had suggested the board set a percentage of reserve funding based on the study.
“We weren’t even using the proper numbers,” Stevens said. “To use the DMA numbers properly, to understand, you had to do an analysis on what they meant in each of the individual areas … without doing that, the numbers that they show you there just aren’t useful.”
While Viola argued that the association should look at the bigger picture and not “dive into minutiae, Hill disagreed.
“We are looking at a study that’s based entirely on paper,” he said. “On paper, especially with the age of our assets, we have a lot of assets that are beyond their useful life, so we have skewed numbers on paper. By the reserve study, the ceiling tiles should all be replaced in the administrative building. There’s $900,000 worth of work that, by the reserve study, we should be doing.
“The ceiling tiles are fine – they’re not falling in,” Hill continued. “There is hundreds of thousands of dollars in these buildings that – by when we installed it 20, 30, 40 years ago – we have met the lifespan and, on paper, [they] should be replaced.”
Overall, Hill said homeowners in Ocean Pines should expect to see major changes in the next budget.
“I’m going through, right now, our complete organizational chart and assessing what I have in each department,” he said. “I suspect that the budget next year is going to look very different from next year because there are certain elements in our organization that, should we shift them, is going to reflect in the presentation of the budget.”
A timeline included in the committee report stated that a first draft of the fiscal year 2018 budget was to be presented to the committee by the general manager by Dec. 21.
Budget and finance set aside two days, Jan. 11 and 12, for review of the budget, followed by final recommendations from the committee to the board on Jan. 16.
The general manager is scheduled to present the budget to the board for review on Jan. 25, and the final budget must be approved by Feb. 28.
That was the topic of discussion on Sept. 21, when the directors met with the budget and finance committee to review a series of recommendations from that advisory group.
Hill said the new board would like to make some sweeping changes in the way Ocean Pines creates and presents its budget, but he also acknowledged that could prove difficult as the association juggles other responsibilities, including finding a new general manager position.
Committee recommendations included studying full-time equivalent expenses against government statistics, hiring specialists in information technology and human resources, and addressing road depreciation, which the committee report said was “unpredictable” because the only current funding source is casino revenues.
Some of the recommendations, such as presenting the budget against prior year numbers and its effect on assessments, were already being done according to Board Vice President Dave Stevens.
Others, such as consolidating vendor contracts across different departments and amenities, were being pursued, although at one point Hill joked that Ocean Pines couldn’t even decide on a common cola.
“There are six goods and beverage line items spread out across the budget, and, from my brief exposure into our operations, I’ve seen we are dysfunctional to the point of we can’t decide on Coke or Pepsi,” he said. “That is a large hole that needs to be filled and that’s part of looking at what the load is on our current operational staff.”
Committee members and directors hit a snag on the suggestion that the budget be presented “rolling, multiyear formats,” an approach Stevens did not endorse. Perhaps most contentious during the more than two-hour talk was the recommendation that reserve accounts not be diminished in the next fiscal year budget.
Committee Member John Trumpower cautioned that a reduction in reserves could lead to special assessments when large spending projects, such as replacing entire buildings, came up.
“You cannot have a special assessment – OPA cannot have a special assessment,” he said. “If you start getting rid of reserves, you could have a big problem down the road.”
Stevens admitted that had happened in the past, but he took issue with the Design Management Associations (DMA) study on Ocean Pines reserves, saying many of its numbers were either outdated or incorrect.
Committee Chairman John Viola had suggested the board set a percentage of reserve funding based on the study.
“We weren’t even using the proper numbers,” Stevens said. “To use the DMA numbers properly, to understand, you had to do an analysis on what they meant in each of the individual areas … without doing that, the numbers that they show you there just aren’t useful.”
While Viola argued that the association should look at the bigger picture and not “dive into minutiae, Hill disagreed.
“We are looking at a study that’s based entirely on paper,” he said. “On paper, especially with the age of our assets, we have a lot of assets that are beyond their useful life, so we have skewed numbers on paper. By the reserve study, the ceiling tiles should all be replaced in the administrative building. There’s $900,000 worth of work that, by the reserve study, we should be doing.
“The ceiling tiles are fine – they’re not falling in,” Hill continued. “There is hundreds of thousands of dollars in these buildings that – by when we installed it 20, 30, 40 years ago – we have met the lifespan and, on paper, [they] should be replaced.”
Overall, Hill said homeowners in Ocean Pines should expect to see major changes in the next budget.
“I’m going through, right now, our complete organizational chart and assessing what I have in each department,” he said. “I suspect that the budget next year is going to look very different from next year because there are certain elements in our organization that, should we shift them, is going to reflect in the presentation of the budget.”
A timeline included in the committee report stated that a first draft of the fiscal year 2018 budget was to be presented to the committee by the general manager by Dec. 21.
Budget and finance set aside two days, Jan. 11 and 12, for review of the budget, followed by final recommendations from the committee to the board on Jan. 16.
The general manager is scheduled to present the budget to the board for review on Jan. 25, and the final budget must be approved by Feb. 28.