(Sept. 24, 2015) Although Pete Gomsak’s financial presentations have been an annual tradition during the Ocean Pines Board of Director orientation meetings for a number of years, the assistant treasurer made one notable addition during his two-hour talk last Thursday.
The final slide shown to the seven directors, including freshman board members Cheryl Jacobs and Tom Herrick, revealed a proposed 10-year funding plan, through 2024, that included a number of new capital projects.
Gomsak first drafted the “Projected Major Facility Capital Costs and Proposed Funding Plan” while he was serving on the now-defunct 10-Year Task Force.
In May 2013, he updated the list with General Manager Bob Thompson and Controller Art Carmine.
“You heard during the campaign, ‘we gotta get a plan, we gotta get a plan,’” Gomsak said during an interview on Friday. “And I’m saying to myself, ‘we had a plan.’”
The proposal uses the $130 in assessments collected each year under the umbrella of the five-year funding tool, which totals to $1.1 million annually, to pay for $8.4 million in major capital projects by fiscal year 2024.
When needed, the plan also borrows from depreciation.
“We tried to marry up the timing of what we viewed as the prioritized list of projects together with the inflow of dollars, always understanding – and the board bought into this concept – that instead of going out to a bank and borrowing the money, we would borrow from our existing depreciation fund,” Gomsak said.
“We’d have to pay it back, but in the meantime we had the money. It’s earning a certain rate of interest. Let’s just pay ourselves the money and not pay a high rate of interest to the bank.”
The 2013 update, he said, was created in an attempt to give the directors a better picture of upcoming major projects “post-yacht club.”
“I said to Bob and Art, let’s update this, recognizing now that we’ve completed the yacht club project at an obviously greater cost than we ever had [anticipated], and then see where we are with this plan,” Gomsak said.
“This has never been presented, much less approved by anybody, but it’s a starting point taking what was left as the 10-Year Task Force concluded its activities and as Bob Thompson took a fresher look at some of these projects.”
The outline starts in fiscal year 2015 with $185,000 in available funds and $3 million in remaining yacht club debt borrowed from depreciation.
In fiscal year 2017 – next year – a new police building and Swim and Racquet Club bathhouse are budgeted for $600,000 and $250,000, respectively, as well as phase one of a new country club, with golf cart storage, and a new aquatics center.
The country club would cost $3.2 million, spread out over two years, while the aquatics center would cost $1.7 million, also over two years.
Fiscal year 2019 includes $200,000 for the Ocean Parkway bridge, likely the community’s share of replacing the structure, while $1.2 million would be earmarked for a new administrative building in fiscal year 2020, and $300,000 for the North Gate bridge in fiscal year 2021.
An additional $2 million would be borrowed from depreciation in FY17, and $1.5 million in FY18.
Concluding in 2024, the plan shows Ocean Pines funding 10 major capital projects while paying back $6.5 million to depreciation, all, according to Gomsak, without having to raise assessments.
At that point, he said, the community could consider reducing a portion of the five-year funding plan.
“If you get to a certain point in time where, hey, we’re all finished with the major projects, fine, you can cease the activity and cease the mechanism,” Gomsak said. “But while you’ve got these things staring at you in the face [you have to address them].
“The principal message [is] there was a plan and a plan not only to address the major physical facility needs, but how to pay for them,” he added.
Gomsak said he included the proposal during the orientation this year, at least partially, because “nothing was happening.”
“Frankly it had been a couple of years [when] nothing has happened,” he said. “This is a starting point and I think that was my motivation in including it this year. I wanted to remind certain people and make other people aware that we have a starting point from which we can go. We just need to get on with it.”
During the campaign, Gomsak met with both Jacobs and Herrick, and both were presented with copies of the proposal. Whether it ever comes into play during a board meeting remains to be seen.
“It’s really not up to me, [but] I’m willing to be helpful,” Gomsak said.
The final slide shown to the seven directors, including freshman board members Cheryl Jacobs and Tom Herrick, revealed a proposed 10-year funding plan, through 2024, that included a number of new capital projects.
Gomsak first drafted the “Projected Major Facility Capital Costs and Proposed Funding Plan” while he was serving on the now-defunct 10-Year Task Force.
In May 2013, he updated the list with General Manager Bob Thompson and Controller Art Carmine.
“You heard during the campaign, ‘we gotta get a plan, we gotta get a plan,’” Gomsak said during an interview on Friday. “And I’m saying to myself, ‘we had a plan.’”
The proposal uses the $130 in assessments collected each year under the umbrella of the five-year funding tool, which totals to $1.1 million annually, to pay for $8.4 million in major capital projects by fiscal year 2024.
When needed, the plan also borrows from depreciation.
“We tried to marry up the timing of what we viewed as the prioritized list of projects together with the inflow of dollars, always understanding – and the board bought into this concept – that instead of going out to a bank and borrowing the money, we would borrow from our existing depreciation fund,” Gomsak said.
“We’d have to pay it back, but in the meantime we had the money. It’s earning a certain rate of interest. Let’s just pay ourselves the money and not pay a high rate of interest to the bank.”
The 2013 update, he said, was created in an attempt to give the directors a better picture of upcoming major projects “post-yacht club.”
“I said to Bob and Art, let’s update this, recognizing now that we’ve completed the yacht club project at an obviously greater cost than we ever had [anticipated], and then see where we are with this plan,” Gomsak said.
“This has never been presented, much less approved by anybody, but it’s a starting point taking what was left as the 10-Year Task Force concluded its activities and as Bob Thompson took a fresher look at some of these projects.”
The outline starts in fiscal year 2015 with $185,000 in available funds and $3 million in remaining yacht club debt borrowed from depreciation.
In fiscal year 2017 – next year – a new police building and Swim and Racquet Club bathhouse are budgeted for $600,000 and $250,000, respectively, as well as phase one of a new country club, with golf cart storage, and a new aquatics center.
The country club would cost $3.2 million, spread out over two years, while the aquatics center would cost $1.7 million, also over two years.
Fiscal year 2019 includes $200,000 for the Ocean Parkway bridge, likely the community’s share of replacing the structure, while $1.2 million would be earmarked for a new administrative building in fiscal year 2020, and $300,000 for the North Gate bridge in fiscal year 2021.
An additional $2 million would be borrowed from depreciation in FY17, and $1.5 million in FY18.
Concluding in 2024, the plan shows Ocean Pines funding 10 major capital projects while paying back $6.5 million to depreciation, all, according to Gomsak, without having to raise assessments.
At that point, he said, the community could consider reducing a portion of the five-year funding plan.
“If you get to a certain point in time where, hey, we’re all finished with the major projects, fine, you can cease the activity and cease the mechanism,” Gomsak said. “But while you’ve got these things staring at you in the face [you have to address them].
“The principal message [is] there was a plan and a plan not only to address the major physical facility needs, but how to pay for them,” he added.
Gomsak said he included the proposal during the orientation this year, at least partially, because “nothing was happening.”
“Frankly it had been a couple of years [when] nothing has happened,” he said. “This is a starting point and I think that was my motivation in including it this year. I wanted to remind certain people and make other people aware that we have a starting point from which we can go. We just need to get on with it.”
During the campaign, Gomsak met with both Jacobs and Herrick, and both were presented with copies of the proposal. Whether it ever comes into play during a board meeting remains to be seen.
“It’s really not up to me, [but] I’m willing to be helpful,” Gomsak said.