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Berlin, MD 21811
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News

Terry memo gives OPA golf critics needed assurance

4/3/14 | By Sheila R. Cherry, Associate Editor

OCEAN PINES—Recent actions by members of the Ocean Pines Association Board of Directors appear to have slowed momentum that began building last month for a referendum to stop the financial bleeding of expenses on the golf course by converting it to open space or park land.  

During a March 5 work session, the overwhelming costs of maintaining and improving the golf course was one of two issues that drew a crowd to the proceedings. The other, of course, was geese.

Director Marty Clarke presented the issue of the OPA offering a request for proposals to lease the community’s golf operations to an outside group to save the OPA from further expenditures on the financially troubled amenity. He said he intended to raise the matter at the next regular meeting because of reports that inquiries by interested third parties were not being taken seriously.

The discussion soon turned to long-time Ocean Pines developer Marvin Steen, who was circulating flyers on behalf of the members’ group Coalition for Ocean Pines Equity (COPE), which was urging OPA management to consider either franchising or leasing the golf course.

The group said it had retained a lawyer to draft a binding referendum question should the board decide not to work with them to address their concerns.

During the work session, OPA President Tom Terry, General Manager Bob Thompson and a majority of the board made the argument that after the financial investments to improve the course were made last year the OPA should give the golf course one year of solid operation to determine whether it could make money in its newly improve state. They also said that a referendum just as the spring play season was about to begin would send the wrong signal to potential members and players that the OPA was not commitment to its product.

At the March 19 regular meeting Terry reiterated his commitment to monitor the performance of the OP Golf Club under Billy Casper Golf, which the OPA had outsourced management to, and to be prepared to seek an alternate business model should the course still fail to attract a viable stream of business by later this year.

Terry distributed a memorandum outlining the history of the golf course’s challenges and what actions management and the board of directors were taking to mitigate further financial losses.

The conclusion of experts who were called in to examine the course, Terry said, “was that the condition of the 40-plus-year-old greens was very poor and subject to future severe damage from weather conditions, as a result of the deterioration of the sub-surface drainage infrastructure and soil conditions.” He added, “Their recommendations were to undertake a long-term solution and replace all 18 greens.”

According to the memo, remediation of the greens essentially cut the amenity in half—turning it into a nine-hole rather than 18-hole course. “This caused a significant decrease in rounds played and revenue, resulting in much greater-than budgeted operating losses,” it said.

As a result, Terry said, “FY 2013 was the most dramatically impacted period, as revenue declined 17 percent from the prior year and the operating loss nearly doubled to $537,000.” He also noted that “the operational budget, developed by Casper Golf, failed to recognize the extent of the fallout from the course problems and the budgeted loss was significantly understated.”

Nevertheless, representatives of the OPA contacted four parties who had expressed interest in pursuing the possibility of a business arrangement regarding the golf course, Terry said. Of them, three of the parties were deemed serious business, rather than employment, inquiries. The club’s anemic financial record was a recurring concern, he said.

None of the parties closed the door on the possibility of working with the OPA, Terry said, “Unfortunately, when you have three out of three saying our financials could be a barrier, and/or the reference to the poor condition of the golf industry; the ability of our OPA to approach a leasing option right now is not easy.”

With the golf season beginning, he said “The action to lease our course should be positioned for another time.”

Terry assured members the OPA leadership was working to address ways to minimize losses from the course. “I would hope the board members would accept that a good faith effort was made, within our very short time , to find an opportunity with those who were proposed,” he said. He added that OPA representatives would keep the lines of communication open with the interested parties they met with to build a solid alternative.

“The good news is that FY 2014, after 10 months of actual results, is expected to have an operating loss of approximately $237,000, a decrease of $300,000 (56 percent) from FY 2013,” Terry said. “This financial improvement is scheduled to continue in the FY 2015 budget; which calls for a further significant decrease in operating loss to $73,000,” he added.

As a part of their strategy, Terry said the OPA would continue the discussions with the interested parties to better prepare them and the OPA for acting on a leasing option if the financial trend experienced in the past could not be reversed under Casper.

Asked where things stood with the referendum effort on March 31, Steen seemed cautiously optimistic about the actions the OPA board members had taken. For now, he said, he was “just letting them do their thing.”

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