(April 21, 2016) Veteran OPA Director Tom Terry came away from the April 11 special meeting with an extremely positive view of the reserve study conducted by Design Management Associates Inc.
“I really feel like DMA delivered exactly what they had promised and proposed to deliver,” he said. “I think the tool that they have given us is going to help a lot in being able to assess the impact of how much reserves we need in Ocean Pines.”
What DMA essentially created, Terry said, was an “independent assessment of the various components [of Ocean Pines] and the condition of the buildings,” as well as the life expectancy of virtually all of the association’s assets.
“I think there’s just an enormous amount of information in there that was done by an independent set of engineers and independent business that we can look at and count on to help us make decisions,” he said.
That information was put into an XML spreadsheet that can be updated whenever new numbers, or data sets, are available.
“I think the tool is very flexible, meaning we can take a look at the various options that we may do, and if we do one action, how does that affect other investments and how it all fits together,” Terry said. “I’m very excited about having a tool like this available to us, most importantly done by an independent voice, who has looked at everything we’ve got. Not the least of which, we also have a complete inventory of all of the pieces that Ocean Pines has, and a means of tracking all of them.”
Previously, Terry said most of Ocean Pines’ assets were only tracked within its accounting books.
He admitted some of the numbers in the study needed to be updated, simply because some have changed since the study started in October.
“But, that’s the idea – to be able to update it, year by year, on an ongoing basis that allows us to have a very flexible ability to analyze what we have and what major decisions we need to make,” he said.
To his knowledge, Terry said this was the first time Ocean Pines had a tool of this sort at its disposal.
“I don’t know that we’ve ever had all of [the data] with an assessment of lifespan from engineers independently assessing it and giving us their view, all in one place,” he said. “That’s what I find most intriguing.
“There are those that are going to be skeptical. In the end, once [Doug Greene from DMA] got into the report and he started explaining it, both in the component model and the cash flow model, being able to show, right there on the screen, the impact of where we are and what the trends will be in the future and what they have to be to meet the needs of Ocean Pines – it was pretty darned obvious as to what this tool allows us to do. It allows us to have a fairly unemotional answer as to where we stand,” Terry added.
He said the next step is for the board to set a policy that says exactly what percentage Ocean Pines will fund its reserves. At present, they appear to be well below the levels DMA recommend – in several areas – including roads, bulkheads and replacement reserves.
“We need to say what that level is,” he said. “We can drive many decisions based on that. You have to have some cornerstone policies that you’re going to live by, and you have the company who put all this together saying to you, ‘you’re sitting on five percent,’ virtually, on all the [reserves]. You’re not even close to being where we need to be.
“There’s no question there’s got to be updates, but, all in all, the tool is really fantastic,” Terry said. “I thought the board went through this presentation very well, receiving it, learning, paying attention, understanding … There’s still a whole lot more to learn and know, and this is not something that’s going to be done in the next two or three weeks. This is a month after month effort to get us prepared for the development of the budget.
“There’s a lot of good, serious, honest data available to us now for us to use, to start analyzing. I think Bob [Thompson] has got some evaluation to do, along with the staff, and we need to all work together, based on this information and using this tool, to do the options. That’s the strength of this tool, as long as we find a way to use it effectively.”
“I really feel like DMA delivered exactly what they had promised and proposed to deliver,” he said. “I think the tool that they have given us is going to help a lot in being able to assess the impact of how much reserves we need in Ocean Pines.”
What DMA essentially created, Terry said, was an “independent assessment of the various components [of Ocean Pines] and the condition of the buildings,” as well as the life expectancy of virtually all of the association’s assets.
“I think there’s just an enormous amount of information in there that was done by an independent set of engineers and independent business that we can look at and count on to help us make decisions,” he said.
That information was put into an XML spreadsheet that can be updated whenever new numbers, or data sets, are available.
“I think the tool is very flexible, meaning we can take a look at the various options that we may do, and if we do one action, how does that affect other investments and how it all fits together,” Terry said. “I’m very excited about having a tool like this available to us, most importantly done by an independent voice, who has looked at everything we’ve got. Not the least of which, we also have a complete inventory of all of the pieces that Ocean Pines has, and a means of tracking all of them.”
Previously, Terry said most of Ocean Pines’ assets were only tracked within its accounting books.
He admitted some of the numbers in the study needed to be updated, simply because some have changed since the study started in October.
“But, that’s the idea – to be able to update it, year by year, on an ongoing basis that allows us to have a very flexible ability to analyze what we have and what major decisions we need to make,” he said.
To his knowledge, Terry said this was the first time Ocean Pines had a tool of this sort at its disposal.
“I don’t know that we’ve ever had all of [the data] with an assessment of lifespan from engineers independently assessing it and giving us their view, all in one place,” he said. “That’s what I find most intriguing.
“There are those that are going to be skeptical. In the end, once [Doug Greene from DMA] got into the report and he started explaining it, both in the component model and the cash flow model, being able to show, right there on the screen, the impact of where we are and what the trends will be in the future and what they have to be to meet the needs of Ocean Pines – it was pretty darned obvious as to what this tool allows us to do. It allows us to have a fairly unemotional answer as to where we stand,” Terry added.
He said the next step is for the board to set a policy that says exactly what percentage Ocean Pines will fund its reserves. At present, they appear to be well below the levels DMA recommend – in several areas – including roads, bulkheads and replacement reserves.
“We need to say what that level is,” he said. “We can drive many decisions based on that. You have to have some cornerstone policies that you’re going to live by, and you have the company who put all this together saying to you, ‘you’re sitting on five percent,’ virtually, on all the [reserves]. You’re not even close to being where we need to be.
“There’s no question there’s got to be updates, but, all in all, the tool is really fantastic,” Terry said. “I thought the board went through this presentation very well, receiving it, learning, paying attention, understanding … There’s still a whole lot more to learn and know, and this is not something that’s going to be done in the next two or three weeks. This is a month after month effort to get us prepared for the development of the budget.
“There’s a lot of good, serious, honest data available to us now for us to use, to start analyzing. I think Bob [Thompson] has got some evaluation to do, along with the staff, and we need to all work together, based on this information and using this tool, to do the options. That’s the strength of this tool, as long as we find a way to use it effectively.”