By Josh Davis, Associate Editor
(Sept. 6, 2018) The Ocean Pines Board of Directors on Saturday indicated they were close to finalizing a long-gestating reserve study, but were also interested in developing a parallel mechanism to deal with new capital purchases more appropriately.
General Manager John Bailey said Design Management Associates, the company that developed the study, is working with recommendations from the budget and finance committee and all that remains is for the board to accept the final calculations.
“Really, it’s a planning tool and we’re pretty much done with it at this point, other than the board actually just fully receiving the final study,” Bailey said.
As evidence of the reserve study’s broad appeal, Director Ted Moroney joked even former directors Marty Clarke and Pete Gomsak now agreed on the contents.
During the discussion, Moroney called for the budget and finance committee to look into a better way of addressing new capital items, “otherwise the capital is taken directly out of the operational budget,” he said.
Bailey said in setting the fiscal 2019 budget, for instance, about $250,000 of new capital purchases were proposed but only about $16,000 were approved, because any more would have significantly increased assessments.
His favorite example, Bailey said, was addressing resident complaints about Ocean Pines mailboxes, which could not be funded through replacement reserve channels included in the study. He also mentioned lighting around the south gate pond and new playground equipment.
“All of that’s new capital and there’s no process … to fund those things,” Bailey said.
Further complicating matters was a tendency to approve funding during one fiscal period and expensing it during another, according to Association President Doug Parks, who said, “We do things at such a glacial pace.”
He used the platform tennis courts installed last year as an example.
“That was money that was approved [by a] prior board in a previous year’s budget, [that] didn’t get implemented until the next year’s budget and ended up being $130,000 hit,” Parks said. “The idea of having some money in reserve in some fashion is probably appropriate.”
Parks and others cautioned the money could become a “slush fund” if not allocated properly.
Treasurer John Viola, also chairman of the budget and finance committee, said the committee would develop a recommendation for funding new capital items.
Viola added the association needed to “protect ourselves from ourself.