By Josh Davis, Associate Editor

(Dec. 6, 2018) When it comes to updating financial management systems in Ocean Pines, the association appears to have just two options: buying Northstar Club Management Software and running the operation in house, or contracting with Legum & Norman of Falls Church, Virginia, to do the job.

How quickly the decision needs to be made, however, is a matter of debate.

The board of directors has wrestled with the issue for several years, forming a technology work group in 2016 that eventually came back with the NorthStar recommendation. But some current and former board members instead advocated outsourcing the entire operation and the selection was delayed several times.

General Manager John Bailey apparently asked the board to make a decision within 45 days, so whichever option is chosen is in place by the start of the next fiscal year.

Director Slobodan Trendic on Saturday introduced a discussion topic, “Review of two options to modernize Association’s IT management of key functions.”

According to Trendic, “The board must discuss and decide which business model is the most beneficial long-term solution to the association to manage its key financial functions.”

“After conducting the RFP process, we now have competitive offers for both the software solution with in-house management approach, and a third-party outsourcing option,” Trendic said. “The first option would be to keep all responsibilities with the association’s staff, thereby handling all IT functions services internally. The outsourcing option places the responsibilities on an experienced third-party solution provider.”

He recommended forming yet another work group to look into the issue.

Director Ted Moroney confirmed the issue had been discussed for more than two years. He asked if a choice could now be made in 45 days.

“I believe we can,” Trendic said. “I think if we have the right people … we should be able to come back to the GM and to the board with a report.”

Several others expressed frustration with the process. Association President Doug Parks said, “We knew where we were back in October of 2016.”

At the time, according to Parks, it was determined “we have an antiquated system that is difficult to support, that requires a lot of manual intervention which, as we all know, if rife with potential error, fraud, and any other nefarious activities that would compromise the accuracy of the information.”

Parks said the technology work group interviewed employees that were operationally responsible for “running both finance, amenities and all the other aspects of the OPA environment.”

The work group’s recommendation was then compared against the outsourcing option, Parks added.

“That’s been done,” he said. “So, in my mind … we’re at a point now where we can’t delay any longer.”

Parks disagreed with earlier comments that there was no sense of urgency in implementing new systems.

“Every day we run on this antiquated system that’s supported by a single vendor who has highly customized that system – who’s technical knowledge is the only source of any type of resolution should some calamity occur – puts us at a very high-risk position,” he said.

“I think, quite frankly, all of the discussions have been very healthy, they’ve been very productive, they’ve been thought provoking but, at some point, a decision needs to be made,” Parks continued. “I think we have enough information right now to move forward.”

Moroney agreed.

“It’s time stop screwing around,” he said. “Let’s sit down, let’s knock the damned thing out and get it done. Otherwise, in six months … there’s going to be another board and you’re going to go back through this again.

“We’ve got to commit as a board to put the work in here … and get this thing knocked out,” Moroney continued. “We’ve got to make a decision, answer our questions and then go forward. If we don’t, we are just, as Doug says, expending risk. But, more importantly, we’re not doing our job.”

Director Colette Horn said she wanted the process to move even faster than 45 days, calling for a vote on Saturday to select NorthStar. She pointed to a board-approved motion in September “to issue a non-binding request for proposals … for back office financial management to include necessary software, staffing options, and necessary IT support.” Results were to be presented to be board by Dec. 1.

“The data that we received and the analysis that was done by the review group, I believe, has given us the answer to at least that question,” she said. “Based on the cost and the limited adequate response that we got to the RFP … we can pass a motion today at least that looks at the in-house, versus the outsourcing decision.

“If we go into this discussion process … we’re going to find ourselves running around in circles,” Horn added.

Trendic countered that everyone wanted to reach a decision, but the group had yet to share their observations on each proposal.

“To say that we need to decide today, I believe it’s a self-inflicted deadline that really doesn’t have to be put upon us,” he said, reiterating his call for another work group.

Director Frank Daly also called for another work group.

“If there’s ever a need for this board to get together in working sessions … this is the issue to do it on,” he said. “And if we can’t all make it, tough … we should schedule it and get it done.”

Daly said the analysis already done suggested outsourcing “costs more and will increase the assessment.”

“How much more and how much is it going to increase the assessment?” Daly asked. “That same analysis says that there’s basically no cost savings [over current systems] in going with the NorthStar option, and there’s no appreciable increase in the time that we’re going to get our financials.”

Others said the process needed to move faster.

“We’re done this already. We’ve gone through this,” Parks said. “The pessimist in me says, ‘here we go again.’ We’re getting another group together so we get another opinion. And then, what’s to say that once that effort’s done, we [don’t] get another group together for another opinion, and ad nauseam.”

Parks said he would begrudgingly accept another round of assessments but, if it took more than a few weeks, “it’s a nonissue.”

“We cannot delay this any longer,” he said. “We’ve done the due diligence. It’s time to move forward.”

Moroney also said there was a sense of urgency.

“Let’s get to the end of the road here,” he said. “The GM needs a solution from us in either direction, whatever way we want to go, within 45 days … I think we’re committed as a board to moving forward in that direction. Let’s push it and do it.”

Horn said the issue needed to be resolved and that she was unhappy with how the board had proceeded since September.

“This needs to come to a close,” she said. “We need to reduce this risk by getting a decision done. And I’ll reiterate how disappointed I am in what has happened since September, when this motion was carried forward that now, here we are, having been told we would have what we need to make an answer, but we don’t.”

Horn proposed a motion “to accept the recommendation to implement the NorthStar software proposal as soon as possible.”

Moroney offered a friendly amendment: “The board, working with the GM, commits to completing all due diligence of solutions to include filling all software holes, pricing and ancillary areas, within 45 days and bring a recommendation to the full board using open working groups.”

The work group would apparently include additional interviews with each vendor. Moroney clarified, “the important thing is to get together as a group ahead of time, before the vendors come in, [and] make sure that we’ve talked about anything that’s been done that may be asked and answered … and then make sure we’re all on the same page.”

“The bottom line is to come out of that with everything answered,” Moroney said.

The amendment and the original motion as amended were each approved unanimously, 7-0.

Several directors responded to follow-up questions on Monday.

Daly said he believed the directors were indeed down to just two vendors.

“In my mind that is true, and it is, at this time, unclear which solution provides the best overall value to the association,” he said.

Association Vice President Steve Tuttle added, “We are approaching a decision point.”

Tuttle said board members would see another NorthStar demonstration on Dec. 14, although for some it would be the first time meeting with the company.

“Any remaining questions that directors have about NorthStar are to be answered on the 14th or soon after if questions come up during the demo,” he said. “The board also has the L&N proposal. This proposal will be part of my deliberations to come to a final decision in 45 or fewer days.”

Parks said the board had “gone through a number of iterations in reviewing potential options for the supporting the technology requirements of the association.”

“The final two options under consideration are running the operation using in-house staff and the NorthStar software platform, or running the finance operation using L&N as an outsourcing partner along with their technology platform,” he said.

“The upcoming working sessions and product demos will allow each director to be fully informed regarding any questions they may have, which in turn will effectively prepare the board to move forward in making this important decision,” Parks added.