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Budget options impact Pines assessments

By Greg Ellison

(Jan. 7, 2021) Ocean Pines residents are facing the possibility, but probably not the likelihood, of triple-digit assessment increases based on the proposed fiscal 2021-22 budget released late last month.

While by no means set, as extensive negotiations remain before the board votes to adopt a budget in February, the initial numbers include assessment increases of $121 for non-waterfront lots and $221 for waterfront residences.

General Manager John Viola said numerous moving parts remain, including potential financial offsets and forthcoming monthly actuals that could alter final budget numbers.

“We came up with an overall budget, which did show an increase in assessments. However, we have options,” he said.

The fiscal 2021-22 proposed budget, which was released on Dec. 22, reflects an assessment increase from $986 to $1,107 for non-waterfront lots and $1,501 to $1,722 for waterfront properties.

Total assessment revenue for fiscal 2020-21 is forecast at $9,126,237 from 8,452 properties, while the proposed 2021-22 budget would yield $10,290,804, reflecting an increase of $1,164,567.

“There are options here depending on what we want to do for this assessment,” he said. “I want to utilize the next seven weeks, when we will have two more months of financials, to see where we are financially.”

Viola said the final numbers through January represent three quarters of the current fiscal year, thus allowing for more precise budget forecasting.

“Right now we show a favorability of $1.2 million,” he said.

Viola estimated the $1.2 million favorability recorded at the end of November would likely to be cut nearly in half to about $650,000 by the end of fiscal 20-21 on April 30.

“That $650,000 is not locked in stone,” he said. “I still have five months to go.”

From that sum, Viola is recommending the board pay off an earlier operating deficit of roughly $186,000.

“Last year, I suggested the board take some of that years’ favorability and offset the operating deficit,” he said.

After devoting $250,000 to the old debt last fiscal year, Viola said earmarking about $200,000 from the anticipated favorability this year would erase the debt for good.

Viola said the board has potential methods to reduce the impact on assessments, including reallocating funding for road repairs for other infrastructure expenses.

“We do receive about $325,000 for roads but the money is also for infrastructure,” he said. “We could on a one-time shot … allocate that money to the drainage expenses that we have proposed and that would offset some of the assessment increase.”

Viola also said there are a number of smaller maintenance projects that could be delayed to cut costs, with the final call falling to the board.

“A lot’s going to happen over the next seven weeks and could shed more light on larger issues,” he said. “You can’t just take any one of those schedules that we do and say the assessment is increasing $121, there’s too many variables right now.”