Budget and Finance Committee Chairman John Viola

By Josh Davis, Associate Editor

(Sept. 13, 2018) With plenty of time to address variables, the Ocean Pines Budget and Finance Committee on Saturday recommended no growth in the fiscal 2020 operating budget, according to Committee Chairman John Viola.

Viola, on Saturday, presented the board of directors with an overview of a budget guidance document created by the committee.

The document starts the process of drafting and approving a fiscal 2020 Ocean Pines Association budget.

Among the important variables, Viola said the committee requested “a detailed, viable work plan” from General Manager John Bailey regarding both the bulkhead and road replacement programs. The committee specifically recommended funding road depreciation, something that was not done in prior years, and requested cost information for staging bulkhead repairs at the swim and racquet club.

If work plans are not received, “we will give guidance to suspend for the FY budget 2019-2020 assessment for bulkheads and roads,” Viola said.

“Overall, B&F gave guidance for zero operating growth to last year’s assessment, at this time, based upon assumptions and variables that still need to be addressed or reviewed by December,” he added.

Among the items the committee asked for in the budget guidance is a justification of any departmental revenue or expense change or 5 percent or $5,000 – whichever is less.

The committee asked for a payroll study that includes benefits and comparable salaries, along with reasons for any staffing changes.

Food and beverage budgets were recommended to remain in line “with years prior to FY 2016/2017,” according to the guidance.

On legal and consulting expenses, the committee asked for a breakdown on “type of spend,” along with a reasoning, timeframe and per-hour costs for legal and any other consultants.

The committee recommended budgeting for the Tern Grill and golf to reflect planned renovations of the country club that houses both operations.

Additionally, the committee plans periodical reviews ofthe capital budget “to ensure proper oversight.”

The committee also recommended addressing losses last year, “with a plan to fund” them.

Next in the process, according to the document’s timeline, is the board of directors budget guidance to Bailey on Friday, Sept. 28.

A first draft of the budget from Bailey is due to the budget and finance committee by Jan. 4, 2019.

The committee plans to review the draft over two days, beginning on Jan. 9, and provide a recommendation to Bailey on Jan. 14.

Bailey is scheduled present a draft of the fiscal 2020 budget to the board on Jan. 23.

The budget would be presented to homeowners before board approval, which is required by March 16.

Viola said Monday the reserve study is close enough to being finalized that it would play in role in setting the fiscal 2020 budget. He does not anticipate an assessment hike for replacement reserve collections.

“It’s kind of in line with what we have, even when we look out four or five years and even after the projected spend for the country club,” he said. “At this time, it does not look like there would be any difference in that account.”

However, collections for road reserves could have an assessment impact, if the program proceeds. For fiscal 2019, the association budgeted $250,000 for road reserves, but that was reallocated to pay for the forensic audit. Viola said the committee is recommending $450,000 for road reserves for fiscal 2020.

“That’s only contingent upon the GM coming forward by January with a work plan – otherwise we would go back to what it was,” he said.

Viola, also the association’s chief financial officer as the treasurer, said the board asked him to take on a larger role than previous treasurers in developing the new budget.

“I should be there side-by-side with [Bailey], from a finance side,” he said. “It’s definitely more input than in the past with budget and finance, with this GM and the new role that I have.”

Overall, he said the association appeared to be on a much better financial footing than it was a year ago.

“The numbers are better, at this time, and I believe the budget process will be enhanced,” Viola said.