By Josh Davis, Associate Editor
(Feb. 7, 2019) Ocean Pines General Manager John Bailey opened his presentation of the latest fiscal 2020 budget draft to a large audience last Saturday by thanking everyone for coming and for sharing their “comments, concerns and frustrations.”
He said his favorite comment so far was that the $127 proposed assessment increase was “just so the GM could have a nicer and bigger office.”
“For the record, my office is just fine,” Bailey said.
“There is one thing I know we all can agree on – I certainly got your attention,” he added, referring to the proposed increase, which, if it stands, would be the second largest in association history.
Bailey said the good news is from last August through December, Ocean Pines is “operating in the black for this fiscal year.” He said the forecast through the end of the fiscal year is about even, “plus or minus a little in either direction.”
“If we’re doing well in the budget this year, why do we need such a large increase for next year?” Bailey asked. “Ultimately, that depends on what we … really want to accomplish.”
He said the budget needs to achieve some means of deficit recovery; cover general administration, operating departments and payroll; tackle drainage and deferred maintenance; and bank capital for both general replacement and deferred maintenance.
Road and bulkhead maintenance also require funding, and the proposed budget would cover expansions of the police department ($400,000) and sports core pool ($200,000), he added.
Bailey said nine additional capital items totaled $225,714, ranging from $8,000 for a grounds sweeper to $80,000 for a “Mail Station Demo Project,” that were not funded. He said those items would have added another $27 to assessments.
On deficit recovery, Bailey said roughly $1 million remained of the $1.6 million deficit incurred during the previous two fiscal periods, and the recommended budget would pay off the balance in equal amounts spread over three years.
He said payroll would increase by $275,000, including $128,000 to address “pay gaps” for 35 positions addressed in an internal pay study, with $74,000 for an estimated 10 percent increase in medical benefit costs, and $73,000 for 2-percent merit raises.
Bailey said the fiscal 2019 budget includes $116,937 for drainage, while the recommended budget would spend $913,232 on drainage. The bulk of that, $620,000, would come out of road reserve and pay for “major under-road pipes.”
He said replacement reserve contributions were increased $186,000 from a previous draft, which “represents $22 of the increase.”
A dozen items listed as replacement reserve items and projects included the police expansion ($800,000), White Horse Park playground equipment ($150,000), crabbing pier ($135,000), and resurfacing the swim and racquet club tennis courts ($100,000).
Bailey said an increase in road reserves also factored into the assessment hike. He said about $325,000 from casino impact money goes into that fund, but that’s not enough to address all of the association needs.
“To do the 80-plus miles of roads that we have … we’re going to need a lot more than $325,000 a year to make any headway,” he said, adding the budget and finance committee and Assistant Treasurer Gene Ringsdorf recommended adding $400,000 into road reserves.
Additionally, the recommended budget includes $19 for bulkhead collections not included in the proposed budget released on Jan. 4, when there was no assessment increase.
Bailey said the proposed assessment of $951 was increased to $982 during a public hearing on Jan. 12.
“Now, the recommended assessment is $1,078,” Bailey said. “That’s $127 increase, or 13.4 percent.”
Bailey listed additions to road reserves ($47), payroll ($33), general replacements ($22), drainage ($21), deferred maintenance ($19), bulkheads ($19), fire and EMS ($10), legal services ($6), “new capital debt services” ($3) and “other” ($5) as items driving up the increase.
Subtracting an additional $31 spent last year on deficit recovery and $27 last year for the forensic audit brings the basic annual assessment to the $127 increase.
Bailey said the board would meet again on Feb. 16 to vote on whether to adopt the fiscal 2020 budget.