Editor,
I write this letter with some hesitation. My involvement in OPA administration ended in August of 2016 and I do not wish to dwell on assessing every action taken since then.
What I want to do is to insure the Members of the OPA remember where the organization has been, where it is today, and pay attention to where the organization is going. We are facing a financial situation that could leave the OPA’s Operating Fund with a deficit of $1 million or more by the end of the current fiscal year, due to the failure to meet budgeted operating results for two consecutive years.
When I left last year, it was correctly reported that the organization had turned the Operating Fund deficit of almost $500,000, which existed at the end of FY 2009, into a slight surplus of $6,000. To put it another way, the organization was in the black for the first time in years.
At the start of my time on the board in 2010 the Board, and a different new general manager, inherited this large deficit. But six years later the OPA was in the black having eliminated the deficit through approaches based on a long-term view. A similar, but potentially worse challenge, will be faced by our new board and newest new general manager.
The new board and new general manager are inheriting a fiscal direction and status which will not easily be turned around. Operating results for FY 2016-17 were negative to budget by $369,000. In the current year 2017-18, after three months, the results are negative to budget by an additional $534,000. Even if the remaining months are reasonably close to budget, the total deficit, just for the FY 2017-18, could exceed $1million.
To set the fiscal stage environment correctly, as stated, thru the first 3 months of this fiscal year, OPA had a negative variance to budget of $534,000 vs. $22,000 at the same point last year. This is a negative difference of $512,000 when comparing the same time periods. The OPA was clearly in a better position before the change in leadership.
Now the OPA is viewing a future where it must overcome a likely million-dollar deficit. This negative variance (deficit) MUST NOT be linked to Bob Thompson or the new general manager when the results are finalized next spring.
However, a projected accumulated operational deficit of a million dollars, or more, cannot simply be pushed aside saying it’s OK, the OPA will be fine. Nor is it a fiscal calamity that needs immediate “do it today” action. We have been here before. However, ignoring the trend is not an option.
Like boards, and GMs, before it, hard and difficult decisions will need to be made over time. The key, in my view, is to assure that decisions are made based on facts, not emotion; honest deliberation, not political pressure; and with an eye to the future, not revenge for past actions. Nor should activities be canceled, or amenities closed, to try to make up for the failures since August of 2016.
Taking the long-term view of the organization, and making necessary adjustments to achieve recovery over time, is usually the best approach and has the smaller negative impact on services provided in the near-term.
Assessment of what actions to take must not follow a mantra which appears to say whatever was done before had to be wrong. Not every action from those on the staff, or the organizational leadership, from 2010-2016 could have been wrong if they led the way out of a deficit situation. Nor should the mistake be made to say that every action that was taken since August of 2016 was wrong.
Our new board and new general manager will need the support of our community as they establish again a long-term path to return the organization to a strong fiscal condition. Short-term or quick fix solutions, that are taken to simply look like something is being done, are not valuable to the organization or its members.
Defining the real source of the problem and taking action to address that source, is what is key. Simply being tougher on the staff, or making a building prettier, does not fix the core issues of effective management, product quality or service delivery. Likewise, a change in a business model does not always lead to success. Allowing one group of members to force an action, or force an action to not be taken, does not enable the issue to be defined based on the needs of the organization.
That being said, to say something should or should not be done based on the interests of the full membership is an approach which can be used to stop virtually every action. Ocean Pines is made up of a tapestry of people and groups who all have different focal points and interests. Besides assessment levels and public safety, there is little that affects all members. One of the few exceptions to that is operating deficits that must be addressed by all Members through their financial support of the organization. Deficits cannot be ignored.
In my view, the best solution is to work with people to jointly improve performance, even if that is a longer-term, non-quick fix approach. We should wish the new board and the new general manager success and let us not force them to make quick changes for change sake. Giving credence to the efforts that came before, be they successful or not, is critical. It is my experience that many things have been tried at some time over the years in the OPA. Learning from the efforts that came before can help define the right path.
I will let the cumulative operational financial results over the six years 2010-2016 speak for themselves. While eliminating a large deficit and performing numerous capital projects, the assessment increases were limited. The assessment increases over the six-year trend prior to 2010-16 were an average increase of 8 percent per year. From 2010-16 the average increase was 2 percent. I will let the staff’s cumulative track record of achievement during 2010-16 determine if they should have been valued more.
We have lost critical staff members, but we still have the core of a good team for our new GM to link to and move forward. In the end, as members we have our board, our GM and the GM’s staff, Advisory Committees, and volunteers to depend on for results. We all need to give them the time to think through their plans and time to implement their adjustments.
Provide them with an environment of understanding and support which will allow them to make adjustments to services, assessment levels, staffing, etc., even if it means returning to approaches that came before. Give them the opportunity to meet with and listen to Advisory Committees and members at large. This will not be a short-term fix. It took years to recover the last time we had to overcome a deficit position, which was 50 percent of what the organization is facing today.
Lastly, I hope personal vendettas held for years, or actions taken for revenge over more current feelings of being wronged, will be eliminated by this Board and the community. This does not mean that acts which have ethical or legal implications should be ignored.
But, we have our new team. Let’s give them support and not pick apart every word they say, impugn every thought we think they have, or criticize every action they take, as they work to address the future.
I ask that we all try to remember ideas, be they good or bad, are not the enemy of the future. It is failure to allow ideas to be assessed as good or bad, or assuming a single person has the only answer, that will doom the future.
Let’s wish our team well and, even if it is hard, stay positive about our organization’s future.
Tom Terry
Past OPA President and Treasurer
I write this letter with some hesitation. My involvement in OPA administration ended in August of 2016 and I do not wish to dwell on assessing every action taken since then.
What I want to do is to insure the Members of the OPA remember where the organization has been, where it is today, and pay attention to where the organization is going. We are facing a financial situation that could leave the OPA’s Operating Fund with a deficit of $1 million or more by the end of the current fiscal year, due to the failure to meet budgeted operating results for two consecutive years.
When I left last year, it was correctly reported that the organization had turned the Operating Fund deficit of almost $500,000, which existed at the end of FY 2009, into a slight surplus of $6,000. To put it another way, the organization was in the black for the first time in years.
At the start of my time on the board in 2010 the Board, and a different new general manager, inherited this large deficit. But six years later the OPA was in the black having eliminated the deficit through approaches based on a long-term view. A similar, but potentially worse challenge, will be faced by our new board and newest new general manager.
The new board and new general manager are inheriting a fiscal direction and status which will not easily be turned around. Operating results for FY 2016-17 were negative to budget by $369,000. In the current year 2017-18, after three months, the results are negative to budget by an additional $534,000. Even if the remaining months are reasonably close to budget, the total deficit, just for the FY 2017-18, could exceed $1million.
To set the fiscal stage environment correctly, as stated, thru the first 3 months of this fiscal year, OPA had a negative variance to budget of $534,000 vs. $22,000 at the same point last year. This is a negative difference of $512,000 when comparing the same time periods. The OPA was clearly in a better position before the change in leadership.
Now the OPA is viewing a future where it must overcome a likely million-dollar deficit. This negative variance (deficit) MUST NOT be linked to Bob Thompson or the new general manager when the results are finalized next spring.
However, a projected accumulated operational deficit of a million dollars, or more, cannot simply be pushed aside saying it’s OK, the OPA will be fine. Nor is it a fiscal calamity that needs immediate “do it today” action. We have been here before. However, ignoring the trend is not an option.
Like boards, and GMs, before it, hard and difficult decisions will need to be made over time. The key, in my view, is to assure that decisions are made based on facts, not emotion; honest deliberation, not political pressure; and with an eye to the future, not revenge for past actions. Nor should activities be canceled, or amenities closed, to try to make up for the failures since August of 2016.
Taking the long-term view of the organization, and making necessary adjustments to achieve recovery over time, is usually the best approach and has the smaller negative impact on services provided in the near-term.
Assessment of what actions to take must not follow a mantra which appears to say whatever was done before had to be wrong. Not every action from those on the staff, or the organizational leadership, from 2010-2016 could have been wrong if they led the way out of a deficit situation. Nor should the mistake be made to say that every action that was taken since August of 2016 was wrong.
Our new board and new general manager will need the support of our community as they establish again a long-term path to return the organization to a strong fiscal condition. Short-term or quick fix solutions, that are taken to simply look like something is being done, are not valuable to the organization or its members.
Defining the real source of the problem and taking action to address that source, is what is key. Simply being tougher on the staff, or making a building prettier, does not fix the core issues of effective management, product quality or service delivery. Likewise, a change in a business model does not always lead to success. Allowing one group of members to force an action, or force an action to not be taken, does not enable the issue to be defined based on the needs of the organization.
That being said, to say something should or should not be done based on the interests of the full membership is an approach which can be used to stop virtually every action. Ocean Pines is made up of a tapestry of people and groups who all have different focal points and interests. Besides assessment levels and public safety, there is little that affects all members. One of the few exceptions to that is operating deficits that must be addressed by all Members through their financial support of the organization. Deficits cannot be ignored.
In my view, the best solution is to work with people to jointly improve performance, even if that is a longer-term, non-quick fix approach. We should wish the new board and the new general manager success and let us not force them to make quick changes for change sake. Giving credence to the efforts that came before, be they successful or not, is critical. It is my experience that many things have been tried at some time over the years in the OPA. Learning from the efforts that came before can help define the right path.
I will let the cumulative operational financial results over the six years 2010-2016 speak for themselves. While eliminating a large deficit and performing numerous capital projects, the assessment increases were limited. The assessment increases over the six-year trend prior to 2010-16 were an average increase of 8 percent per year. From 2010-16 the average increase was 2 percent. I will let the staff’s cumulative track record of achievement during 2010-16 determine if they should have been valued more.
We have lost critical staff members, but we still have the core of a good team for our new GM to link to and move forward. In the end, as members we have our board, our GM and the GM’s staff, Advisory Committees, and volunteers to depend on for results. We all need to give them the time to think through their plans and time to implement their adjustments.
Provide them with an environment of understanding and support which will allow them to make adjustments to services, assessment levels, staffing, etc., even if it means returning to approaches that came before. Give them the opportunity to meet with and listen to Advisory Committees and members at large. This will not be a short-term fix. It took years to recover the last time we had to overcome a deficit position, which was 50 percent of what the organization is facing today.
Lastly, I hope personal vendettas held for years, or actions taken for revenge over more current feelings of being wronged, will be eliminated by this Board and the community. This does not mean that acts which have ethical or legal implications should be ignored.
But, we have our new team. Let’s give them support and not pick apart every word they say, impugn every thought we think they have, or criticize every action they take, as they work to address the future.
I ask that we all try to remember ideas, be they good or bad, are not the enemy of the future. It is failure to allow ideas to be assessed as good or bad, or assuming a single person has the only answer, that will doom the future.
Let’s wish our team well and, even if it is hard, stay positive about our organization’s future.
Tom Terry
Past OPA President and Treasurer