Restrictions will specify how money can be used

By Greg Ellison

(March 5, 2020) Responding to concerns about funding reallocations aired last month when next year’s budget was approved, Ocean Pines Association Treasurer Larry Perrone has formed a work group to develop controls for the recently established New Capital Reserve Fund.

OPA Board member Steve Tuttle abstained from voting for budget approval on Tuesday, Feb. 18 because of that concern, with OPA President Doug Parks echoing his sentiments to have a strategic plan to earmark intended expenditures from the fund.

“The strategic planning committee is going to be critical … before we do any further funding of that account,” Parks said during budget approval. “We’re establishing a fund that needs to be controlled and managed properly.”

Speaking last Friday, Perrone said board members have been weighing the potential for unintended uses since efforts to create the new capital reserve fund began late last year

“The question is managing the money once it’s in there,” he said. “What we decided to do was establish a work group so that we can formalize some polices or procedures.”

In addition to Perrone, the work group consists of board of directors member Frank Daly, OPA Budget and Finance Committee Chairperson Jim Trummel, Strategic Planning Committee Chairperson Moe Delcher and Director of Amenities and Operational Logistics Colby Phillips.

“We haven’t had a meeting yet, because we were waiting for Frank to recover from his knee surgery,” he said.

Perrone said Daly had just confirmed health issues were no longer limiting his involvement and the group’s initial meeting would be forthcoming.

“From my perspective, and I think … of the board, is we would like to see the Strategic Planning Committee involved,” he said.

Potential expenditures for projects or equipment from the new capital reserve fund would be limited in scale due to a maximum permitted balance of $1 million and a $500,000 annual spending cap.

“We’re not looking for this fund to be used … to build another clubhouse or … yacht club,” he said.

The initial allotment for the new capital reserve fund in the fiscal 2020/2021 budget that takes effect on May 1 is $167,000.

“This year, we put aside $100,000 to potentially build a room addition onto the Sports Core building,” he said.

The remaining funds include allocations of $40,000 for a retractable awning at the golf clubhouse, $20,000 for a golf video simulator and $7,000 for a photo booth at the yacht club.

“One of the things we agreed to early on is for the general manager [John Viola] to keep a spreadsheet of new capital projects or equipment so we’ll have the project designated and then how much money has been put aside,” he said.

Perrone said the intent of the reserve fund is to cover smaller dollar projects and equipment, not deemed replacement, which were often sidelined previously to avoid increasing annual assessment fees.

“It doesn’t raise the assessment and that was the whole purpose,” he said.

Still, Perrone said regardless of initial intentions for new capital reserve funds, subsequent board members could redirect the monies to other uses.

“The reality … is any four directors can vote to do something else,” he said. “The hope is going forward that by having some established policies and procedures that won’t happen.”