By Greg Ellison
Advisory group gathers on Monday to review results of departmental presentations
(Jan. 14, 2021) After spending more than 12 hours reviewing next year’s proposed budget, the Ocean Pines Budget and Finance Committee reconvened on Monday to issue formal guidance for the board of directors before it meets next Tuesday.
Budget Committee Chairman Dick Keiling said General Manager John Viola for the committee’s opinion about whether to use any money in excess of this year’s budgeted bottom line to pay down prior operating deficits.
“Budget and Finance has said it was important to clear up the prior year loss,” he said.
Viola estimated the current operating budget would reflect a surplus of roughly $650,000 when concluded on April 30.
“It’s actually $162,000 [left] on the balance sheet as of September,” he said. “We remain firm on that point moving forward.”
Factoring out the $162,000 in past debt, Keiling asked if whatever balance remained could be employed to reduce potential assessment increases next year.
“How do you marry the two so it works?” he said.
Ocean Pines Treasurer Doug Parks said the board previously approved paying off an operational deficit incurred in 2017 over a three-year period.
“We can also look at options to not pay off the entire amount right now,” he said.
Still, Parks hesitated about applying the current year’s surplus against assessment rates.
“I’m not a big fan of trying to reduce assessments with prior year dollars,” he said.
Keiling reiterated the need to use any budget surplus to counter potential assessment rate hikes.
Committee member John O’Connor asked if any planned projects or improvements for next year could be delayed.
“We either increase revenue or decrease expenses to change the increase in assessments,” he said.
Committee member George Solyak noted there was a request last week for roughly $33,000 to repair cracks and repaint pickleball and tennis courts.
“It came in the last day and is not in the original figures,” he said.
Solyak said that budget request, as well as roughly $162,000 for new pickleball and tennis courts, along with fencing and $70,000 for T-Docks at the Yacht Club could be moved to the next year.
Committee member Brian Reynolds advocated fiscal conservatism.
“Given the uncertainties, why not let the small surplus ride out and keep it in our back pocket for covid-related problems?” he said.
Keiling said if feasible the estimated $33,000 for court repairs should be completed this year as costs would likely increase if work is delayed.
“Is there an opportunity to use the surplus and the board could populate the reserves with some of that?” he asked.
Parks said a super majority of two-thirds of board members is required to move an budget surplus to reserve accounts.
Solyak suggested the committee propose what percentages of surplus funds are directed to what ends.
Keiling recommended designating one-third for retained earnings and the bulk to help reduce assessment increases.
Reynolds said the board should ascertain the percentage dedicated in either direction.
Committee member Tom Piatti took issue with spending $70,000 to install T-docks at the Yacht Club.
“We know there will be a return on investment but it’s not a high priority,” he said.
Piatti said the planned courts expansion at the Racquet Sports Center should be considered a higher priority.
In closing, Keiling said the committee would recommend any current year budget surplus amount be stashed in retained earnings, with specific allocations left to the boards’ discretion. The committee also proposed the T-dock project should be ranked lower in priority.