By Josh Davis, Associate Editor
(June 7, 2018) Ocean Pines’ deficit projection for fiscal year 2018 has been lowered to $1.2 million, based on the April monthly financial report released last week that unofficially ended the fiscal period. Original estimates were as high as $1.6 million.
During a budget and finance committee meeting last Thursday, Finance Director Steve Phillips partly credited measures put into place by General Manager John Bailey with helping slow some of the losses.
“J.B. implemented austerity measures a couple months ago, sat down with all the department heads and said, ‘what can we do to cut back spending?’” Phillips said. “These are tough times so, obviously, that paid off.”
Bailey said those measures saved some, but added, “Most of the reduction in the estimate comes from conservative estimating up front, followed by practical, actual adjustments to true costs.”
“Overall, it’s good news because we were forecasting $1.6 [million],” Phillips said. “We put in conservative numbers when we ended up preparing that forecast of $1.6 [million] as a worst-case-scenario because, basically, we didn’t want any surprises at the end of the year.”
Phillips said the $1.2 million in deficits was largely because amenity revenues did not match projections, with a total shortfall of just over $1 million.
“That’s 85 percent of our loss. We put a number in there we weren’t able to achieve,” he said.
He cautioned the numbers were preliminary and could be adjusted based on the end-of-year audit.
Phillips, in an email last Friday, clarified some of the numbers contributing to the deficit.
A large portion comes from projected net revenues at the yacht club, off budget by $741,640, and beach club, off budget by $262,965.
A 20-percent food and beverage discount, implemented after budget adoption and without board approval, added another $99,600, and combined write-offs because of bad inventory at both facilities totaled $74,000.
Two new unbudgeted platform tennis courts cost $107,167 and the decision to book an additional allowance for uncollectible debt added $134,252 as compared to the budget.
Legal services were over budget by $47,270 and auditing services ran $25,000 over budget.
Also notable was a budget adjustment for fire and EMS services of $165,000, for early repayment of a loan.
Additionally, several departments finishing better than budget estimates offset some of the losses. Those include public works ($97,000), parks and recreation ($87,000), and golf ($87,000).
With the addition of $363,640 in deficits from the previous year, the two-year deficit total is now $1,582,102, Phillips said.