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OP annual budget process commences with guidance

By Greg Ellison

Association Treasurer Doug Parks discusses advisory committee recent meeting

(Oct. 15, 2020) The Ocean Pines Association’s annual budget process got underway last Friday with a session on advisory committee guidance.

OPA Treasurer Doug Parks said the Budget and Finance Committee began planning for the next year’s operating fund, which must be approved by the Board of Directors no later than Feb. 28.

“It happens every year. All the directors got that guidance via email,” he said. “Friday we met with myself, [General Manager] John Viola, [Finance Director] Steve Phillips and [Budget Committee Chair] Dick Keiling.”

Parks said the first step in the annual fiscal budget process is for the Budget Committee to highlight areas of concern for board members.

Parks said the discussions were relatively straightforward.

“The one issue we’ve got to be aware of is the effect of the lower revenue that we generated this year on our amenities because of covid,” he said.

Reduced revenue totals would play a factor in fiscal planning, Parks said.

“For the rest of the fiscal year, since our big season is almost done, we’ve just got to keep an eye on expenses because we won’t be generating as much revenue as we have from May through September,” he said. “The other side of it, too, is we didn’t have as much labor hours on the expense side as we would have in the past.”

Parks said it’s no surprise that actual income is down, as some operations were restricted by state-ordered covid-19 safety measures.

Parks said in terms of charting future earnings, it’s important to realize the current year is an anomaly.

“I’ve seen it in the past, especially in my real life job before I retired, and that’s why you look at historical trends,” he said. “You’ve just got to understand that anomaly is situational … and you plan accordingly going forward.”

Parks said unknowns remain at the federal and state levels in terms of future emergency funding.

“It’s still too early to tell,” he said. “We’re still looking at where the administration, both at the state level and the federal level, are addressing covid restrictions.”

Parks stressed that the board is not adopting a wait-and-see attitude.

“We’re just looking at all different possibilities and trying to figure out what the best approach will be, and it will become readily apparent as we have more information in a number of areas,” he said.

Parks also stressed the importance of adopting a conservative approach for revenue projections.

“We don’t want to make the assumption that all the amenities will go back to a 100 percent operating environment,” he said.  “One of the items in the budget guidance from the … committee was to make sure we pay attention to five-year historical trends.”