By Greg Ellison
Department proposals get scrutiny in uncertain times
(Jan. 14, 2021) Ocean Pines kicked off a multi-day FY 2021-22 budget presentation last Wednesday, with covered food and beverage services, fire/EMS, golf operations, finance, marketing and general administration.
In-depth departmental presentations were provided for the Budget and Finance Committee, which will subsequently issue guidance for consideration during a board of directors work session on Jan. 19-20.
General Manager John Viola is scheduled to publish recommended budget figures by Jan. 29, followed by a board hearing on Feb. 6 before final approval on Feb. 20. The new fiscal year begins on May 1.
The proceedings actually began a day earlier than originally anticipated, with food and beverage contractor the Matt Ortt Companies presenting its information on Tuesday.
CEO Ralph DeAngelus said although precise time frames remain open to conjecture, the current distribution of coronavirus vaccines indicate the possibility of stronger financial returns this year at the Yacht Club, Beach Club and Golf Clubhouse Bar and Grille.
“I truly believe we’re going to have a great year,” he said.
One positive financial indicator DeAngelus noted is a recent uptick in private event deposits.
“We have $335,000 already booked in weddings and events,” he said.
DeAngelus said that figure is guaranteed to grow between now and May 1.
“It proves public confidence is coming back,” he said. “This is more than we had scheduled for last year.”
DeAngelus estimated 85 percent of private events booked for next year are at the Yacht Club.
“It’s a bigger venue,” he said.
Looking at bottom line numbers by food unit, the Beach Club, which was budgeted for a net profit of $96,937 for the current fiscal year, is estimated to net $97,742 profit during FY21/22.
DeAngelus said charting profit margins at the new Golf Clubhouse Bar and Grille is difficult because the lack of history.
“We don’t see covid being impactful on the Clubhouse,” he said.
Revenue estimates for the Clubhouse Bar and Grille are roughly $230,000, which DeAngelus characterized as a conservative figure that likely could be topped.
Net revenue at the Yacht Club is estimated at $1.8 million next year and forecast to close this year at roughly $1.5 million.
The surplus in revenue, however, will be eliminated by rising payroll, with salaries forecast to close the current fiscal year at just over $676,000 and forecasted at more than $927,000 in the next budget.
Still, DeAngelus expressed confidence in netting a 10 percent.
“We did a good job of keeping our revenues up because of the specials we did,” he said.
Ocean Pines Fire Department President Dave VanGasbeck said emergency responders had to maintain a flat budget this past year.
“It was a challenging year,” he said.
The department tapped into reserve funds for building projects and apparatus replacement expenses.
“We’ve done our best to come in as efficiently and effectively as we can and still provide … services,” he said.
Fire Chief Steve Grunewald said the Ocean Pines Volunteer Fire Department is requesting funding of roughly $722,000 from the association, up about $46,000 from about $675,000 requested for the current fiscal year.
Increased revenue is also anticipated from Worcester County, which ponied up roughly $704,000 between fire and EMS for the current fiscal year, with roughly $808,000 anticipated for fiscal 21-22.
VanGasbeck said preliminary work is in progress to update the South Station at 911 Ocean Parkway to meet National Fire Standards, with a plan being developed to keep maintenance costs reasonable.
General Manager of Golf Operations and Maintenance John Malinowski said net revenues, which were budgeted at $1.07 million for the current fiscal year, are proposed at $1.1 million for next year.
Malinowski said the roughly $35,000 increase would likely break down to about $30,000 from play fees and $5,000 from merchandise sales.
On the expense side, payroll costs are anticipated to top $297,000, compared to $282,000 budgeted for the current fiscal year.
Revenue from membership dues is proposed at $130,000, the same amount budgeted in fiscal 20-21.
Regardless of a stuttered start for golfers this spring due to covid-19, the number of rounds played this year is approaching prior numbers.
“If you look at May and June we lost over 3,500 rounds, which is more than $100,000 in revenue,” he said.
Since that slow beginning, course play has accelerated, with at present 22,414 rounds played to this point in the calendar year, versus 22,155 in the year prior.
“Things are looking good for golf,” he said.
Director of Finance and Operational Logistics Steve Phillips said one minor revenue change would include the proposed increase from $25 to $50 for property transfer fees based on the amount of administration work involved and increased numbers processed recently.
Marketing Coordinator Julie Malinowski said the impact from covid-19 on public relations objectives has been less severe than anticipated.
Malinowski also noted that starting next fiscal year revenue generated by the Ocean Pines Farmers and Artisans Market would be shifted from administration to Recreation and Parks.