By Greg Ellison
(Jan. 14, 2021) The Ocean Pines Budget and Finance Committee closed its multi-day review of the budget proposal for next year on Friday with detailed financial projections for aquatics, beach club parking, racquet sports and the Bainbridge drainage project.
Ocean Pines Director of Amenities and Operational Logistics Colby Phillips said the Aquatics Department’s bottom line for 2020 was hammered by coronavirus restrictions.
While a net operating loss of $108,000 for the current fiscal year was expected, the pandemic-related health-safety restrictions led to a loss more than triple that, with a closing forecast of minus $381,000.
“We were down 48 percent at all pools,” she said.
With uncertainties abounding regarding vaccination disseminations and timelines for reopening social activities the aquatics budget proposal for next fiscal year reflects an operating loss of about $236,000.
“We will have to rebuild with people getting comfortable using pools,” she said.
Cash revenue from daily use fees was also severely reduced, Phillips said.
While budgeted at $262,000 this year, cash fees are forecast to close at around $174,000. Next year’s proposed budget estimates that number increasing to $223,000.
“Private lessons slowed down,” she said. “Exercise classes are doing decent but swim lessons took a hit.”
Revenue from swim classes, which was budgeted at $220,000 this year is now forecast to close at $80,000, while the proposed budget estimates the figure expanding to $187,000.
“Normally in May, swim lessons are busy, but we feel it will be slow this year to start,” she said.
Perrone, while agreeing that rebuilding usage is going to be a primary challenge, asked what steps could be taken to reduce the projected loss for next year.
“Maybe not open all pools at the same time to reduce staff,” he said.
Phillips said a few cost-cutting measures were already enacted this past summer.
“We have shortened some hours … to reduce expenses,” she said.
Perrone advised further scrutiny be paid to next year’s budget projections before the board work session on Jan. 19.
“This is a big number,” he said.
BEACH CLUB PARKING
Phillips said revenue projections for beach parking next year were on par with current forecasts but unknowns remain for next summer.
“It could be a slower go next summer,” she said.
Beach Club parking, which was budgeted for a net operating profit of $97,000 last summer, is forecast to close at more than $96,000.
The initial projection for next year is another $97,000 profit margin.
Manklin Meadows Racquet Sports Complex Facilities Manager Tim McMullen and licensed U.S. Tennis Association instructor Terry Underkoffler offered an overview of projected revenues and enhanced marketing strategies.
McMullen said racquet sports, including tennis, pickleball and platform tennis, were less affected by coronavirus than other Pines amenities.
“We averaged 115 people a day through June, July and August,” he said. “We’ve still averaged 55 people a day the last few months.”
Underkoffler said after Ocean Pines hosted its first USTA tournament in late September, the hope is to expand that marketing and revenue stream in the future.
“As we grow with tennis tournaments, and tournaments in general, it will be a revenue gatherer,” he said.
Underkoffler said the pandemic has cause the U.S. Tennis Association to delay its tournament schedule, with no dates set for when tournaments might resume.
“We’re looking at maybe 4-5 tournaments in the summer,” he said.
In total, racquet sports are projected for an operating loss of more than $10,000 next year, while being budgeted for a loss of $25,000 this year that is currently forecast at $34,000.
While tennis and platform tennis have proposed budget deficits of roughly $26,000 and $4,000 respectively next year, pickleball has a projected profit of about $20,000.
To help offset those projections, non-resident daily rates for tennis are proposed to increase from $10 to $12, with pickleball and platform also slated to increase from $5 to $6 next year.
McMullen said improved instructional offerings would help boost revenues next summer.
Perrone suggested taking another pass at tweaking fees for next year to compensate for anticipated losses.
“Those numbers should probably go up if you are looking at an overall proposed loss of $10,800 for next year,” he said.
To further muddy the fiscal picture, the association just learned that the repair of cracks and repainting pickleball courts and a pair of Har Tru tennis courts could cost $30,000.
Phillips said the cost is not currently factored in the next fiscal year budget.
“The costs will be less if we address it now,” she said.
Phillips said the Bainbridge drainage project is projected to begin by early March and should be completed by the end of October.
“Bainbridge is kind of the backbone of future grant opportunities,” she said.
Phillips said a state grant of $549,000 is in the hands of Maryland Department of Natural Resources, with Ocean Pines slated for reimbursement once invoices are provided to Worcester County.
Viola said Ocean Pines has also approved an additional $300,000 in the current fiscal year budget to cover costs above the grant amount.
“Right now the team is confident there will not be a cost in the fiscal 21-22 budget,” he said.