By Greg Ellison

Despite challenges, OPA operations still in black

(July 9, 2020) The May financial report for the Ocean Pines Association showed a net operating profit of $92,000, as revenue losses of roughly $370,000 were countered by reductions in expenses, OPA General Manager John Viola reported last Wednesday.

In addition to reviewing profit and loss totals for May, Viola shared accounting details for potentially forgivable PPP funding during last Wednesday’s board of directors meeting.

With the meeting held at the new Golf Clubhouse, Viola said net revenues dipped sharply from budget projections to open fiscal 2020/2021 this May.

“Obviously, with covid-19, our amenities weren’t open on May 1,” he said.

The unshuttering of amenities in May delayed hiring of seasonal staff, which when combined with other cost-cutting measures, dropped expenses that had been budgeted at $1.175 million to just over $712,000, or $462,468 under projections.

“We didn’t have our seasonal workers in place because we weren’t open at certain times,” he said.

Delving into specific department profit or loss totals that accounted for the $92,117 positive net operating tally in May, Viola said the good financial performance in the Public Relations, Public Works and the Police departments were offset by losses at pool facilities.

“Aquatics, as you would expect, would be down because of the way we have to open,” he said.

Finishing on the positive end of the financial scale during May were public relations at $22,800, public works at $38,500, police at $14,500 and general maintenance at $28,000.

Profit totals in May were offset by losses of $99,800 in aquatics, $79,300 in golf operations, $146,200 for Beach Club parking, $15,000 in racquet sports, plus $14,000 for food and beverage facilities.

Viola was also quick to deflect credit while noting general administration ended May with a positive variance of $336,100 over budget projections.

“We know I didn’t generate that,” he said.

Viola explained the $1.143 million in Payroll Protection Program funding the OPA received following the onset of covid-19 in March padded the general administration figures.

“Every amenity, every department will have payroll [that] will stand-alone and … be the actual numbers,” he said. “In general administration as a top entry is where we booked the PPP as other income.”

Viola said during May the OPA used nearly $310,000 of the $1.143 allotment for salaries and exemptible overhead expenses.

Director Frank Daly asked Viola if the PPP funding is likely to qualify for grant status or have to be repaid as a low-interest loan.

“Under the original terms of the PPP, if we keep everybody on the payroll until June 21 that loan converted to a grant,” he said.

While noting the June 21 dateline had been extended, Daly inquired about notification from the Small Business Association regarding loan forgiveness.

Viola said PPP protocols permit the funds to be accounted as other income if staffing levels are maintained.

“It gets forgiven each month as we utilize it, assuming that we have everybody employed,” he said.

Viola said with PPP timelines now extended to 24 weeks, the OPA would potentially use the entire $1.143 million allotted.

“Each time we record that other income, our loan payable goes down because that is a loan,” he said. “At the end of the day, assuming we use all of it [and] we kept everybody employed, per the agreement in the contract that loan should be forgiven.”

If the OPA does not qualify for loan forgiveness under the PPP program, Viola said the profit and loss picture would look significantly different.

“If that’s the case, we would have to book an expense for that $1.1.43 million and I would have a loan payable,” he said. “That’s pretty important and that’s how it works for everybody.”