By Greg Ellison

(Feb. 4, 2021) The Ocean Pines Association will be updating its reserve study to track account balance percentages and revise the fixed assets list to reflect recent capital building projects.

During the Budget and Finance Committee meeting last Wednesday, General Manager John Viola discussed plans to revise the study, which was updated two years ago following its creation in 2015 by Richmond-based Design Management Associates.

Viola said the update is being undertaken partially at the behest of the Budget Committee.

Six years ago, the OPA board paid Design Management $31,800 to ascertain what level of reserves it should maintain based on assets.

Doug Greene, a partner with the Richmond firm, presented an initial report to the board in April 2016, with a follow-up review conducted in 2018.

Viola said Public Works office manager Linda Martin is assuming lead on the project that will begin this month.

“She will meet with each department head to review the fixed assets register for updates,” he said.

Martin will be working with Viola, Director of Finance and Operational Logistics Steve Phillips, Accounting Manager Julia Johnson and the Budget and Finance Committee.

The new data to be considered includes the capital building projects completed over the past few years.

“She will summarize all those changes,” he said.

Viola said once changes to the fixed asset register are compiled, both he and Phillips would consult with Greene.

“I did tell him a couple years ago we will use his proprietary software to do all the calculations,” he said.

Viola described the latest reserve study as “DMA Lite,” which should cost roughly half of the initial investment in 2015.

“We’ll do all the legwork,” he said. “He will do all the calculations and provide overview, like he did last time.”

When the process is completed, the OPA is planning a town hall meeting to present the findings.

“To review how much we have in the reserves and to see where we stand,” he said.

Viola was serving on the Budget and Finance Committee in 2018, when the reserve study was reviewed and the committee agreed that the reserve account should contain a minimum of 22 percent of assets.

“We had dipped down to 17 percent but we showed over two years how we would get back there,” he said.

While the same range of 22-28 percent was agreed to for replacement reserves, other accounts were treated differently last time around.

“Bulkheads and drainage are separate and we didn’t give percentages,” he said. “The feeling back then for bulkheads was that we had enough to do the next year plan and a cushion of a couple hundred thousand,” he said.

Viola said bulkhead reserves have averaged about $1.4 million the past few years.

Although not addressed in 2018, drainage reserves are slated for greater attention in the next reserve study.

“I anticipate more on drainage for this time around with the DMA Lite.”

Included in the fixed asset registry are buildings, furniture and equipment, along with depreciated values for each.

“When we update our fixed asset register, that effects the depreciation,” he said.

Depreciation is calculated on the useful lives and amount of assets.

“Part of what we are updating is the new buildings and for this budget we had agreed with Budget and Finance to review to reflect the depreciation,” he said. “Normally, the fixed asset register is updated by the accounting firm at the end of the budget year.”