Commmissioners Chip Bertino and Jim Bunting are pictured addressing attendees to a town hall meeting in Ocean Pines on April 23.

By Tara Fischer

Staff Writer

Opposing a proposed sewer and water fund budget that would increase quarterly utility rates remains the priority of Ocean Pines and its Worcester County representatives, who held a public meeting last Wednesday that included the threat of legal action.

Convening in the Ocean Pines Library at the invitation of Worcester County Commissioners Chip Bertino and Jim Bunting, who represent Ocean Pines, residents were given the opportunity to express their concerns and ask questions about the budget proposed in March.

The Ocean Pines service area includes Ocean Pines, Pennington Commons, Bay Point Plantation, Pines Plaza, Turville Creek Area, Ocean Downs, and Crabs to Go. Water and sewer are planned for St. Martins and Dolly Circle, yet neither has been constructed.

If passed, the spending plan would raise water and wastewater rates by an estimated $32 a quarter across all 11 county utility districts to alleviate a $2.1 million deficit in fiscal year 2026.

Opponents argue the proposal unfairly targets service areas, like Ocean Pines, that had only a minor impact on the accumulated debt.

Each district’s budget is contained in a separate accounting entity known as an “enterprise fund.” According to Bertino, Ocean Pines’ fund shows a loss of $116,699, which should result in fee increases of only $1 to $3 rather than the intended $32.

By contrast, the shortfall in the Riddle Farm’s sewer and water enterprise fund is a little over $1 million.

Bertino and Bunting oppose the presented plan, contending that it would be used as a model to pay back a looming $6 million loan to address budgetary shortfalls within the combined water/ wastewater enterprise service areas.

These shortfalls were created by financial inconsistencies with the enterprise fund operations discovered in February 2024 when the county budget office and deputy chief administrative officer were implementing new procedures.

Bertino said at a special meeting of the Ocean Pines Association Board of Directors in March that following this discovery, it was learned the county finance department neglected to bring to anyone’s attention “accumulated deficits and that the budget transfers were being made on paper from reserves that did not exist in individual areas.”

The commissioners were informed, and to avoid furthering the crisis, they approved a transfer of about $9 million from the general fund to the enterprise fund. While $2.7 million was designated as a grant to the Riddle Farm Service area, $6.3 million was provided as a loan with an interest rate of about 5% that would be required to be paid back to the general fund over 10 years beginning in fiscal 2027.

Bertino maintained that the Ocean Pines service area did not contribute to the accrued losses.

Rather, $242,000 was given to Edgewater Acres, $790,000 to the Landings, $1,730,000 to Mystic Harbor, $200,000 to Newark, and $3,339,010 to Riddle Farm. This debt must be repaid over 10 years beginning in FY27. The $2,760,177 grant to Riddle Farm does not need to be repaid.

Officials worry that if the spending plan to make up FY26’s $2.1 million debt is approved, that same process, which raises the fees of ratepayers across all service areas equally despite that area’s actual contribution to the deficit, is likely to be used to address the $6 million loan.

The FY26 plan was created by a water/wastewater discussion group made up of county staff and county commissioners Ted Elder, Eric Fiori, and Bunting. Bertino said the team met three times, and a majority voted to present the proposal on March 18.

Bertino and Bunting have been informing their constituents of the plan in an attempt to halt its passage.

“This is only one proposal, but it is the only proposal put forward to be considered for the budget at this point,” Bertino said. “The reason for that has to do with the timelines and restrictions of putting the budget together. County administration and our budget director had to have something in place to move forward for the public hearing, and this stupid plan was the one the majority of commissioners decided to put forward.”

Bertino said the proposal is unfair to the service areas that had a small or no impact on the deficit. The other five county commissioners, he said, support the plan.

“What was said by one of the commissioners was, now these are my words and not his, ‘Ocean Pines can basically suck it up, it wasn’t all that much money,’” Bertino said. “That’s ridiculous. I don’t care if it’s $1 or $100, it makes no difference. We shouldn’t have to deal with it.”

While spreading the debt repayment across all districts is the only option being considered, Bertino said county staff has created alternative means to address the budgetary issues. One would be to require all service areas to pay for its own usage. Ocean Pines’ water and sewer base fee would increase from $207 to $209 in this case. The commissioner added that this selection “seems fair.”

Furthermore, under the county code, enterprise funds must be self-supporting, which is in line with Bertino’s alternative choice.

The code reads, “The County Commissioners shall levy assessments by resolution on all properties within the sanitary service area or sub-area for the sole purpose of raising funds to retire any indebtedness of the service area or sub-area incurred for the purpose of acquiring or constructing sanitary facilities.”

While this county code would prohibit the option of raising rates $32 a quarter, Bertino said that the commissioners could tweak the guidelines to allow that choice to be implemented.

Bertino and Bunting argue that the budgetary issues require additional time to resolve, despite support for pushing through a plan that the Ocean Pines commissioners believe is not well thought out.

“Since this conversation started, [County Chief Administrative Officer Weston Young] has been saying that we need to have a longer horizon and timeline to work through these issues,” said Bertino. “[Bunting] and I agree with that. At this point, I don’t know how many other commissioners agree with it because it’s one commissioner who wants to sacrifice Ocean Pines on the altar of political expediency.

“If he could ram this through today, he would … [Young] recognizes that this issue was many years in the making and it can’t be solved in just a month, or two months, or three meetings of a subcommittee that, however well intentioned, came up with a stupid plan.”

The Ocean Pines Association Board of Directors also oppose the proposed plan. On April 22, Bruce Bright of Ayres, Jenkins, Gordy, and Almand, OPA’s legal counsel, released a letter threatening civil litigation if the county proceeds it.

The letter said the plan “is pursued by a voting majority of the commissioners, is not only grossly unfair to Ocean Pines ratepayers, but just as troubling, would directly violate clear provisions of state and local law, would be contrary to the county water and sewer plan, and would in our judgement subject the county to costly legal claims not only by OPA and/or its ratepayer members, but also by the ratepayers in other unlawfully and unfairly impacted service areas (e.g., Briddletown, Edgewater Acres, Lighthouse Sound, River Run, and West Ocean City).”

The letter also quotes county code: “water and wastewater facilities and services shall be provided and managed based on separate service areas…The revenue and expenditures for each such area shall be accounted for in a separate enterprise fund in accordance with the financial management rules of the county…”

The letter argues that civil litigation will likely move forward if the plan proceeds.

“If the majority of the commissioners proceed with their unlawful and unfair plan, and take further deliberate steps in that direction, OPA and other ratepayers would likely initiate civil litigation, and advance claims against the county and certain commissioners, including breach of fiduciary duty, equal protection violation under the Fourteenth Amendment of the US Constitution, for declaratory and injunctive relief, for monetary damages and attorney’s fees, for violation of applicable state and county code provisions, for administrative mandamus, and/or for unlawful taking.”

Bertino, Bunting, and the OPA Board of Directors continue to ask the public to voice their opposition to the  proposal.

A public hearing is scheduled for Tuesday, May 6, at 6 p.m. in the Government Center in Snow Hill.