By Greg Ellison

Spending reductions make revenue needs less urgent

(Jan. 28, 2021) In addition to reviewing current financials with two thirds of fiscal 2020-21 now in the ledgers, Ocean Pines General Manager John Viola last Wednesday gave the Ocean Pines Association Board of Directors the latest figures for next year’s proposed budget.

Viola said the fiscal 2021-22 budget had been vetted by the Budget and Finance Committee and received an initial board review.

“I have included reconciliation of FY 2020-21 to the recommended budget reflecting the board’s review and feedback,” he said.

Among the changes in the newest version is an assessment increase significantly less than initially proposed $120.

Viola said the current estimates set the assessment rate at $1,021, which reflects a $35 increase over the $986 rate charged this year.

“Where are we and what caused the increase?” he said.

Higher costs for medical benefits and payroll, along with property and casualty insurance, are anticipated to increase assessment fees by $30, $13 and $7 respectively.

Significant revenue deficits from aquatics are estimated to account for an additional $17 to next year’s assessments.

“For aquatics and beach parking, at this point Budget and Finance and the board feel even if covid eases it will impact this amenity,” he said.

Viola said the return of pool patrons would be guided, in large part, by state directives.

“We don’t know what will be mandated by the governor [Larry Hogan],“ he said.

To partially offset the higher rates, other costs were trimmed, primarily payroll, from Public Works and the Police Department.

Viola said roughly $133,000 savings — resulting in $16 off the assessment rate — came from not fillin three open positions in from Public Works.

Roughly $110,000 in savings — and another $13 cut from the assessment rate —was accomplished by not filling one open position in the Police Department.

Additionally, higher revenues from the OPA Golf Course and racquet sports are earmarked to reduce assessments by $4 and $3 respectively.

“These are the major components,” he said.

The largest cost-cutting measure is tied to a proposed reallocation of $350,000 in roadway funds the state pays the association from the casino impact grant, which knocks $44 off assessment fees for next fiscal year.

With a bottom line that will be well into the black at the end of current fiscal year ends on April 30, the association is aiming to zero out roughly $180,000 in debt remaining from the $1.6 million operating debt incurred three years ago.

“We will use the ending favorability to offset any operating deficit,” he said. “Any remaining favorability will be used as a cushion for covid.”

Looking at current year budget figures, for December the association’s operating fund had a negative balance of $209,428, with revenues under budget by $39,349 and expenses over budget by $170,079.

Despite the negative December figures, the association continues to maintain overall favorability with four months remaining in fiscal 20-21.

To close last month, fiscal 20-21 ledgers reflect a positive year-to-date operating variance of $1,145,696, with revenues over budget by $235,462 and expenses under budget by $910,234.

Viola estimated the current year favorability would be reduced to roughly $650,000 by the end of April.

Expenditures for December were also negatively affected by the $250,000 transferred from general maintenance to drainage.

Included among expenses for December was $50,000 for reversal of allowances for doubtful accounts based on guidance from Director of Finance and Operational Logistics Steve Phillips.

“We’ve had some good progress on collections so he wanted to try and balance it out now,” Viola said.