PHOTO FROM YOUTUBE
Ocean Pines Budget and Finance Committee Chairman John Viola, left, and General Manager John Bailey introduce the proposed fiscal 2020 budget to membership last Saturday.

By Josh Davis, Associate Editor

(Jan. 17, 2019) General Manager John Bailey on Saturday introduced a proposed fiscal 2020 budget that would raise the basic annual assessment $31, or about 3.3 percent, to $982.

Last Monday, Bailey proposed a budget that would have kept assessments flat, but that was changed after three days of public hearings with the budget and finance committee.

Speaking to a handful of homeowners during a hearing with Budget and Finance Committee Chairman John Viola on Saturday, Bailey several times said the next budget is still a work in progress.

“The biggest thing I can tell you at this point is this is a process,” he said. “While I appreciate the comments made in the press that ‘if the general manager has his way,’ that’s not the case. It is a consolidated process of myself, all the staff, the advisory committees, the budget and finance committee, the board of directors, and you, the membership.

“The general manager doesn’t just create this and expect it to be done by somebody that’s omniscient, omnipresent, all powerful, all knowing and perfect,” Bailey continued. “I don’t know who that GM is, but it’s not me.”

In a PowerPoint presentation on what the 2020 budget must accomplish, Bailey proposed a four-year plan to pay down the remaining $1 million Ocean Pines deficit, including $100,000 in 2020, $250,000 in 2021 and $325,000 in both 2022 and 2023.

The budget and finance committee recommended an accelerated three-year deficit recovery plan, with $333,333 paid each year.

Viola, describing the situation as “a little dicey,” said those numbers also came from board direction.

“What the GM is recommending – and it’s his right – was way behind what the board had given its guidance or some leeway on,” Viola said. “When you do something like this, you keep the assessment flat, but sooner or later … we’re going to wind up paying for this anyway.”

Bailey said the proposed budget did not include subsidy increases for the golf, aquatics, racquet sports or food and beverage amenities. However, user fee amounts would increase an average of 3 percent.

According to Bailey’s presentation, a payroll study identified pay gaps for 35 positions with a total pay adjustment increase of $128,000 included in the budget. Also included were 2 percent merit increases and a roughly 10 percent increase for medical benefits.

Overall, payroll costs would increase 8.4 percent to more than $7.6 million.

While the current budget includes $116,937 for drainage, the proposed 2020 budget would total $914,732, with the bulk of that, $620,000 allocated for “major under-road pipes” and paid by road reserves. Also listed under drainage was $125,000 for contracted labor, $118,232 for labor, $31,500 for materials and $20,000 for engineering work.

Deferred maintenance, described as “lots of repair and maintenance projects that have not been addressed over the years,” included more than $200,000 worth of capital items from replacement reserves and more than $160,000 to be paid by the operating fund. Bailey cited the beach club parking guard shack, exterior signs throughout the community and playground equipment as examples.

Replacement reserve spending would total more than $3.4 million, also including $1.6 million for country club renovations, $800,000 to renovate the police and admin building, $150,000 for White Horse Park playground equipment, $135,000 to replace the crabbing pier and $100,000 to resurface the swim and racquet club tennis courts.

The reserve balance as of May 1, 2019 projects to be about $4.8 million with the April 30, 2020 balance dipping to around $3.2 million. The estimated fiscal 2020 reserve contribution would total just over $1.9 million.

Proposed road reserve spending would total $1.3 million, including $633,000 for road paving and $620,000 for drainage pipes on Cathell Road and Ocean Parkway, the Boarderlinks Condominium, and on Mumford’s Way.

Road reserves project tot be about $1 million on May 1, 2019 and would fall to $143,500 by April 30, 2020.

Bulkhead spending in fiscal 2020 would total $1.6 million, depleting total bulkhead reserves from nearly $1.6 million on May 1, 2019 to $1,443 on April 30, 2020.

Additionally, Bailey proposed a one-year waiver of bulkhead assessments, including $19 per lot owner communitywide and the additional $453 assessment paid only by bulkhead lot owners.

The proposed budget, as of Saturday, did not include budget and finance committee recommended additions of $237,000 for deficit recovery, $200,000 for a room addition at the sports core pool or $16,000 to add a part-time compliance, permit and inspections staffer.

Items recommended by the committee that did factor into the proposed budget included $133,000 more for fire and EMS services, $50,000 more for legal fees, $40,000 more for deferred maintenance, a $10,000 increase in marina revenues and $49,847 listed as “other,” including information technology costs and depreciation changes.

Those additions drove the $31 assessment increase.

“Now we’re at a proposed assessment at $982, that’s $31 [or a] 3.3 percent increase,” Bailey said. “Ultimately, it’s the board of directors that gets to make those decisions, particularly with regard to assessment, deficit, recovery, etc.”

Board budget work sessions were scheduled Monday through Thursday this week.

According to a budget calendar, the recommended budget will be published on Jan. 25, with the board set to conduct a budget hearing on Feb. 2 and a vote to approve the budget scheduled on Feb. 16.