FILE PHOTO
Ted Moroney

By Josh Davis, Associate Editor

(Feb. 7, 2019) Ocean Pines Director Ted Moroney said mistakes and numerous other factors led to the $127 assessment increase seen in the latest draft of the fiscal 2020 budget, which was released on Jan. 25.

For one, he said the most recent draft, called the “recommended” budget, should have been the one released on Jan. 4, when General Manager John Bailey instead submitted his “proposed” budget with no assessment change.

“There is a longstanding tendency to allow assessments to drive or dictate the budget, rather than the needs and requirements of the community,” Moroney said. “Obviously, all budgets have wants, which should be based on a well-reasoned, thoughtful process. Therefore, in my opinion, the GM should submit what he or she feels is needed and the enhancements wanted regardless of the assessment number.”

Moroney added that was “likely wishful thinking, but the way I would do it.”

In his ideal budget process, Moroney said the second step would see the budget and finance committee verify the general manager’s and department heads’ justifications of what they believe are the community’s budgetary needs. The committee also would review the logic of the staff’s ‘wants’ area of the budget, and make recommendations to the board based on what they found, as well as the impact of the assessment.

“Instead, the review this year included adding missing pieces [and] updating calculations, as well as other adds and modifications based on the review itself, most of which were bound to increase the assessment,” Moroney said. “The B&F committee did their job in proactively addressing each of these areas. Again, in my opinion, the majority of the items should have been in the original budget.”

What’s more, Moroney said, the original budget was not “fully vetted” in terms of long-term roads and bulkhead planning.

“During the time after initial presentation and B&F hearings, extensive work was done on updating depreciation schedules and in particular roads and bulkheads from the reserves,” he said.

Doing so, he said, added about $19 per homeowner for bulkheads and $47 for roads. General reserves additions added another $10, while the capital portion of the fire and EMS budget, which Moroney said was “simply missed,” added $15.75.

The was also the issue of paying off the remaining $1 million deficit balance.

“The GM provided a backloaded deficit plan and B&F and board members — at least me — wanted an evened-out plan over three or four years,” Moroney said. “That deficit recovery cost in year one is a $28.04 add, [and] the sum of those five items alone accounts for $120 of the $127.

“I feel the depreciation calculation as well as the roads and bulkheads calculations must be completed prior to issuing the budget,” he continued. “The OPVFD was a miss. The GM provided a deficit recovery plan, however, based on recommendations, including mine, that program needed to be increased and leveled out. Other items making up any increase from first to current budget are small.”

Other areas also could be tightened, and Moroney said Bailey and the budget and finance committee were reviewing several wants versus needs, as well as items for immediate action versus those that could be delayed or done in phases. He said payroll recommendations are under review, as is the actual length of deficit recovery.

Moroney said the association can avoid repeating these mistakes in the future by starting with a more complete GM budget that clearly defines needs and wants, followed by budget committee scrutiny of the complete package, and the committee’s recommendations to the board.

“The board must clearly define what they are eliminating, the potential short and long-term impact, and why they are choosing to make cuts or add items,” he said.

“In the end, the best transparency is when a board clearly defines what they are excluding or including and why,” he added.