Commissioner Jim Bunting and Chip Bertino, left, are pictured during a meeting with OPA officials last Thursday. Photo by Tara Fischer

By Tara Fischer

Staff Writer

Ocean Pines residents could experience a significant increase in fees if a proposed water and wastewater budget presented at a Worcester County Commissioners meeting last week is passed.

The fiscal year 2026 Water/ Wastewater Enterprise Funds budget was presented at a meeting of the Worcester County Commissioners on March 18. If implemented, the proposed plan to make up a $2.1 million deficit for fiscal year 2026 may raise Ocean Pines ratepayers’ – and those in the other 10 services areas – quarterly bills by an estimated $32 despite the community’s mere $116,699 share of the losses.

However, as Ocean Pines boasts 10,000 of the 18,000 utility users countywide, making it the largest service area, the fee bump should come to only $1 to $3, Worcester County Commissioner Chip Bertino said.

Bertino and Commissioner Jim Bunting oppose the plan. The pair argue the outline, which equally charges all 11 service areas, will unfairly impact Ocean Pines ratepayers, given their low contribution to the deficit. For context, Riddle Farm’s enterprise fund shortfall comes to a little over $1 million.

This equality model could be used to pay back a looming $6 million loan to address budgetary shortfalls within the combined water/wastewater enterprise service areas, increasing Ocean Pines residents’ bills even further despite the community’s minimal impact on the funding insufficiencies.

Furthermore, county code prohibits the proposed budget move, according to Bertino. The current code requires the debt of each service area be the responsibility of that individual service area. Each enterprise fund should be self-sustaining with income equaling expenses.

“By county code, we should not be paying for another district’s shortcomings,” Bertino said. “What was presented is contrary to what our current code is. As with so many other things, the commissioners can decide to change the county code and tweak it. But as it stands right now, the option before us is contrary to county code.”

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.”

The Ocean Pines Board of Directors met with Bertino and Bunting on Thursday, March 20, in a public meeting to discuss the budget plan, what can be done to prevent its passage, and what has led to the current situation.

At this gathering, Bertino said that in February 2024, the county budget office and deputy chief administrative officer were implementing new procedures and discovered “financial inconsistencies within the Enterprise Fund operations.”

It was learned the finance department was not bringing 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,” Bertino said.

At this time, the commissioners were informed of the gravity of the situation.

Upon further inspection between early 2024 and September, it was revealed that the Enterprise Funds “as a whole would soon run out of money.”

Bertino said the commissioners approved a transfer of about $9 million from the general fund to the Enterprise Funds to avoid a financial crisis.

“Of this, $2.7 million was designated as a grant to the Riddle Farm Service area,” Bertino added. “The remaining $6.3 million was designated a loan with an interest rate of about 5% that would be required to be paid back to the general fund over a period of 10 years beginning in fiscal 2027.”

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

“Of the $9 million transfer to stabilize the Enterprise Funds for accrued operations and maintenance shortfalls of individual service areas, the Ocean Pines service area was not a part,” Bertino said. “The Ocean Pines service area did not contribute at all to the accrued losses.”

A plan was created by a water/ wastewater discussion group made up of staff and Commissioners Ted Elder, Eric Fiori and Bunting to address the situation. Bertino said the team met three times and a majority voted to present the plan that came before the commissioners last week.

Under the proposal, Ocean Pines must contribute to the loan repayment by shouldering more of the debt than it is responsible for. The other service areas are Assateague Pointe, Briddletown, Edgewater Acres, Landings, Lighthouse Sound, Mystic Harbour, Newark, Riddle Farm, River Run, and West Ocean City.

Bertino said Ocean Pines’ share winds up being “ten times more” than what the community should be required to pay. He added that the increase would “more or less remain forevermore on our bills.”

“That’s just for this year’s identified $2.1 million shortfall,” he said. “Waiting in the distance is the $6 million loan that needs to be paid back to the general fund beginning in FY2027. If the plan presented Tuesday requiring Ocean Pines to shoulder the shortfall debt of other service areas passes in the final budget, it’s likely the same model will be used for the $6.3 million loan plus interest repayment over the next 10 years.”

Bertino continued, arguing that the potential rise in rates is inequitable to the Ocean Pines community.

“Doing simple math – and I want to reiterate that nothing about this situation is simple – our rates in Ocean Pines will increase about $9 per quarter per ratepayer for the repayment of this loan over 10 years, that equates to $3.6 million collectively over 10 years that we weren’t responsible for to begin with,” he said.

Also impacting Ocean Pines fees is that while the community’s service area currently accepts waste from the Riddle Farm service area and is being compensated approximately $532,000 annually, the location is expected to be back online in December. Therefore, soon, “the pump and haul expenses to that service area and the revenue our service area has been receiving for many years” will be eliminated, Bertino said.

It is likely that lost revenue will need to be made up. The commissioner noted that a quick calculation reveals that bills will include about a $13 quarterly increase. This modification will remain regardless of the outcome of the budget draft proposed last week.

Bertino noted the presented spending plan is a “conversation starter” and that while it is currently the only option on the table, it has not been approved.

“Those of us in the Ocean Pines service area have a responsibility to pay for the operations and maintenance and capital improvements of the facility that provides us clean water and processes our effluent,” Bertino said. “Ocean Pines ratepayers do not have a responsibility, nor should we be expected to shoulder the costs of other service areas that through the years were not financially managed properly by county government. The plan put forward Tuesday was a draft, an option that will be discussed and deliberated by the commissioners. It’s possible it will change … But this is the only plan now before us, and it is not in Ocean Pines’ best interest.”

The Ocean Pines Board of Directors expressed their concerns with the proposed plan.

“This sounds like a neighbor who takes out a loan to do a major redo of their home then goes walking down the street asking everybody else to help them pay it off,” Director Steve Jacobs said.

A public hearing to express concerns has been set for Tuesday, May 6, at 6 p.m. at the Worcester County Government Center in Snow Hill.

“Everybody in the Ocean Pines service area needs to be informed,” he said. “They need to understand so they can articulate their concerns. They should come out to the public hearing. They should write letters and emails. We need to educate our people. Knowledge is power … Ocean Pines is not a shy community.”

OPA Board of Directors Secretary John Latham echoed Bertino’s sentiments.

“Our community is going to do everything we can,” he said.

OPA Board President Stuart Lakernick asked the commissioners about the possibility of legal action. Bertino maintained at this point since no decision has been made except to accept the budget as an option for consideration, this step cannot yet be taken.