Earlier estimate for pending fiscal year fee increases cut  from $121 to roughly $35

By Greg Ellison

(Jan. 21, 2021) The Ocean Pines Board of Directors started its two-day review of the next fiscal year’s budget on Tuesday, with instant good news after learning earlier estimates for potential assessment increases have been reduced substantially.

General Manager John Viola said earlier calculations indicated a $121 assessment fee increase could be required, but that figure was readjusted based on guidance received from the Budget and Finance Committee last week.

“The increase on assessments could have been a couple hundred dollars,” he said. “It’s now in the $35 range.”

Although the final budget numbers are still taking shape, cost-trimming measures to this point have included reducing the added cost for bulkheads work from $41 to $25.

Ocean Pines Public Works is half way through a four-year bulkhead replacement program begun two years ago.

While numerous line items remain open to discussion, Viola said increases for payroll, benefits and casualty insurance leave little room for flexibility.

“Salary and benefits account for 70 percent of the assessment,” he said. “You can’t ignore that.”

Viola said one of the larger points of debate during the Budget and Finance Committee review earlier this month was where to shift the estimated $650,000 the OPA will have netted above its budgeted bottom line.

Ocean Pines General Manager John Viola

Viola said one priority is paying off the roughly $163,000 in past operating debt.

“I believe the favorability will cover the operating deficit,” he said. “At the end of this budget it’s gone and we covered it all.”

The association incurred roughly $1.6 million in operating budget debt three years ago, and Viola said that has been paid down without significant impacts on assessment rates.

Several proposed capital projects were also vetted by the Budget and Finance Committee earlier this month.

Deemed a primary project and supported by Budget and Finance are proposed upgrades to add court space at the Manklin Meadows Racquet Sports Complex.

Viola said the roughly $160,000 to expand pickleball and junior tennis courts, along with fencing, could be sourced from either the new capital reserve account or current year budget favorability.

“I believe over time the racquet sports will break even,” he said.

Although deemed a secondary project by Budget and Finance, Viola said costs to add T-Docks at the Ocean Pines Yacht Club should be recouped eventually.

“I believe that revenue over time will help us offset expenses,” he said. “There are hard calls that might have to be made here.”

OPA President Larry Perrone suggested a proposal to reallocate $350,000 from the roadways budget to subsidize the Bainbridge drainage project would require further board discussion.

Board member Frank Daly said advised caution in that respect, saying, “In the past we let facilities crumble to keep assessments from increasing.”

Daly said between government mandated payroll increases and price volatility for materials, there are budget issues over which the association lacks control.

“The assessment goes up or situations get a hell of a lot worse,” he said.

Perrone said the principal consideration is deferring road maintenance next year.

Board member Tom Janasek said if future drainage-related grants are awarded to Ocean Pines the roads funding could be reimbursed.

Agreeing was Director Doug Parks, who pointed to potential long-term benefits.

“Moving money from roads establishes a positive precedent for future grant pursuits,” he said.

Daly, who backed the reallocation recommendation, also highlighted the 5-6 miles of underground pipe in Ocean Pines that are at or near the end of their useful life.

“There’s a liability we face to replace pipe,” he said.

Daly said the cost could eclipse $30 million when addressed.