OCEAN PINES — Should the Ocean Pines Association fail in their latest attempt to reverse the Fourth Circuit Court of Appeals’ decision, the membership may find what was meant to be a temporary increase in dues extended indefinitely.
This week the Board of Directors voted to use the funds that have been set aside to pay down the Association’s debt by means of a $4 annual increase over five years to instead pay any fines handed down by the IRS. After the IRS amount is paid, the five-year plan will be reinstated.
The five-year plan was designed to pay down a $500,000 structural debt by setting an automatic increase of $4 per year, eventually doing away with the need to increase the Association membership fee to combat debt.
At the time is was passed some expressed skepticism over the plan, worrying that the board could not be trusted with a large amount of money set aside. Should the OPA lose the IRS case, the amount owed could be in the $1 million range. During this week’s meeting the board said that they still had no exact figure to share but expected to have one in time for the end of the fiscal year.
Should the OPA lose, the first million or so in income generated by the $4 annual increase will go to pay down the IRS debt. After that debt is cleared, the increases will continue until the $500,000 mark is reached.
Although the board renewed their commitment to continue the case, it is possible that the renewed appeal might never be heard.
Whatever the case, the Board decided that it would be best to book the loss in the fiscal 2012 financial statement and make adjustments as necessary should they prevail.
They also took a step toward deflecting tax liability in the future by passing a measure that would allow single day passes to be sold for the Beach Club parking lot. Under the program, members and non-members alike may purchase a $30 one-day pass.
The restrictions are that the pass must be purchased two-days before the date of its intended use at the Ocean Pines Administrative Building. The pass comes with single-day access to the Beach Club bathrooms and there will be no rain checks offered.
The directors reasoned that as long as it was technically possible to purchase a pass, the OPA would again have tax-exempt status for Beach Club parking revenues. The proposal was vetted by OPA legal council.
The passes will be bar-coded with the correct date and one-day passes will end at 5 p.m., just as the annual passes do.
The Board discussed making a different rate for members — $20 per day — and non-members but General Manager Bob Thompson suggested that this might encourage members to stop purchasing Beach Parking passes and opt for a pay-as-you-go approach. The Board agreed and amended the motion.
Part of the decision against the OPA in the IRS suit was that since the passes were not available to the general public the revenue did not serve the general good. In other Board business, Thompson explained, in response to questions on the matter, why the current liquor license was best left as is.
The OPA has a Class “C” license which allows them to sell alcohol in an area zoned R-3 residential. Although, according to a slide provided by Thompson “Zoning prohibits a public restaurant being located at the property” since the OPA has a club on the premises they are allowed to serve food to members.
There have been calls to attempt a change in the past, but it would, Thompson said, require getting the Town of Ocean City to rezone the property; a prospect he considered difficult and time-consuming at best. As it stands the liquor license will be left as is.