By Greg Ellison

(Feb. 3, 2022) Ocean Pines General Manager John Viola and Finance Director Steve Phillips reviewed the proposed FY 22-23 budget during a virtual town hall meeting on Tuesday.

Viola said inflation would affect the budget, but that steps were taken to mitigate losses.

Viola said the association is on track to close the current budget year with an operating surplus of roughly $1.2 million.

“That surplus will have a positive effect for assessments this year and a positive effect on our reserves,” he said.

Additionally, Viola said the budgetary surplus would also be used to purchase previously approved T-docks for the Yacht Club.

In light of the anticipated $1 million plus surplus, Viola has recommended dedicating $450,000 of that sum for a one-time assessment reduction of $53.

“This would be depending each year on the prior year performance and where we are at the end,” he said.

Ocean Pines General Manager John Viola

Improved financial figures for amenities and departments is also providing budget positivity.

“If you go through all the line items … every amenity across the board, we have growth,” he said.

Viola said price increases are proposed for numerous amenities, including golf, aquatics and racquet sports.

“A lot of these amenity prices have not been raised in years,” he said.

Higher golf greens and cart fees are anticipated to boost revenues by roughly $125,000, while aquatics is poised to capture an extra $180,000 based on volume and fee increases.

Previous bad debt, which reached $1.6 million in FY18, has continued trending lower.

Recent assessment figures included an annual percentage to reduce the total debt over a five-year period.

“We didn’t need all of that,” he said. “Over the last three years, we decreased the rest of that deficit just from operations surplus,” he said.

Out of the anticipated current year budget surplus, $350,000 is being earmarked to replenish road reserves that were previously reallocated for drainage.

Looking at wages and salaries, the proposed FY22-23 budget accounts for a number of increases, including $37,000 for mandated minimum wage rates, $70,000 for part-time staff, $118,000 to cover a 3 percent merit increase and market adjustments of $42,000.

In total, salary costs are slated to increase by $267,000, which represents a $32 rise in assessments.

Increased staffing needs for the Ocean Pines Volunteer Fire Department adds $250,000 to budget numbers, which represents a $38 assessment increase.

Legal fees were also adjusted from the current year.

“We tried to compare to this year and believe we can reduce it by $10,000 or reallocate to the election and the referendum expenses that we believe will possibly increase this year,” he said.

Viola also highlighted the importance of monitoring reserve account balances.

“Depreciation is a big number,” he said.

Viola said the recommended level for general replacement reserves is between 22-28 percent of assets.

“We’ve had that in place for several years,” he said.

Right of way fees paid by Mediacom and Comcast are jumping by $30,000 for a total of $190,000 during FY22-23.

Also, marina boat slip fees are jumping by 4 percent to account for an additional $8,000 in revenue.

“When you add all the revenue growth, as well as pricing, we get about a $500,000 increase budget versus budget,” he said.

Ocean Pines annual budget requires final approval 45 days before the next fiscal year, which begins on May 1.