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Pines opens FY22/23 budget presentations

By Greg Ellison

(Jan. 13, 2022) Ocean Pines officials took a deep dive on the proposed budget for next year during multi-day departmental presentations begun last Tuesday.

General Manager John Viola said the association anticipates both favorable tailwinds and challenging headwinds during the next fiscal year that starts on May 1.

Among the financial hurdles in FY22/23 cited by Viola were inflation, wage increases, rising insurance premiums and pending state legislation mandating reserve levels for homeowner associations.

On the positive side, Viola said the improved bottom lines of various amenities and departments in the current budget year suggest a continuation of that trend in the year ahead.

“We have a surplus,” he said.

After ending FY20/21 with revenues ahead of expenses by more than $1 million, the association estimates the current budget year will see the same thing.

“We did not use any of the surplus for this budget,” he said.

Viola said Finance Director Steve Phillips is compiling a schedule to reflect how surplus balances would be applied to reserve accounts.

At this point, the proposed budget reflects a one dollar reduction in assessment fees from the current rates of $996 for non-waterfront lots and $1,611 for waterfront properties

“That’s where we are before all the tail and head winds,” he said.

Viola said even though revenues are outpacing expenses by a significant amount now, indicating that a more substantial reduction in assessments is possible, increased personnel costs in the new year will use up a good portion of that variance.

In addition to an estimated increase of roughly $262,000 for association payroll, staffing requests from the Ocean Pines Volunteer Fire Department could add about $319,000 to costs.

Shifting to specific amenities, General Manager of Golf John Malinowski projected that revenue from the golf course, which are expected to close the year $1.23 million, will be up slightly in the new year at roughly $1.29 million.

“Our expenses aren’t much more,” he said.

Although golf salaries are only slated to bump up by about $12,000, Malinowski said the price tag for chemicals and fertilizers used for green maintenance is anticipated to jump from about $130,000 to roughly $155,000.

“Fertilizers and chemicals are kind of going through the roof right now,” he said.

Malinowski said minimal price increases are planned at the golf course during the next fiscal year.

“We raised the prices for non-resident play at times we were sold out essentially,” he said.

In addition to increase rates for nonresidents who play from 7 a.m. to 4:30 p.m. the charge for residents to shoot 18 holes is going up.

Greens fees for non-member property owners and guests are budgeted at $59 for 18 holes, up from $54 this year, with the cost for nine holes remaining unchanged at $35.

Also rising slightly are golf cart fees, which are budgeted at $25 for 18 holes and $15 for nine holes for FY 22/23, up from the current $22 and $12.

Association President Larry Perrone said questions over charging identical rates for owners and guests to play the course have been raised.

“We’re getting some questions about why owners’ guests are paying the same rate as owners,” he said. “Why are they not paying a little bit more? They’re not owners here and they’re not members.”

Malinowski said resident guests have traditionally paid the same rate at both the golf course and swimming facilities.

“We’ve always done it that way,” he said.

Next up was Recreation and Parks Director Debbie Donahue who highlighted the payroll adjustments in the new budget.

“Our previous full-time administrative assistant is now part time,” she said.

Other budget measures slated for the new year include higher charges for special events and bus excursions.

“We raised the fee for July 4 to offset some costs,” she said. “We haven’t raised that in a long time.”

Revenue from special event bus trips, estimated at $60,000 for this year, are budgeted at $90,000 for FY 22/23.

“It would generate revenue if we can do bus trips safely,” she said. “We haven’t been able to do them in a year.”

Other proposed price hikes include a $10 increase for Camp Ocean Pines.

“It’s been four to five years since the last raise,” she said.

Shifting gears, Marian Manager Ron Fisher presented budget projections for slip rentals and fuel sales.

“I tried to be conservative on fuel sales,” he said.

Fisher said Mother Nature also dampened fuel sales this past season.

“This year we had 57 days with small craft advisories,” he said.

Of that number, Fisher said 14 occurred during weekends, including Memorial Day.

Director Amy Peck questioned the absence of higher rates for boat slip rentals and inquired about the number of people currently on the wait list for slips.

Fisher estimated 76 boat owners were on standby for slips.

“We did increase 4 percent last year, but we didn’t want to again,” he said. “We don’t offer the same amenities as other marinas.”

Based on the number of interested parties, Peck suggested that a price hike could be absorbed by users.

“I think we could bump up our rates and still sell every slip easily,” she said.

The possibility of renovating mailbox clusters was discussed during the Public Works budget presentation.

Committee Chairman Dick Keiling said the issue is of prime importance.

“I would prioritize those mailboxes that are most visible … some are horrendous looking,” he said.

Viola noted the high cost for replacing concrete pads associated with mailbox clusters.

“If you want to start doing this, it’s a lot of money,” he said. “We can go in and repair the worst examples.”

Perrone said after recently contacting state officials to inquire if the U.S. Post Office would foot the bill, it appears the association is solely responsible.

Aquatics Director Kathleen Cook reviewed proposed rate hikes for pools.

“It was my recommendation that we make a change in the daily fees for both residents and nonresidents,” she said.

Cook said daily-use fees have been stagnant since 2012.

“I’m also proposing that we begin to charge children from 1 to 4,” she said. “They have to count in my capacity numbers. However, I don’t generate any revenue.”

Perrone said the price inclusion for tykes was a bad idea.

“This is not going to be received well by the community,” he said.

Perrone suggested charging more for nonresidents.

Cook said bumping up charges for nonresidents would not appreciably increase revenue.

“When I break down the data …  it’s like 4 percent of people that aren’t residents,” she said.