4/5/2006

Power surges abound in Ocean Pines
By Tom Sandusky
Former Ocean Pines Association Director

We’ve been experiencing a lot of power surges in Ocean Pines lately.  Not the electrical kind, but the political kind.  Electrical surges damage our computers and TVs, while the political kind can hurt far more important components. Like people. Like OPA employee morale and productivity. And, ultimately, the effective management of our beloved Home Owners Association.
 
Political power grabs are certainly not news…happens all the time.  They are, however, rather new to Ocean Pines.  The resultant power surges have been happening lately with a frequency that’s become alarming.  This became clearly and painfully obvious to me at about the 5 hour mark of yet another mind-numbing marathon meeting of our board of directors, on March 15. It was at this point that association members witnessed the most recent, and most disturbing public power surges.  I joined a significant number of attendees who quietly left the meeting in disgust, and immediately sent an e-mail to all board directors, in which I pretty much predicted what finally, inevitably, materialized nine days later - Dave Ferguson’s “retirement” as general manager of the Ocean Pines Association.
 
The theme of my letter to the board was “how long until the ever-increasing OPA staff morale problems you continually create result in staff resignations?” and “how will we attract their replacements?” A truly hard question to answer, I suppose, as I received only a "thank you" response from one director and an "I disagree with you" response from another.
 
Now I have a second hard question: Why did Dave Ferguson choose this particular time to suddenly resign?  I've been rather close to Dave for the past four years, but I will not ask him that question; he's had more than enough hot seat time.  Besides, even those who might not know him well could easily see his increasing frustration with board decisions over the past year or so.  Ferguson was hired after a professional executive search about seven years ago, and had originally planned to work here only for about five years. But in 2005 an OPA board finally saw passage of a community center referendum, and Dave promised to stay around long enough to see the actual building become a reality.
 
The OPA press release implies that Dave suddenly decided age 64 is close enough to age 65, and that it’s time to head for the rocking chair.   We are left to assume that - leaving OPA in the soundest financial position in its history, overseeing the financial and cultural rebirth of the Yacht Club, and having contributed to a total amenity package that would be envied by any community, was a good enough legacy for Dave.  Just ride off into the sunset, like the Lone Ranger.  Perhaps. But I submit that the membership has not been paying close attention to the power surges which have been building in both strength and frequency, over the past several years.  Let’s take a look at the chronology:                                               
 
 In 2003 a new director, having lived in Ocean Pines for all of seven months, and with absolutely no facts to back him up, publicly alleged that OPA "has no internal financial controls", and that one of our department heads "is a thief". The allegations were obviously a bit of a staff morale buster, but certainly required investigation. The Board of Directors wisely rejected the suggestion to form a property owner “vigilante” committee, and contracted with Faw, Casson, a prominent CPA firm, to conduct an independent study of our internal controls.  Several months and $25,000 later, we learned that OPA does, indeed, have adequate controls, that they are being managed properly and that there was no indication of any misappropriation of funds.  This study included the additional strong benefit of being supervised by a senior FC partner with impressive food & beverage consulting experience with some 30 area restaurants.  Thereby, the FC study provided us with some strong recommendations on how to improve our food and beverage operation. Their advice included the admonition that the board goal of breaking even financially could never be met so long as we kept the Yacht Club open all year.
 
Since 2004, an over-abundance of "advisory committees" and "task forces" have been proposed and discussed ad nauseum within the new atmosphere of marathon “let’s see who goes brain dead first” OPA board meetings.  Some of those proposals, however, especially the onerous Public Works "Oversight Committee," were, thankfully, rejected. OPA staffers have properly perceived this unending proliferation of accusatory oversight committees as evidence that the OPA board doesn’t trust them.  Believes them to be incompetent.
 
 In 2004, the board directed that our Yacht Club was to break even financially within three years. In two years, our losses there have dropped from over $300,000 a year to just an originally projected $35,000 this fiscal year.  It’s looking now like we might do significantly better than that. OPA staff’s 2006-2007 food service budget had called for the first profit in over 20 years.  The OPA board wisely approved the proposed budget during the initial stages of this year’s budget sessions.                                                   
 
Then, in its most outrageous power surge, this year's board revisited the staff food service budget, voted to reject it and incredibly demanded that no catering be allowed upstairs at the YC during summer months. Seems that our highly profitable summer catering annoyed a handful of patrons who objected to not being seated for dinner upstairs on the two or three annual occasions they deigned to eat there. No matter that, given the strong profitability of our catering, we will now endure substantial FY 2006-2007 red ink. The board decided they know how to manage our food and beverage operations and revenue better than our professional staff does.
 
Power spiked again, this time striking the golf budget. The board first approved the general manager’s proposed 2006-2007 golf budget even though it projected a loss of $30,000.  The board had wisely, and for the first time in many years, directed staff to prepare the new golf budget and saw that it was a clear improvement over this year’s projected results  - and that, as with the turnaround at the Yacht Club, it would take at least two years to manage golf into the black.  And keep it there.                                     
 
A week later, this board re-visited golf, strongly and publicly conveying the message that staff was incompetent to construct a golf budget and voted for an entirely different one from the staff budget it had already just approved. The board majority assured us this budget would bring golf to break even in just one year.  Unbelievably, after discovering that this “new and improved golf budget was based on what proved to be an inaccurate revenue assumption, and amid significant community uproar, the board pulled an "Emily Rotella," (remember ‘Saturday Night Live’?) saying "never mind". They decided to ignore both of their initial golf budget approvals, and opted to leave the golf budget exactly as last year's, including a loss of at least $100,000.  It became evident to many of our members that continuing power surges has made our current board dysfunctional.
 
Next comes an impressive-sounding "marketing plan," its budget expounded upon during the March 15 board meeting, to be carried out by a new "marketing committee," with the near guarantee by its sponsor that the plan's success will win back all our food service and golf losses …which the board had just created! Another strong statement that staff is not to be trusted to put together its own marketing effort, even with the "exciting" new (part-time) sales director. The inference I took was that should the plan actually not succeed, it would be the fault of staff for not following the plan to the letter.
 
Don't know about all of you, but I for one am very weary of hearing the word "marketing,” especially since I can think of only one of these constantly espoused marketing efforts having actually been successful over the past three years. I believe it's doubtful we can further market our Yacht Club and golf amenities within a homeowners association that already knows about them, most having moved to the Pines because of the amenities in the first place.  I know this was Dave Ferguson’s position, as well.
 
 Finally, at this same March 15 meeting, the board passed yet another "we don't trust you, and you're incompetent" motion - to create an accounting task force. This intrusive organization of "better" accounting experts than our active and professional OPA staff is designed to take as much time as possible from staff performance of their duties, and to come up with a "more readable" budget and financial report, maybe even determine that staff has no idea of what they're doing.  “To heck with what the premier CPA firm of TG&M and Faw, Casson CPAs attest to in their audits and reports, and to heck with our established and effective Budget & Finance Advisory Committee and the countless hours it contributes to our annual budget effort and monthly financial reports”.  This board could simply not resist the urge to, once again, find one or two property owners who disagree with staff in any way and placate them by creating another morale busting, “watch dog” task force.
 
 Time to return to "Hard Question #2: Wonder why Dave Ferguson is leaving us? What CEO would not? This board has, obsessively, fashioned  "micro-management" into an unwise and potentially very damaging art form.
 
 And this leads to "Hard Question #3 and the most relevant of all: How in the world will we find a competent and professional replacement for our GM position?  How will we attract replacements for lesser staff vacancies – when they will likely occur? Certainly not from anywhere our many local newspapers are read. Certainly not from any who have actually sat through any of our embarrassing board meetings.

I conclude with a sincere recommendation to our board of directors, and a wonderful money-saving idea:  Make absolutely certain, at some point during your interviews with prospective GM candidates, that you inform them that “we are not actually looking for a competent, experienced, and effective professional for this position. What we want is a lackey. A yes man (could be a yes woman) who must understand that the board, thank you very much, calls all the operating shots around here. All we need is some time to re-write our by-laws to allow us to do that, or at least allow us to insist that policy, our only legal responsibility other than to approve the annual budget and hire a general manager, means only what we choose it to mean”.
 
The really good thing about hiring lackeys is that they come cheap.  Especially incompetent ones…board favorites… who don’t actually try to manage anything. We should easily be able to get one of these guys for no more than about a third of Dave Ferguson's salary.
 
There just aren’t enough surge suppressors in the world to correct this mess, folks. But maybe all we really need is a good, solid, power outage!