OPA Budget Follies
Commentary by Joe Reynolds

The Ocean Pines Board of Directors met on Tuesday, January 8, 2008 to review the 2008-2009 OPA budget proposed by General Manager Tom Olson. The meeting was interesting, to say the least. Toward the end of the meeting it became clear at least four directors -- Reid Sterrett, Les Purcell, Marty Clarke and Bill Rakow -- were not going to vote for an assessment increase. That's when the fireworks started and the meeting nearly spiraled out of control.

Olson proposed a $30 assessment increase, right out of the box, adding to the largest increase in OPA history last year, a whopping $150. Olson's goal is to accumulate a large reserve fund to do major rehabilitation projects over the next five to 10 years. Olson wants to take the money from the pockets of association members upfront because he says any required referendum is more likely to pass if OPA has the money in-hand as opposed to borrowing for these large capital projects.

This sounds reasonable at first glance, but the devil is always in the details. As former Budget & Finance Committee member and CPA Gene Ringsdorf and OPA Board member Bill Rakow point out, taking all the money from lot owners upfront means higher assessments than if the funds were borrowed and the assessment bite spread out over the term of a 20 year or longer loan. They emphasize the fundamental unfairness of taking all the funds from the pockets of lot owners upfront.

In other words, Olson's assessment policy, supported by the Budget & Finance Committee, is based on political considerations, not fairness considerations.

Incomprehensibly, at one point a member of the Budget & Finance Committee suggested OPA also increase the assessment on waterfront lot owners by $15, even though OPA Controller Art Carmine did not ask for an increase and apparently believes the current assessment on waterfront properties is sufficient to carry on the bulkhead replacement program. The question arises as to why OPA should collect more funds from waterfront lot owners than needed for the bulkhead replacement program. The fact is non-waterfront lot owners will never pay a nickel of costs to maintain the bulkheads of individual lots in Ocean Pines; all such costs will be paid by the 1400 or so waterfront lot owners. Take the money as needed.

Beth Gismondi, chair of the OPA Budget & Finance Committee, was outspoken in support of both assessment increases. Those who follow local politics will recall that Gismondi, in her other Worcester County position as chair of the powerful Board of Zoning Appeals, was the deciding vote in denying the variance requested by the YMCA to build a new Y with an indoor pool on land off Gum Point Road. Gismondi's "no" vote on the YMCA triggered a chain of events that led to OPA deciding to cover the Sports Core pool at a cost of $1 million. Some suggest Gismondi's vote cost Ocean Pines lot owners $1 million in upfront capital costs, not to mention creation of a financial white elephant with the very real prospect of damaging the OPA bottom line every year more than Yacht Club and golf loses combined! Even with relatively warm weather, the indoor pool costs for propane and electric alone are a staggering $10,000 per month.

As the meeting neared an end, five or six people were talking at a time; Board member Dave Stevens and President Bill Zawacki began making accusations. Stevens told Clarke that he (Clarke) had come to the meeting with his mind already made up not to support an assessment increase, as though Stevens had not come with his mind made up to support the increase.

Stevens then accused Rakow of following in the footsteps of prior boards who deferred maintenance on OPA facilities by not increasing assessments. Zawacki followed suit. The accusations were totally unfounded, and Rakow insisted his priorities include proper maintenance of facilities. As Rakow properly pointed out, the issue was not doing proper maintenance, rather fairest way to fund major maintenance.

At another point a Budget & Finance Committee member angrily told Ringsdorf that his theories were gobbledy-goop, or words to that effect.

Earlier in the meeting Olson became clearly angry when Rakow said Olson's business plan for the Yacht Club was "negative," after Olson asked what Rakow thought of it. Olson stood up, as if he would leave the room, and then sat back down. What Olson may not know is Rakow's characterization of the Yacht Club business plan was mild compared to what some members of the Budget & Finance Committee had to say about it at their own budget review a week earlier. Had Olson attended the meeting he would have heard words like "pathetic" used to describe the plan.

The nearly seven-hour board budget meeting was full of interesting vignettes. For example, in the review of Terns Grill, Carmine pointed out the operation will lose $13,000 or so, even after closing it down for some months, with the budget predicting more losses for the coming year. Dave Stevens then said, "Well, it will start making money in March." Duh.

Clarke and Gismondi got into it over the skateboard park. Clarke wanted to know why she wanted to charge kids a user fee to use the proposed skateboard facility but not charge a fee to use meeting space for card playing.

Stevens said $26 of proposed assessment increase was to subsidize the indoor pool operation. As many will recall, the pool cover was sold to (forced on?) lot owners on the premise swimmers would pay all costs associated with it.

Clarke said it costs every lot owner $100 per year to subsidize those who play golf.

Olson said shutting down the Yacht Club, a major part of his grand scheme to stop the financial bleeding on that mis-managed operation, wasn't saving nearly as much money as he had hoped. No surprise there. When asked how much closing three days would save at the time he announced the change a few months ago, he said he didn't know. Apparently now he knows..... not much.

One big-ticket item in the budget is $1.5 million (for starters) on the Community Hall. Community Hall options are under investigation. What OPA does is, in many ways, contingent on the Ocean Pines Volunteer Fire Department plans to build a new northside fire station in front of the old Community Hall. Those plans may be thrown into a cocked hat with recent revelations that the area is within the Critical Areas designation. This means it could take years to get a permit, with the possibility of not even obtaining a permit. Same problem exists for any expansion of the footprint of the existing Community Hall.

Fortunately for lot owners, Rakow and Clarke, are investigating all this. Their efforts could save lot owners a load of wasted money. Olson, left to his own devices, would most likely take the Comprehensive Plan Committee recommendations and send them out to an architect at considerable cost, for a service Rakow and Clarke have volunteered to do.

If all this sounds to readers like the theme of some new TV sitcom comedy, you are not alone. Bill Rakow was recently chastised by former Golf Governors president Ralph Menton for saying the OPA was dysfunctional. Truth be known, Rakow's description was probably an understatement.