A Matter of Trust
commentary by Joe Reynolds

Trust is a valuable commodity for the Ocean Pines Board of Directors and the General Manager. Once lost, it is difficult to recover, and lost trust can cause a myriad of unfortunate, unexpected ramifications.

Many association members lost trust in the board due the bungling of the eventually failed Community Center project, closely followed by a divisive board decision on the covered pool project. The extent of lost trust is debatable, but it was, and remains, real. Most association members hailed the board election last August as a move in the right direction to restore lost trust.

Alas, it seems this new board, presided over by OPA president Bill Zawacki, has not exhibited the kind of leadership necessary to restore trust. In fact, it has acted in ways that further damage association member trust. The most recent example is how the board dealt with a lingering problem it inherited from the prior board -- an apparent overpayment of perhaps $60,000 to SPN, Inc., the company contracted to provide construction management for the failed Community Center project.

Earlier this year Zawacki sent a letter to SPN requesting a refund of what OPA believes was a large overpayment in 2006-2007. Obviously a majority of directors believe SPN was overpaid or the letter from Zawacki requesting a refund would not have been sent. But for Director Bill Rakow raising the issue at a board meeting early this year the membership might not even know about it. Since then, any attempt to find out what is happening is met with increasing resistance.

Apparently SPN refused to make any refund, and there were subsequent closed meetings of the board with counsel to determine what OPA should do. SPN's refusal might well be based on Zawacki's letter. Zawacki composed and sent the letter without a final review by the board. Based on open discussion at the board meeting mentioned above, the letter contained language similar to, "We know you don't owe us the money but we believe you should return it." One can only imagine SPN shivering in its corporate boots upon receiving Zawacki's letter.

When the SPN issue was again raised during the July 16th board meeting, director Reid Sterrett said OPA was "SOL." Director Marty Clarke suggested otherwise. General Manager Tom Olson then said all payments to SPN were based on a contractual arrangement. To that, Marty Clarke replied, "Don't go there." When asked later if OPA had overpaid SPN, Clarke replied, "Yes." Asked if the overpayment could be an embarrassment for OPA on the possibility costs associated with the failed Community Center were intentionally run up to make any attempt to stop the project more difficult, Clarke replied, "I'm not suggesting there was a conspiracy to do that, but there was someone on the grassy knoll."

Backtracking for a bit of history, in November 2006, before Clarke was elected to the board, he was obtaining signatures to force OPA to hold a second referendum on the Community Center Project because it was substantially over the amount initially approved by association members. OPA would not accept Clarke's petition, rejecting it formally on 1/17/2007 on questionable grounds. As a result, in February 2007 Clarke filed a case against OPA in the Worcester County District Court and Judge Eschenberg issued a stop-work order on March 9, 2007. OPA caved, and in May 2007 again went to referendum on the Community Center project. It was overwhelmingly turned down by association members, essentially vindicating Clarke's position.

At the same time Clarke was gathering signatures for a petition to referendum, SPN began billing OPA about $18,000 a month for the months of November 2006 through February 2007. In that same time frame board member Zawacki posted a message to association member Joe Schanno on OceanPinesForum.com stating, "We have contracted to pay SPN $172,440 to function as our construction management representatives."

When the dust settled, OPA paid SPN roughly $74,000 of a $172,440 contract to function as construction manager for the construction phase of a Community Center that was never built.

Why did SPN begin billing OPA about $18,000 per month in November 2006? Who authorized SPN to begin these billings? Who authorized payment of these invoices, and why? Was this yet another bad OPA business decision or was something else going on? 

As mentioned, some believe the idea was to inflate the out-of-pocket costs associated with the Community Center on the premise the more OPA spent, the more difficult it would be for Clarke to force a second referendum. When the project did go to referendum again, the Board of Directors somewhat confirmed such suspicions by emphatically warning association members how much OPA would be "out-of-pocket" if the referendum did not pass. OPA mailed a letter to association members warning out-of-pocket expenses would be in the range of $900,000 if they rejected the referendum.

Clarke and others challenged this as an outright lie and scare tactic. Clarke believes Olson also employed such scare tactics in a 4/18/2007 pre-referendum newspaper article. Olson wrote: "You also know that should the membership decide to abandon the project, the Association has paid or may be obligated to pay over $900,000 to cancel agreements entered into to construct the building." Clarke says his position was eventually proved correct since OPA's costs were not $900,000 but less than $500,000. Many in the community trusted Olson's numbers.

Attempts to review OPA's files related to SPN are now met with resistance. Zawacki and Director Dave Stevens, based on comments made at board meetings, apparently wish to keep association members in the dark as much as possible. Others, including Reid Sterrett and Marty Clarke, would prefer to have full disclosure in an open board meeting. Had full disclosure happened early in the year, OPA would not now be facing questions about the handling of the SPN issue.

A recent association member request to review the SPN contract and invoices was rejected outright by General Manager Tom Olson on the premise of privacy because OPA's attorney is "corresponding with SPN" about the issue. Olson's refusal to allow association member access to the SPN contract is yet another example of how Olson attempts to control the flow of information within OPA. Perhaps he doesn't realize the SPN contract was posted on the OPA web site at one time. Olson also recently removed a great deal of other information from the web site, including prior budgets and audited financial statements, not to mention virtually all documents dealing with the failed Community Center.

OPA management needs to stop treating association members like little children who must be shielded from the facts of life. Hiding, covering up, or censoring information flow to association members is not in the best interests of the Ocean Pines Association. Such policy diminishes trust in the Board of Directors and the General Manager.

Coming full circle, lost trust can cause a myriad of unfortunate, unexpected ramifications. When will the OPA Board of Directors learn openness instills trust and rarely causes a loss of trust, while unnecessary secrecy never instills trust and almost always results in lost trust?