Budget guidance offers a sliver of hope
Commentary by Tom Stauss
Although there is nothing in the recently approved budget guidance to the general manager that explicitly instructs him to eliminate the unneeded and vexatious five-year funding plan for big-ticket capital projects that may or may not be in our future, there is at least some hope for those who believe the policy should be ended after this, the third year of programmed increases in the base lot assessment.
The budget guidance adopted by the board for the Fiscal year 2013 budget, now in early stages of preparation, asks the general manager to look at alternatives to assessment increases as a means of financing these currently undefined future projects.
Those alternatives could include borrowing, bonding or simply concluding that funds collected to date are sufficient to finance the projects that Ocean Pines property owners are prepared to support.
Even after three years, the funding program’s $30 annual increases produce $90 in revenue that flows into the OPA’s very healthy reserves, in addition to flows that originated prior to the adoption of the five-year funding plan. Currently the reserves stand at just slightly less than $6 million.
The introduction of language asking the general manager to consider alternatives to assessment increases is the first step in a process that could lead to a decision next year to hold the line on them. Had OPA Director Dan Stachurski not introduced the idea of an alternative, it would be virtually assured that the OPA would be reaching into the wallets of members for another round of increases.
Without Stachurski’s recent efforts, with a helpful assist from Director Dave Stevens, by default a $30 increase would already be cooked into the books for next year.
Some other elements in the budget guidance, when combined with the new language, offer reason for hope, though not cause for undue optimism.
One is that the board has asked General Manager Bob Thompson not to increase the assessment to fund operations next year, which is a clear message from the board that it would like him to live within what was budgeted this year, or even less, OPA President Tom Terry said recently.
Another element is that the board has asked Thompson to produce updated estimates on the cost of various future capital projects, so the board won’t be making judgments on financing based on two or three-year-old numbers that may be wildly inaccurate.
To assist the board further in making sound judgments on what should be included in a future capital improvements plan, the board is asking Thompson to produce detailed business plans to back up those estimates.
It remains to be seen whether any rational business plan can be drafted that would credibly justify millions of dollars rebuilding the Yacht Club, Country club or golf course, so it may very well be that more modest, affordable and politically palatable approaches to capital improvements will substantially reduce the need and rationale for additional increases in the assessment next year.
All of that remains to be seen, but there is at least some crack in what previously had been wholesale reliance on lot assessments increases.
A scenario can be envisioned in which they’re seen by most board members as unnecessary.
– Tom Stauss
Uploaded: 11/8/2011
