Unaudited financials show $131,000 profit for fiscal year; Directors also address DR violations, delivery means for forensic audit

Financials Improved

The April financial report, released this week, showed the Ocean Pines Association capped a remarkable turnaround, as the unaudited statement revealed the total net operating fund for fiscal 2019 finished $130,584 better than what was budgeted.

By comparison, the fiscal 2018 audited financial statement showed the operating fund more than $1.2 million below budget, while the fiscal 2017 audited statement was just over $363,000 worse than the budget.

Final audited figures for fiscal 2019 will be released during the Ocean Pines Annual Meeting, scheduled Aug. 10.

Interim General Manager John Viola said total revenues for the fiscal year were $535,790 over what was budgeted, while total expenses were $392,090 over budget. He said higher than expected revenues led to higher expenses, especially at the yacht club.

Reserves closed out the fiscal year at $8.8 million, including $5.2 million in replacement reserves, $2.5 million in bulkhead reserves and $1.1 million in road reserves, according to the unaudited report.

Association President Doug Parks, during his remarks, commented on the turnaround.

"Think back to this time last year and our financial condition at that point," Parks said. "We were not in very sound financial position last year … this year, you’ll find that quite a different story."

Viola added the numbers showed a "big difference from last year."

"Last year, at this time, I was probably giving you a number that was in a big loss position – let’s just leave it at that," Viola said.

To view the entire April financial report, visit http://oceanpines.org/wp-content/uploads/2019/05/April-2019-OPA-Financial-Report-1.pdf.

Initiative Highlights

Viola said demolition of the old Ocean Pines Golf clubhouse building was nearly finished and an advisory team that includes builder Marvin Steen and contractor Frank Brown was formed to provide advice on plans for the new building.

He said golf operations have not been greatly impacted by construction, as evidenced by the success of the annual Ravens Roost tournament held on Friday at the course. The tournament raised money for local scholarships.

Viola said three additional large golf outings were scheduled this summer.

"I don't think we've lost a beat on anything there," he said. "I talked to the golfers, I talked to the outside play. It's all positive so far."

Viola said he would work to ensure banquets lost to the golf clubhouse would not be moved out of the community. A portion of the Ravens Roost tournament, for instance, was moved to the Ocean Pines Yacht Club.

"That money was captured within Ocean Pines," Viola said. "We will monitor those banquets ... to ensure that, somewhere within Ocean Pines, we're capturing that money – and everybody's having a good time."

In a summary of other ongoing initiatives, Viola said the prior general manager estimated a replacement golf cart barn building would cost $450,000, but a new proposal suggested that number would be much lower.

"I believe we will come in way under that number and have a very solid cart barn," he said. "I'm looking at very positive things there, in the sense of the budget.”

He added an advisory team was formed to aid the planned expansion of the police station, and that project remains on schedule.

Viola said a review meeting was held last Friday related to implementation of the new NorthStar financial systems, and that project is also on track.

He said another advisory group recently reviewed five bids to bring in an outside management firm, although "none of the bids were viable."

"They were more expensive than the traditional GM position ... that our bylaws call for," Viola said, adding "just about all" of the bids excluded some basic requirements, such as managing the police station. Several, he said, wanted to use their own software systems, which would have conflicted with the NorthStar implementation.

Viola said the general manager position was posted on the website and, so far, one resume was received.

Operations Director Colby Phillips said a drainage advisory group has met once a month. The next meeting, open to the public, is scheduled June 14 at 9:30 a.m. at the public works building.

Phillips said bid requests went out for the Watertown Road pipe replacement project and additional drainage pipes were being replaced as needed. She encouraged homeowners with specific drainage issues to reach out to her directly. To contact Phillips, email cphillips@oceanpines.org.

She said public works crews were also working to address potholes in the community. Phillips said in many cases the association was going back over work done by Worcester County crews. Again, she asked homeowners with specific issues or concerns to let her know.

"If you see [a pothole], please don’t hesitate to reach out," Phillips said. "The public works team is working very hard and, obviously, they don’t see everything. But, if you see something, just let us know."

Phillips said the association is also working to restart its bulkhead repair and replacement program, and that Fisher Marine Construction Inc would be brought on to finish construction on West Mallard Drive that has "been at a standstill." She said weather and other issues disrupted the work.

"It’s as top priority for us, moving forward with the bulkheads, to get a really good system [in place] and get things completed." she said.

Addressing other major projects in the community, Phillips said improvements to the White Horse Park playground were scheduled to finish the week of June 17, and recent renovations at the Swim and Racquet Club tennis courts finished well under budget.

"We budgeted $100,000 and we got [the project] completed for a little over $15,000, so we saved about $84,000," she said.

Phillips said the pools and marina had a busy opening weekend, over the Memorial Day holiday, and recreations and parks summer camps for children were nearly full. For information on spring and summer activities, view the latest issue of the Ocean Pines Activity Guide at http://oceanpines.org/wp-content/themes/Evolution/pdf-flipper/activity-guide/spring-summer-2019/mobile/index.html.

New Business Highlights

Board members found compromise in a motion by Director Frank Daly that originally asked, "To place before the homeowners a referendum that will permit the Association to levy fines for violations of the Declarations of Restrictions."

Daly said a recent survey of association members supported such a move by a roughly 2-1 margin, with 1,161 responding "yes" and 540 replying "no" to the question: "Would you support a referendum to provide for better enforcement of the covenants and regulations, including the possibility of limited and capped fines through due process?"

Parks said he liked the concept but was struggling with some of the detail, and that more community input was needed.

Director Thomas Piatti added a final decision should be postponed until after the August election re-staffs the Ocean Pines Board, which is currently short one member and was without Director Jeff Knepper on Saturday. According to Parks, Knepper was recovering from surgery.

Daly later agreed to accept a friendly amendment, which Director Colette Horn read aloud: "This motion will authorize the board and general manager to solicit input from the membership and work with legal counsel to develop a referendum question that incorporates the violations that will be subject to fines, [a] violation correction period, fines schedule, collection of legal fees, [and] due process and appeal requirements, by Sept. 1." Directors voted 5-0 in favor of the friendly amendment and 5-0 for the original motion as amended.

Daly had one final comment just prior to the vote.

"Let’s form the right question. Let’s get the right input … Let’s put in the safeguards to do this thing correctly and effectively, but then let’s [not] kick this down the road," he said. "Let’s say we’re either going to do something, or we’re going to live with the system we have."

Additionally, board members supported an amendment to another Daly motion that originally asked, "To make arrangements for a controlled distribution of the complete forensic audit, without redactions, to all assessment recipients beginning June 10, 2019."

Earlier during the meeting, it was announced the directors unanimously by an email vote accepted a draft of the forensic audit submitted by Gross, Mendelsohn & Associates. Association Vice President Steve Tuttle noted the board made no changes to the report.

Daly said the forensic audit cost about $200,000.

"The purpose of a forensic audit is to determine whether or not a crime has been committed," he said. "It’s done. It’s time for you to read it. I want you to read it. I don’t want one sentence redacted. I don’t want one name redacted. I don’t want one word redacted, because the most important thing that you can have is faith and trust that, when you give us money ... it has been handled properly and efficiently, and to your best interest."

Piatti said he was not in favor of Daly’s suggested delivery methods, but instead proposed "a different pathway to get this out to the public."

He drafted a friendly amendment to Daly’s motion, "To direct the general manager to have staff print a minimum of 25 copies of the forensic audit report for pickup by members at no cost, starting on Wednesday, June 5, and for copies to be mailed to members upon written or emailed request."

Piatti said it was not proper to post the full report online, but by following his suggestion Ocean Pines would be complying with the Maryland Homeowners Association Act.

Parks argued such delivery methods differed from similar practices regarding contracts, and would set a precedent "that doesn’t need to be set."

"There’s a mechanism in place … both from an OPA perspective and a Maryland HOA perspective that, if you want information, you request it and it’s provided to you," he said. "At the risk of diminishing the importance of the forensic audit, I treat it as just another one of the documents that’s collateral for this organization."

Directors voted 5-0 in favor of the friendly amendment and 4-1, with Parks opposed, for the original motion as amended.

Other Votes Taken

Directors voted unanimously in support of several additional motions, including:

• "To direct the interim general manager to put out an RFP to solicit bids for a Compensation Study"

• "To rescind the motion regarding issuance of one share of stock for the Yacht Club and the issuance of one share of stock for the Beach Club"

• "To approve the police vehicle take-home policy as presented by the GM"

• "That the Ocean Pines Board of Directors approve the recommendation by staff to award a contract in the amount of $196,875" to Fisher Marine to perform bulkhead repair/replacement work at 10-20 West Mallard [Drive]"

The latter two motions were added to the agenda at the start of the meeting.

Directors also voted to approve an Ocean Town Construction LLC contract for $86,826 for a new craft building, and to approve revisions by second reading to resolutions F-03 (Financial Reserve Accounts) and F-04 (Delinquent Assessments).

For more information on any of the posted agenda topics, view the full meeting packet at Click Here.

Special Presentations

Ocean Pines Chamber of Commerce Executive Director Kerrie Bunting said the nonprofit had not always "had a great, symbiotic working relationship with the GM or the board," but she now hoped to correct that.

"I want all the residents and visitors to know that we are here for them," she said, adding attendance was strong during a recent car show. She said a flounder fishing tournament was scheduled on Aug. 3, and plans are underway for the annual Senior Living Expo, scheduled Nov. 9.

"And we’re open to suggestions for community events that we can help you with," she said. "I want to do a lot more with the OPA, the residents [and] the visitors."

For more information on the Ocean Pines Chamber of Commerce, visit www.oceanpineschamber.org.

Jillian Cordova, a partnership specialist with the United States Census Bureau, said the census next year would shift to being "primarily electronic." She said next March homeowners would be mailed a card with a code to fill out the census online, and that papers copies of the census may be mailed upon request. Cordova added the number of questions was reduced from nearly 30, to just 10 or 11.

She said census workers were available to set up informational tables at local events, and the census is looking to hire local people, starting this August, to assist in its activities. Pay starts at $18.50 per hour and there are opportunities for supervisor positions.

For more information on the census, visit www.census.gov.

Meeting Video and Notes

To view the entire meeting video, visit www.youtube.com/watch?v=16V87sPd94I.

Time stamps for specific agenda topics are as follows:

Call to Order - Doug Parks, President (26:41)

Pledge of Allegiance – All (26:41)

Approval of Agenda – Board (27:03)

Approval of Minutes (28:49)

May 4, 2019 - Regular Meeting (28:49)

President's Remarks - Doug Parks, President (29:12)

Announcement of Email Vote/Motion - Colette Horn (31:26)

Presentations -

Ocean Pines Chamber of Commerce - Kerrie Bunting (33:41)

U.S. Census Bureau - Jillian Cordova, MS (36:21)

Treasurer's Report- John Viola (42:34)

Operations Report - John Viola and Colby Phillips (59:48)

Public Comments (1:06:24)

Capital Purchases Requests Recreation & Parks - Craft Building (2:08:15)

CPI Violations12 Sandpiper Lane (2:09:52)

12 Starboard Court (2:10:24)

19 Duxbury Road (2:11:04)

1435 Ocean Parkway (2:12:08)

Unfinished Business - (2:12:49)

Second Reading - Approval of Revisions to Resolution F-03 - Frank Daly (2:12:49)

Second Reading - Approval of Revisions to Resolution F-04 - Frank Daly (2:14:48)

New Business - (2:19:45)

MOTION: To place before the homeowners a referendum that will permit the Association to levy fines for violations of the Declaration of Restrictions. - Frank Daly (2:19:45)

MOTION: To make arrangements for a controlled distribution of the complete forensic audit, without redactions, to all assessment recipients beginning June 10, 2019. - Frank Daly (2:55:56)

DISCUSSION - Permitting Issues with Worcester County - Frank Daly (3:05:41)

MOTION: to direct the interim general manager to put out an RFP to solicit bids for a Compensation Study - Colette Horn (3:10:06)

MOTION: Move to rescind the motion regarding issuance of one share of stock for the Yacht Club to and the issuance of one share of stock for the Beach Club. - Doug Parks (3:15:34)

MOTION: To approve the police vehicle take-home policy as presented by the GM (3:16:35)

MOTION: That the Ocean Pines Board of Directors approve the recommendation by staff to award a contract in the amount of $196,875 to Fisher Marine to perform bulkhead repair/replacement work at 10-20 West Mallard (3:17:09)

Appointments - None

Adjournment (3:18:42)