At the same time they use gross rental revenues with no consideration of lost interest on the capital, insurance, water, electric, maintenance, reserves, or management which could be as much as half of the gross revenue. According to the O/P/A budget the existing marina slips lose money. The 7.7 year recovery number is ludicrous. A more realistic number would be 22 years.

The above is a quote from Mr. Marty Clarke. He is pointing out erroneous methodology in calculating paybacks for the marina project. I am voicing my concerns over OPA'scapital management policies and procedures. My concerns are based on a number of troubling observations with respect to this topic.

1) If Mr. Marty Clarke's assertion is correct, then the 7.7 payback number for the marina project was calculated incorrectly. Does OPA use appropriate analytical methods?

I attended the September 21 meeting wherein Design Atlantic made its presentation and provided its numbers.  The numbers were based on concepts only.  There are no actual designs.

2) It does not matter what the numbers are based on. The component numbers on page 16 do not add up to the total on page 16. There is a basic math error somewhere. The total should be $1,188,000 higher or one or more of the component numbers on page 16 are wrong. This leads me to ask if anyone in OPA performs due diligence reviews of the numbers and assumptions being submitted by consultants for proposed projects.

3) If it is true that OPA has not had to confront major capital expenditures in its 35 years of existence, and OPA is about to embark on major capital expenditures over the next several years, does OPA have appropriate capital management policies and procedures in place? One might assume if they have not had to deal with major capital programs, they may NOT have appropriate policies and procedures in place.  

4) How does OPA control capital costs? I have yet to see or hear discussed by anyone in OPA, budget versus actual expenditures for OPA's current capital expenditures. The very fact that you and others are questioning how much money is spent on preliminary design and engineering studies for proposed projects such as the marina slips and community facility evaluation are prime examples of what I am talking about. These observations concern me.

5) I talked with the accountant from Trice, Geary & Myers (OPA's auditors) who presented the financial report at this year’s annual meeting. I spoke to him about some OPA capital management issues of interest to me. He was totally clueless about the issues. OPA made a major change in reporting results for fiscal year ended 4/30/2004 that invalidates any comparisons with the FY4/30/2003 numbers. Trice, Geary & Myers made no mention of this change in this year's annual report in which both sets of numbers appear. These incidents cause me to have some concerns about our auditors and their advice to OPA.

6) I moved here a little over two years ago. For my first 18 months here the press was dominated by complaints from within Ocean Pines about alleged fiscal mismanagement of amenities and the subsequent impacts on assessments.