Thank you for giving us the time to talk to you about an issue of considerable importance to all of us in the Ocean Pines Water/Wastewater service area.

As you are aware, during the most recent Commissioners meeting on Tuesday, a FY2026 budget draft was put forward for the Water/Wastewater Enterprise Funds. The timing of this presentation was to conform to the necessary advertising timeline in advance of the public hearing on the County’s FY2026 budget set for May 6.

It’s important to understand that what was presented Tuesday was a draft document, a conversation starter. Nonetheless, the information included in the draft as well as the intentions behind what is included in the draft raise considerable concern that ratepayers in the Ocean Pines Service Area will be expected to pay more than our fair share; that we will shoulder debts and shortfalls incurred by some of the other 10 service areas in the county.

I raised these concerns during Tuesday’s public meeting and I am thankful for the opportunity to talk with you and by extension our Ocean Pines community, here today.

It’s my objective that this will be the first of additional opportunities for our community to learn more about this issue and discuss its ramifications on each of us.

What follows is a quick overview of how we arrived at this point in time. Please understand that this is a fluid, changing and very complicated issue with a lot of moving variables that individually and collectively have had an impact on the overall situation to date and that will shape the process moving forward.

The mistakes of the past, and present and future decisions have and will impact individual ratepayers.

First, it should be understood that there are 11 Water/Wastewater service areas within Worcester County. Each service area operates as an Enterprise Fund, meaning that it should be self-sustaining, in short, income should equal expenses.

Income is derived from rates paid by users that should be commensurate with the expenses to operate the service area.

The Ocean Pines service area includes the following:

- Our community of Ocean Pines – water and sewer
- Pennington Commons (water & sewer)
- Bay Point Plantation (sewer)
- Pines Plaza (water & sewer)
- Turville Creek Area – 589/Gum Point Road (sewer)
- St. Martins / Dolly Circle (planned for water and sewer, although neither has been constructed)
- Ocean Downs (sewer)
- Crabs to Go (sewer)

Other water-only areas include River Run and Refuge at Windmill Creek.


In February of last year, our budget officer and Deputy Chief Administrative Officer were implementing new budgeting procedures. It was during this transition with the finance office they became aware of financial inconsistencies within the Enterprise Fund operations.

Between that time and September, they delved into the situation more and realized that the Enterprise Funds as a whole would soon run out of money. They learned that contract to county financial protocols, the finance department was not bringing to anyone’s attention accumulated deficits and that budget transfers were being made on paper from reserves that did not exist in individual areas. It was at this time the scope and gravity of the situation was brought to the attention of the Commissioners.

To avoid a financial crisis within the service areas and to provide financial breathing room to develop a plan moving forward, the Commissioners approved a transfer of about $9 million from the general fund to the Enterprise Funds. Of this $9 million, $2.7 million was designated as a grant to the Riddle Farm Service area – the reasons for this we discuss in a few minutes.

The remaining $6.3 million was designated a loan with an interest rate of about 5% that would be required to be paid back to the general fund over a period of 10 years beginning in fiscal 2027.

Please note – of the $9 million transfer to stabilize the Enterprise Funds for accrued operations and maintenance shortfalls of individual service areas, the Ocean Pines service area was not a part. In short – the Ocean Pines Service area did not contribute at all to the accrued losses. Let’s take a moment for that to sink in.

For Fiscal 2026, it is projected that there will be a $2,188,530 overall loss within the combined service areas. Of this amount, Ocean Pines share is $116,699.

During the February 18 Commissioner meeting, a motion was made by Commissioner Fiori whose service areas are most impacted by financial shortfalls, to create a Water Wastewater discussion group that would include appropriate staff and three Commissioners – Commissioners Elder, Fiori and Mitrecic - to develop options to address the situation. Despite Ocean Pines being the largest service area with about 10,000 users of the 18,000 users countywide, the motion excluded either Commissioner Bunting or me from being a member. Following my objection and Commissioner Bunting talking with Commissioner Mitrecic, Commissioner Mitrecic recognized that his district of Ocean City is not within any of the service areas and therefore yielded his position for me. Shortly thereafter upon reflection, I emailed the Commissioners requesting that because Commissioner Bunting was much more qualified than me in this area, he should sit in the group. The Commissioners agreed.

The discussion group met three times and a majority voted to present the plan that came before the Commissioners on Tuesday.

Let’s go back to the $2.1 million projected overall shortfalls in the FY26 budget. As I mentioned Ocean Pines share of this shortfall is about $117,000 -equating to roughly to between $1 and $3 on our quarterly bills. For those doing quick math, it’s not a quick answer to divide $117,000 by 10,000 users. There are other variables that enter into the final amount. So, for the purposes of this discussion, the range of between $1 and $3 is used to determine what we should be responsible for.

Despite our relatively small debt, under the plan presented Tuesday, Ocean Pines ratepayers would see a $32 increase in their quarter bills to pay for the accumulated deficit – 10 times more than what is our responsibility. This amount would more or less remain forevermore on our bills.

That’s just for this year’s identified $2.1 million shortfall. Waiting in the distance is the $6.3 million loan that needs to be paid back to the general fund beginning in FY2027.

If the plan presented Tuesday requiring Ocean Pines to shoulder the shortfall debt of other service areas passes in the final budget it’s very likely the same model will be used for the $6.3 million loan plus interest repayment over the next 10 years.

Doing simple math – and I want to reiterate that nothing about this situation is simple - our rates in Ocean Pines will increase about $9 per quarter per ratepayer for the repayment of this loan, that equates to $3.6 million collectively over ten years that we weren’t responsible for to begin with.

Another wrinkle in the Ocean Pines service area budget is the fact that we are currently accepting waste from the Riddle Farm Service area for which we are being compensated about $532,000 annually.

The Riddle Farm plant is expected to be back online in December thus eliminating the pump and haul expenses to that service area and the revenue our service area has been receiving for many years.

It’s very likely that all or a portion of that lost revenue will need to be made up by our service area. A quick calculation – and I reiterate again that nothing related to water/wastewater is quick or easy – our bills will include about a $13 quarterly increase.

I recognize that this is a lot of information to absorb and understand. I share your pain. What I’ve share is just a sliver of the overall issue.

To sum up. Those of us in the Ocean Pines service area have a responsibility to pay for the operations and maintenance and capital improvements of the facility that provides us clean water and processes our effluent.

Ocean Pines ratepayers do not have a responsibility nor should we be expected to shoulder the costs of other service areas that through the years were not financially managed properly by county government.

The plan put forward Tuesday was a draft, an option that will be discussed and deliberated by the Commissioners. It’s possible it will change; that other options will be brought to the table. But this is the only plan now before us and it is not in Ocean Pines best interest.

There will be a hearing on May 6 for the public to express their thoughts and concerns about this issue. I need you help, we need your help, to ensure that the Ocean Pines service area is not sacrificed on the altar of political expediency.

I mentioned that I want this to be the first of multiple community conversations. To that end, Commissioner Bunting and I will be hosting a town meeting within the month to discuss this issue further. Stay tuned for details.

We are happy to address your concerns or answer your questions as best as we possibly can.