Family Feud - OPA v OPVFD
Commentary by Joe Reynolds
A major political power struggle is currently going on between the Ocean Pines Board of Directors and the Ocean Pines Volunteer Fire Department (OPVFD). At the heart of the issue, as is typical for most such contests of will, is money. It is a classic example of a Family Feud.
The battle was engaged during the OPA Board's annual budget process. As it does each year the OPVFD submitted a budget request to the General Manager for inclusion in the OPA budget for the 2011 fiscal year. OPA funds a share of the fire department's expenses based on a contract dating back to 1977. The contract essentially says that the fire department will make every attempt to collect funds from the county, fund raising efforts, and other possible sources, and then come to OPA to seek whatever additional funds are required for their operation.
OPA is required to provide fire protection by the Association's various Declarations of Restrictions. Those restrictions also require OPA to provide police protection. For police protection OPA elected to form its own police department. Initially OPA had a fire department as well, but it was moved to a separate independent corporation, OPVFD, in order to obtain county funding, and OPA then contracted with OPVFD for the required fire protection.
It should also be noted the contract with the fire department did not include Emergency Medical Service (EMS). Originally the fire department sold "subscriptions" for EMS to individual association members, essentially an insurance policy for ambulance service. Many years ago OPA then adopted a policy of including an amount in the assessment for EMS service and including said amount in the yearly formula to determine how much OPA paid OPVFD. EMS subscription sales were stopped. The assessment amount is currently a little over $15 per year. With roughly 8400 association members, the total paid to the fire department for EMS is about $130,000 per year.
For years, a number of association members promoted the idea of having the OPVFD initiate an insurance billing program whereby insurance companies, where applicable, would be billed for ambulance runs. The idea was to recover these insurance payments as a way for the OPVFD to gain EMS income and thus hopefully reduce the amount of assessment dollars paid by OPA to OPVFD. The department resisted.... until recently. Beginning in 2009 the OPVFD initiated a program with an outside contractor to collect these insurance fees. It appears the income will be substantial.
For the period May 1, 2009 through October 30 of 2009 the OPVFD received $104,000 net from insurance billing but there are still substantial funds yet to be collected during the current 2010 fiscal year. It appears the fire department may net as much as $265,000 on the low side and more than $300,000 on the high side. Since OPA fully funded the OPVFD request for fiscal 2010 at this time last year, including $130,000 for EMS, these insurance funds collections are pure additional unbudgeted income for the fire department.
OPA is not looking for reimbursement related to fiscal 2010, only asking that going forward both OPA association members and OPVFD share in the benefits of the income from insurance collections, a move that could reduce OPA assessments by $15 per year.
Based on comments made during public board discussions, initial meetings between representatives of OPA and OPVFD produced general agreement on this sharing idea. So far, so good, but here comes the rub. The OPVFD Board of Directors decided to nix the idea; it wanted to keep all the EMS insurance collections and the $130,000 EMS funding from OPA. In a letter from OPVFD President Ron Thorwart dated 1/11/2010, Thorwart wrote, "Our Board of Directors does not accept this funding cut."
In a nutshell, OPA wants to stop paying the $130,000 of EMS funding from assessment dollars to the OPVFD because those funds will be more than offset by the funds collected from insurance companies. OPA is being perfectly reasonable, but another "rub" comes into play. Apparently some OPVFD folks felt OPA was trying to dictate to them during the initial negotiations, and emotions erupted on the fire department side. Whether there is fault at the OPA level on this or not is beside the point. The important thing is to do what is right for the association members of Ocean Pines.
A board vote to comply with the full budget request of the OPVFD, including the $130,000, failed, with Marty Clarke and Dave Stevens the only board members voting in the affirmative. Clarke walked out of the meeting after the vote was taken. A subsequent motion to reduce the payment by $85,000 failed, but Bob Thompson's compromise motion to reduce the payment by $40,000 passed. Thompson spoke with the OPVFD sometime after the meeting on Wednesday and is hopeful they will accept the compromise.
Of greater importance is the future. The OPA Board needs to mend emotional fences on the OPVFD side, while still doing what is right for OPA association members; the OPVFD also needs to do what is right for OPA association members. The only purpose of both organizations is to best serve Ocean Pines association members.
The right thing for the parties to do is quickly reach an amicable agreement for fiscal 2011 funding. Next the board needs reach an agreement allowing OPA association members to share in the future income from insurance collections, at least to the amount of the $130,000. A fair agreement would see OPA paying OPVFD any difference between total insurance funds collected and $130,000 in the event less than $130,000 insurance dollars are collected.
On the flip side, OPVFD should reduce yearly funding requests up to a maximum of $130,000 when insurance funds exceed $130,000. Finally, there needs to be agreement on maximum reserve funds maintained by OPVFD. A good starting point for discussion would be to set maximum reserves at OPVFD operating costs for one year, something in the range of $1.5 million. These moves would tend to eliminate future disputes.
All these issues aside, there is no doubt, no doubt whatsoever, that the Ocean Pines Association will fund all needs of the OPVFD required to provide first class fire and EMS service in our community. Association members demand it; OPA has done so over the years; OPA will continue to do so.