Feb. 22, 2021 

Board approves FY21-22 budget, sets assessment at $996 

The Ocean Pines Board on Saturday voted 6-1 to approve the fiscal year 2021-2022 budget and set the basic annual assessment at $996.  

That figure represents a $10 increase over the prior fiscal period.  

Director Doug Parks, who is also the Association treasurer, said the budget reflected $15,956,299 in revenues against $13,024,180 in operating expenses.  

Bulkhead and drainage repair expenses totaled $1,368,221 and capital expenditures totaled $1,047,970, Parks said.  

The budget process started last fall, when department heads used a bottoms-up approach in crafting the budget at the direction of General Manager John Viola. Viola instructed each department to give budget estimates without specific adjustments related to the COVID-19 pandemic.  

After a thorough review by Viola, Parks said the budget went through public review by the Budget and Finance Committee and the Board of Directors. It was also posted to the Association website, and the Board held a public hearing on Feb. 6 “to present the budget to the membership and have an open discussion with the membership to address any questions or concerns,” Parks said.  

Parks thanked Viola and Director of Finance and Operational Logistics Steve Phillips for helping with some last-minute calculations, which helped to lower the assessment to $996, from an earlier estimate of $1,021.  

“Kudos to them for the quick turnaround,” Parks said. “I think they did a yeoman’s job in getting this information, so we can have an updated budget that better reflects the real needs of the Association with regard to expenses and the overall annual assessment.”  

Association President Larry Perrone said those changes included removing salary and medical benefit costs related to the recent departure of Director of Amenities and Operational Logistics Colby Phillips, as well as a significant reduction in health insurance premiums.  

“We were anticipating a premium increase,” Perrone said. “The original information we got from our broker was [that] it would be at about $300,000. On Thursday, they advised us that the new estimate was a reduction of about $100,000.”  

Director Tom Janasek said he would not vote for the budget, because of those last-minute changes.  

“I just haven’t had a chance to review it diligently enough to vote ‘yes’ on this,” he said.  

Director Frank Daly praised the new budget and said he had requested many of the final changes.  

“I think this budget has been put together in a very concise manner,” he said. “We asked the general manager and his team to put one [together] from the bottoms-up and they did it. [And] things were very carefully reviewed by the Budget and Finance Committee.”  

Daly said the final assessment increased over the prior budget “exactly at the rate of inflation.”  

“Just like everybody’s household, Ocean Pines faces inflation and we’re managing to do what we’re doing and still keep [within] that inflation rate,” he said.  

Parks said he received questions about a projected surplus from the current fiscal year, and why that wasn’t used to help reduce the assessment.  

“Unfortunately … it doesn’t really work that way,” he said. “Retained earning allows us the flexibility to address any issues that may be out of our control due to COVID restrictions continuing through the upcoming fiscal year. So, I think it’s a prudent and conservative approach to keep the money in retained earnings, anticipating that we may have to make some adjustments in … the revenue that we won’t realize if certain restrictions are put on activities.”  

Parks specifically mentioned Recreation and Parks, Golf, and the Yacht Club as departments that could suffer revenue losses if pandemic restrictions continue.  

“We just wanted to make sure that retained earnings are being used appropriately,” he said.  

Viola said another thing the new budget would do is end prior-year deficits that, at one point, totaled roughly $1.6 million.  

“Our team, along with this Board, we inherited somewhere around $1.6 million of deficit,” he said. “With this budget … that deficit is going to be wiped out.  

“Part of that [deficit] would have been part of the assessment to pay it off – we didn’t need it,” Viola continued. “This Board over the last three years, and your team [of staff], we covered that $1.6 [million].”  

Also on Saturday, the Board also approved a 6% delinquent assessment fee.  

“This 6% has been consistent over the past several years,” Parks said, adding that Ocean Pines bylaws require setting the rate. “It’s not a departure from anything we have done in the past.”  

To view video of the meeting, visit Click Here.  

To view the approved fiscal 2021-2022 budget, visit Click Here.