GM report touches on reserves, financials, budgeting and North Gate Bridge

(Nov. 23, 2021) Ocean Pines General Manager John Viola addressed subjects including the recent reserve study, upcoming budget, North Gate Bridge, and more positive financial reports during his monthly presentation to the Board of Directors on Saturday.  

On the updated reserve study, Viola supplied an overview of the Nov. 10 public work session with the Budget and Finance Committee.  

Viola said work on the updated study was "a total team effort," led by Public Works Office Manager Linda Martin. 

Martin said Design Management Associates delivered a first draft of the updated study in July, and department heads reviewed that in July and August. Additional drafts came on Aug. 24 and Sept. 15. 

She said the committee, during the working session, approved department expenditures for the next five years, along with a 3.08% inflation rate factor and a "fully funded average percent" of reserves of 20% over the next five years. 

"DMA also recommended … an increase of contributions to general reserves, and recommended considering a funding source for road reserves,” she said.  

Viola said he appreciated the hard work done by the committee and staff.  

"This is a valuable tool to me [and] to this Association, where it puts everything into perspective as far as our fixed assets [and] a review of when everything needs to be replaced. It gives us a guide so that we can get an understanding of where our reserves are, which is a big number and a big part of our balance sheet and what we do here. It ties it all together,” he said.   

Viola said the fiscal year 2022-2023 budget was "progressing very nicely." He said staff used a "bottoms-up" approach to the budget, with some "top-down" input from the general manager.  

Next in the process, he said budget binders would be delivered to Budget and Finance Committee members before the Christmas holiday, and staff would make public budget presentations to the committee on Jan. 4-6.  

"When I present the proposed budget, it will be probably a little different this year. I will be addressing a surplus that we have ... that we realized last year," he said. "That will all come to play, and I will certainly analyze that and present that to [the committee], the Association and the Board, and I think we have a few options this year that we haven't had in the past." 

Viola said headwinds including inflation and mandatory minimum wage increases were among the factors that would impact the next budget.  

"With the inflation [and] ... with the increases in the minimum wage it is prudent – and I have and we are – looking at [proposed] pricing and pricing increases for our amenities," Viola said, including Aquatics, Golf and Racquet Sports.  

Viola referenced a car accident on the North Gate Bridge in October, and said Association staff are in the process of maintenance efforts to both spruce up the bridge and bring the approach up to Maryland Department of Transportation and Maryland State High Administration standards.  

"The county has recommended some contractors that they use, and we're talking to them to get that done," he said.  

Following up on recent life-saving efforts by Clubhouse Bar and Grille staff, Viola said Automated External Defibrillators (AEDs) are currently in place at Public Works, the Racquet Center, Yacht Club, Community Center, Administration Building, Marina, and all five pools.  

All departments have had initial AED training, and Aquatics, Marina, and Recreation and Parks staff are certified to use AEDs in case of an emergency.  

He credited Aquatics Director Kathleen Cook with leading the charge, both in training and maintenance of the AEDs. 

"It's a very valuable training and we're lucky to have somebody like Kathleen and the rest of the people here to carry that out," he said.  

On the financial side, Viola said the Association was favorable to budget roughly $175,000 in September, thanks to organic growth in Golf, Racquet Sports and Aquatics, and expense reduction across the Board. 

"The entire team, we scrub all accounts. And where we can rebalance or reallocate, we do that," he said.  

Year to date, Viola said Ocean Pines is favorable to budget just over $1.3 million. However, he cautioned that number is likely to change. 

“The next four or five months, it's basically expense," Viola said. "It's the winter months and the revenue is down, but we still have ... expenses that are needed. So, obviously these numbers will come down." 

Viola also briefly touched on new pickleball courts. He said permitting for the courts is now waiting on signature at the state level.  

"Hopefully, I [will] have good news on that coming forward," he said.  

Viola also said filtration improvements at Bainbridge Pond were finished, but there are some remaining utility issues before the overall project can wrap up.  

"We're working with the county. We had a meeting with them over the last two last two weeks, and hopefully that [work] will get started in the near future," he said.  

To view slides from the monthly report, visit /documents/20124/122622/11-20-21%20Meeting%20Power%20Point%281%29.pptx/729dc23e-be93-7ab2-8e3c-64a05b8287d8.