Highlights from Nov. 2 Board meeting

Ocean Pines Board members on Saturday voted 6-1 to set up a new capital reserve account. 

The Association will fund the account by using up to 10 percent of replacement reserves each year. The account cannot exceed $1 million in total, and no more than $500,000 may be spent in a single year.  

Proponents of the amendment said many new capital projects over the years fell by the wayside because prior Boards were fearful of negatively affecting assessments. The goal of the amendment is to be able to fund those projects without raising annual dues.  

Treasurer Larry Perrone introduced the second reading to amend Resolution F-03, related to financial reserve accounts.  

“A reserve account dedicated to new capital expenditures will allow for better financial planning and control, without directly impacting the association yearly assessment,” Perrone said. “It will also eliminate the tendency to forego necessary new capital purchases and projects, because of the direct impact on the annual assessment.” 

Perrone said among concerns he heard about establishing the new account were that “this will be a slush fund.” 

“I wholeheartedly disagree,” he said. “We already have a ‘slush fund,’ which is our replacement reserve fund, which has been used in the past – sometimes appropriately and sometimes not appropriately … This is a much smaller fund, based on the limits we’re trying to put on it.” 

Perrone said there were also concerns this or any future Board could abuse the account.  

“The discussion seems to be [that] this money could be used for some grandiose project. If you look at the numbers we’re talking about, that’s impractical at this point … $500,000 is a lot of money, but we’re not going to build a bowling alley or a parking garage for $500,000,” he said.  

Perrone said the Association spends about $150,000 each year on new capital projects.  

“That does not include the projects that were not approved because we didn’t want to raise the assessments,” he said, adding over the last five years more than $1.2 million in new capital projects had been asked for, but not funded. “Of all that money, there was only one project that was $200,000, and that was the addition to the Sports Core.” 

“From a financial standpoint, this is appropriate and provides for better planning and financial control by this Board,” he said. 

Director Frank Daly agreed that prior Boards often did not fund new capital projects “in the name of keeping the assessment low.” He said the same was true for maintenance.  

“We need new things, we need a mechanism to fund it, and this is the best method forward,” Daly said, although he cautioned there was no guarantee that future Boards would use the account as intended.   

Director Colette Horn said the fund would help improve financial planning, also adding the Strategic Planning Committee could offer input on prioritizing new capital projects. General Manager John Viola said the plan was to engage the committee and include their feedback in the budget process.  

Only Association Vice President Steve Tuttle said he was not in favor of the new account. 

“I don’t like putting all this money aside and not having a real plan in understanding how we might spend it,” he said. “If we need to do it, bite the bullet and change the assessment.” 

Tuttle voted against the amendment, while Perrone, Daly, Horn, directors Tom Janasek and Camilla Rogers, and Association President Doug Parks voted in favor.  

 Also during the meeting, the Board voted unanimously to amend Resolution M-02, related to amenity policies. Daly introduced a second reading to the amendment prior to the vote. The changes were minor and vetted by the Bylaws and Resolutions Committee.  

Board members added three new items to the “New Business” part of the meeting, including a motion to approve a $710,000 Fisher Marine contract for bulkhead work. The figure fell within the $1.6 million budgeted for bulkhead replacement, and the motion was unanimously approved.  

Daly asked to rescind a prior approved motion to send a request for proposals for an accounting firm.  

He cited a preference to keep the current firm, SC&H Group, as the Association is currently busy transitioning to the new Northstar financial systems. Again, the motion received unanimous approval.  

Daly also added a discussion item based on several proposed resolution amendments designed to streamline the process of compliance, permit and inspections (also known as CPI) violations.  

After a dialog with Board colleagues, Daly agreed to send feedback on the changes from the Bylaws and Resolutions Committee to Parks, who will send them to Ocean Pines’ attorney for feedback. The Directors will revisit the issue during a later meeting and after the attorney review. 

Board members then voted 7-0 on two committee appointments: Jeff Knepper to the Bylaws and Resolutions Committee (second term) and Gary Miller to the Clubs Committee (second term). 

To view a video of the meeting, visit https://youtu.be/8Eztq1bjXg4.  

The meeting will rebroadcast on Channel 78 this week on Monday, Wednesday and Friday at noon and again at 7 p.m.    

Links for specific agenda topics are as follows:   

Call to Order – Doug Parks, President 

Pledge of Allegiance – All 

Approval of Agenda – Board https://youtu.be/8Eztq1bjXg4?t=24  

Approval of Minutes – https://youtu.be/8Eztq1bjXg4?t=198  

September 19, 2019 – Special Meeting 

October 2, 2019 – Regular Meeting 

President’s Remarks – Doug Parks, President https://youtu.be/8Eztq1bjXg4?t=241  

GM Report – John Viola https://youtu.be/8Eztq1bjXg4?t=257  

Dashboard Report – Colby Phillips https://youtu.be/8Eztq1bjXg4?t=1416  

Treasurer’s Report – Larry Perrone https://youtu.be/8Eztq1bjXg4?t=1833  

Public Comments – None 

Capital Purchases Requests – None 

CPI Violations https://youtu.be/8Eztq1bjXg4?t=2083  

3l Sundial Circle 

60 Nottingham Lane 

9 Dove Lane 

37 Driftwood Lane 

74 White Horse Drive 

Unfinished Business – 

Second Reading – To amend Resolution F-03 – Larry Perrone https://youtu.be/8Eztq1bjXg4?t=2807  

Second Reading – To amend Resolution M-02 – Frank Daly https://youtu.be/8Eztq1bjXg4?t=3511  

New Business –  

Motion – to approve Fisher Marine contract https://youtu.be/8Eztq1bjXg4?t=3661  

Rescind motion – to issue RFP for auditing service – Frank Daly https://youtu.be/8Eztq1bjXg4?t=4000  

Discussion topic – Resolutions M-01, M-10, C-02 and M-04 – Frank Daly https://youtu.be/8Eztq1bjXg4?t=4301  

Appointments – https://youtu.be/8Eztq1bjXg4?t=5409  

Jeff Knepper – 2nd Term -By-Laws & Resolutions 

Gary Miller – 2nd Term – Clubs 

Adjournment – to closed session as permitted by the Maryland Homeowners Act Section 11B-111(4), matters pertaining to employees and personnel https://youtu.be/8Eztq1bjXg4?t=5437  

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