Proposed Budget for Fiscal Year 2019-2020 Released

The Ocean Pines Association announced on Friday, Jan. 4 the release of the Proposed Budget for fiscal year 2019-2020 (FY19-20) that “does not propose an increase to the annual assessment” however, it “accomplishes many things that will be new to the Association’s operating budget,” according to an executive summary.

In a summary released to the Membership, Ocean Pines Association General Manager John Bailey said, “the assessment was raised $30 last year, along with a reduction in overall expenditures to the tune of about $30 more dollars per lot, to begin to deal with the Association’s deficit that we owe ourselves from the prior two years of about $1.6 million.”

The Proposed Budget for FY19-20 indicates that the fiscal year ending April 30, 2019, will have seen the deficit reduced to $1 million.

One of the budget guidance terms, outlined by the Ocean Pines Board of Directors, was to provide a three or four-year plan for eliminating the prior year’s total remaining deficit of $1 million. Bailey recommends a four-year plan to do just that. The remaining deficit is to be paid down over the current budget and the next three budgets on a schedule of $100,000, $250,000, $325,000, and $325,000. Thus, the Proposed Budget for FY 19-20 includes $100,000 for deficit recovery.

“The Association has $225,000 (previously used for the forensic audit) and $500,000 (previously used for deficit recovery) to work with to begin to accomplish the many ideas and needs that have been illuminated during community discussions this past year,” said Bailey.

“That’s a total of $725,000, which includes new funding for deferred maintenance, drainage, pay study adjustments and other adjustments throughout the operating budget.”

With that $725,000, the Proposed Budget provides new funding for:

Deferred Maintenance (non-reserve funding) $120,000
Drainage $178,000
Pay Study Adjustments, 2% labor increase, 10% benefit inflation $275,000
Other adjustments (+ and -) throughout the operating budget $152,000

The Proposed Budget also includes the following increases in funding:

Deferred Maintenance (Replacement Reserve funding) $305,000
Drainage (Road Reserve funding) $620,000

Total spending on Deferred Maintenance for this coming year is proposed at $425,000.

Total spending on Drainage is proposed to increase by $798,000; from $117,000 to $915,000.

Another highlight of the Proposed Budget for FY19-20 is a one-year waiver of the full contribution to the Bulkhead Reserve. This includes the $19 contribution that was waived last year for common property bulkheads, and the annual contribution only paid by those members with private bulkheads.

While the Proposed Budget for FY19-20 does not call for an increase in the general assessment, most user fees are proposed to increase at an average of three percent.

There are no subsidy level increases proposed for the fee-based amenity departments – Golf, Aquatics, and Racquet Sports, according to the Proposed Budget for FY19-20.

Bailey reminds the Membership that “the budget schedule indicates, this is a process.” The Budget & Finance (B&F) Advisory Committee now has three days of budget hearings, starting Monday, Jan. 7 at 9 a.m. in the Assateague Room of the Ocean Pines Community Center, located at 235 Ocean Parkway.

Bailey and his team of Department Heads will present the Proposed Budget for FY19-20 to the B&F Advisory Committee, local media, and Membership.

The scheduling of the upcoming B&F Advisory Committee meetings can be found online at http://www.oceanpines.org/wp-content/uploads/2019/01/1-2019-BF-Budget-Meetings-agenda-1.pdf.

The Board of Directors will conduct a series of budget meetings the following week.

“These six meetings and one-member hearing will give us a Recommended Budget to present at another member hearing,” said Bailey. “Final budget adoption will take place on February 16, six weeks from now.”

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