OCEAN PINES – Continued discussions of a recent reserve study indicate annual assessments will have to increase to bolster the Ocean Pines Association’s general replacement reserve.
On Friday, the Ocean Pines Association (OPA) Budget and Finance Advisory Committee met with General Manager John Bailey to review the reserve study recently completed by DMA Reserves. The study, which identifies the cost of each of the association’s components, is meant to provide the association with an idea of its funding needs for the next 30 years.
“This is a tool for budgeting,” said John Viola, chairman of the committee. “It’s not locked in stone.”
According to the DMA report, it would take Ocean Pines close to $20 million to replace all of its various components. The association currently has $4.5 million in reserves. Viola asked committee members what level of funding they thought OPA should keep in the reserve account.
Committee member Marty Clarke pointed out that the association owned 19 lots that could be sold whenever OPA needed money.
“We’re not near broke,” he said. “We don’t need to be piling this money into the bank.”
Bailey said he’d considered maintaining funding in the reserve account with an 11.4 percent assessment increase every three years. Committee members, however, said they preferred a small increase each year rather than a larger increase every few years.
There was also discussion of the need for funding to address bulkhead and road replacement in the Pines. Bailey said the association received roughly $325,000 in casino revenue that it used for road work along with $25,000 from the state.
“The road reserve is underfunded,” Bailey said.
He said road work typically cost roughly $400,000 a mile and that he’d planned on budgeting close to $750,000 for roads each of the next two years.
Much of the discussion Friday focused on the renovation of the country club, the biggest capital project in the association’s immediate future. Bailey said the initial budget for the work had been $500,000 but that significant redesign efforts resulted in a higher price tag. With the addition of the latest roofline and elevation changes, as well as construction site costs, the project is estimated at $1.2 million. When Viola asked why the roof was being replaced when much of it was just installed last year, OPA board member Ted Moroney explained that there were issues with the installation work the contractor — who was eventually terminated from the job — had done last year. He said that OPA now planned to have those issues addresses while the rest of the country club was being renovated. He said the facility’s walls were starting to bow in because of water leaks.
“The biggest thing is to come out of this with an envelope that’s sealed,” Moroney said.
Clarke said the country’s club’s roof had been fine for 30 years.
“What I’m hearing is a classic case of mission creep,” he said. “What we’re doing is doing our very best to drive costs off the Richter scale.”
Pete Gomsak, a former board member, said the initial $500,0000 estimate had been for a significantly smaller project than what was currently proposed.
“Let’s not compare apples to kangaroos,” he said.
Bailey offered similar comments and pointed out that when the actual request for proposals had been issued, the prices for the project came in near $900,000.
He added that the renovation of the country club would make it a multipurpose facility that the entire community could use.
“The key thing is to educate the community it’s not just for golf,” Gomsak said.
Viola pointed out that the building was currently sub-standard and had major issues that needed to be addressed quickly.
“We’re waiting for the next rain to see if the Tern Grille flushes away,” he said.
Bailey also mentioned the potential expansion of the administration building, which also houses the Ocean Pines Police Department.
“It’s a concept at this point,” Bailey said.
Discussion of the reserve study is expected to continue in the coming weeks. Bailey said that once new board members were in place following the August election, the board would review and accept the final reserve study.
