OCEAN PINES – The association’s general manager says he is waiting to hear if more than $1 million in PPP funding will be forgiven.
Last week, General Manager John Viola presented his monthly financial report to the Ocean Pines Association (OPA) Board of Directors. He said the association closed March with nearly $200,000 more than budgeted. He said Ocean Pines is now ahead of budget by more than $1.3 million for the year.
“We believe the favorability would be somewhere around $1,150,000 at the end of April,” he said.
Viola said much of the association’s positive variance occurred within the general administration budget, which includes $1.143 million in Paycheck Protection Program (PPP) funding.
Last year, the association received $1.143 million in federal assistance tied to COVID-19 relief to pay employees’ salaries. Viola noted that money has yet to be forgiven.
“That’s where we are right now,” Viola said last week. “The fact that the loan has not been forgiven yet, I believe we stay the course the way we are and report it the way it is, which is basically income.”
Viola told board members last week community operations benefited from the PPP funds. While OPA projects a $1,150,000 surplus by the end of the fiscal year – April 30 – he said the association would have had an operating deficit of roughly $400,000 without the federal assistance.
“If I took out all the stimulus, we would have lost somewhere around $400,000 even with all the cost cutting …,” he said.
Viola noted the association had submitted its application for PPP loan forgiveness and was awaiting a reply. Director Camilla Rogers asked if similar organizations had received any response.
“Have you had the opportunity to talk to any other organizations similar to ours about whether those loans have actually been forgiven?” she said.
Viola said he had and the loans had been forgiven.
“If ours is not forgiven … that means that $1.143 million would come out of these operation numbers I gave you,” he said. “That would be a loan at 1 percent.”
Viola told board members the association would have a prior period adjustment if it learns the PPP loan is not forgiven after the fiscal year ends. If forgiven, however, he said the money would be used to cover the operating deficit and fund roads and drainage projects not funded in the fiscal year 2022 budget.
“I’m not going to come forward with that until I know one way or the other,” he said.