January early february 2015 ocean pines progress

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January - Early February2015

Vol. 10, No. 10

410-641-6029

www.issuu.com/oceanpinesprogress Directors vet golf management firms

THE OCEAN PINES JOURNAL OF NEWS & COMMENTARY COVER STORY

Thompson budget calls for $25 hike in base lot assessments for next year $24 of the proposed increase is attributable to an increase in the Ocean Pines Volunteer Fire Department subsidy resulting from declining reimbursements for emergency services

By TOM STAUSS Publisher cean Pines Association General Manager Bob Thompson and his management team have drafted a proposed OPA budget for fiscal year 2015-16 that includes a $25 assessment increase, no increase in amenity fees other than a slight adjustment for pickleball, and capital spending totaling $1.99 million.

In a special meeting of the Board of Directors Jan. 8 at the Ocean Pines Country Club, Thompson distributed thick budget books to board members and briefly highlighted some of the policy details embedded in it. He also glossed over some proposals that may well draw some opposition or at least debate among the directors, among them some carry-over capital projects from the current fiscal year.

The draft balanced budget calls for $10,920,376 in revenue and spending, with the expense side comprised of $10,742,894 in non-capital spending, $110,818 in new capital additions, and $66,664 in Sports Core loan principal payments.

On the capital expenditure side of the ledger, the draft budget’s $1.99 million in proposed spending includes $1 million in spending from funded depreciation and $675,000 from the so-called fiveyear funding plan, which would be in its seventh year if funded by the board.

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Still no Sandpiper agreement with OPA Despite indications in early December that there had been a conceptual breakthrough in talks between the Ocean Pines Association and Sandpiper Energy over a new franchise agreement that could usher in the roll-out of natural gas conversion in Ocean Pines, a pact seems as elusive as ever.

OPA Vice-president Marty Clarke had told the Progress that, in an email received by the OPA in early December, Sandpiper indicated it was willing to negotiate a franchise fee with the OPA to allow it to continue to use its pipeline. ~ Page 21

Bunting says county facing tough year The rest of the capital spending is attributable to new capital additions.

Compared to recent years, Thompson’s capital spending requests for next year are relatively modest.

The current year’s approved budget is for $10,229,558 in departmental operationall spending, with another $3.1 million in capital spending, much of which won’t be spent despite its inclusion in the budget.

This means that Thompson is proposing a decline in capital spending of roughly $1.1 million over this year’s approved budget, but an increase in spending for operations of roughly $690,000 year-over-year.

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Following a Jan. 9 special meeting in which supporters of Billy Casper Golf turned out to support continued management of the Ocean Pines golf course, the Ocean Pines Association directors met in closed session to begin the process of vetting four golf course management proposals.

Among the four proposals under consideration – a fifth company has been dropped from the competition after submitting a proposal – is one from Billy Casper Golf that calls for continuing with the current threeyear management contract, renewed last year by the board in advance of the expiration of the initial three-year agreement. ~ Page 8

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Actual spending this year no doubt will differ from the budget approved in February of last year.

Thompson attributed some of the increase in the budget to the federal Obamacare law – otherwise known as the Affordable Care Act – and an increase in the minimum wage, along with a roughly $200,000 projected increase in the cost of emergency medical services provided for by the Ocean Pines Volunteer Fire Department but funded by the OPA. While much of the OPVFD EMS budget is funded by county and insurance company reimbursements, shortfalls To Page 18

Despite a nominal increase in the assessed value of some properties in Ocean City, Worcester County’s coffers are still facing significant challenges for the upcoming fiscal year. While other counties saw double digit assessment increases for properties included in the state’s triennial review, Worcester is lagging behind.

This year’s reassessment included both residential and commercial properties in Ocean City; while overall residential property values nudged upward, commercial property values continued to decline.

~ Page 29

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OCEAN PINES

One lease proposal is competing with three fee-based proposals for OPA board approval

By TOM STAUSS Publisher ollowing a Jan. 9 special meeting in which supporters of Billy Casper Golf turned out to support continued management of the Ocean Pines golf course, the Ocean Pines Association directors met in closed session to begin the process of vetting four golf course management proposals.

Among the four proposals under consideration – a fifth company has been dropped from the competition after submitting a proposal – is one from Billy Casper Golf that calls for continuing with the current three-year management contract, renewed last year by the board in advance of the expiration of the initial three-year agreement. The new agreement includes an easy-out clause that permits the board to seek out alternatives to BCG with no penalty.

No decision to retain or terminate BCG had been made as of early January and none was expected at the Jan. 9 special meeting after the board met with representatives of the golf management companies. OPA Director Jack Collins, head of a three-member working group that is bringing golf management proposals to the board for consideration, said he had no timetable in mind for a board vote on whether to keep or terminate BCG. “That would be up to the OPA president,” he said, referring to Dave Stevens, who spent much of December and part of early January on an overseas trip.

The three companies competing with BCG to manage the course – one has proposed to lease the course rather than operate it under a fee-based management contract – are Affinity Management, of Charlottesville, Va.; Landscapes Unlimited, of Lincoln, Nebraska; and the Haley-Marshall partnership, based in Salisbury.

The latter is comprised of Mike Mar-

shall, son of the late Charles Marshall, an OPA general manager – executive director who worked in Ocean Pines in the late 1970s, and Bob Haley, the first Ocean Pines golf pro who served in that position throughout the 1970s. He later owned the Bay Club golf course outside Berlin.

Haley-Marshall’s proposal is the one that includes a leasing option.

Affinity Management and Landscapes Unlimited both have Web sites detailing their histories as golf course managers.

OPA General Manager Bob Thompson is an advocate for continuing the BCG contract, and he seems to have at least two directors in his corner. Director Sharyn O’Hare drafted a letter sent to golf members asking them to come to the Jan. 9 meeting in support of BCG. When Stevens in internal board email took issue with what he viewed as O’Hare attempting to stack the special meeting with BCG supporters, Director Bill Cordwell came to her defense, at one point even comparing Stevens’ criticism to something that might occur in North Korea. O’Hare even went so far, in comments to a local weekly newspaper, as to accuse Stevens of treating her disrespectfully and of bullying her, assertions the OPA president rejected in comments to the Progress. [See separate article in this edition of the Progress for details.]

Collins declined comment on the propriety of the O’Hare letter urging golf members to attend the Jan. 9 meeting, but previously he has said that opinion within the golf community is mixed in its views about BCG. A fifth management firm has asked to be withdrawn for consideration, Collins said in early January.

The reason was an unwillingness to submit requested financial data, the Progress had learned. The original five proposals emerged after as many as ten

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individuals or companies indicated early interest in taking over management of the golf course.

The task force, including Collins and Director Tom Terry, submitted a document containing a ranking of the proposals in early December to Stevens.

Both Collins and Terry had said when the directors meet with the principals, it’s possible there will be some negotiating with them to achieve a better result than simply accepting the offered terms.

One of the four proposals still in the running is from BCG to continue the current management contract, which was extended earlier this year but is cancellable if the directors decide to make a management change. Initially, both Collins and Terry said they will not spend any time assessing BCG, since that company’s track record in Ocean Pines is well known.

But Terry said he believef BCG’s track record in Ocean Pines should be thoroughly evaluated by the board before a decision is made whether to replace the company. To that end, the working group decided to invite BCG to

the Jan. 9 special meeting to make the case for why their company should be retained.

Responses to the RFP were due back

by Nov. 14, with evaluation by the working group originally supposed to take place during Nov. 15-21, according to the posted request for proposals (RFP). Late in November, the working group was supposed to select the finalists for board consideration, with the board to decide whether to retain Casper or replace the company with an alternative sometime in December, according to the posted timeline.

The schedule has slipped a bit, as the working group submitted a ranking of the proposals to Stevens in early December. There is no scheduled board meeting in December, and Collins said the board vetting process would await the return of Stevens from his trip.

Collins said the next step in the process once all seven directors are available will be to decide the question of whether to terminate the contract with BCG. That option is allowed without penalty to the OPA under terms of the new three-year contract.

Collins said another possibility still in the mix is a return to in-house management of the golf course, perhaps by extending an offer to current golf pro and director of golf, John Malinowksi, and the golf course superintendent, Rusty McClendon, to operate the course

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Directors begin process of vetting golf course management proposals

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January - Early February 2015 Ocean Pines PROGRESS

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4 Ocean Pines PROGRESS January - Early February 2015 But Collins told the Progress that he Golf management is leaning in favor of the lease propos-

al if the terms can be revised to make it more palatable. He declined to provide details on the record given the sensitivity involved.

“We want to be fair to everyone we invite to discuss their proposals,” he said.

“And it is a board majority who will decide this issue, not one or two of us on the working group.”

While the decision on what to do with the golf course is in the hands of the task force and then the board of directors, Thompson has not been out of the loop. Some OPA directors say it is obvi-

ous he is in favor of continuing the current management contract with BCG, even while he may not necessarily say so publicly.

At his town hall meeting in November, the general manager was upbeat about BCG’s financial performance in recent months, especially after a weak start in May, the first month of the fiscal year. Since then, Thompson said, the company has been “chipping away” at the negative variance to budget that occurred in May. Through the first seven months of the fiscal year, golf operations, including food service at the Tern Grille, is

$67,942 in the black, down from the $115,580 surplus recorded at the end of October. At the end of October, operations were $30,620 in the red. So there’s been roughly a $145,000 turn-around in golf year-over-year, according to the October financial report prepared by OPA Controller Art Carmine.

According to the November financial report, golf is $35,245 behind budget for the year after seven months of operation. Even if BCG achieves its budgeted numbers during the rest of the winter months, April, the final month of the fiscal year, can devastate the bottom line.

Precisely that occurred in April of 2013, when a very poor April offset what had been a decent year financially, at least relative to budget.

During discussion at the Nov. 22 meeting of the Board of Directors, board member Marty Clarke noted another area where BCG fell short of budgetary expectations.

Clarke said that there’s been a net revenue shortfall relative to budget of between $50,000 and $60,000. The October financial report confirms this: the negative variance wass actually $55,955.

A year-end forecast prepared by Thompson and Carmine and released in Thompson’s Nov. 22 general manager’s

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From Page 3 directly for the OPA rather than through BCG. Terry said several months ago that the contract extension approved by the board and BCG earlier this year does not include any non-competing provisions that would prevent either Malinowksi or McClendon from being hired by the OPA to run the course, either on an interim or more permanent basis.

Such an arrangement would save the OPA roughly $70,000 per year in management fees paid to BCG.

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January - Early February 2015 Ocean Pines PROGRESS

5

Golf management From Page 4 report predicts that golf operations will lose only $88,113 for the year, compared to the budgeted $73,300 loss. Thompson’s draft budget for next year includes a net operating deficit for golf of only $14,000.

But Clarke told the Progress he was very skeptical of any forecast for golf performance, noting that another such forecast, issued nine months into the 2013-14 fiscal year, proved to be wildly optimistic.

The last month of the fiscal year, April of 2013, turned out to be horrible financially. Golf ended up losing more than $300,000 for the year, before golf-related depreciation expense of $450,000, which property owners fund through the annual lot assessment.

The vetting of the four management proposals now under way is the just the latest step that began in October with action taken by the three-member working group to solicit golf management proposals. At an Oct. 18 special meeting of the board, the directors ratified the subsequent posting of the request for proposals (RFP) on the OPA Web site.

Some skirmishing over the initial RFP that occurred without explicit board approval occurred in October.

Thompson initially resisted a request from the working group to post the RFP on the Web site, resistance that Stevens said was understandable under the circumstances. Director Bill Cordwell reacted angrily in emails to his colleagues when he first learned of the request, along with the disclosure that some groups had already been provided copies of the RFP. Cordwell was upset that Casper officials and local staff were not given a “heads-up” prior to the RFP going out to already identified interested groups.

Cordwell said it would have been “a courtesy” to inform local Casper employees that their jobs might be in jeopardy by the search for possible management alternatives, and that “I’m a director” and that he “and the GM didn’t know” that the RFP had been sent out to inter-

Literary ladies

The Literary Ladies of Ocean Pines celebrated year 2014 at a luncheon held recently at The Inn on the Ocean in Ocean City. Pictured are (left to right): Sharon Armstrong-Saffran, Marion Winslow, Sandy Glassman, Diane McGraw, Marlene Lombardi, Mary Jo Scarbath, Kay Gibbons, Jeanne Stiehl, Muriel Hinz, Sally Kohler and Shirley Schaefer. ested parties.

Cordwell contended that “something this drastic” should have been an explicit board decision, but Stevens said it had been his “understanding” that the working group had been “empowered” to seek management proposals from interested parties and that, once proposals were received and vetted, there would be “significant board discussion” over how to proceed.

Stevens said it’s possible there will be “no credible” leasing proposal or alternative from those who submit an RFP, and that it’s possible then that the OPA would simply retain Casper or “go to self-management,” which is the way the course has been operated for most of its existence.

Cordwell said that while he from time to time has been a “big critic” of the way Casper has run the course for the OPA, he also said the course under Casper is now in its best condition in some time and that leasing it out to a private entity could result in cutting the course maintenance budget “in half” and would “jam

us with outsiders” who make tee times more difficult to obtain for Ocean Pines

golfers.

Collins advised Cordwell “to wait and see” what kind of proposals are offered as a result of the RFP, while Renaud said the working group would talk with “people from other golf courses” to assess whether maintenance suffers under

leasing or other alternatives.

Clarke said that Casper had every opportunity to submit a proposal or proposals in response to the RFP. Indeed that is what happened, but Collins said it appears that the company is offering no alternative other than continuation of the current management contractor.

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6 Ocean Pines PROGRESS

By TOM STAUSS Publisher bout 25 members of the Ocean Pines golf club jammed the board room at the Ocean Pines Association’s administration building Jan. 9 for a special meeting of the Board of Directors, called primarily to allow four competing groups to present proposals for managing the Ocean Pines golf course.

The presentations were held in closed session, on the grounds that proprietary information would be presented and discussed, said Jack Collins, the OPA director who is heading up a small working group of directors established to gather management proposals.

Before the board went into closed session, they heard comments from the contingent of golfers in support of Billy Casper Golf, the current fee-based management company that is in its fourth year of operating the Ocean Pines golf course.

OPA President Dave Stevens told the group of golfers that he would be limiting their comments to a half hour and he asked those who offered views to avoid repeating points made by previous speakers. He later complimented them for avoiding repetition.

Collins, in answer to a question from one golfer, for the first time disclosed the three companies that are in the running to replace Casper. They are Af-

A

OCEAN PINES

January - Early February 2015

Contingent of golfers advocate for retention of Billy Casper Golf Clarke, Gomsak spar over golf financial results finity Management, of Charlottesville, Va.; Landscapes Unlimited, of Lincoln, Nebraska; and the Haley-Marshall partnership, based in Salisbury.

The latter is comprised of former Ocean Pines golf pro Bob Haley, who also is a former owner of the Bay Club golf course outside Berlin, and Mike Marshall, son of the late Charles Marshall, a former general manager-executive director of the OPA in the 1970s. Marshall Enterprises manages numerous hotels in the Ocean City-Salisbury area.

Stevens said the special meeting was for the purpose of “information gathering” from BCG and the three other firms who have management proposals to present and explain. He said no decision would be made at the meeting, either in closed or public session, on whether to terminate the BCG contract.

Fewer than ten golfers had the oppor-

tunity to make their cases in support of BCG in the open session portion of the meeting, punctuated by applause from the assembled contingent. They complimented BCG for managing a very well maintained golf course and for making steady improvements in golf’s financial results. Also cited was good cooperation by the BCG staff for tournaments and efforts to promote outside play, generally acknowledged to be a critical factor in how well the golf course does financially.

Former OPA Director Pete Gomsak, a lifetime golf member, attempted to frame what he called “a very important decision” of the board in the context of support for, and the importance of, amenities generally. He said the board should be basing its decision-making on the long-term best interests of Ocean Pines and its diverse amenities.

He went on to make the case that,

after some early years of poor financial results, BCG has been doing much better lately. He cited this year’s projected loss of the golf operations in the latest projection as $88,000, adding that, in the new budget draft for next year just unveiled by OPA General Manager Bob Thompson, the golf deficit would be down to a mere $14,000.

From the peak loss of $530,000 to the projected loss of $14,000 next year, Gomsak argued that the deficit has had a cumulative decline of 97 percent.

After the meeting, OPA Director Marty Clarke, an advocate of leasing the golf course, questioned the accuracy of both the $88,000 projected loss for this year and the $14,000 projection for next in Thompson’s initial budget draft.

“I don’t believe budget projections,” he said, adding that Thompson had served up a rosy budget projection for golf nine months into the 2012-13 fiscal year, only to see April results hemorrhage red ink, mostly the result of poor April weather typical of the Eastern Shore. The f’inal result for the year was a $326,047 loss, before depreciation expense, Clarke said.

He said golf lost $317,225 in 2011, $288,064 in 2012, $536,901 in 2013, and $3256,047 in the year that ended on April 30 of last year. He described the results as the worst four years for golf in the history of Ocean Pines.

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OCEAN PINES

Director criticized for email promoting Casper retention

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Cordwell defends O’Hare, while Stevens, Clarke take exception to her role in promoting organized attendance at board special meeting on golf course management the public domain through an email chain obtained by the Progress.

The disagreement pits O’Hare and Director Bill Cordwell, who believe the email and call to action was proper, against OPA President Dave Stevens

and Vice-president Marty Clarke, who believe she overstepped.

At issue was a special meeting of the board called for Jan. 9, primarily for the purpose of assessing golf course management proposals obtained by the

OPA as the result of an RFP (request for proposals) process. The vetting of the proposals, including one that would involve a lease of the course rather than a management contract in which the OPA retains control of the course, was scheduled for closed session.

Prior to the board going into executive session, the directors conducted what effectively was a public hearing,

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By TOM STAUSS Publisher disagreement over whether Ocean Pines Association Director Sharyn O’Hare acted improperly by sending out an email to golfers who favor the retention of Billy Casper Golf as the Ocean Pines golf course management firm in the hopes that they would come “out in force” to attend a special meeting of the board has spilled out into

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Email controversy From Page 7 designed to listen to opinions on the management issue from golfers or any other property owner with a viewpoint.

The meeting format was designed by Director Jack Collins, who is heading up a three-member working group created to bring management proposals to the board for consideration.

[See separate story in this edition for details of the public hearing.]

According to the email chain obtained by the Progress, O’Hare triggered a robust debate among some of the directors by suggesting, in an email to prominent Ocean Pines golfer Jim Beisler, that “I hope that we can get the golfers out in force for that meeting. Can you spread

the word?” he asked of Beisler. “I think this meeting will be informative and important for all the golfers.”

Earlier in her e-mail, O’Hare said that she had heard “through the grapevine” that there are other e-mails circulating in Ocean Pines “that endorse Casper Golf, but the BOD (board of directors) is not getting them. We need the golfers to send those emails to the directors in the next two weeks.”

It was this passage that portrays O’Hare as an advocate for the retention of BCG as the Ocean Pines golf course management company, at the same time she is attempting to generate emails among BCG supporters to be sent to the board. In this context, her email also seemed to be crafted in a wayto encourage BCG supporters to turn out at the

Jan. 9 meeting, although the email, to the extent that it was forwarded on to the entire golf community, could also have been received by golfers less supportive of BCG’s management.

While Collins declined comment on the propriety of O’Hare sending her email to Beisler, Stevens and Clarke were not so reticent. Clarke has been an advocate of terminating BCG’s management contract. Clarke responded to a question posed to him by the Progress.

“If I had pulled a stunt like that,” Clarke said of the O’Hare mail, “Sharyn would be starting a petition to throw me off the board yet again.” That was a reference to a very public effort to remove Clarke from the board more than a year ago, based on complaints against him made by OPA General Manager Bob

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Thompson and O’Hare and one or two directors at the time. After an investigation by OPA general counsel Joe Moore, the matter was dropped with no action taken against Clarke He said he did not intend to file a complaint against O’Hare in the latest incident.

Stevens’ views on the matter were contained in a Dec. 30 response to an email from Ocean Pines golfer Thomas Herrick, who told Stevens that a “board member soliciting and requesting emails … from a small special interest group, to bolster her own personal opinion” is “not proper.”

Herrick said that O’Hare is a member of the nine-hole ladies group and she “is well aware of … problems they had this year” with BCG management.

He said a group of which he is a member – he referred to it as the Geezer Golf Group – “also has had bad experiences” with BCG. Stevens, in his reply to Herrick, agreed with his assessment of the situation. “ ‘Rallying the troops’ is not a new thing for Sharyn, whether it be golfers or the Clubs committee or any other group, who given the right amount of misinformation will come to a board meeting and repeat, one after another, a particular point of view without adding anything to the discussion of the real issue,” Stevens wrote in his response to Herrick. “By organizing this, they give the false impression of representing an actual majority. They place people who have a different opinion, but are not members of the group, at a real disadvantage. More importantly, it has a stifling effect on reasonable discussion of pros and cons.”

The OPA president said he had all of the emails sent to the board on the golf management issue and had not “seen one that actually addresses” the issue at hand.

He said the “one point” made by BCG advocates is “that we should not look at other management options” but should “forget the record of the last four years and stay with Casper” because some golfers have “now decided that they like them after all.”

He went on to say that, in his opinion, “Sharyn is doing a real disservice to her colleagues on the board and the remainder of the community by promoting” emails and organized attendance at the Jan. 9 special meeting.

Stevens indicated that he was not advocating for or against BCG but only a fair competition among competing proposals “on a level playing field.”

That prompted an email in defense of O’Hare by Cordwell, who said he would “like to see any emails where Sharyn solicited anything from any special interest group.” He told Stevens that O’Hare “merely advised golf members of a meeting that had been set to decide the golf issue. I demand proof of any misinformation that Sharyn has given to any of these folks.”

According to Collins, the meeting

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8 Ocean Pines PROGRESS

OCEAN PINES From Page 8 on Jan. 9 was not called to decide the golf issue, but instead to gather opinion from golfers in public session and, in closed session, meet with the principals of groups that submitted proposals in response to the RFP. Collins said it was possible that some director could offer a motion to keep or terminate the BCG contract during the closed meeting, but the more likely scenario is that board would decide BCG’s fate at its regular meeting later in the month.

Cordwell said that he, like O’Hare, has received “numerous requests” from golf members asking them to keep them advised on developments regarding golf course management, and he said he has told them to email the directors and attend relevant meetings.

“It’s the same advice that I have given to members of Mr. Herrick’s apparently special interest platform tennis group in the past,” he wrote.

Cordwell also said he had received emails from golfers that had not been shared with other members of the board and that he urged these golfers to send them to the entire board.

“Did I overstep my duties by trying to have the board educated to make a prudent decision?” he said. “Should we as board members not communicate with members of other clubs we belong to?”

Cordwell then went on to criticize Stevens for declining to create a com-

mittee to evaluate BCG’s performance in Ocean Pines over the past four years, as had been suggested by O’Hare at a board meeting in December. Stevens decided not to do so because the timetable for a decision on the golf course already was in danger of falling behind schedule. In addition, he suggested that it really was up to the board to evaluate BCG’s performance based on information readily available.

According to Cordwell, Stevens had proposed to “fire Billy Casper Golf” prior to leaving on an overseas trip in December. Stevens has said he has never publicly advocated for Casper’s firing.

Cordwell concluded by saying that the OPA “has a signed contract” with BCG and that the board “must weigh all information before we decide to break a binding contract.” He said the directors “need to be able to be personally prepared for any legal consequences” for actions taken.

Clarke then joined the fray, telling Cordwell that he (Clarke) “was confused” and was “under the impression that when we entered into the most recent” three-year agreement with BCG last April “it became an at will agreement with no termination penalty should BCG not meet their budget by November.”

Clarke further noted that the agreement allows the OPA to negotiate directly with Casper employees in the event of a contract termination.

He said the company did not meet

budget, according to the November controller’s financial report.

In another email to his colleagues, this time in response to a spirited defense of BCG offered by golfer Ron Rider, Clarke said some in the golfing community are “circling the wagons in order to protect the status quo. No surprise.”

But he urged his colleagues to debate the financial realities associated with BCG’s tenure in Ocean Pines.

“Under BCG we have just suffered the second worst November performance in the past eight years,” he wrote.

The worst “was also under BCG in 2011.

The average bottom line performance for the past three years (audited) has been a negative $383,670, compared to the three-year average of a negative $204,520 (audited) for the years 2007, 2008, and 2009.

“As of the November 2014 Controller’s Report BCG is $35,245 off their budget (for the current fiscal year).

They have never made a budget in our employment. All of this in spite of our investing millions of our assessment dollars in the golf course infrastructure improvements,” Clarke wrote.

He also said the board should look at golf membership numbers, which, according to the November membership report, indicates “only 162 paid golf memberships, includes 20 lifetime, and an additional five package play plans. In 2009 we enjoyed 263 paid memberships.

These numbers indicate a 101 member (37 percent) decrease” in membership in

9

four years, Clarke said.

He has said previously that the board needs to consider the interests of more than 8400 property owners when deciding what to do with the golf course not just the interests of a declining membership base.

The debate his spilled into the pages of the local media, with O’Hare unloading on Stevens in comments made to a local weekly, calling him a “bully” and disrespectful.

“Anytime I have made a comment, he has publicly said in meetings that I am wrong. I’ve asked for compromises. He has publicly said ‘no.’ I’m another fellow board member. My opinion is just as important as his,” adding that “we don’t have to agree. I get it. But we should certainly treat each other with respect for Gods’ sakes.”

In comments to the same weekly, Cordwell reiterated comments he had made to the board in email about the importance of keeping Ocean Pines residents informed and actively engaged.

“This is Ocean Pines, not North Korea,” he said.

Stevens, who was reported as unavailable for comment in the article that appeared in the weekly, told the Progress that he “didn’t care” that O’Hare and Cordwell had attacked him in print.

He joked that Clarke “might like it” because he no longer is the focus of attention, a reference to the fact that Clarke is often the subject of media headlines.

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Email controversy

January - Early February 2015 Ocean Pines PROGRESS

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Email controversy From Page 9 In a more serious vein, however, Stevens said that neither O’Hare nor Cordwell produced any convincing evidence that the OPA president has bullied O’Hare or acted in a dictatorial fashion.

He said calling someone wrong or rejecting a compromise is normal giveand-take in a board meeting. As president, he said he is bound by majority rule, suggesting that O’Hare and Cordwell are having some difficulty to adjusting to the fact that they aren’t in the majority as much as they once were.

He further said it appeared that O’Hare had released internal board emails to the media, after criticizing Clarke and even initiating ethics charges against him for doing something similar.

He called that sort of behavior “twofaced,” subsequently amending it to “hypocritical.” He said he personally didn’t care if O’Hare had released the emails to the media, calling the kerfuffle of minor importance in contrast to the larger question of what to do about golf management in Ocean Pines.

project’s design engineers, the commissioners operated to award the contract to the low bidder of A-Del Construction of Newark, Del. The commissioners also awarded a contract for construction administration and inspection services for the force main project to EA Engineering at a total cost of $72,612. That cost includes construction administration services at $32,779 and construction inspection services at $39,883.

Funding for the project is available in a recent $5.3 million bond issue for improvements to the wastewater collection system. Tustin said the project will take approximately six months to complete.

Anyone with specific concerns related to the project may contact Public Works Deputy Director John Ross or Construction Technician Mike McCabe at the Department of Public Works Water and Wastewater Division at 410-641-5251.

County awards contract for water line project

After months of trying to find a company to replace hundreds of water service lines in Ocean Pines, the Worcester County Commissioners in December finally awarded a contract for the work.

The commissioners approved an arrangement with the firm of WM Water and Sewer LLC of Ocean View, Del. To replace the aging polybutelene or blue tubing water lines along Ocean Parkway.

The county twice tried soliciting for contractors to replace 250 water service lines in the Ocean Pines Service Area, with the commissioners posting two separate requests for proposals months apart.

After failing to secure any bid, county staff suggested breaking the project into smaller sections that can more easily be completed by local contractors and negotiating directly with those companies to take on the project.

John Tustin, public works director, said that process netted only one reasonable pricing package from a contractor for the first phase of the work, the proposal from WM Water and Sewer LLC. The contractor agreed to replace 23 short side water service lines at a cost of $550 each and 24 long side service lines that cross under Ocean Parkway at a cost of $900 each, for a total project cost of $34,250. He said WM Water and Sewer LLC successfully completed similar work along King Richard Road in Ocean Pines last year.

Tustin said no other contractor provided a reasonable proposal, with the next lowest price coming from ABC Contractors LLC at $3,975 for long side and $22,60 for short side services. He said that contractor’s pricing was more than

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A

fter months of planning and negotiating contracts for the project, late last month contractors finally began replacing portions of a wastewater force main located along Ocean Parkway in Ocean Pines. The work will take several months and will cause periodic traffic delays along the main travel way through the community.

Worcester County Public Works officials are advising the public to expect traffic delays due to construction in Ocean Pines on Windjammer Road and Bird’s Nest Road and on Ocean Parkway between Windjammer Road and Village Way. Drivers should be aware that there will be changing traffic patterns and construction traffic, as well as lane and parking restrictions, in these areas for the next several months. Construction is expected to be complete by late spring 2015.

A-Del Construction of Dover, De., will install a new 12-inch diameter sewage force main to replace older lines in the area. The Worcester County Commissioners in November voted to award the company a contract for the project.

The county received three bids for replacement of the force main transporting wastewater from the north side of Ocean Pines to the Ocean Pines Service Area’s wastewater treatment plant. The bids ranged from a low of $1.66 million to a high of $3.79 million and all three bidders were from Delaware. Based recommendations from both staff and the

From Page 10 four times the WM Water and Sewer LLC price.

The first phase of the project is now under way and is expected to take two months to complete.

The overall project involves replacing the 250 water lines from the stop on the water main to the water meter pit. The contractor will be responsible for the restoration of all surfaces disturbed for the work including pavement and grassed areas. The contractor is required to minimize interruptions to water service while completing the work and notify all affected property owners 48 hours in advance. Water outages will only occur between 8:30 a.m. and 3:30 p.m. on weekdays.

The total cost for the construction project is estimated at $300,000. Funding for the work was included in a recently completed bond issue. Last year the commissioners approved the sale of consolidated capital improvement bonds of a total $48.3 million to finance various improvements to the Ocean Pines water and wastewater system and renovations and additions to Snow Hill High School. The portion of the bond allocated for the Ocean Pines Service Areas improvements totals $5.3 million.

Commissioners review Pines’ Plaza EDUs

The Worcester County commissioners on Jan. 6 reviewed a request for a reallocation of equivalent dwelling units of capacity within the Pines Plaza Service Area, which is connected to the Ocean Pines system.

As part of the original resolution and agreements creating the service area, the county designated 64 EDUs for Pines Plaza. Now, however, the property owner says it doesn’t need that much capacity.

In a letter to the county, Bob Waugh, vice president and chief operating officers for property owners Pines Plaza Associates Inc., asked for a reduction of the current EDU allocation for the property.

“At the current time this project is not at full capacity and is using significantly less water and sewer than the maximum forecast allocation of 64 EDUs,” Waugh said. As a result, he requested a reduction of the allocation from 64 EDUs to just 24 for existing uses and one more for a potential expansion of Dollar General.

Waugh said the property owner anticipates making additional applications for more EDUs in the future as more tenants for Pines Plaza are secured.

Bob Mitchell, county director of environmental programs, said that reducing the allocation for Pines Plaza would free up those additional 39 EDUs for other users within the system.

He added that the Pines Plaza owners are still required to contribute for the construction of infrastructure necessary to provide water and wastewater service to Pines Plaza. The property owners’ share of that cost based on an

January - Early February 2015 Ocean Pines PROGRESS

11

allocation of 25 EDUs is $132,500.

Clean-out flea market scheduled for Jan. 17

The Ocean Pines Community Center will be the scene of a new year’s Cleanout Flea Market on Saturday, Jan. 17, from 8 a.m. to noon.

The indoor flea market will feature vendors selling gently used clothing, children’s items, household items, and collectibles, as well as some new handmade items.

Those interested in participation can call 410-641-7052 for information.

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New trash collection service begins in Ocean Pines with little fanfare Angst by fans of Waste Management, the previous trash collector in Ocean Pines, did not mar roll-out of Republic Service’s new contract, which modestly lowers the quarterly cost of trash collection while adding once-a-week recycling

By TOM STAUSS Publisher epublic Services, Ocean Pines’ ne trash and recycling collector, quietly began operating in Ocean Pines the first week of January, with only slight confusion caused by a oneday delay in the start-up because of the New Year’s holiday.

Trash and recycled materials that normally would have been collected on Ocean Pines’ northside on Thursday, Jan. 1, instead was collected on Friday, Jan. 2. Trash and recyclables that would have been collected on Friday, Jan. 2, on the southside instead was collected a day later.

The one-day delay in response to holidays was identical to the way they were handled by Waste Management, the trash collection whose exclusive contract with the Ocean Pines Association expired at the end of December, and will be the template for the duration of the Republic Services contract whenever normal collection days falls on holidays.

Republic Services began delivering 65-gallon recycling carts on Dec. 29 to Ocean Pines residents who had signed up for service earlier in the month.

The recycling carts are being provided to customers as part of the quarterly fee of $46.71. In a change from the Waste Management contract, recyclables under Republic will be collected once a week, on the second regular weekly pick-up day, either Thursday or Friday.

Deliveries of optional trash carts to residents who requested them will be made during that time as well.

The cost to rent a 95-gallon container from Republic is $1.20 a month.

Because Ocean Pines has changed collection companies several times over its 45-year-plus existence, many residents have acquired their own trash cans or carts over the years.

There is no prohibition against residents simply depositing well-sealed garbage bags for collection.

To Page 14

OCEAN PINES BRIEFS

Muth was in the 6th Wave and narrowly escaped when his landing craft was hit and was taking on water. He eventually spent four weeks living in tents on this beach.

Sauer also landed at Omaha in the 4th Wave, was wounded and was awarded a Purple Heart for his bravery. Both men helped raise a flag that originally flew over the American Cemetery at Normandy.

This was also the first flag that flew over the Worcester County Veterans Memorial at Ocean Pines.

R

From Page 11 scheduled for the Ocean Pines Yacht Club on Saturday, Jan. 10, followed by a reception at the club.

Participating in the event were World War II and D-Day survivors Elmer Muth and John Sauer.

Both men landed at Omaha Beach in France, early in the morning on June 6th, 1944, amid a hail of firestorm from enemy troops.

As a quartermaster in the Navy,

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Trash collection From Page 12 Waste Management trucks were seen in Ocean Pines on its last day of service on Dec. 31.

The company will be circulating throughout the community from Jan. 1-15 to collect their trash and recycling containers curbside.

Waste Management customers who prepaid for quarterly service including January and February are due a refund,

but indications are that they will have to call the company to request the refund.

For questions about Republic Services or to sign up for service, the company’s phone number is 302-658-4097.

Depending on the time of day, there may be wait times before a customer service representative becomes available.

Those who have been tardy im signing up for service can do so anytime, by calling the customer service number, filling out an enrollment form available on the Ocean Pines Association Web site and emailing it to oceanpines@republic-

services.com.

It can also be mailed directly to the company at 1 Briar Drive, West Grove, Pa. 19390, attn.: Ocean Pines.

In December, a customer service representative was available in the Community Center to handle service applications in person.

Judging by the number of e-mails received by the OPA administration, there was considerable angst in Ocean Pines over the change in trash collection companies.

The decision to award the contract to

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Republic was based on cost; it was the low bid. OPA sources say that the Waste Management contract proposal called for roughly $50 more per customer per year over the old rate.

The OPA Board of Directors, in a 6-1 vote with Director Marty Clarke abstaining, awarded the trash collection contract to Republic Services during a Nov. 22 meeting.

The motion for approval by Director Tom Terry made the selection contingent upon receiving an “acceptable contract” with the company, and authorized General Manager Bob Thompson to finalize that contract.

Clarke said he abstained on the vote because he didn’t have enough information on the details of the contract prior to its vote on the matter.

With Waste Management’s existing contract expiring at the end of December, but with a billing cycle ending at the end of January, bids for a new three-year contract for both residential and commercial refuse collection were due to the OPA by Nov. 10.

Bids were solicited for the award of an exclusive three-year franchise to operate within the confines of Ocean Pines.

During the Nov. 22 board meeting, Thompson said he received four bids for the new trash and recycling contract.

While he did not provide any details about the cost of service proposed at that time, the contract is structured so that residents will pay a total of $15.57 per month, $12.07 of trash collection and another $3.50 for recycling collection.

Refuse will be picked up twice a week and recycling once per week, the latter on the second day of regular weekly collection.

Even before bids came in, the OPA had to seek additional information from the refuse companies related to the RFP. Staff had neglected to include requirements for twice weekly collection in the original document.

Since only one of the bidders included that collection schedule in its proposal, Thompson had to reach out to the others and ask them to provide pricing for that option.

OPA President Dave Stevens said the proper procedure would have been to amend and repost the RFP. But that is not how Thompson opted to handle the situation; instead he simply contacted the bidders and notified them of the change.

However, Stevens said based on the bids that were received “it appears at least from the standpoint of dollars it doesn’t make a difference” that proper procedure was not followed.

Thompson acknowledged that the original RFP didn’t include two weekly trash collections and one recycling pick up.

But he pointed out that this was not a specific request the last time the contract was bid either.

It was an option brought to the OPA by the current trash company, Waste Management.

He said he crafted an amendment

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14 Ocean Pines PROGRESS

OCEAN PINES

January - Early February 2015 Ocean Pines PROGRESS 15

OPA FINANCES

OPA’s financial performance slips in November

T

Trash collection From Page 14 to the FRP and posted it on the OPA’s website and staff contacted every bidder to let them know that information was omitted from the RFP. If such situations should be handled differently in the future, he said directors should inform him what procedure they would like to have followed.

With directors ready to approve the contract with Republic Services, Thompson said he would like to speak with the company first to work out final details, such as what vehicles will be entering the community and at what times.

He said he wants to make sure the company understands “all of the details” related to working in Ocean Pines.

Stevens originally made a motion to approve the contract, but withdrew it based on Thompson’s comments.

Terry then made a motion authorizing Thompson to proceed with finalizing the contract. That motion was approved 6-1 with Clarke abstaining.

Ocean Pines residents will still be able to take their trash to Worcester County’s transfer stations or the central landfill for disposal instead of contracting with the new franchise holder, once a contract with Republic Services is officially implemented.

However, residents are not supposed to contract with a different trash removal company.

The contractor that is awarded the franchise also cannot subcontract with another company to provide for residential collection within Ocean Pines without the expressed written consent of the OPA.

Golf records $47,638 loss for month, but outperforms budget by $4,707; Yacht Club loses $46,651 for November, behind budget by $40,659 Golf operations lost $47,638 for the month, but that was $4,707 better than the budgeted $52,345 loss, continuing the recent trend of golf performing better than budget projections had called for.

Even so, golf has a $35,245 negative variance to budget for the year, the result of a poor start to the fiscal year in May. The good news is that golf is in the black for the year in the amount of $67,952, but that’s a positive number that likely will turn red by the time the January results are recorded, if not in December.

April also has been a particularly challenging month for golf in years past, as poor weather can adversely affect rosy projections for revenue derived from outside play. That happened in April of last year with unfortunate results on golf ’s bottom line for the year.

These results are contained in Controller Art Carmine’s financial report for November, posted on the OPA Web site in mid-December.

According to the report, November’s negative operating fund balance of $48,326 resulted from revenues that were under budget by $33,349 and ex-

penses that were over budget by $14,977.

The cumulative year-to-date operating positive operating fund variance resulted from revenues that were over budget by $156,888 and total expenses over budget by $76,035.

Of all the amenity departments, the Yacht Club was the department that seemed the most seriously off track, with very little good news buried in the numbers, even for someone looking hard for a silver lining.

Total revenues of $63,472 missed their budget target by $23,778, while net revenues had a negative variance to budget of $16,366.

Most of the expense categories also missed targets, sometimes by substantial margins.

Wages and benefits for the month cost the OPA $58,999, compared to the budgeted $41,209, for a negative variance of $17,790 in that line item alone.

Services and supplies missed its budget by $4,486, while utility costs were over budget by $3,203.

Only the catch-all “other” category managed to do better than budget, but only by a small margin, $946.

For the year, the Yacht Club through November managed to hold on to a slight operating surplus of $9,162, compared to

OPA net operating results by department as of Nov. 30

the budgeted $15,007.

That’s a negative variance to budget of $5,845.

At the same time last year, the Yacht Club was in the red in the amount of $64,156, so Yacht Club advocates can at least point to year-over-year improvement in the bottom line performance, with a swing of roughly $75,000 to the good.

Aquatics produced a $35,296 loss for the month, with an $11,689 negative variance to budget. Through November, aquatics is $12,758 in the red and $27,891 behind budget for the year.

The silver lining is that, compared to a year ago, aquatics is performing well.

Through November of 2013, aquatics had lost almost $43,000, so that means there’s roughly been a $30,000 net improvement in bottom line performance year over year in aquatics. A recent change in Sports Core propane suppliers could continue the positive trend.

Status of reserves – The reserve summary released as part of the November financial report shows that the OPA’s allocated reserve balance dropped in the month to $4,699,394, compared to 4,871,868 in October, $5,128,136 in September, $5,178,302 in August, $5,519,149 in July, $5,786,683 in June and $6,003,165 in May. The annual contribution from assessments traditionally is recorded in May, the first month of the fiscal year.

[See separate story for details]

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By TOM STAUSS Publisher he Ocean Pines Association’s financial performance for November stayed in deficit territory, with a negative operating variance to budget of $48,326.

Even so, for the fiscal year so far, the OPA is $80,853 ahead of budget, on the strength of solid performance throughout most of the summer months.

All amenity departments lost money in November, except for all three racquet sports, which recorded nominal surpluses.

The Yacht Club food and beverage operation was the month’s worst performer relative to budget, but it was golf operations that actually did slightly worse in its actual loss.

The Yacht Club lost $46,651 for the month, with a negative variance to budget of $40,659.

It had been budgeted to lose a much more modest $5,992 for November, but both regular dining and the banquet business underperformed relative to budget.

16 Ocean Pines PROGRESS

OCEAN PINES

January - Early February 2015

Financial report

From Page 15

Status of the balance sheet – According to the Nov. 30 OPA balance sheet, the OPA has total assets of $31.2 million, against total liabilities of $1.75 million and owner equity of $29.5 million.

The balance sheet indicates a modest increase in operating cash from

$1,402,913 at the end of October to $2,133,033 at the end of November, which compares to the $1,719,99 in September and August’s $2,281,367 balance.

The November balance sheet indicates that the OPA has $4,018,768 in short term investments as of Nov. 30, compared to $5,315,829 in October and $5,612,201 on hand at the end of September.

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By TOM STAUSS Publisher he reserve summary released as part of the November financial report shows that the Ocean Pines Association’s allocated reserve balance dropped by more than $172,000 to $4,699,394 in the month.

The balance stood at $4,871,868 in October, $5,128,136 in September, $5,178,302 in August, $5,519,149 in July, $5,786,683 in June, and $6,003,165 in May. The erosion is typical as the OPA makes expenditures from the reserves through the year.

The May reserve summary reflects the annual contribution from the property assessments that traditionally is recorded in the first month of the fiscal year.

Usually, most of the month-to-month reduction in the overall reserve balance is attributable to activity in the Major Maintenance and Replacement Reserve, which as of May 31 had a balance of $4,754,531, reflecting the full annual transfer from lot assessments into this fund.

That didn’t happen in November, however, just like it didn’t in October. By the end of the Novemver, the balance in this reserve stood at $3,916,546, a nominal drop from the $3,921,064 balance in October and the September balance of $3,924,024.

That compared to the August balance of $3,965,983, which in turn was down from July’s $4,296,457 balance and June’s $4,554,081 balance.

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Through Nov. 30, capital spending from this reserve totaled, $1,154,506, comprised of $933,773 in spending from the funded depreciation component of this reserve and $220,733 from the fiveyear capital plan funding stream, most of which would be related to Yacht Club construction costs.

All of the other OPA reserve funds – bulkheads, future projects, road, golf drainage, and operating recovery -were unchanged or only insignificantly changed in November from earlier months.

The bulkhead and waterways reserve had a balance of $1,127,177, up slightly from the balance of $1,224,917 in October but down from the $1,478,081 balance in September.

The future projects reserve had a deficit of $60,305, the roads reserve totaled $222,331, the golf drainage reserve had a deficit of $641,936 and the operating recovery reserve had a surplus of $135,581.

The operating recovery reserve had been zeroed out last year, on the theory that previous year deficits had been sufficiently offset by subsequent surpluses,.

But the OPA Board of Directors earlier this year, perhaps without realizing it, authorized $135,152 from the current year’s property assessment to be allocated to this previously zeroed out reserve fund.

The purpose of resurrecting this fund and adding money to it purportedly involves the possibility that funds will be needed to address certain tax liability issues in future years.

January - Early February 2015 Ocean Pines PROGRESS

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OCEAN PINES

January - Early February 2015

Budget draft From Page 1 are, as a matter of policy, paid for by the OPA under a formula negotiated in recent years by the OPA and OPVFD. The draft budget for amenity departments suggests that the general manager foresees good times ahead, with operating deficits in the big three – the Yacht club, golf and aquatics – at very modest levels.

Aquatics would lead the pack with a $113,000 deficit, followed by the Yacht Club with $87,868 in projected red ink.

Golf and related food and beverage operations would only lose $14,124, which would be a truly impressive number were it actually achieved given deficits in recent years in excess of $300,000.

The golf budget was for the most part prepared by Billy Casper Golf, the management company that currently operates the golf course for the OPA. The board is reviewing options for golf course management this month from proposals submitted in response to an OPA request. Of four proposals still in the running, one is for a lease, one is a status quo proposal from BCG, and the other two are for management contracts similar to the current fee-based BCG arrangement.

The aquatics’ budget deficit would drop considerably from this year’s projected loss because of a proposed reallocation of about $48,000 in Beach Club parking revenue to the aquatics membership line item.

The logic behind this proposal is that one of the parking pass revenue streams includes four passes to use the swimming pool at the Beach Club, OPA Controller Art Carmine told the Progress.

The $48,000 is the cash value attributable to the parking passes issued to purchasers of parking-only passes to the Beach Club parking lot, he said.

In another aquatics related proposal, Thompson said his budget includes funding for the hiring of staff to run a modest food and beverage operation at the Swim and Racquet Club, site of the new splash pad for toddlers. The aquatics staff has noticed that pool patrons bring in fast food or call for pizza, and the staff believes some of that business can be captured for the OPA if an inhouse option is available to supplement vending machines that are on site.

On the capital side of the aquatics budget, Thompson is proposing an expansion of the constricted deck area at the popular Beach Club swimming pool in Ocean City, at an estimated cost of $100,000, and new pool furniture, a perennial item, at $22,559. Carry-over aquatics capital items include $100,000 for Sports Core pool resurfacing and $50,000 for deck resurfacing at the same pool.

Also included in the list of proposed “carry-over” capital expenditures is $500,000 for a new police department building, or perhaps an extension of the existing one that is part of the OPA administration building, as well as $145,000 for new restrooms in White Horse Park. One carry-over item that

had been proposed last year but is not included this year is conversion of the Assateague Room in the Community Center into a fitness center.

The police department expansion proposal was controversial when initially brought up, but it has some support on the board, notably Director Bill Cordwell.

The budget is not scheduled for adoption until the board’s regular meeting in late February, so that leaves plenty of time for the Budget and Finance Advisory Committee and the directors to review it. Changes are likely before the final version, assessments and amenity fees are formally adopted.

A number of directors have already said privately that they are adamantly opposed to any assessment increase next year and may even try for a reduction.

A year ago, Thompson’s draft budget for the current fiscal year proposed a $15 increase in the base lot assessment, but the directors went on to reduce it instead by $5.

Committee review was scheduled to begin the week of Jan. 12, with the board to follow two weeks later.

In introductory comments, Thompson attributed $24 of the $25 proposed increase in assessments to the OPVFD funding request, higher by roughly $200,000 because of declining reimbursements from emergency medical

q

18 Ocean Pines PROGRESS

Proposed department summary, draft 2015-2016, not yet approved

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Budget draft

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of the so-called five-year funding plan, which pumps about $1.1 million per year into the OPA’s major maintenance and replacement reserve, or roughly $130 per year of the lot assessment. In previous years, including this one, most of the disbursement from the five-year plan component of the major maintenance and replacement reserve went for the new Yacht Club.

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From Page 18 calls. While the number of calls continue to increase, requiring more staffing and cost, more calls and responses don’t always result in transport to area hospitals via ambulance, adversely affecting revenue, Thompson said.

The general manager’s draft budget includes funding for the seventh year

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20 Ocean Pines PROGRESS Budget draft

OCEAN PINES

January - Early February 2015

From Page 18 The Yacht Club has essentially been bought and paid for, mostly with funds from the five-year funding plan component.

Because the five-year funding plan did not collect enough money in its six years of existence to pay the entire cost of the Yacht Club, that portion of the Major Maintenance and Replacement Reserve shows a deficit, both at the end of the current fiscal year and even in April of 2016.

The funded depreciation portion of this reserve fund, however, is quite flush.

The proposed budget’s reserve summary shows a balance of $5,219,393 in funded depreciation at the end of this current year and an increase to $5,805,070 on April 30 of 2016.

Next year’s proposed capital spending plan doesn’t include any Yacht Club spending from the five-year plan component. Of $650,000 in proposed spending from this component, $500,000 is for the new police building, which likely will be challenged by some directors, and another $175,000 in funding for bridge replacement.

The funded depreciation component of the Major Maintenance and Replacement Reserve, however, is the funding source for a number of Yacht Club capital expenditures proposed in the draft

budget, including $26,877 for a draught beer system for the outdoor tiki bar, $25,000 for tiki bar hurricane shutters, $15,155 for banquet furniture and equipment, and $13,475 for new kitchen equipment.

Paying for what arguably new items out of funded depreciation – deceptively called the historical reserve in various financial documents within the budget book – will probably be scrutinized and criticized by some members of the budget committee and certain directors.

Funded depreciation actually is new money collected every year through the lot assessment.

In Thompson’s draft budget, this income stream assesses property owners $1.55 million, or roughly $180 per lot assessment.

Other proposed capital spending for the Yacht Club would come directly out of next year’s assessment-driven general fund, including $20,000 for an outside service bar, $5,300 for a storage shed, $4,850 for a floor scrubber/steamer, another $4,497 in new kitchen equipment, $4,229 in Adirondack chairs for the patio area, another $2,703 in banquet furniture/equipment, $2,481 for outside waste and smoking containers, and $2,023 for a covered band patio tent.

These items, considered “new capital” in budget parlance, directly affect the level of lot assessments if fully or partially funded by the board.

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OCEAN PINES

January - Early February 2015 Ocean Pines PROGRESS

21

Still no Sandpiper, OPA agreement on natural gas

D

Clarke confirms accuracy of report indicating willingness of Sandpiper to negotiate a franchise fee and payment of OPA’s legal expenses, but the parties appear no closer to a final agreement Clarke made clear – as did the Progress in its article – that a willingness to negotiate a franchise fee and the other issues did not mean an agreement was in place. As of the first week of January, the OPA has not received a revised draft of a franchise agreement reflecting the contents of the early December e-mail or the fruits of any discussions between the parties since then.

Indeed, the OPA currently is embroiled in a kerfuffle over who is to head up its OPA’s Sandpiper working group, with Thompson recently bowing out as the team’s lead negotiator, in a dispute with Clarke over comments attributed to him in the recent Progress article and whether those remarks undermined efforts to conclude a new agreement.

A report in a local weekly publication appeared to contradict the idea that some sort of conceptual breakthrough had occurred that could lead to a final agreement. Quotes attributed to Clarke seemed to walk back his comments to the Progress as reported in the Decem-

ber-Early January edition.

A Sandpiper representative, a vice-president of the utility’s parent company, Chesapeake Utilities Corporation, also was quoted in a way that seemed to suggest that Sandpiper representatives had sent no email to the OPA as had been described by Clarke.

A close reading of the applicable quotes, however, shows that the official did not directly contradict Clarke’s description of the email.

The Chesapeake official called Clarke’s comments “in poor taste” and said his company did not want to negotiate details of the franchise agreement in the press.

In a subsequent conversation with the Progress in mid-December, Clarke clarified his earlier remarks.

“Everything in it (the Progress article detailing Sandpiper’s willingness to negotiate a franchise fee and other issues) was true,” Clarke said, saying that he thought the remarks he made to the Progress about the e-mail communica-

tion had been made “off the record,” not intended for publication. But he said he could not be absolutely sure of that.

Clarke said he had received calls and some criticism about his published comments, most notably from Thompson, who told him that they would make it more difficult to finalize a new agreement with Sandpiper.

Clarke said he disagreed with Thompson’s opinion. He said Sandpiper would either conclude a franchise agreement with the OPA or would not, and that whatever is or isn’t published in the local media won’t be a determining factor either way.

He said he had not read the Progress article prior to being contacted by the weekly publication and being asked to comment on it. Having subsequently read the article, he said it accurately described the early December e-mail from Sandpiper. He repeated his assertion that he thought his quoted remarks had been presented as off-the-record but that their publication in no way jeopardized an eventual agreement with Sandpiper.

Whether the utility is willing to make good on what was said in the e-mail remains to be seen, Clarke said.

He said he believes the company is

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By TOM STAUSS Publisher espite indications in early December that there had been a conceptual breakthrough in talks between the Ocean Pines Association and Sandpiper Energy over a new franchise agreement that could usher in the rollout of natural gas conversion in Ocean Pines, a pact seems as elusive as ever.

OPA Vice-president Marty Clarke had told the Progress that, in an email received by the OPA in early December, Sandpiper indicated it was willing to negotiate a franchise fee with the OPA to allow it to continue to use its pipeline to bring propane and natural gas to its Ocean Pines customer base. Clarke also said the email indicated willingness by Sandpiper to consider payment of OPA’s legal fees of roughly $70,000 incurred during protracted contract negotiations and to negotiate a turn-over agreement covering pipeline assets at the expiration of a new franchise pact.

Because Sandpiper had not previously indicated willingness to negotiate these issues, at least not as forthrightly, the Progress characterized the early December email as a breakthrough in a headline and article published in its December-Early January edition.

OCEAN PINES

January - Early February 2015

Sandpiper From Page 21 quite capable of not concluding a deal based on it, but he said that he believed the utility would eventually come around to meeting OPA’s terms, given that Ocean Pines represents such a significant percentage of the company’s customer base in Worcester County.

After a Nov. 22 meeting of the Ocean Pines Association’s Board of Directors, it appeared that differences over a new franchise agreement between the OPA and Sandpiper Energy, the exclusive purveyor of propane to Ocean Pines homes via pipeline, were even wider than previously reported.

Without a new franchise agreement, plans for rolling out conversion to natural gas are effectively on indefinite hold.

Clarke has said that situation will remain unless and until Sandpiper is willing to produce a new franchise agreement draft that the OPA can accept. In early December, Clarke had said the parties so far had not been able to agree on the amount of a franchise fee, and it was not clear whether the parties were any closer to an agreement a month later.

It’s been known for some time that the OPA has been attempting to obtain a franchise fee as part of a new Sandpiper franchise agreement, in the neigh-

borhood of the same $150,000 that the OPA receives each year in a franchise fee from Mediacom, the cable, telephone and Internet supplier.

According to sources, that equates roughly to $3 per month that would be tacked on to a residential customer’s monthly bill from Sandpiper. The utility is said to be concerned how that add-on fee would be evaluated by the state Public Service Commission, which would have to approve it if Sandpiper attempts to pass it on to customers rather than simply absorb it.

The OPA natural gas working group, which includes Directors Tom Terry and Thompson, also has been insisting that Sandpiper reimburse the OPA for legal expenses incurred thus far in the negotiations with Sandpiper. Last year, the board hired Salisbury attorney Steve Smethurst to represent it in discussions with Sandpiper.

“Calling it a negotiation at this point is a stretch,” Clarke said during the Nov. 22 meeting.

It was the apparent willingness of the OPA to discontinue negotiations that prompted Sandpiper to move to a willingness to negotiate the OPA position, Clarke told the Progress in early December.

The OPA also has been trying to obtain an acknowledgment from Sandpiper that a county-wide agreement that

Sandpiper has in place with Worcester County for a natural gas roll-out does not supersede or obviate the need for the company to obtain a franchise agreement with the OPA that grants Sandpiper the right of way to use its gas pipelines buried on OPA-owned property.

In an earlier letter to the OPA, Sandpiper indicated that if the two parties are unable to reach an accord on a new franchise agreement, the natural gas roll-out will be governed by the county’s agreement, something which the OPA working group flatly rejects.

Finally, the OPA is asking for a formal turn-over agreement at the end of the 20 years that would grant the OPA ownership of the pipeline absent a new agreement or contract extension.

In late November, Stevens drafted and sent a letter to Sandpiper detailing these positions.

The letter said the OPA would be unwilling to expend additional money attempting to obtain a new agreement.

However, there is at least one more legal service that Smethurst provided, at Clarke’s urging: The “final” letter to Sandpiper was reviewed by Smethurst before it was sent out.

Clarke told the Progress several months ago that should Sandpiper attempt to roll-out natural conversation without a new agreement, the OPA would probably go to court in an attempt to pre-

vent it. If the company doesn’t take any action to begin a natural gas roll-out, as seems to be the current situation, then the status quo of propane delivery through the existing pipeline will persist indefinitely with no litigation necessary, according to Clarke.

The OPA retains another lever to help persuade Sandpiper to submit a franchise draft that might achieve majority approval of the OPA directors.

Recently, the OPA posted on its Web site a RFI, or request for information, on the cost of propane and related information from area propane vendors.

As of the Nov. 22 meeting, there had been no response from vendors, which Stevens and Clarke blamed on poor wording in the RFI. The directors subsequently directed Thompson to redraft and simplify the RFI and actively solicit the information from local propane vendors.

Stevens suggested that the RFI be redrafted in simplified form so the OPA can disseminate information about propane pricing to Ocean Pines residents.

According to Clarke, in some cases Sandpiper is charging its Ocean Pines customers twice what other propane suppliers are charging their customers.

“You’re paying a premium for being on a pipeline,” Stevens said during the Nov. 22 board meeting.

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22 Ocean Pines PROGRESS

January - Early February 2015 Ocean Pines PROGRESS

Sandpiper

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From Page 22 In addition to posting the RFI on the OPA Web site, the OPA president said he would be drafting a press release advising residents of their options in obtaining propane service.

After Stevens said that the OPA was in effect offering propane vendors free advertising on the OPA Web site, Terry said the OPA had to be careful not to promote any particular company’s products.

“We’re not advertising other suppliers,” Terry said. “We’re doing our information (role). We can’t be endorsing” any particular vendor, he added.

With an agreement between the OPA and Sandpiper seemingly elusive, it appeared that a new franchise agreement was out of reach. Without a new agreement in place, Sandpiper most likely would be reluctant to begin the complicated and protracted process of converting neighborhoods in Ocean Pines to natural gas.

As a practical matter, Sandpiper would need close cooperation with the OPA to facilitate that conversion.

Terry reported during the OPA Board of Directors meeting Sept. 27 that there had been some positive “movement” between the two sides in face-to-face negotiations, but the revised contract submitted by Sandpiper in a follow-up to that negotiating session did not seem to incorporate that positive movement, according to the OPA. Clarke recently characterized that revised document as a “step back” and even went so far as to say that prospects for agreement on a new franchise agreement as a replacement to the one in place since the 1990s, and repeatedly extended by the board during negotiations with Sandpiper, are worse now than they were a few months ago.

If nothing emerges that meets board approval by a yet to be determined deadline, Clarke said he personally would support sending a letter to Sandpiper advising it that it no longer has the right to serve its Ocean Pines customers through the pipeline that Eastern Shore Gas Company, a predecessor company whose assets were purchased by Sandpiper’s parent company, installed in

23

most areas of Ocean Pines during the 1990s.

Currently, Sandpiper is operating under the 1990s agreement, which has been extended five times and is now in place under a kind of rolling extension.

Clarke said he personally has contracted with a Salisbury propane supplier for propane at a significant savings.

The supplier buried a storage tank in Clarke’s backyard at no cost – a fiveyear service contract was required – but the contract is cancellable anytime with proper notice, Clarke said.

During a Sept. 3 board meeting, Terry, one of the directors on the OPA’s Sandpiper working group, said that Sandpiper had come to accept in concept that the OPA is seeking compensation from the company in exchange for allowing company pipelines on OPA-owned property.

But he also said the OPA was awaiting language from the company consistent with that.

It never materialized, for whatever reason.

It probably is not a stretch to speculate that the company fears other jurisdictions will request franchise fees.

Clarke has said for some reason Sandpiper representatives prefer not to call the agreement under discussion a franchise agreement, which is what has been in place since the 1990s.

With conversions already having taken place in Berlin and the nearby Glen Riddle development, Ocean Pines under normal conditions might be the next logical target for Sandpiper.

Until the OPA and the energy company reach a contract agreement, it’s essentially anyone’s guess when conversion work will begin in Ocean Pines.

Lawyers for Sandpiper and the OPA informally agreed to extend the old contract for an indefinite period of time pending formal board approval, which occurred in executive session following a Sept. 3 meeting. This latest approval is for a so-called “rolling extension” that remains in force until such time as the sides agree on a new contract or is cancelled.

This is the fifth, and presumably the last, such extension in the protracted discussions between the parties.

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OCEAN PINES

24 Ocean Pines PROGRESS

OCEAN PINES

January - Early February 2015

Thompson bows out as lead negotiator on Sandpiper contract

O

Decision criticized by working group members Dave Stevens and Marty Clarke, while Tom Terry calls it understandable and ‘exactly the right thing to do’ down from the role, Stevens said there is no “lead negotiator” for the OPA’s Sandpiper working group and that, unless and until the OPA receives a “meaningful” proposal from Sandpiper that responds to OPA demands, there is no need to appoint one.

“When that happens, I’m sure we’ll be able to decide quickly who’s to have that role,” Stevens said.

The Sandpiper working group includes Stevens, Clarke, Director Tom Terry and Thompson, and Stevens said Thompson’s continued role needs to be looked at because of the way the general manager criticized Clarke for quotes attributed to him in the December-Early January edition of the Progress.

Stevens said that Thompson took the position that Clarke’s comments made it more difficult for him to successfully conclude an agreement with Sandpiper.

“I disagree,” the OPA president said.

“Nothing Marty said hampered any negotiations or in any way affects what Sandpiper presents to us.”

He defended Clarke’s right to say what he did and that, contrary to claims by the general manager and Sandpiper representatives, nothing Clarke was quoted as saying to the Progress amounted to trying to negotiate a new agreement in the press.

Stevens said that once Thompson

was given the role to negotiate on behalf of the working group, the general manager should have continued in that role until he was specifically authorized to step away from it.

“He doesn’t get to say what his job is,” Stevens said, adding that the general manager’s decision to step away as the lead negotiator “will be dealt with later” at the appropriate time and place.

One member of the working group, Terry, a former OPA president, defended Thompson’s decision.

“I clearly and absolutely understand Bob’s position on this,” Terry said. “In the eyes of Sandpiper, we looked like we were trying to negotiate in the newspapers. We were in discussions trying to

determine if there was a way to come to an agreement, and then all of sudden there were these comments in the newspaper that Bob, based on what he was hearing from Sandpiper, believes made his job more difficult.”

Terry said the general manager’s decision to step away from the lead negotiator role “was exactly the right thing to do.”

He said it effectively allowed Stevens, when he returned from his trip overseas, to decide how to proceed.

Clarke, when apprised of the differing opinions of his two working group colleagues on the propriety of Thompson stepping from the role of negotiator, mot surprisingly agreed with Stevens.

“I don’t believe Bob had the authority to step down,” Clarke said. “He works for us, not the other way around. He doesn’t have the right to pick and choose what

q

By TOM STAUSS Publisher cean Pines Association General Manager Bob Thompson, temporarily tasked with serving as the OPA’s lead negotiator in efforts to secure a new franchise agreement with Sandpiper Energy, has bowed out from the role, citing differences with OPA Director Marty Clarke, who, with Thompson, is a member of the OPA’s Sandpiper working group.

OPA President Dave Stevens said that, in a meeting in December after he had left on an overseas trip, the remaining members of the working group involved in trying to secure a new franchise agreement with Sandpiper appointed Thompson to negotiate what was initially seen as a promising e-mail from the utility company expressing willingness to negotiate a new agreement addressing the OPA’s key demands.

Stevens described the e-mail that triggered a revived interest in negotiations as reflecting “some progress,” but he said he has since concluded that it was little more than “a delaying” tactic and that the OPA and Sandpiper are no closer to an agreement than they were prior to receiving the e-mail.

“Bob would disagree,” Stevens said, “but I see no evidence that we’re any further along than we were” in the brief time – roughly the first half of December – when Thompson was engaged with Sandpiper representatives to see whether an agreement could be concluded.

As a result of Thompson stepping

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Sandpiper From Page 23 Stevens said in a recent interview with the Progress he did not want to paint Sandpiper as “the bad guy” as the sides try to resolve a number of prickly issues.

But he also said the OPA, in doing its due diligence in obtaining the best deal possible for OPA property owners and Sandpiper’s gas customers, should not be blamed for blocking a new agreement and “preventing OPA gas customers from obtaining lower cost natural gas.”

Stevens said that under the blended rate structure for propane and natural gas approved for Worcester County by the Maryland Public Service Commission, a multi-year conversion process in Ocean Pines will yield only modest cost savings for Sandpiper customers in Ocean Pines and elsewhere in the county in the near term.

The original agreement that dates back to the 1990s used the term franchise in its title and in the test. It essentially granted a predecessor company, Eastern Shore Gas Co., an easement to bury gas lines in Ocean Pines on rightsof-way owned by the OPA, giving the company exclusivity with respect to propane, and eventually natural gas, pipeline delivery.

The exclusivity rights did not prohibit competitors from delivering propane to buried or screened storage tanks.

There was no franchise or easement fee involved in the agreement with Eastern Shore Gas.

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Clarke also said what was attributed to him in the newspaper – what he says was all true, even though he thought it was “off the record” when he said it – has had no effect whatever on the negotiations.

“They might have had an effect on Bob,” he added. “We haven’t really had any real negotiations with Sandpiper” for months.

According to information the Progress has been able to piece together, the working group in a meeting Dec. 3 agreed that Thompson would assume the role of negotiator with Sandpiper after the OPA received an email from the utility in early December indicating a willingness to negotiate a franchise fee, payment of OPA legal expenses related to protracted discussions over a new agreement, and a turn-over of assets at the conclusion of a new agreement.

Prior to receipt of the early December email, the OPA board had virtually given up on the idea of further negotiations, citing frustration at the apparent lack of progress and the utility’s seeming unwillingness to negotiate the OPA’s key demands. The early December email resurrected a willingness to deal directly with Sandpiper representatives.

In a Dec. 18 memo to the board apparently written shortly after the working group met again to assess progress in negotiations, the general manager stepped down from the role, citing a number of complaints against Clarke.

Chief among them were quotes attributed to the Clarke in the Progress article that Thompsons claimed had made his job of negotiator more difficult.

He also said he was stepping down as a way of minimizing additional internal conflict with the OPA working group and, according to one source, to help ease the way to the OPA again speaking in “one voice” in negotiations with Sandpiper.

Stevens declined to release Thompson’s Dec. 18 memo, calling it an internal board document. Clarke also declined to release it, saying a decision to do so should come from Stevens or by a vote of the board.

Terry struck one positive note despite the kerfuffle within the working group.

“I think we can get back on track (in discussions with Sandpiper),” he said. “I still think we can get a deal done” that is in the best interests of all property owners, including customers of Sandpiper and those property owner who aren’t.

Stevens sounded less optimistic.

He said the longer Sandpiper waits to meet the OPA demands for a franchise fee, the payment of OPA legal fees and some sort of turn-over agreement, more of the company’s Ocean Pines customer base will shop around and discover less expensive alternatives to propane delivered by pipeline.

He cited the decision of the OPA to contract with Sharp Energy for significantly lower priced propane at the Sports Core indoor pool as an example.

January - Early February 2015 Ocean Pines PROGRESS

First Shore Federal donation

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First Shore Federal Savings & Loan Association made a $1,844 contribution to Diakonia, Inc. and the Art League of Ocean City’s Empty Bowl Project, a partnership between the Art League of Ocean City and Diakonia to help end hunger. Pictured (l to r) are members of the Art League of OC Board of Directors and Diakonia, Inc.: Lisi Ruczynski, Katy Durham, 2nd Vice President, Art League of OC, Tom Wilson, Treasurer, Diakonia, Inc., Marian Bickerstaff, President, Art League of OC, Rina Thaler, Executive Director, Art League Center for the Arts Building, Marty Neat, President, First Shore Federal S & L, Alyson Church, Claudia Nagle, Executive Director, Diakonia, Inc., Debbi Anderson, Emmy Challenger, Secretary, Sandra Sribnick and Judy Tremellen

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26 Ocean Pines PROGRESS

January - Early February 2015

OCEAN PINES

OPA changes propane vendor at Sports Core indoor pool

N

egotiations between Sandpiper Energy and the Ocean Pines Association over a new propane-natural gas franchise continue, but the OPA at one of its key propane-guzzling amenities isn’t willing to wait for a new agreement: The OPA in December contracted with another local firm, Sharp Energy, for propane at the indoor Sports Core swimming pool.

After having been given clear direction during the Board of Directors’ November meeting, OPA General Manager Bob Thompson and staff began seeking competitive bids as an alternative to propane purchased from Sandpiper Energy, which OPA Director Marty Clarke has said is comparatively higher priced that competitors.

Thompson’s bid process proved that to be true, as the OPA was able to lock in a price of roughly $1.10 a gallon compared to the previous $2.96, Clarke told the Progress in early January.

As acting president during the absence of OPA President Dave Stevens, Clarke authorized Thompson to execute a contract with Sharp Energy to supply propane to the Sports Core pool. The contract calls for two large tanks to be supplied at no cost to the OPA. Clarke said the contract can be terminated at any time.

Clarke said the change in vendors would save OPA roughly $3500 per month based on the amount of usage in October.

During colder months when the usage is greater, the savings to the aquatics budget should be even greater.

Clarke said that he authorized Thompson to execute the contract without formal board approval because it’s important to get service up and running to realize savings as soon as possible.

“The general manager doesn’t need board approval to save the association $3500 a month,” Clarke said, adding that the board had given him clear direction to lower propane costs at the Sports Core pool during the board’s regular meeting in November.

The switch to Sharp is an achievement for Clarke, who had urged a change to lower cost propane in 2013 only to face resistance from Thompson, who did not act at the time. More recently, Clarke had been trying for some time to obtain the Sandpiper pricing from Thompson, only to be ignored.

Early in December, he decided to ask OPA President Dave Stevens to intervene on his behalf, and within 20 minutes Thompson responded with the current pricing, Clarke said. He used that information to contact a number of pro-

pane suppliers in the area, one of whom quoted him a $2.09 per gallon commercial rate for limited usage, and a price that could fall below $2 for the kind of usage that is typical for the Sports Core pool.

It turns out the price per gallon quoted by Sharp is roughly half the rate found in Clarke’s informal canvassing.

“I have no idea why he didn’t act a lot sooner than this,” Clarke said of Thompson recently. “This is kinda a no-brainer.”

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WORCESTER COUNTY

January - Early February 2015 Ocean Pines PROGRESS

27

MARYLAND GENERAL ASSEMBLY

Legislators say fiscal woes likely to dominate new session

M

Mentoring Month

Even with recent Board of Public Works action, much remains to be done to reduce structural deficit ocrats, and Shank, a Republican, all agreed that the legislature must work across political party lines to address the state’s funding shortfall and structural deficit.

“Change brings forth opportunities to work together,” Shank said. He said Governor-elect Larry Hogan is forming a diverse, inclusive and bipartisan cabinet just as he promised during the election that he would do.

Busch said there are big changes coming in the House of Delegates, where 60 of the 141 members are new in 2015. “It is the largest transition that I can remember,” he said, adding that will create interesting challenges in trying to get everyone up to speed on the issues facing the state as quickly as possible.

As always, the number one priority of the legislature is to pass a balanced budget, Busch said. But, he added that

The Worcester County Commissioners joined with Samantha Hill of Big Brothers/Big Sisters (BBBS) to recognize January as National Mentoring Month. Pictured are Commissioner Jim Bunting (front row, from left), Samantha Hill of BBBS, and Commissioners Diana Purnell, Bud Church and Merrill Lockfaw; and Commissioners Ted Elder (second row, from left), Joe Mitrecic and Chip Bertino.

82 percent of the budget is preauthorized, giving legislators little room to work within when trying to ensure that expenditures align with revenue. If revenues continue to founder, then more cuts will be necessary, he said.

Shank agreed that this will be a year of the state tightening its belt and cutting spending wherever possible. Additional revenue streams are not likely to materialize.

“New taxes are simply not on the table,” he said. What will be interesting to watch is whether Hogan, who ran on a tax-cutting platform, will attempt to persuade the legislature to allow him to fulfill a campaign promise.

Miller lauded O’Malley and the Board of Public Works’ action to cut spending by 2 percent across all state agencies, more in some departments and programs. He said the lame duck governor “has the budget under control.”

However, additional reductions will be necessary and “nothing is going to be sacrosanct.”

He said “these are very tough times.”

County officials should not expect an in-

flux of revenue from the state, he said.

In fact, he said, it “would be nice” if there was some cooperation at the local level to help address the state funding woes. He asked the counties to look at their tax structure moving forward and take steps necessary to offset state funding cuts.

Shank said he, too, was pleased with the Board of Public Works’ action. But he said the state’s biggest funding issue is in the area of capital debt, which has slowly crept into the general fund, too He said the state needs to address that issue “head on” because the level of capital debt is having an impact on the state’s other revenue streams.

When Miller mentioned that returning gas tax revenue to local jurisdictions was a priority for Hogan, county officials murmured their approval. That will mean a slight boost in revenue for counties.

“It’s going to happen,” he said. But he acknowledged that no one is sure just yet exactly how it’s going to happen.

Changes at the Department of Assessments and Taxation could also mean more revenue for counties, according to Miller. He said the department had a q

By ROTA L. KNOTT Contributing Writer oney, money, money. That’s what legislators are prepping to talk about during the 2015 General Assembly session. With the Maryland Board of Public Works this week approving a $400 million spending reduction plan proposed by outgoing Gov. Martin O’Malley, some of the heavy lifting has already been completed, but with hundreds of millions of dollars in deficits yet to address more cuts are sure to come.

Talk of fiscal issues dominated the Maryland Association of Counties winter conference held the first week in January.

Leaders from both houses in the General Assembly met with the assembled elected officials and county staffers from across the state on Jan. 9 to preview the upcoming session, which convenes on Jan. 14. Senate President Mike Miller, House of Delegates Speaker Michael Busch and Senate Minority Whip Christopher Shank each cited addressing the state’s financial climate as the guiding factor for the session. Miller and Busch, both Dem-

28 Ocean Pines PROGRESS General Assembly

WORCESTER COUNTY

January - Early February 2015

From Page 27 “gloomy” audit and was cited for a lack oversight that could mean not all of the property tax revenue due to counties was making it to them.

“There’s an opportunity there to improve and make sure the counties get the funds,” he said.

Another hot topic was the “Richmond decision,” which is named after a man who was denied a lawyer after requesting one at his first bail hearing, and its financial impact on the state. Last year the Maryland Court of Appeals upheld a lower court ruling that criminal defendants are entitled to legal representation at their very first appearance before a District Court Commissioner, not just later when their case finally goes before a judge.

Last year the legislature approved $10 million to cover the cost of having public defenders available to more than 175,000 people arrested annually in the state. And Miller says that’s all that will be allocated for it even though the true cost of compliance with the court ruling is estimated at $30 million.

“It’s a very expensive proposal,” he said.

Shank concurred and said “I think it was a bad decision.” He said a better investment of that $10 million would be for the state to put it into pre-trial programs such as criminal risk assessments.

Fishing contest winners

The Ocean Pines Anglers Club recently announced its 2014 fishing contest winners at its final meeting of the year. Winners were presented a cash prize and certificate. Shown in the photo are, left to right: Eric Bruder, 20-inch large mouth bass; Larry Eberly, 27.25-inch flounder; John Jewer, 19-inch bluefish [tie]; Bill Bundy, 15-inch fresh water trout, 19-inch bluefish (tie); Kevin Welkner, 19-inch tautog, 19.15-inch weakfish. Winners not present: Greg Donahue, 44-inch striped bass; Clifford Moore, 18-inch black sea bass.

“Public safety to me has never been a partisan issue,” he said, adding that it is about creating safe, viable communities.

Shank said the state is also facing increased pension and education costs this session, and will have to do something to address the heroin crisis in Maryland.

He said it had become a public health

emergency, and Hogan is very interested in finding ways to curtail the problem and its impact on communities.

Busch added that addressing the increasing cost of providing Medicaid for citizens under the Affordable Care Act will also be on the legislature’s agenda as will be building new revenue

streams be creating an improved business climate. He said the state is poised to become a hub for the cyber security industry and is one of two sites under consideration for the Federal Bureau of Investigations headquarters, both of which would bring significant revenue to the Maryland’s coffers.

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WORCESTER COUNTY

January - Early February 2015 Ocean Pines PROGRESS

Bunting says county is facing another tough year financially Small increase in assessed values adds to budgetary challenges if 77 cent property tax rate is to remain the same

By ROTA L. KNOTT Contributing Writer espite a nominal increase in the assessed value of some properties in Ocean City, Worcester County’s coffers are still facing significant challenges for the upcoming fiscal year.

While other counties saw double digit assessment increases for properties included in the state’s triennial review, Worcester is lagging behind.

This year’s reassessment included both residential and commercial properties in Ocean City; while overall residential property values nudged upward, commercial property values continued to decline.

Jim Bunting, Worcester County Commissioner president, said the financial picture for the county is not a pretty one.

“I thought the last four years were difficult. I’m wondering how difficult the next four year are going to be,” he said, adding, “the economic outlook is not very good.”

Bunting said county finance employ-

D

ees are projecting at least one more year of hard times before things start to improve and property assessments begin to rise. He said “the jury is still out” on when that will begin to happen.

“I don’t really think we’ve reached the bottom yet,” he said.

As for this year’s reassessments, Bunting said the increase in values largely occurred on the east side of Coastal Highway, while a majority of properties on the west side actually dropped in value yet again. Overall, the county is still facing a loss of about $1.5 million, he said.

The average increase in the full cash value of both residential and commercial properties included in the triennial reassessment was just 2.2 percent in Worcester County, as compared to a statewide average of 10.8 percent. Prince George’s County saw the largest increase at 19.5 percent, followed by Montgomery County at 18.7 percent. Still some counties saw overall declines, such as Talbot at 7.1 percent

and Garrett and Caroline with 2.8 percent drops.

Still, for Worcester County even a nominal increase in the assessed value is a step up from last year’s reassessments of West Ocean City and the southern end of Worcester County, where there was a 7.8 percent decline. The full cash value change in the assessments in Worcester County $ 174408,400, up to $8.097 billion from $7.92 billion as of Jan. 1, 2012, when these properties were last reassessed.

Worcester County residential properties included in the triennial review posted a 2.6 percent increase in value, but commercial properties fell by 1.1 percent. Statewide both resident and commercial property values increased, but residential showed a smaller change at 8.1 percent, while the commercial base grew by 18.6 percent.

The state assessed a total of 32,578 properties in Worcester County, with 11,254 or 34.54 percent decreasing in value. Of those properties, 30,941 were

improved residential properties, with 10,583 or 34.2 percent of them decreasing in value. Statewide the decrease in value was 25.98 for improved residential properties and 23.76 percent for all reassessed properties.

Bunting, who just assumed his role as commission president in December, is leading a Board of Commissioners that includes a majority of newly elected officials. Bunting said “the biggest thing on the horizon” for them to address is the county’s budget and how to address yet another year of funding shortfalls and projects that must be completed.

The county’s budget stabilization fund created when the county’s coffers were flush prior to the Great Recession is almost depleted, meaning that this fund will no longer be available to fund budgetary shortfalls.

He said a plan to address a projected budget shortfall is “being worked on.”

But there are several factors that could influence the county’s future revenue, including a Supreme Court case regarding the collection of local piggyback taxes paid by people domiciled in other states.

If the U.S. Supreme Court were to throw out such taxes, the county could have to pay back three years’ worth of piggyback taxes to the affected individuals, Bunting said.

While faced with declining revenue, the commissioners still need to determine how to move forward with funding several projects, according to Bunting.

Among those projects are construction To Page 31

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30 Ocean Pines PROGRESS

OCEAN PINES

January - Early February 2015

CHANGE AT THE HELM

More professional commissioner meetings, improved relationships top Bunting’s agenda New commissioner president focuses on improvements with little or no cost

A

that they are really “looking at things” and “seem to have some of the same values I have.”

He said he is looking forward to having a good relationship with his fellow commissioners as he serves as their president during the next year.

“I’m very proud to be president for this year,” Bunting said, “It’s a privilege and an honor.” He added that it is only a one-year appointment and he believes every commissioner should have the opportunity to serve as the board’s leader if they want to do so.

He would only accept the presidency for another year if no other commissioner wants the job. For the last several years, he said the presidency has been dominated by one person – Bud Church -- and that in Bunting’s view is inappropriate.

Bunting said he is looking forward to working with this new board and to moving the county in a new direction.

In taking over the helm, Bunting said he plans to steer the commissioners toward improved relationships with coun-

ty staff and the Board of Education, update lackluster county public outreach and communication tools, and button down meetings so commissioners stay on topic and spend as much time as necessary addressing the issues on deck.

He hopes to do all of that while the county is still trapped in a financial maelstrom that may necessitate cutbacks in expenditures and services again this year.

Because of the limited funding availability, Bunting said he is focusing on improvements that have little or no cost.

Topping Bunting’s “to do” list is a task that may sound simple, but never is – chairing the twice monthly commissioner meetings. As president he intends to run more orderly and on-topic meetings by following the rules and procedures that are supposed to govern the commissioners’ actions, something that he said has been lacking

New County Commission President Jim Bunting in recent years.

“I know Worcester County is a very relaxed county,” he said, adding that he

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By ROTA L. KNOTT Contributing Writer s president of the Worcester County Board of Commissioners, Jim Bunting is planning to run a tight ship, both philosophically and fiscally.

Entering his second term, Bunting, who represents the Ocean Pines-Bishopville-Showell area District 6, was elected president in December by a closed-door majority vote of his peers.

Bunting is helming a board with a lot of new faces on it, including the all Ocean Pines District 5 Commissioner Chip Bertino, District 7 Commissioner Joe Mitrecic, District 4 Commissioner Ted Elder and District 2 Commissioner Diana Purnell.

In addition to Bunting, returning commissioners are District 1’s Merrill Lockfaw and District 3’s Bud Church, who served as commissioner president for the last several years.

“So far I’m very pleased with the new commissioners. I’m going to say that for all four of them,” Bunting said, adding

From Page 30 is wants meetings to be conducted in a more professional manner. As president he plans to ensure that the commissioners adhere to the topics under discussion, instead of wandering off into subtopics and side discussions, but to also slow down the meetings to ensure that everyone has a full understanding of each issue before the commissioners vote.

Bunting said the president needs to have better control of commissioner meetings and how they are conducted.

For several years, the meetings have been less structured, with topics popping up for discussion that weren’t on the agenda, commissioners talking over each other and the public being invited to speak – or not speak – based on the whims on leadership, not the rules of order.

All of that needs to change, according to Bunting, who served for many years as chairman of the Worcester County Board of Zoning Appeals and then the Worcester County Planning Commission. He ran those meetings.

He said public bickering between commissioners needs to stop. If they have disagreements, they need to be worked out before they get to the public meetings, he said.

Still, Bunting said, the other commissioners will have plenty of opportunity for input. “I’m president, not king,” he said.

Another sore point for Bunting under the previous regime was the rush to wrap up commissioner meetings by lunch time. He said the commissioners are elected to do a job for their constituents and they need to do it. If that means they have to spend more time in meetings, then that’s what they need to do, he said.

Bunting said the commissioners’ only regular commitment is to attend the board’s twice monthly meetings in Snow Hill. So they need to set aside that minimum of two Tuesdays per month to do county business – all day on two Tuesdays per month, not just until noon, he said.

“I’m not trying to be an enforcer or anything like that,” he said, but added when the commissioners were elected they made a commitment to serve the county that they need to keep.

Bunting also wants to enhance the county’s staid public outreach program, which generally consists of sending out the occasional barebones press release, to include streaming of commissioner meetings on the Internet or on television.

Worcester is decades behind in offering that opportunity for citizens who can’t physically make it to commissioners meetings to see the elected body in action; the Town of Ocean City has been providing that public information service for nearly 20 years, as has Wicomico County.

The Ocean Pines Association also streams most of its Board of Director meetings online.

January - Early February 2015 Ocean Pines PROGRESS

County budget

From Page 29 of a new Showell Elementary School, a $30 million-plus project that has been on the drawing board for decades, and upgrades to the emergency system towers, at a cost of $1.5 to $2 million, determining whether or not the county should stay in the liquor sales business and what to do with the money-losing operation at the central landfill.

“The future is still not looking good,” Bunting said, adding, “It’s the same problem we’ve had all along” – too much to do and not enough money to do it with.

Building the new SES is at the top of Bunting’s list of proprieties, but he said the county needs to find a more fiscally responsible way to do it.

“We know we’re going to build the school. We just have to do it in the most economically feasible way,” he said. The cost of school construction is continuing to escalate so the county must work

Building better relationships with county employees and the Board of Education are also high priorities for Bunting. He said the commissioners’ relationships with both of those groups have been strained in the past.

The discord between the commissioners and the Board of Education generally revolves around money, or lack thereof. Worcester County funds the bulk of the school system’s operating budget, as well as capital projects like school construction and renovations.

The feuding often revolves around how much money to the county can afford to give the Board of Education each year and how it should be used, Bunting said.

“It always comes down to controversy about salaries and benefits,” he said, adding that those seem to be the annual

with the Board of Education to address its needs in an effective but conservative manner, Bunting said.

He said that’s true of all of the county’s expenditures. The commissioners need to evaluate them and see where savings can really be gained. “Maybe we can get through this until things actually do turn around,” he said.

In Maryland, properties are reassessed, by law, once every three years.

Properties are required to be assessed at their current market value so that all property owners pay only their fair share of local property taxes.

The new assessments are based upon the examination of 51,295 sales that occurred in the reassessment area during the past three years. Any increase in property values is “phased-in” equally over three years.

Any decrease is fully implemented in the first tax year and remains at the reduced assessment for the full three year cycle.

The assessment only partially de-

31

termines a property owner’s tax bill.

Ultimately, next July’s tax bill will be calculated with the tax rates that local governments will set in the spring.

As part of the budgetary process, the property tax rates are established by the revenue requirements of each local government.

The county can offset assessment increases by lowering its tax rates to the “constant yield” tax rate level. The constant yield tax rate provides local governments with a stable level of property taxes from one year to the next.

If Worcester County maintains the current property tax rate of 77 cents, despite the change in assessments, it would mean the owners of those properties that experienced a decrease in value will pay less in property taxes during the next few years.

If Worcester County holds its property tax rate steady at 77 cents per $100 of assessed value it will translate into a savings on properties where the assessed value has decreased.

q

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32 Ocean Pines PROGRESS

worcester county

January - Early February 2015

AROUND THE COUNTY County provides residents with new trash disposal option Worcester County Commissioner Chip Bertino, who represents the allOcean Pines District 5, will hold a Town Meeting on Saturday, February 21, at 10 a.m. at the Ocean Pines library.

Bertino, who replaces retired Commission Judy Boggs, was sworn in as a commissioner Dec. 2 at the Worcester County Government Center in Snow Hill.

For more information about the meeting or to contact Bertino call 443783-3248 or email cbertino@co.worcester.md.us.

Tourism partners win state awards

Worcester County Tourism and its local partners that promoted Berlin as America’s coolest small town and worked to boost space coast tourism won three awards at the annual Maryland Tourism & Travel Summit in November.

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ging rights as Budget Travel’s 2014 “Coolest Small Town in America,” WCT and Berlin officials won two awards. The first was the MTC for the Best Use of Social Media award. The second was the Maryland Office of Tourism Visit Maryland award, for making an outstanding investment and performance in improving and promoting Maryland’s image as a travel destination, use of new and innovative interactive media and other unique activities with measured proof of performance.

For their Space Coast Tourism Initiative, tourism partners earned the Maryland Tourism Coalition Cooperative Partnership award. Partners developed the initiative to build regional tourism around NASA programs and rocket launches and other area activities, as the space program grows.

Maryland team partners included WCT, the State Office of Tourism, 4 DMOs (Destination Marketing Organization), Greater Ocean City Chamber of Commerce, Ocean City Tourism, Ocean City Hotel-Motel-Restaurant Association,

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PAYT tags do not expire and can be used at any time regardless of the purchase date.

Disposal of yard waste is not included in the PAYT program; a standard Homeowners Permit is required for yard waste disposal.

Residents who do not wish to participate in the PAYT program can still purchase up to two homeowner permits annually for use at the Central Landfill and HOCs at a cost of $100, with the option to purchase additional permits at a cost of $100 each.

PAYT tags and homeowner permits can be purchased at Worcester County Treasurer’s Offices, located in the Worcester County Government Center in Snow Hill and the Isle of Wight Office in Bishopville, and the Worcester County Landfill in Newark.

Under both programs, homeowners must provide their own trash bags.

For more information about the PAYT program, call 410-632-0686 and select option 4 or 410-632-3177 between 8 a.m. and 4 p.m. Monday through Friday.

W

W

orcester County residents have a new economically and environmentally friendly way to dispose of household waste.

The county is now offering a Pay as You Throw option for household trash.

“The new PAYT treats trash disposal just like electricity, gas, water and other utilities,” Public Works Director John Tustin said. “Households pay a variable rate depending on the amount of solid waste disposed of. This creates a direct economic incentive to recycle more and dispose less waste because the less individuals throw away the less they pay.”

Homeowners can purchase PAYT tags at a cost of $1 per tag, with tags to be sold in sheets of five. One tag must attached to each 33-gallon bag being disposed of at the Central Landfill in Newark or the Homeowner Convenience Centers located in Berlin, Snow Hill and Pocomoke.

Bags larger than 33 gallons are permitted under the PAYT program but two tags must be affixed to each oversized bag.

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January - Early February 2015 Ocean Pines PROGRESS

From Page 32 Somerset County Tourism, Wicomico County Tourism and Oceancity.com. The Maryland team worked in cooperation with NASA’s Wallops Flight Facility, Chincoteague Chamber of Commerce, Southern Delaware Tourism, Virginia Tourism Corporation, and Eastern Shore of Virginia Tourism Commission.

To learn more about the initiative, visit www.wallopsisland.org.

at 3:30 p.m., and grades 7-8 at 4:45 p.m.

The cost for each program is $25 per player and $20 for each additional child.

Financial aid is available for those who have a demonstrated need. Proof of eligibility is required. There is also an additional $5 fee after the registration deadline. Volunteer coaches are also needed to run a successful league.

Contact the WCRC at 410-632-2144 or recandparks@co.worcester.md.us.

Visit www.worcesterrecandparks.org for a complete list of youth programs.

County honored for financial reporting

Health Department receives accreditation

Worcester County Government earned an award and a Certificate of Achievement for Excellence in Financial Reporting for the sixth consecutive year from the Government Finance Officers Association of the United States and Canada. The GFOA recognizes contributions to the practice of government finance that exemplify outstanding financial management, and WCG was honored with this recent recognition for its comprehensive annual financial report for the fiscal year ending June 30, 2013.

The Certificate of Achievement is the highest form of recognition awarded to local governments in the areas of accounting and financial reporting. To be awarded the Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized CAFR, and its contents must conform to program standards. Such reports should satisfy Generally Accepted Accounting Principles and applicable legal requirements.

WCG was a recipient for this prestigious award with Chief Administrative Officer Harold Higgins, Finance Officer Phil Thompson, Budget Officer Kathy Whited, Assistant Finance Officer Jennifer Swanton, Enterprise Fund Controller Jessica Ramsay and Budget Accountant Kim Watts accepting the certificate on behalf of the county.

Basketball, soccer league play begins

Winter youth indoor soccer and youth basketball leagues kick off Saturday, Jan. 10 at the Worcester County Recreation Center in Snow Hill. Soccer is open to children ages 3 through grade 8.

Basketball is open to children in kindergarten through grade 8. Both leagues are co-ed.

Soccer consists of five age divisions, age 3-4, grades K-1, grades 2-3, grades 4-5, and grades 6-8. The age 3-4 and the grades K-1 divisions play Saturday mornings, grades 6-8 play Monday and some Wednesday evenings, grades 4-5 play Wednesday or Thursday evenings, and grades 2-3 play Thursday evenings.

Practice dates, times, and locations are to be determined.

The basketball league will consist of four age divisions, grades K-1, grades 2-4, grades 5-6, and grades 7-8. Games will take place every Saturday afternoon. Grades K-1 will begin at 1:00 p.m., grades 2-4 at 2:15 p.m., grades 5-6

The Worcester County Health Department has achieved national ac-

creditation through the Public Health Accreditation Board. Worcester and Frederick counties are the first two health departments to be accredited in Maryland.

The national accreditation program works to improve and protect the health of the public by advancing the quality and performance of the nation’s Tribal, state, local and territorial public health departments.

WCHD is one of only 60 health departments to receive PHAB accreditation nationally.

“We are pleased and excited to be recognized for achieving national standards that foster effectiveness and promote continuous quality improvement,” Health Officer Debbie Goeller said. “The

33

accreditation process helps to ensure that the programs and services we provide are as responsive as possible to the needs of our community.

With accreditation, Worcester County Health Department is demonstrating increased accountability and credibility to the public, funders, elected officials and partner organizations with which we work.”

The national accreditation program, jointly supported by the Centers for Disease Control and Prevention and the Robert Wood Johnson Foundation, sets standards against which the nation’s more than 3,000 governmental public health departments can continuously improve the quality of their services and performance.

34 Ocean Pines PROGRESS

LIFESTYLES

January - Early February 2015

Monday, Jan. 9 Fiscal Year 2015-16 OPA budget review sessions begin, Budget and Finance Advisory Committee, 9 a.m., Ocean Pines Country Club, second floor.

Also following days, same place and time, as needed. Members of the committee review the general manager’s draft budget department by department, in detail, with department heads in attendance to answer questions.

Tuesday, Jan. 13 Ocean Pines Water and Wastewater Advisory Committee meeting, 10 a.m., Ocean Pines wastewater treatment plant administrative building.

First look at proposed operating budget for the Ocean Pines Water and Wastewater Treatment Service Area for fiscal year 2015-16.

Thursday, Jan. 15 Pine’eer Craft Club monthly meeting, 10 a.m., Marlin Room, Ocean Pines Community Center. Planning meeting for 2015.

Saturday, Jan. 17 New Years Cleanout Flea Market, 8 a.m. to noon, Ocean Pines Community Center. Featuring vendors selling gently used clothing, children’s items, household items, and collectables, as well as

HAPPENINGS some new handmade items! For more information, call (410) 641-7052.

Grand Opening of the new Ocean City Performing Arts Center, featuring the Mid-Atlantic Symphony Orchestra and Ocean City Stars, 6:30 p.m. Ribbon-cutting ceremony, complimentary hors d’oeuvres and cash bar. Black tie optional. Purchase tickets now at ticketmaster.com. $25-$45 per person.

Sunday, Jan. 18 Sharing Sunday, Southside firehouse, 1-3 p.m. The Democratic Women’s Club of Worcester County will collect non-perishable food, toiletries and paper products, to be shared with a local food ministry. 410-641-8553.

Monday, Jan. 19 Democratic Women’s Club of Worcester County, monthly meeting, 10 a.m., Ocean Pines Community Center. Coffee and conversation 9:30 a.m. Featuring Sandra Hurley, curator of the Ocean City Life Saving Museum.

814-322-2119.

Monday, Jan. 26 and Tuesday, Jan. 27 Fiscal Year 2015-16 OPA budget

review sessions, Ocean Pines Association Board of Directors, 9 a.m., Ocean Pines Country Club, second floor. Board reviews budget and considers recommendations from the budget and finance committee.

Thursday, Jan. 29 Regular Ocean Pines Association Board of Directors meeting, 3 p.m., Ocean Pines Community Center. Agenda and board packet posted on oceanpines.org several days before meeting.

Saturday, Jan. 31 Deadline for nominations for Women of Tomorrow Awards, sponsored by the Worcester County Commission for Women. Honoring young women who have made significant contributions to their communities. Based on community service, demonstrated leadership, commitment to and pursuit of academic and future goal achievements. The women will be honored in three different groups: Grades 7-8, Grades 9-10 and Grades 11-12. Two awards are given for each grade level, first place and honorable mention. Nomination forms may be obtained by calling L. Eloise Henry-Gordy, 443-235-3214.

Saturday, Feb. 14 Annual Kiwanis winter pancake breakfast, 8 a.m. to 11 a.m., Ocean Pines Community Center. $5 adults, $3 children under 12, free to children under 5. Pancakes, sausages, fruit cup, orange juice and coffee or tea. Tickets are available in advance from any Kiwanis member or by calling 410-208-6719 or at the door. Carry-out breakfasts available.

Ongoing Free platform tennis clinics, Saturdays at noon, Manklin Meadows tennis complex. Bring sneakers, the rest is provided. Annual memberships start at $150 .

Pine Tappers free adult tap dance classes, Tuesdays, 2-3:30 p.m., Ocean Pines Community Center. Exercise and have fun with choreographed tap dancing routines. From 2-2:30 p.m., brush up on basic techniques and a review of the routines, then join the regular class from 2:30-3:30 p.m. Every week or drop-in as convenient. Lori at 410-251-2162 or tntandcompany@gmail. com.

Ocean Pines Ping Pong Club, Ocean Pines Community Center, Monday noon to 2 p.m, Wednesday and Friday noon to 3 p.m. All levels of players welcome. Neil Gottesman, 732773-1516.

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January - Early February 2015 Ocean Pines PROGRESS

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January - Early February 2015

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Cove’s indoor pool due back on line in a few weeks

By TOMSTAUSS Publisher aptain’s Cove residents eager for the reopening of the indoor swimming pool at the Marina Club community center have only a few more weeks before they can enjoy one of the Cove’s year-round amenities.

The pool has been closed in recent months because the outdoor pumphouse and bathroom that serves both the indoor and outdoor pools at the Marina Club is being renovated.

During the renovation, which includes rebuilding the pumphouse/bathroom on pilings to address a severe subsistence problem in the old building, the pumps have been out of commission.

During the Cove property owner association’s Dec. 11 board meeting, Cove President Tim Hearn predicted the pool’s reopening for late January or early February, noting that as of then there had been no change orders requested that could delay completion of the renovation project.

He told residents that once they see that the new pumphouse is under roof, the pool reopening will be “three weeks out, even if the bathrooms aren’t completed within those three weeks.

Hearn said that the pump equipment can be reset within that timeframe to al-

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low water to flow once again to the indoor pool.

Fiber optic Internet – Communication coordinator Justin Wilder reported that a recent effort by Eastern Shore Communications to gauge interest by Cove residents in high-speed Internet and bundled voice-over-Internet telephone service resulted in solid support for acquiring the service.

About 85 percent of those contacting the Cape Charles and Pocomoke-based company were in favor of it, Wilder said, reporting that 175 responded to a survey representing about 200 Cove lots.

In comments during the Dec. 11 board meeting, Hearn repeated that the biggest hurdle the company faces is bringing fiber optic down from Snow Hill into the Cove, at an estimated cost of $750,000.

He said the company would need to acquire its own upfront capital to finance the construction of the fiber optic line, but that it remains an option for the board to assess Cove members over time for the construction cost.

That would include principle and interest on the $750,000 cost that could increase the annual Cove lot assessment about $100 as soon as the 2016 fiscal year.

Hearn said the board will have to decide, as part of the fiscal year 2016 budget process, whether it wants to include a line item in the Cove POA budget to finance the project.

“They have to know (before committing to the expenditure of $750,000) that we (the Cove POA) will step up with principle and interest,” he said.

Former Cove association president George Finlayson suggested during public discussion that instead of fiber optic service from Eastern Shore Communications, the Cove should see if Verizon would bring high-speed FIOS to the Cove.

Hearn repeated an option that was mentioned in late October when representatives from Eastern Shore Communications pitched the idea of fiber optic Internet and phone service to the Cove.

Some residents with clear line of sight could obtain satellite-based fixed wireless from the company as an alternative to buried fiber optic, he said.

The problem there, however, is that much of Captain’s Cove is forested without clear sight lines to a mounted satellite dish, Hearn said.

Back in late October, the company’s president described the potential for bringing what he called FIOS-like service to Captain’s Cove, with Internet

q

36 Ocean Pines PROGRESS

CAPTAIN’S COVE High-speed Internet

January - Early February 2015 Ocean Pines PROGRESS

From Page 35 speeds up to 100 megabits per second.

While cable television programming is not included as part of the start-up plan, it could be added later if demand justifies it, according to Judith Morgan, the company’s vice-president for residential services.

Morgan said the initial plan is to bring high-speed Internet and phone service to every home in Captain’s Cove in most of Sections 1,2,3,4,5,6,8,9 and 10.

Among the benefits, she said is that fact that national statistics show that high-speed Internet can add $5000 or more to the value of a home that previously didn’t have it.

Basic service would run at a speed of 5 megabits per second, for those with basic needs such as accessing Web sites and checking email, while those into gaming could double that speed to 10 megabits.

Advanced users could have access to speeds as high as 100 megabits per second. Streaming of large video files benefit from fast download times to avoid the dreaded buffering that sometimes occurs while watching movies, she said.

Most residents would pay a monthly fee of $80 for Internet and phone service, with part-time residents to be charged

$55, Morgan said.

The first 125 residents who indicate interest in signing up for service would be charged a one-time $125 “founding member” installation charge, while those who sign up later, after construction is complete, would pay a $425 installation charge.

Hearn said the declarant has offered to pay a portion of the $750,000 cost of bringing fiber optic cable into the Cove, but that rest would have to come from the Cove POA, with an impact on the annual lot assessment.

Hearn acknowledged that property owners with unimproved property in Captain’s Cove might object to helping to pay for a service unavailable to them.

In the end, though, it would be a Cove board decision on whether to contribute to the cost of bringing the trunkline into the Cove.

In the meantime, much of Captain’s Cove receives its Internet through satellite television companies such as Directv or through the local phone company.

The company asked those with an interest in fiber optic high-speed Internet to notify Morgan by phone, fax, or on the web, at www.esvc.us. The company’s office phone in Cape Charles is 757-6952090.

The Cove board will be making its decision on whether to subsidize the

Cindy Welsh 302-381-6910 (cell) 888-241-9590 (Office)

trunkline in part on how many Cove nounced that there are 180 lots in the residents indicate interest in the service pipeline for the next foreclosure auction from Eastern Shore Communications. of lots that are delinquent in their Cove Marketing consistency – As part lot assessments. of an ongoing discussion over how to imThe next auction, not yet scheduled, prove the marketing and promotion of is likely to occur in late winter or early Captain’s Cove to prospective buyers of spring. lots and homes, Cove secretary Pat ------In a hearing called to consider sever----- suggested during the board’s Dec. 11 al complaints by property owner John meeting that the Cove POA logos from Ward, the Cove board decided against the 1970s need to be updated. Her idea, him in his assertion that the Cove POA which other directors endorsed, was to violated its founding documents by asask the developer/declarant, Captain’s suming responsibility for building roads Cove Group Note LLC, if it would be in Sections 1 through 13 in a 2012 setwilling to allow the Cove POA to use the tlement agreement that ended a legal declarant’s logos in the Cove’s promo- dispute between the Cove and declarant tional materials. interests.

She said the old logos are used on the Ward, a Cove board member when Cove association’s Web site and Face- the 2012 agreement was executed, said book pages but that all the logos should the directors at the time had no authorbe “synched up across the board.” CCG ity to make the deal it did.

Note has its own Web site that it uses to The directors disagreed, in effect depromote the Cove. ciding that Ward had offered no compelHearn said the idea “was worth the ling evidence to support his position. squeeze” if it helps the declarant to sell The board also ruled against Ward on lots, and Jim Silfee, a Cove board mem- an issue concerning records that back to ber with ties to the developer, agreed to the early 2000s. the proposal, with only one condition: In the latter case, Hearn told Ward He said he wanted blog posts from the that the Cove no longer had in its posdeclarant’s Web site to be posted on the session the documents at issue.

Cove POA Web site as well.

The latest decisions against Ward After discussion, the board voted to continues of losses

by Please him inVis For A Virtual Tour aofseries Captain’s Cove, integrate the declarant’s logos into the complaints filed against board action.

My Web site at captainscoveproperties.com Cove POA’s sites.

His lack of success has not deterred him In other board business Hearn an- from continuing to file complaints.

For A Virtual Tour of Captain’s Cove, Please Visit My Web site at Captain’sCoveProperties.com

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38 Ocean Pines PROGRESS

January - Early February 2015

OPINION

COMMENTARY Another year, another proposed assessment increase

I

n some respects, General Manager Bob Thompson’s Does anyone really think that golf will lose only of next year’s budget, about to enter its seventh. proposed budget for the 2015-16 fiscal year is $14,124 next year if Billy Casper Golf is retained as Eliminating all spending from the five-year plan restrained, devoid of a lot of big ticket or controversial the golf course manager? What about the Yacht Club funding component as part of the budget process for initiatives that will generate a lot of controversy. with a mere $87,868 loss? Or aquatics with a $113,000 2015-16 should be accompanied by a one-year holiday That would be a misleading first impression. The deficit? in contributions, budgeted at roughly $1.1 million, acproposed budget would increase spending over budActually, the proposed aquatics budget seems the cording to the proposed reserve summary below. geted operations in the current fiscal year by rough- most realistic of all of them, if the board accepts a Eliminating the $1.1 million in five-year-plan conly $690,000, roughly $200,000 of that attributable to reasonable staff proposal to redirect about $48,000 in tributions is only fair and reasonable as a new CIP higher requested subsidy of the Ocean Pines Volunteer Beach Club parking pass revenue to Aquatics’ member- is presented, debated and approved in the coming Fire Department. The higher requested subsidy, which ship revenue. The logic behind this is that four swim- months. That would save property owners roughly the OPA has little choice but to grant, is designed to ming passes are issued to those who purchase annual $130 in the base lot assessment, more than enough to offset less-than-expected reimbursements for emer- parking-only passes to the Beach Club; the $48,000 is cover the higher OPVFD subsidy but still leaving more gency service calls. As it turns out, many such calls the amount of revenue associated with those parking than $100 in the pockets of property owners. won’t be covered by county or insurance companies be- passes were they sold independently of the parking A one-year holiday in assessing property for a plan cause they don’t actually involve taking someone to a passes. not yet formulated -- the last one was approved back in local hospital via ambulance.

If the board is looking for a simple way to avoid the 2012, and is so out-of-date as to be essentially worthThe need for a higher OPVFD subsidy is not contro- proposed assessment increase and indeed lower it by, less -- is the most efficient way to effect a responsible versial; it’s the price the OPA must pay for the pres- say, $100, it need look no further than the excessive reduction in the lot assessment. ence of a quick-response emergency medical service funding of reserves in the proposed budget, despite a But assessing property owners for a plan that does within Ocean Pines. Moreover, the OPA is obligated by relatively restrained capital budget for the year. not yet exist, on the other hand, is immoral. As part of formal agreement with the OPVFD to come to the deAs the draft reserve summary below indicates, the CIP process, the actual need for additional revepartment’s financial assistance in the event of a fund- Thompson is proposing only $675,000 in spending out nue on top of funded depreciation should be quantified, ing shortfall. of the five-year plan funding component of the Major with precision and detail, along with a much clearer Even so, Thompson conveniently lays the blame for Maintenance and Replacement Reserve. idea on how much money needs to be extracted from almost all of a proposed $25 increase in the base lot It so happens that $500,000 of that is the proposed property owners in the form of assessments over, say, assessment on the need for a higher OPVFD subsidy new police headquarters, a project that can be deferred a ten-year period.

-- $24 out of the $25 increase, in fact. for at least another year or longer depending on where If and when the need for a supplemental funding Perhaps he presumes there will be less resistance it fits -- if indeed it fits at all -- in a new Capital Im- source is proven and quantified, but only then, should to an increase that high because it is neatly wrapped provement Plan that could be approved by the board the board fund it, perhaps as soon as one year from in a non-negotiable need to come to the assistance of sometime this year. now. the OPVFD. Another $175,000 in bridge replacement also is The net effect of a one-year holiday in five-year plan This is a cynical budgetary ploy if ever there was funded out of the five-year funding plan revenues, but contribution would be to reduce the Major Mainteone. What’s controversial or objectionable is not the this is a misallocation. The more appropriate source of nance and Replacement Reserve, sometimes called the OPVFD funding request per se, but rather its use as a funding for rebuilding bridges is funded depreciation, Capital Assets Replacement Reserve, to a balance of means to deliver a $25 assessment increase almost as the “historic” component of the replacement reserve. roughly $3.1 million at the end of the 2015-16, roughly a fait accompli. If that indeed that is the plan, then let’s Funded depreciation is the OPA’s least understood where it is projected to be at end of the current fiscal hope those charged with reviewing the budget in com- but most lucrative source of reserve funding, bringing year on April 30. ing weeks will see through the charade and make other in more than $1.5 million per year. Absent an OPA polUntil actual capital funding needs can be deteradjustments to the proposed draft that will obviate any icy to stop listening to the dogma of paid professional mined in a new CIP, that’s something the OPA can live need for an assessment increase. number crunchers, who insist on the full funding of de- with. After all, it will be living with it at the conclusion The draft budget also includes a carry-over $500,000 preciation by homeowner associations, there’s probably of the current fiscal year. in the capital expenditure budget for either a new po- not much that can be done about it.

If the Board of Directors is interested in reducing lice department headquarters or an expansion of the Not so when it comes to the optional five-year fund- the burden of lot assessments on property owners, this current space, crammed as it is into one section of the ing plan, now in it’s sixth year and, if approved as part is the easiest and most efficient way. -- Tom Stauss OPA administration building in White Horse Park. When first presented by the general manager a year ago during the budget process for the current fiscal year, the idea seemed to generate little enthusiasm from among most of the directors at the time, While he made a case for some of the inconveniences caused by the current usage within the alloted space -- including conversion of an storage closet as a temporary holding cell -- he did not close the sale. Is more space the only solution to identified issues, or can the space be rearranged in such a way as to mitigate or minimize the inconvenience?

In any event,there was no movement on this issue this past year, no indication that it’s on anyone’s front burner, so it’s hard to see why it should gain much traction in the coming year.

Its inclusion in the capital budget for next year as a placeholder is not justified.

The draft budget also contains suspiciously optimistic projections in the three key fee-based amenity departments -- golf, the Yacht Club and aquatics. A number of years ago, the OPA Board of Directors issued policy guidance that it wanted OPA budgets to use realistic revenue assumptions in the amenity departments. The impetus behind that objective seems to have faded over time.

Proposed reserve summary, part of the draft 2015-16 OPA budget

OPINION

January - Early February 2015 Ocean Pines PROGRESS

39

Interests of non-golfers should drive golf course decision

O

cean Pines Association directors have arrived at the most critical phase of the golf course management issue: to decide whether to retain or say sayonara to Billy Casper Golf, the company that has managed the course with less than stellar financial results for the past four years. That decision could be made in the latter part of January, maybe early February. If BCG is asked to leave, then it becomes a question of which among three remaining management proposals is the best fit for Ocean Pines going forward.

A group of golfers appeared at a special meeting of the board of directors on Jan. 9 to press the case for retaining BCG; the same group has been responsible for an organized letter-writing and e-mail campaign. OPA Director Sharyn O’Hare has been involved in this coordinated effort to influence this board decision, as she has every right to do.

Whether she should have done it, of course, is another matter entirely. Those elected to decide difficult and controversial issues would be well advised to keep some distance from interest groups who lobby on behalf of a particular outcome. Urging them on and cheerleading as they attempt to influence a board decision is not likely to be appreciated by colleagues.

When OPA President Dave Stevens called her out on a poorly disguised attempt to stack the Jan. 9 meeting with pro-BCG supporters, she apparently went to a media outlet perceived as sympathetic, sharing private board emails – that’s hardly a criminal or atypical offense in this leaky association -- and excoriating Stevens for his supposed bullying and disrespect. Director Bill Cordwell weighed in as well, somehow conflating honest disagreement among directors and Stevens’ exercise of discretion as OPA president as something dictatorial, something one might find in North Korea. Really? Cordwell would be dead or living in a gulag on quarter rations of weeds and tree bark were Kim Un Stevens as dictatorial as Cordwell and O’Hare pretend to believe.

Board skirmishing and bickering is nothing new in Ocean Pines. Much of it is theater, intended to effect a policy outcome.

As for the 25 or so hardy souls who braved chilly weather to attend the Jan. 9 special meeting in support of BCG, their organized, pre-arranged participation in the public comments segment of the meeting is not dispositive. It would be incorrect to assume this group of engaged golfers speaks for the entire golf membership, such as it is, and let’s not kid ourselves: The golf membership in Ocean Pines is but a shadow of its former self. At roughly 160 memberships, including 20 lifetime members, those committed to the game to the degree that they are willing to prepay for Ocean Pines golf course privileges is substantially off the peak achieved in the 1990s: 800 to 900 annual memberships pur-

variance to budget after November is roughly $35,000. Results in December through March are not likely to proAn excursion through the curious cul-de-sacs An excursion through theby-ways curious and by-ways and cul-de-sacs duce substantial improvements in the bottom line, and then there is April, the of Worcester County’s County’s most densely community. of Worcester mostpopulated densely populated community. last month of the fiscal year.

By TOM STAUSS/

By TOM Publisher STAUSS/Publisher April is the month that breaks hearts. It’s the month where reality trichased per year was not out of the ordi- regularity, but that is not to say their in- umphs over hope. nary back then. terests also include the never-ending and April is fickle in the best of years, While certainly entitled to a point of very large subsidy given over to a small extremely dependent on outside play view, a subset of these 160 memberships membership base each and every year in and cooperative weather. Should neiis hardly a cadre whose opinions on the a losing proposition. The subsidy is very ther materialize in April, or appear subject of BCG constitutes a substantial large: $326,000 in the previous fiscal year only sporadically, the bottom line will voice that should have a disproportion- in operating losses alone, with another be a spectacular bust. Just look to April ate impact on board decision-making. $450,000 or so in golf course deprecia- of last year for evidence of that.

No doubt there are golf members who tion, and tens of thousands of dollars in One former OPA director and diewould not be unhappy to see BCG de- so-called new capital expenditures that hard BCG supporter, during the Jan. part Ocean Pines for good. Unfortunate- occur with regularity.

9 special meeting, placed much imporly, an organized email campaign and the Improving numbers relative to bud- tance on this year’s predicted $88,000 stacking of a special meeting with BCG get after a poor start to the year are not deficit and BCG’s projected 2015-16 advocates does not render any real in- persuasive. The decision on whether to loss of $14,000. OPA General Managsight into the extent to which OPA golf terminate the BCG contract should be er Bob Thompson speaks glowingly as membership supports and insists on the based primarily on how well the compa- he always does of spring bookings, as company’s retention. ny has fulfilled its financial goals over the if April weather on the Eastern Shore Beyond that, of course, it’s not so course of four years, not some modest and will make it easy to convert bookings much the vocal views of a subset of golf- incremental improvement since the poor into actual play. He knows better. ers that should drive a board decision on start in May. Losses in 2011: $317,225, April is the month where Rosy SceBCG but rather the interests of 8200 or followed by $288,064 in 2012, $536,901 in narios go to die. Rosy Scenarios often 8300 property owners who don’t play the 2013, and $326,047 last year. Not includ- are trotted out to influence board deOcean Pines course very often or ever. ing depreciation in each case. cisions at critical times, like now. Rosy The interests of those property ownAfter May’s horrific start, monthly golf Scenarios are simply not credible. ers may very well include having a golf results compared to budget have generThey certainly should not be used course in their community regardless of ally been positive, just not enough to off- to justify keeping BCG as Ocean Pines’ whether they play the game with any set the poor results in May. The negative golf course manager.

LIFE IN THE LIFE INPINES THE PINES

LETTER Trash contract ‘savings’

I write this in response to the change in waste collection companies for 2015 that supply Ocean Pines. My experience has been that Waste Management is a totally professional company and has been more than satisfactory, with modern equipment as well as professional and courteous drivers.

In my opinion it was a dumb decision to change companies for such a little bit of difference that amount to $1.11 less per quarter that I pay with a recycle container only. My current bill under Waste Management is $47.52 per quarter compared to $46.71 (under the new vendor).

I simply cannot understand why we have to go through the hassle of going through yet another change.

One of the comments I noted was that recycled material would be picked up once a week rather than every other week and the container was only 65-gallon, that would better fit the garage and would be easier to handle.

This really doesn’t make any sense as I am sure most households do not generate enough recycle material that requires once a week pick-up. In addition, if the smaller container is easier to handle, then what about the 95-gal. trash container that is being supplied. How will it fit in the garage? (I don’t have a garage.)

Rather than making such a big deal over such a minimal savings, I think more attention should be given on how to reduce the assessment that has seen a substantial increase over the years.

I think additional attention could be given to the golf course and Yacht Club that have become more of a drain with each passing year, as well as the decision to start up the Java Café. That was another loser.

Anyway, thank you for saving me so much on the trash removal charge. After three years, I might have saved enough to buy a Big Mac. John Fleming Ocean Pines Tom Stauss replies: Waste Management’s bid was roughly $50 more per year than its rate structure in place for the past three years. While resistance to change is understandable, no doubt it would have expressed itself in opposition to retaining Waste Management once a change in rate structure -- roughly $12 per quarter -- had shown up in invoices.

Republic Services won the contract fairly in a reasonably open bid process.

The OPA had little option choice other than to accept the company’s proposal.

As for weekly recycling: At least it will be easier to remember than the every-other-week schedule under Waste Management.

The Ocean Pines Progress, a journal of news and commentary, is published monthly throughout the year.

It is circulated in Ocean Pines, Berlin, Ocean City, and Captain’s Cove, Va. Letters and other editorial submissions: Please submit via email only.

Letters should be original and exclusive to the Progress. Include phone number for verification.

127 Nottingham Lane Ocean Pines, MD 21811

PUBLISHER/EDITOR Tom Stauss tstauss1@mchsi.com 410-641-6029

Advertising Sales Frank Bottone 410-430-3660

ART DIRECTOR Rota Knott

CONTRIBUTING WRITER Rota Knott InkwellMedia@comcast.net 443-880-1348

PROOFREADER Joanne Williams

40 Ocean Pines PROGRESS 32 Ocean Pines PROGRESS

January - Early February 2015

December 2012

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