Download the Ocean Pines Progress May 2012 Issue.

With more than $556,000 in profit being generated by Worcester County’s fledgling Department of Liquor Control this year, it may simply be a matter of time before the Ocean Pines Association begins to address whether it makes sense to lobby for a share of the bonanza, which currently is divvied up among county government and the governments of Worcester’s four municipalities.

Although managed by a homeowners association, Ocean Pines is the most densely populated community in Worcester County, with roughly 25 percent of the county’s year-round population.

County and state officials say they have not been contacted by anyone from the OPA about the potential opportunity of receiving a cut of net income from the department. That’s no surprise; the possibility of sharing in the bounty has not been publicly raised by the OPA’s board of directors.

“No one has even mentioned that to me. It’s the first time I’ve heard it,” said Bud Church, Worcester County Commissioner president, when queried on the possibility by the Progress. “I’d have to digest that a little bit. I’d have to give some thought to that.”

Because Ocean Pines is not a municipality and it is the county and towns that receive the revenue generated by the LCD, the OPA is not cut in for a share of the profits, even though its residents are as likely to consume alcohol as are the residents of the county’s four municipalities. With its large retiree population, some wags might even suggest that Ocean Pines residents help generate a disproportionate share of the profits. County record-keeping is not so precise that the extent of Ocean Pines’ contributions could ever be quantified.

So Ocean Pines’ status as an incorporated tax-exempt, non-profit homeowners association tells the tale.

“They’re not a municipality. That’s where we give the money,” Church said, referring to state law that currently excludes HOAs from a piece of the local liquor action.

He said he would need to sit down with OPA leadership and “see what their thoughts were” and why they think they are entitled to a portion of the money.

“I’d be glad to talk about it,” he said.

Commissioner Virgil Shockley said no one has approached him about the potential for the OPA to receive liquor derived funding either. He said he is not inclined to divide the profits from the operation even more than they are already.

“The four towns get a portion of it, and the county gets a portion of it,” Shockley said. “The reason Ocean Pines doesn’t get a portion of it is it’s not a town.” Instead, he said, Ocean Pines has been receiving a county grant of about $400,000 for its police department.

“You’ve only got X number of dollars. The county gets half of it, and the rest is divided between the towns,” Shockley said regarding the liquor department profits. “I’m not going to give up any of the county half. That means the towns give up a percentage of theirs.”

County Attorney Sonny Bloxom said the allocation of the profits is specified in state law. That law would need to be changed to allow for any change in the allocation formula.

That much is known by at least one OPA director, Dan Stachurski, who recently told the Progress he’s interested in the possibility of sharing in LCD profits, in much the same way that the OPA shares in local impact funding generated by casino operations in the state. Stachurski said it’s possible that the state’s largest HOA-run community, Columbia, is able to share in Howard County’s government-control liquor sales by a special legislative carve-out.

“If that’s true, we might be able to persuade” local state legislators to offer a text amendment in the Maryland Annotated Code to allow Ocean Pines and other similarly-sized HOAs to share in LCD profits, Stachurski said. He had been planning to raise that possibility with District 38-B Delegate Norm Conway prior to the launch of the just completed session of the General Assembly but was never able to secure a meeting with him.

Stachurski said he would vehemently oppose any effort by the county to cut the $400,000 police department grant, which he said covers the cost of providing police services to areas within and outside the HOA-controlled Ocean Pines subdivision, even if the OPA receives a share of LCD profits.

He said he views the possibility of sharing in LCD profits as an addition to the police grant, not as a full or partial replacement.

With Conway expected to run for reelection in a newly created legislative district that won’t include Ocean Pines in 2014, Stachurski has said it probably would be better to ask other local legislators for help.

State Senator Jim Mathias also said no one from the OPA has approached him to discuss revising the state law to give Ocean Pines a share of the county’s liquor profits. But he said the OPA should begin by contacting the commissioners regarding the issue.

“If Ocean Pines has an interest in sharing in the pro-rata distribution that is generated in businesses in their area, I would like them to take that issue up with the county first,” he said.

Mathias noted that a major revision occurred last year of the wholesale and retail alcohol system in Worcester County. He said there is currently a five-year operating plan in place for the newly created Department of Liquor Control, and the county is only at the end of year one.

At the end of that five-year period, licensed alcohol establishments that want to opt out and buy their products directly from a distributor instead of the county will be able to do so.

“Any additional change to the revenue and distribution of funds by proposed legislative changes, I would like to see the concerned party, in this case Ocean Pines, discuss that with the county commissioners,” Mathias said. He added that he would be happy to attend any such meetings. “A trusted dialogue is best in any relationship.”

The Department of Liquor Control was established on July 1, 2011, upon abolishment of the Worcester County Liquor Control Board. The goals set for the department by the county were to preserve the 29 full-time jobs in the department, continue providing services to small businesses, and protect and preserve the departmental revenue to the county and towns.

During an April 17 meeting, Bobby Cowger, department head, presented an update on the liquor operations to the Worcester County Commissioners. He said the department is expected to generate yearly gross sales of more than $15 million, with $10 million of that revenue from the wholesale operations to 200 licensees and $5 million from the county’s retail sales operations.

According to Jennifer Savage, enterprise fund controller, the department is expected to end the budget year on June 30, 2012, with a profit of $556,500, which will be split between the county and municipalities.

“We are currently on track to meet that goal,” she said in her report. “While March and April are anticipated to be break-even months, we look for stronger sales in May and June as our local retail stores and licensees gear up for the summer season.”

Nobody’s talking publicly or officially about the closed executive session that the Ocean Pines Association Board of Directors held Wednesday morning, April 25, but the Ocean Pines rumor mill is in high gear speculating about the “big deal” that Ocean Pines Association General Manager Bob Thompson is supposedly working on.

A press release issued by the OPA several days before the meeting didn’t characterize the reason for the executive session, such as a personnel or legal matter. It simply cited a section of the Maryland Homeowners Association Act that authorizes closed meetings. Thompson declined to disclose the purpose of the meeting in a telephone interview prior to the meeting and was equally reticent in the days that followed.

Among the possibilities about the “big deal” circulating in the hyperactive and fantastical Ocean Pines rumor mill: the OPA will be selling or doing a long-term ground lease for the OPA-owned two acres on Route 589 in front of the library and post office, with the site to be developed as a hotel or motel; the OPA will be purchasing the former Pines Shore Golf Course property on Beauchamp Road, just north of Ocean Pines, with some of the property to be resurrected for golf and the rest for residential development; the OPA will acquire the Point clubhouse in far south Ocean Pines that has been vacant and unfinished for a number of years; the OPA will be selling or leasing the Ocean Pines golf course to a private group of individuals who would attempt to run it as a profit-making venture; the OPA will be leasing out the new (or renovated) Yacht Club to a private management company; the OPA is being sued by a former employee for gender harassment or something similarly nefarious (how the latter would constitute a ”big deal” isn’t immediately clear).

OPA President Tom Terry declined to offer any details on the board’s closed session or to confirm or deny any of the speculation and rumors. He said he expected details of the “big deal” to be released within weeks.

Publisher

As the Ocean Pines Association in early April began advertising for an in-house aquatics instructor who could replace the contractor who has been teaching the bulk of learn-to-swim and stroke mechanic classes in Ocean Pines for the past three years, that contractor has informed the parents of her students that she will not be teaching her classes in Ocean Pines after May 2.

“I sadly must inform you that due to the Ocean Pines Association not renewing or extending Ocean City Aquatics’ contract, I will no longer be teaching at Ocean Pines pools,” contractor Lori Ciminelli wrote in a letter that she began distributing to parents April 25. “I apologize for this untimely and unfortunate situation, as new swim programs have begun and others are in mid-stream.”

She said that it was her “belief and understanding that my contract was to be extended, since the Ocean Pines Association requested me to develop, implement and advertise present and future swim programs in the Activity Guide” for the spring and summer of this year.

Ciminelli said parents who choose not to continue with their kids’ swim classes because “Ocean City Aquatics [is} no longer teaching” them should contact the OPA for reimbursement of class fees. She invited parents who want their kids to continue taking classes from her to follow her to other pools in the Ocean City area where she will be teaching.

She told the Progress that she is still open to working out an arrangement to continue teaching in Ocean Pines, but she expressed frustration that Aquatics Director Tom Perry, who had informed her that he wanted to discuss the contract situation before going on vacation the week of April 23, did not follow-up. She also attended a meeting of the Ocean Pines Aquatics Advisory Committee April 24, in the hopes of meeting with Perry there, but he did not show. Ciminelli showed a copy of her letter to OPA General Manager Bob Thompson early on April 25 as a courtesy.

“He asked me if I could hold on and not distribute it for a day, but I told him I didn’t feel I could delay telling the parents any longer,” she said. Her contract expires May 4, and she said she felt it was only fair to parents to give them a week to consider their options. She said the contract’s expiration date had been known for quite some time and that if the OPA wanted to extend the contract, Perry could and should have indicated interest sooner than he did.

Where Ciminelli’s announced departure leaves the OPA’s aquatics instructional program is, for the moment, uncertain. Thompson told the Progress in a telephone interview April 26 that he thought it was still possible “to work out something advantageous” to Ciminelli and the OPA, including a short-term contract extension. He said he had informed her several months ago that he was not interested in a new long-term contract.

Thompson said he would discuss the situation with Perry upon his return from vacation.

Ciminelli’s announced departure from Ocean Pines may not be well received by parents whose kids have been taught by Ciminelli for months, even years. The first group of parents to receive her letter – the stroke mechanics class at 5 p.m. April 25 – were not pleased.

Michael Tinelli, a parent whose son, Michael, 10, and Elana, 8, started taking classes from Ciminelli when they were 9 and 7, respectively, said he and other parents of kids who have been improving their swimming skills under her tutelage would be following Ciminelli to the pools in Ocean City where she offers the same classes she teaches in Ocean Pines.

“Four or five us are all thinking the same thing,” he said. “After her last class on May 2, we won’t be bringing our kids to Ocean Pines, but instead will wait for the first opportunity to continue with Lori (in Ocean City). We will be asking the OPA for a refund of fees paid to date for classes with Lori.”

Tinelli called Ciminelli a “wonderful instructor” who is able to seamlessly shift from experienced, older kids to beginners and those who are developmentally challenged.

“Her demeanor towards everyone is consistent and professional,” he said, attributing her daughter’s rapid progress from needing noodles to stay afloat to swimming laps unaided.

“And she really involves the parents in the classes,” he said. “We’re like family. I really think it would be a huge mistake for Ocean Pines to let her leave.”

Ciminelli’s announced department occurred a few weeks after the OPA placed an advertisement in local newspapers seeking an in-house aquatics instructor.

Terry told the Progress in mid-April that the early response to the ad had been limited. The ad listed compensation at $12.50 an hour for a part-time position, with lots of certifications and advanced training listed as preferred attributes of a successful candidate.

The position of in-house swimming instructor was authorized by the OPA Board of Directors as part of the Fiscal Year 2013 budget approved by the board in February.

Terry acknowledged that the $12.50 advertised rate might have been too low to attract more qualified candidates and could be negotiable for the right applicant.

Ciminelli told the Progress the rate was too low for her to consider applying for the in-house position. Edith Vogl, a member of the OPA’s Aquatics Advisory Committee and a part-time contract instructor, also told the Progress she believes that $12.50 is too low to produce top-notch candidates with all the current certifications.

During the April 24 meeting of the Ocean Pines Association’s Aquatics Advisory Committee, chair Virginia Reister agreed.

Thompson had promoted the in-house position as part of his plan to reduce aquatics operational deficits, which this year are projected to exceed $150,000 and which he wants to reduce by roughly $100,000 in the fiscal year that begins May 1. Other components of a deficit-reduction plan including cost reductions at the Sports Core indoor poor from reduced use of dehumidification equipment, a switch from propane to natural gas for heating and better management of the lifeguard staff to avoid too many guards on duty during periods of minimal pool use.

The possibility of a new in-house instructor has been viewed as an alternative to the expiring three-year contract that Ciminelli, the OPA’s learn-to-swim and stroke mechanics instructor, has been working under to provide these services to Ocean Pines.

The contract’s pending May 5 expiration did not prevent the OPA from promoting Ciminelli’s lessons in the recently published Spring/Summer edition of the OPA’s activity guide. A message from Perry describes Ciminelli as heading up “an expanded offering” of classes, which are scheduled to extend well into the summer.

Perry has said previously that it is possible that Ciminelli’s contract will be extended after it expires, but as April was drawing to a close, Ciminelli had not yet been offered a formal contract extension. Perry said he and Thompson were awaiting a response to the classified ad for an in-house instructor before deciding how to proceed.

Both have said that Ciminelli was welcome to apply, and she previously has said she would consider doing so. Once she saw the proposed compensation, however, she elected not to apply. She said that she has not kept up some of the certifications listed in the ad because they’re not needed in the lessons she teaches, resulting in the somewhat ironic situation that the current OPA contract swimming instructor is under-qualified for a position that doesn’t pay enough to warrant an application.

Where this leaves the swim lessons after May 5 isn’t immediately clear, but Perry said he is confident that the lessons will continue.

Perry informed the Aquatics Advisory Committee in February that Ciminelli’s contract will most likely be extended beyond its expiration date, and that he envisioned that she will be continuing to teach lessons in Ocean Pines this summer and perhaps even longer.

Perry told the Progress that it may turn out to be an informal extension, with the same basic terms that were in place during the formal contract period. He said the arrangement would be akin to a landlord informally extending a lease on a month-to-month basis pending the execution of a lease with definitive beginning and end dates.

A key issue in any contract with a contractor, whether Ciminelli or someone else, would be the percentage of lesson revenue kept by the contractor versus the percentage that goes to the OPA’s aquatics program. Members of the committee from its very first meeting three years ago questioned the percentage split negotiated with Ciminelli by former Recreation Director Mike Howell, which has been previously reported as 70-30 in favor of the contractor.

Committee members with experience in teaching lessons in Ocean Pines and elsewhere have said the split more commonly is 50-50, and several specialty classes taught by other contractors in Ocean Pines have that arrangement. The rationale for a more balanced percentage is the fact that the OPA is supplying the pools in which lessons are taught, while the contractor provides the expertise to teach the lessons.

Vogl told the Progress recently that in her investigations of what other organizations in the area are paying their swimming instructors, she learned that the most favorable split for a contractor was 55-45, with the contractor paying for her own liability insurance. The OPA’s insurance policy covers liability for costs associated with accidents at all of Ocean Pines pools, but Ciminelli has said that, as a private contractor, she still has to purchase her own liability coverage.

Thompson asked committee members during the February committee meeting to research the subject of how contractors and in-house contractors are compensated by contacting nearby organizations with extensive swimming programs. Committee members agreed to assist.