Dear OB3 Community,
Thank you for your feedback, support and input throughout 2018, particularly as a newly appointed Treasurer and member of the Board. As promised in our Spring Member Meeting, transparency and accountability are two things that I believe to be important in serving you. Given this, I thought it would be valuable to provide you with some details about the budget provided herein for your review and consideration for 2019.
To remind everyone, the assessment is the difference that remains to cover the cost of operations after having accounted for revenue from fees (new member initiations, permits, badges, annual dues, and beach lease costs per member. It is the difference between the cost of operations and our projected revenue; the difference needs to be ‘made up’ with a variable assessment charged to members each year. The total amount of the deficit that exceeds revenue is divided by 986 to determine the amount per member. The assessment is billed to each member for each year along with dues ($20) and the beach lease ($10).
The proposed assessment for 2019 is $598 per member, as you can see in the enclosed budget. I have worked closely with all of the department heads and overseen all of our expenses over the last 8 months, and as a result feel confident that this amount reflects responsible planning and consideration for our cost of operations in the future. I process all expenses and pay all bills as treasurer, and oversee all incoming revenue as well, therefore have a strong handle on how money flows in OB3.
What I have witnessed is a team that is efficient and frugal, and makes every dollar we spend go as far as possible. This is reflected in no better way than in prior years’ assessment amounts. Let’s start with some history in regards to prior year assessments:
• 2016 Assessment: $542/member
• 2017 Assessment: $509/member
• 2018 Assessment: $457/member
Despite the increasing costs of labor, road maintenance and operations overall, we have a history of reducing assessments each year when there was a surplus. In other words, if we asked you for money and did not spend it, we have returned it to you. The background for the numbers above is as follows:
• In 2016, we had a surplus of $85,000 because we did not dredge the boat basin or complete other road-work for which we have budgeted, partly attributable to the board’s efforts to save money. As a result, we carried over this surplus into 2017, which reduced the deficit assessment by $33 per member (to $509), thereby reducing costs to members. This occurred in spite of increasing costs and extended operations to provide year-around security and needed maintenance.
• In 2017, as a result of continued efficient operations and foregone expenditures, a $45,000 surplus remained, which we returned in its entirety to members by reducing the 2018 assessment by $52 per member to $457.
• This is a combined reduction in assessment of $95 per member over two years.
• Our labor, operations and maintenance costs have increased over the last 3 years, year over year, despite the decrease in assessment dues to members.
• Had we not reduced our annual assessments in 2017 and 2018, an annual increase of only 3.37% per year would put us at the proposed assessment for 2019 of $598 per member.
o To further clarify, if we had increased 2017 (from 2016) by 3.37%, then the
subsequent 2018 by 3.37% from 2017, a 3.37% increase in 2019 would result in the proposed amount of $598 per member; or what would be 3.37% compound increase in assessment amount.
Much of the proposed budget increase is attributable to the concerns for the safety on the beach, our need to ensure accessibility to all members and visitors and the feedback [complaints] from members in regards to the beach. Our board member and Head of the Beach, Mike Hanney has experience Lifeguarding at Sea Girt immediately upon completion of beach replenishment, in addition to continuous open dialogue with other Captains and Beach Heads with all of the alliances on the island. Experience suggests that next year we will have stronger rip tides, resulting in greater hazards and more rescues. Higher dunes will require additional staff support to ensure the beach is accessible to all members. The 2019 budget includes an increase of 5 guards and 4 beach patrol staff, enabling us to add another lifeguard stand 7 days a week and extend the patrol to ensure coverage at each walkway and to walk the beach, as well as to sweep the walkways. We have heard many complaints from members about the lack of beach patrol staff enforcing our rules and checking for badges on the beach, and have presented a staffing plan that will allow us coverage at all walkways and additional resources to walk the beach throughout the day.
Also included in the budget are the addition of beach showers at walkways, increased road maintenance done in response to a large number of member complaints in 2018, small cost of living increases for our staff (seasonal and year-round) and the assumption that the new playground will be wholly funded by revenue from fundraising activities, in lieu of assessing the members for playground improvements.
It is important to remember that before we even turn on the lights, our cost of insurance and legal fees have exceeded $150,000 annually for the past 3 years. These are expenses that are beyond the Board of Trustee’s control and the result of litigation and overall increases for insurance coverage, not just to OB3.
Here are links to the 2019 budget to support the explanations provided herein.
I welcome an opportunity to answer your questions and provide any additional information that improves your understanding on September 8th at our general membership meeting or prior to the meeting via email. We are excited to have online voting in place for our Fall meeting, enabling more members to participate and take an active role in our wonderful community.
All of my best and with gratitude,
Ashley J. Swartz