Loan incentive increases profits

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PPP Forgiveness Puts OPA $ 1.275 Million Above Year-End Budget

Greg Ellison

(June 24, 2021) Ocean Pines received good news last week when the association was informed that the $ 1.14 million received last year under the federal payroll protection program is non-refundable.

Following the exclusion of a small business loan from ledger debt, the association’s unaudited fiscal 2-20 / 21 data is closing ahead of budget by $ 1.275 million.

General manager John Viola told the board last Wednesday that the SBA had sent a letter of pardon a few days earlier.

“PPP is forgiven,” he said.

Notices have been awaiting since the association filed loan forgiveness papers in mid-March and the SBA provided a 90-day window for a response.

Viola said Bank of Ocean City officials confirmed the PPP status by phone last week and CFO Steve Phillips received official correspondence days before the board meeting.

Director Doug Parks, noting that the association worked on the assumption that PPP funds would not be returned, asked how this confirmation could affect the audit results for the 20/21 fiscal year.

“This will be income [but] it will be a forgiven loan, ”he said.

Viola said the operating income will be offset by payroll costs.

“If it had not been forgiven, we would have had to change the statements,” he said.

Association President Larry Perrone asked if the budget surplus would be carried over to the books of the current fiscal year.

“If we don’t do anything from an accounting point of view, this money, this profit, will go into retained earnings,” he said.

The surplus for the last fiscal year, among other things, will help zero out the $ 165,000 left over from the previous operating deficit.

“It goes to the same expense and will change this situation for the better,” he said.

Perrone said that despite some financial difficulties, one bright spot is guaranteed.

“The good news is that the deficit that we have worked with over the past few years has now been eliminated,” he said.

Viola said that despite the positive budget deviations recorded in the 20/21 fiscal year, all PPP funds were used to calculate payroll.

“We adhered to it 100 percent,” he said. “We do have a surplus, but it was also formed because we cut costs.”

The decline in the supply of consumer services also contributed to over-budgeting.

“We couldn’t do certain things because of the covid,” he said.

Viola explained the solid financial base with operational concerns, while noting that the PPP funds were channeled in strict accordance with SBA guidelines.

“If we hadn’t done this, it would not have been forgiven,” he said.

The positive financial trend was softened somewhat in April, when at the end of the month the figures reflected revenue ahead of budget by $ 148,000, but expenditures were $ 202,000 above projections to close the estimate by $ 54,000.

Losses for April included approximately $ 48,000 in golf operations.

Viola said $ 40,000 for chemicals and lawn care, originally scheduled for May, has been pushed forward on the advice of, of course, Superintendent Justin Hartshorne.

Hartshoorn said soil temperature affects application time.

“We had a budget for May, but in the end the weather was favorable in April,” he said. “This is not the window you want to miss.”

Viola also stressed that the total renovation work, which will be completed in April, will be around $ 35,000, according to forecasts.

“We’ve done a lot of pending maintenance work that hasn’t been done at the Rocket Sports Center for a long time,” he said.

Looking at the numbers from the beginning of the year to April, which closes fiscal 20/21, the unaudited figures show a $ 370,000 over-budget and $ 905,000 over-budget, with a positive variance of $ 1.275 million.

In addition to PPP funding, the association also received $ 125,000 under the CARES Act, with food contractor Matt Ortt Companies receiving about $ 275,000 in coronavirus aid, which Viola said is about $ 1.5 million. dollars.

“If we hadn’t received any of the $ 1.5 million … we would have lost $ 250,000,” he said.

Briefly about the current fiscal year, Viola said that the monthly budget figures for May this year should be favorable.

“We’ve had record applications or payments for membership across the board,” he said. “The trends are higher than two years ago, but some of them should be started early.”

In addition to growing traffic to golf courses, a racquet sports center and swimming pools, Matt Ortt’s companies reported recent banquet orders worth nearly $ 500,000.

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