PenMar Development Corporation
BOARD OF DIRECTORS
June 10, 2013
Chairman Sam Cool called to order the monthly meeting of the PenMar Development
Corporation (PMDC) Board of Directors at 7:30 a.m. on June 10, 2013 in the Bob Davis Meeting
Room at the Fort Ritchie Community Center, Cascade, Maryland.
In addition to Chairman Cool, the following Board members were present: Joseph Bollinger,
Ruth Anne Callaham, William D. Carter, Jim Devlin, Sharon Disque, Jason Divelbiss, Patrick
Fleagle, Tim Henry, Stephen Kulla, Peter Kurz, and John Van Der Cruyssen. Also in attendance
was PMDC Executive Director Dori Nipps, Robert C. Brennan, of the Maryland Economic
Development Corporation, Bob Spence, Executive Director of the Fort Ritchie Community
Center, Jef Bohn of SEK and David Rawle, legal counsel for PenMar. Brian Flook and Chris
Motz were excused.
Approval of Minutes for the May 13, 2013 Board meeting
Chairman Cool called for a motion to approve the minutes of the May 13, 2013 board meeting.
Stephen Kulla moved that the minutes be approved. He was seconded by Jim Devlin, and the
minutes were approved unanimously.
Financial Report
May Financials
Tim Henry reported on the financial report for May. Of note on the balance sheet is a CD that
matured on May 8, which was extended at .75% for one year. Two other CDs mature on July 6
and July 30. The Finance Committee recommends that the first CD be placed into a money
market account until the other CD matures on July 30, then both can be bundled together and
extended for another year. A retainer fee of $15,000 was made to CRE for consultant fees and
the $61,000 property tax refund is also reflected on the statement.
After review of six audit proposals, the committee is recommending Boyer & Ritter as the
auditors for FY13, 14 and 15. The Total cost for the preparation of the audit and 990 each year is
$6,750 for FY 13, $6,950 for FY 14 and $7,200 for FY15. Previous audit services were
performed by Albright Crumbacker Moul & Itell. The Financial Committee recommends going
with Boyer and Ritter, based on a significantly lower fee structure and a recommendation from
SEK.
Two requests for financial support have been received. The One Mountain Foundation requests
$6,500 for the cost of fireworks for Mountain Top Heritage Day on June 29. PenMar supported
them last year with a donation of $13,500 for fireworks, stage and tent rentals. The committee
recommends supporting a $6,500 donation.
The Blue Ridge Summit Library submitted a request for support of their ice cream social.
PenMar supported them with a donation of $2,500 last year. The social is their major fundraiser
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and the committee recommends supporting a $1,500 donation. In prior years PenMar supported
them with a donation of $5,000.
A motion to accept the audit recommendation and donations of $6,500 to the One Mountain
Foundation for Mountain Top Heritage Day and $1,500 to the Blue Ridge Summit Library Ice
Cream Social was made by Peter Kurz and seconded by Jason Divelbiss. The motion was
unanimously approved. William Carter abstained.
Tim explained the FY14 budget was put together in a series of meetings. First he, Jef Bohn and
Dori met and using figures from our now actual history, compiled a budget that was then
reviewed by the Finance Committee. Summary sheet shows revenue, operating expenses and
capital outlays, which is a summary of the report. Of important note, is an anticipated loss of
$1.4 million. Capital outlays include repair costs of $300,000, which could be in lease-hold
improvements or other expense not yet identified. Personnel considerations included
incorporation of a 2% cost-of-living increase across the board; health insurance increased by
25% (quote is not in hand yet).
Commercial revenue projections were done based on current occupancy. The assumption is that
we will lose one tenant and that at least one-event per month will occur at Lakeside Hall.
Residential assumptions were based upon a slightly higher occupancy, and also account for the
4% rent increase.
Dori is a salaried employee with the remaining employees being hourly. Dori explained that
over-time is only paid when employees are called in - no scheduled over-time. Call-ins are paid
at a minimum of 2 hours overtime. Dori estimated that less than 10 hours overtime was paid the
past year. The staff adjusts their schedule accordingly when special events indicate on-call
services are required. Wages are divided into four separate categories: corporate, residential,
commercial and campus – time is marked based on area worked.
Peter Kurz expressed concern about budget figures for marketing and business development. He
commented that the budget approach and result is by far the best he has seen. The format is clear
and easily understandable. feels that the Board be clear regarding approval and presentation, and
that when a viable option or opportunity is presented that we should not ruminate over arguments
that the money was not previously budgeted. Tim indicated that a presumption was made and at
the appropriate juncture an amendment to the budget will occur. Jason agreed that marketing and
business development should be a disproportionate amount of the total budget. Tim summarized
the discussion by determining that the Board would make necessary budget adjustments at such
time we are provided specifics.
A motion to approve the FY14 Budget as presented by the Finance Committee, with adjustment
to the CRE line, was made by Jason Divelbiss and seconded by John Van Der Cruyssen. The
motion was unanimously approved.
Tim indicated an additional payment of which we only became aware of this week. Our budget
includes payments for the community center and in the May financial statement is $170,000 to
FRCC. June remains, which have this expenditure to $184,000. The total budget is $170,000. It
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appears that earlier in the fiscal year FRCC went one month without the payment and in August
two (2) payments were made. Tim apologized for the over sight. The Finance committee
suggests that the Board approve an extra payment in the FY 13 budget and FY14 stays remains
at $170,000. The Board discussed weaning the FRCC off the annual payment made and insists
they have operating targets that continue to reduce the subsidy provided by PMDC. Ruthann
made comments regarding non-profit status of the FRCC and disagreed that we cut funding
without helping FRCC to build a business model that aids in this regard. The Committee agreed
that PMDC board members share the message with the FRCC they begin to develop a business
model that promotes a self-sustaining program and that the FY15 budget reflect these numbers.
Peter wants community center to be active and viable, but they need to begin now to review
ways to become self-sustaining. Jason questioned if we need to provide a finite message that
indicates possibly reducing by 1%, 5% or more per year that specifically states our intention and
expectations. Our allotment in FY15 is in part going to be based upon FRCC’s proposed plan
and if we agree to be a funding partner in these plans. A motion by Bill Carter to allow us to
provide FRCC with an additional $14,300 in June was made and seconded by Jim Devlin. The
motion was unanimously approved. Dori indicated that she and Pat will take the request for a
proposed funding plan to FRCC next week.
Executive Director’s Report
Ms. Nipps reported that:
 A State inspection on the water plant was completed and approved. This is the first
inspection in more than 6 years.
 Events held recently included the Pignic and swimfest.
 4-man work crews from MCTC have returned and are on site Tuesday, Wednesday and
Thursday. The residents are aware and the crew is under constant supervision.
 Pignic comments by John: the contest went well featuring 38 final competitors;
approximately 5,000 people attended over 2-days; the vendors did well, however the
artisans complained about weather and left at the end of the day; the competitors loved
the facility, however some had complaints about reaching the site. Holding the event
again next year is in question. Feedback from the organizer was less than positive and no
proceeds resulted from the event.
Fort Ritchie Community Center (FRCC)
Executive Director Bob Spence reported that:
 Revenue is 3% over budget and expenses are 29% over budget for April, which is
primarily due to a discrepancy between the accountant’s accrual and the FRCC’s
numbers. There was also a large unbudgeted expense for summer camp.
 PMDC Contribution for April was $14,166.
 Year- to- date revenue is 3% over budget at $199,996. Expenses were 1% over budget at
$189,963. As of the last day of April, cash-on-hand was $64,467.
 The cheerleading team season ended in April. Because of the success of this program, an
informational meeting was held on May 29 to discuss plans for next season, which begins
later this summer.
 Summer exercise class schedule for June, July, and August started June 3.
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Summer camp starts on June 18 for an 8 week session. Registration is strong and final
numbers will be known after a planning session scheduled for today. The necessary State
license is secured.
Several 3 and 5-day mini camps for cheerleading and gymnastics will take place this
summer.
Fishing championship will be held June 22, with the three winners from the previous
heats participating.
Modest membership rate increase becomes effective July 1.
HR Committee
Tim Henry had no report.
Marketing Committee-Patrick Fleagle
Pat Fleagle had no report.
Property Committee-Jim Devlin
Jim Devlin had no report.
Strategic Planning/Redevelopment Committee – Jason Divelbiss
Jason suggested performing an appraisal for the property, perhaps by issuing an RFP for an
appraisal. A fair market evaluation was done a number of years ago. CRE results should identify
highest and best use. The validity of an appraisal is how relevant it is to the time of an event.
Public Comments
Bill Carter, on behalf of the One Mountain Foundation, thanked the Board for supporting the
fireworks.
Convene in Closed Session
At 8:50 a.m. John Van Der Cruyssen moved that the Board go into closed session to discuss
matters as permitted in Section 10-508 of the “State Government Article” of the Annotated Code
of the Public General Laws of Maryland. The motion was seconded by Pat Fleagle, and
approved unanimously by the Board.
Reconvene in Open Session
At 9:30 a.m. the Board reconvened in open session. Chairman Cool reported that in Closed
Session the Board approved submission of names to the County Commissioners for
consideration of reappointment.
Adjournment
Tim Henry moved to adjourn. He was seconded by Stephen Kulla. The motion was approved
unanimously. The meeting adjourned at 9:32 a.m.
The next meeting is scheduled for July 16, 2013.
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Respectfully submitted,
Doris J. Nipps
Secretary
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