Gunstock gets county OK for $750,000 revenue anticipation note

LACONIA — The Belknap County Convention has approved a $750,000 Revenue Anticipation Note for the Gunstock Mountain Resort by a 16-2 vote.
The vote Monday night came following a presentation by Gunstock General Manager Gregg Goddard and members of the Gunstock Area Commission on the role played by the borrowing in allowing the county-owned recreation area to gear up for the upcoming ski season.
Goddard said it was his 20th presentation to the convention on the RAN notes, which he said provide a short-term cash flow for Gunstock, which still receives 70 percent of its total revenue from skiing operations in a 100 day period from mid-December to late March, despite the addition of new summer attractions such as its longest in North America zip line and treetop adventure park.
The amount sought has ranged from $625,000 to $1.2 million in recent years, according to Goddard, who said the $1.2 million was sought when the bridge over Poor Farm Brook was being rebuilt and there was going to be a lag time before federal and state reimbursements were received.
He said that during the summer months Gunstock has spent $2.1 million preparing for the winter and will see a negative cash flow during the late fall until Christmas break skiing starts to produce positive revenues.
Goddard said Gunstock's budget is based on 168,000 skier visits a year, and that while the ski industry as a whole is not growing Gunstock has been able to retain loyal skiers and looks to increase the revenue from each customer in order to enhance revenues.
Unlike larger ski areas to the north, Gunstock, which is the closest large ski area to Boston and the fifth-largest ski area in the state, is based on the day trip market.
He said that there is also a strong customer base of second home owners who are using their property year-round who ski at Gunstock, which also has an outreach program to area schools which brings in local skiers.
Goddard responded to a series of written questions about Gunstock's viability and profitability from the County Convention and said that Gunstock was in a sound financial position with profits in five of the last six years and assets exceeding liabilities.
Asked if the need for a cash flow infusion will ever end, Goddard said hat it wouldn't happen right away. He said Gunstock was trying to stabilize its reserve funds for operating and capital expenses and has a goal of $1 million for operations and $500,000 for capital expenses. Currently it has $20,000 in operating revenue reserve and $91,000 in capital reserve.
He said that the operating revenue reserve account had risen to $700,000 before it was depleted by the virtually snowless winter of 2011.
Gunstock continues to pay the county $175,000 per year based on the terms of a memorandum of agreement reached with the county which extends through 2016. Chuck Lowth, chairman of the Gunstock Area Commission, said there was no plan to increase that amount paid to the county.
Goddard said that while it was good to build up operating cash to the point where there was no need for future RANs, that short-term borrowing at a cost of about $5,000 for a $750,000 RAN ''was not a bad thing to do. We shouldn't be sitting on a lot of cash.''