LACONIA — Beset with financial problems, the Laconia Motorcycle Week Association has expanded its board of directors, who are seeking to restore the organization to financial solvency and place its operations on a sound footing.
The LMWA was established in 1991 as the Laconia Motorcycle Rally and Race Association at the initiative of then Mayor Paul Fitzgerald and its longtime executive director Charlie St. Clair, with the primary purpose of promoting the oldest motorcycle rally in the United States. The association publishes and distributes the Rally News magazine, solicits corporate sponsors and rally patrons, administers an annual grant from the New Hampshire Division of Travel and Tourism Development and sells concessions at the event.
The current membership of the board consists of the City of Laconia, Town of Meredith, New Hampshire Motor Speedway (NHMS), Weirs Action Committee (WAC), Laconia Harley-Davidson and three businesses at The Weirs — the Weirs Beach Lobster Pound, Half Moon Enterprises and NASWA Resort.
The board became aware of the financial troubles of the association earlier this year and, according to documents obtained by The Daily Sun, the board was still seeking to calculate their extent when it met in August. Tommy Blanchette of NHMS and a member of the financial sub-committee, reported that "the first priority is to determine the actual balances of accounts, payables, receivables, and long-term debt of the Association."
A balance sheet as of June 9, 2014 listed total liabilities of $214,490.96, of which a note payable to Charlie St. Clair represented $124,859.30. Charges against 13 credit cards accounted for another $46,453.71 and an outstanding balance on a loan from Bank of New Hampshire for another $30,000. However, in August Blanchette told the board that the debt to St. Clair was more than $178,000 while the credit card debt, carried at high interest rates, was $60,000.
After the association's financial issues came to the fore, the membership of the board was expanded. An attorney, Matt Lahey of Laconia, an accountant, Paul Simoneau of Gilford and a marketer, Amy Landers of the Lakes Region Tourism Association were added to the board. Cynthia Makris of the NASWA Resort serves as president of the association.
At the same time, the board agreed to raise the annual membership dues paid by municipalities and businesses, but not the additional three individuals, from $2,000 to $5,000. In June, the Laconia City Council included the increase the 2014-2015 municipal budget and this week Meredith Town Manager Phil Warren advised the Board of Selectmen of the pending rise in dues.
But, when the LMWA met in August Joe Driscoll of the WAC reported that his organization voted not to pay $5,000 but only $3,000. According to the minutes, Makris said that she "believes it is important for each member to be sharing the cost of dues equally." Blachette suggested that it was premature to introduce an increase in dues until the financial statements have been revised and the 2015 budget prepared.
At the same meeting, Blanchette said that retiring the debt to St. Clair should be a priority and that Landers would approach the Belknap Economic Development Council about borrowing at a rate below that charged by the credit cards to lighten the total debt. He also stressed the development of "accounting policies and procedures" as a priority.
The 2014 budget of the association was $432,764. Corporate sponsorships at $211,000 and advertising sales of $100,000 accounted for three-quarters of projected revenues, supplemented by a grant from the state of $30,064, sales during the rally of $35,000, membership dues of $22,000 and donations from Rally Patrons of $16,000. Payroll, salaries, benefits and related expense, of $132,500 from the state, was the largest single expense followed by $60,000 in print advertising, $45,000 in travel, $29,264 in producing the Rally News, and $22,200 in rent.
Blanchette suggested that the 2015 budget should include lowering expenses, retiring debt and collecting receivables. The minutes read "if a budget cannot be created,Tommy stated, then bankruptcy must be visited as a last-resort effort."
This is not the first time the association has run afoul of financial issues. In 2003, when it was called the Laconia Motorcycle Rally and Race Association, three members — the city of Laconia, Greater Laconia/Weirs Beach Chamber of Commerce and Gunstock Recreation Area — resigned their memberships over misgivings about the quality of financial reporting. A year later, after being assured that its concerns had been appropriately addressed, the City Council resolved to rejoin the organization. Neither the Chamber of Commerce nor Gunstock Recreation Area followed the city's lead.
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