Brian Gallagher named to Gunstock Area Commission

LACONIA — Former State Rep. Brian Gallagher (R-Sanbornton) was the Belknap County Delegation’s choice Thursday night for a five-year term on the Gunstock Area Commission.
Delegation members voted 11-5 for Gallagher, who faced incumbent Sean Sullivan of Laconia, chairman of the commission, who was seeking reappointment to the five-member body, which oversees the operation of the county-owned Gunstock Mountain Resort.
Sullivan, who last week charged that the County Delegation was not negotiating in good faith with the commission on a memorandum of understanding which would establish the amount of money Gunstock will pay the county, had maintained that Gunstock must build up its reserve funds in order to be able to cope with back-to-back poor ski seasons before it could substantially increase the amount it pays the county.
In his view, the responsibilities of the commission are to Gunstock’s customers, employees and taxpayers, in that order, and that building up its reserves is essential in order to make sure that the situation of the early 1990s, in which Gunstock had to seek support from county taxpayers to meet its bond debt payments, never happens again.
Sullivan said the commission’s most recent offer of $100,000 a year plus 5 percent of Gunstock’s operating income was rejected by the delegation’s Gunstock Committee. The commission has suspended negotiations with the county on the memorandum of agreement until it receives more information on legislation proposed by some members of the delegation regarding the management of Gunstock.
Little information was available from the sponsors of the proposed legislation at Thursday night’s meeting.
Gunstock paid $175,000 this year, the same amount it has paid the last five years, even though the MOA expired at the end of 2016.
Gallagher said he was surprised the negotiations have stalled and that he would be open to a study of the history of the funding of Gunstock and its investments and would be willing to investigate all ideas brought forward, including Gunstock’s management structure.
Ensuring the long-term viability of Gunstock is his major consideration and said a long and complex process is ahead for legislation involving Gunstock. He said the commission and delegation should be working together on any legislation.
From Gallagher’s standpoint, “The true owners of Gunstock are the hard-working people of Belknap County” and they should share in Gunstock’s success, just like stockholders of private corporations like Apple computers.
Gallagher pointed out that Gunstock made payments of more than $300,000 a year to the county in 2008 and 2009, when the previous agreement, which included a portion of Gunstock’s revenue above a certain threshold, was in effect.
Sullivan pointed out that, over the five-year period in which the previous agreement was in effect, Gunstock paid the county $1,063,000 and suffered a net loss of $464,000 as well.
“We were paying money to the county we didn’t have and had to increase our borrowing on revenue anticipation notes as a result,” said Sullivan.
He said the change in the amount of money paid to the county, which was set at $175,000 per year, freed up funds for establishing capital and operating reserve funds and for investment in year-round attractions designed to bring additional revenues to the resort.
He said the most recent investment was $2.6 million for an Alpine coaster attraction and that there are no major projects now in the works. One thing the commission would like to see done in the near future is to construct a building next to the base lodge to allow Gunstock to move its rental operations from the basement of the base lodge.
Sullivan also insisted that Gunstock was sharing its profits with taxpayers and had paid what amounted to a 66 percent dividend over the last six years.
There was also discussion of the 1959 legislation, which established the Gunstock Area Commission and removed day-to-day control of the area from the commission, placing it in the hands of a five-member board appointed by the County Delegation.
Rep. Norman Silber (R-Gilford) maintained the 50-year-old statute requires Gunstock to turn over to the county any accumulated revenue greater than 25 percent of any profits remaining after meeting obligations “if required by the County Delegation.”
He said there was no mention of a memorandum of understanding in the legislation and that his calculations showed that the county would receive a substantial amount if it invoked that provision.
Rep. David Huot (D-Laconia) said the fact that the provision had never been invoked showed an intention on the part of previous delegations to work with Gunstock to establish a level of reimbursement that kept the recreation area’s financial situation stable.
Silber also pointed out that Gunstock, which is exempt from property taxes, only pays Gilford $6,586 a year, and asked Sullivan if he thought that is fair. Sullivan said it is, due to the higher property tax valuations which accrue to Gilford as a result of having the recreation area in town.
Silber said that if Gunstock were taxed, it would produce $259,000 in revenue for the town.
Former Delegation Chairman Frank Tilton (R-Laconia) supported Sullivan’s reappointment. He was concerned that Gallagher would not support Gunstock’s efforts to build up sufficient funds to carry it through consecutive winters of poor snow conditions and cited Gallagher’s pushing for using more than $600,000 in surplus funds to reduce county taxes in 2016. He said that depleted the county fund balance and put the county in a position it is still trying to recover from.
Gallagher pointed out that the decision to use the funds to reduce taxes was supported by a 13-2 vote of the delegation. He also said the county would have been better served if the commissioners had followed the recommendation made by the delegation when it approved an $8 million bond issue for a new jail and used the fund balance to pay off current bond issues.
Rep. Tim Lang (R-Sanbornton) also supported Sullivan, maintaining that Sullivan had shown strong leadership for Gunstock in standing up for its best long-term interest. He also questioned how Gallagher would simultaneously give money back to taxpayers and build up Gunstock’s surplus.
Gallagher said that building up reserves would be a long-term process and that it was important to track the returns from Gunstock’s most recent investments to show that they were performing as expected.
Charlie St. Clair (D-Laconia) said he was disappointed that the public was not allowed to speak at the meeting.
Voting for Gallagher were Rep. Glen Aldrich (R-Gilford), Rep. Marc Abear (R-Meredith), Rep. Herb Vadney (R-Meredith), Rep. Peter Varney (R-Alton), Rep. Barbara Comtois (R-Barnstead), Rep. Norman Silber (R-Gilford), Rep. Peter Spanos (R-Laconia), Rep. Ray Howard (R-Alton), Rep. John Plumer (R-Belmont), Rep. Valerie Fraser (R-New Hampton) and Rep. Michael Sylvia (R-Belmont)
Voting for Sullivan were Rep. Frank Tilton (R-Laconia), Rep. Charlie St. Clair (D-Laconia), Rep. David Huot (D-Laconia), Rep. Tim Lang (R-Sanbornton) and Rep. Dennis Fields (R-Sanbornton).

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