Gunstock sees major impact if delegation denies $600K note

GILFORD — Gunstock Mountain Resort General Manager Greg Goddard says the county-owned recreation area will need to make major changes in its operations if its request for a $600,000 revenue anticipation note is denied by the Belknap County  Delegation.

He told members of the delegation Friday morning that the $12.3 million budget prepared by the commission requires the RAN in order to provide a short-term cash flow for Gunstock during the period between ski seasons.

He said that without those funds, several projects and needed maintenance work will be deferred and that Gunstock’s business will suffer as a result, not only this summer but into the future.

The commission had previously sought a $750,000 revenue anticipation note, but was able to trim the request, according to Goddard.

He said that since 1998, the delegation has approved $17,950,000 in RANs, all of which has been repaid.

The RAN was discussed by the Belknap County Delegation when it met Friday morning. But it cannot be voted on by the delegation until it holds a public hearing on the request, which is now scheduled for June 8. A two-thirds vote is required for passage.

Steve Nix, chairman of the five-member appointed commission, said the note will be repaid from Gunstock’s winter season earnings and will not cost Belknap County taxpayers any money.

He said that recent conflicts between the delegation and the commission over Gunstock’s  future need to be resolved in order for both Gunstock and the delegation to know what they can expect tom each other.

The delegation also discussed a proposed memorandum of understanding, or MOU, which provides that Gunstock will pay $175,000 a year plus 3 percent of its net profits to Belknap County.

The memorandum contains a provision to link payment to the delegation approving the full RAN request.

Delegation Chairman Herb Vadney (R-Meredith) said that the MOU will also be taken up at the June 8 meeting.

The commission and the delegation have been at odds since late last year when negotiations over how much money Gunstock should be paying the county broke down.

The delegation voted, 8-7, last month to seek what many legislators believe will amount to a larger share of the revenues realized from the operations of the county-owned Gunstock Mountain Resort recreation area.

The action invokes a provision of the 1959 legislation that established the Gunstock Area Commission as an independent body with control of the operations of the area. The legislation provides that the commission, if required to do so by the delegation, will turn over to the county any funds at hand at the end of its fiscal year which are in excess of 25 percent of the average gross income of the preceding three years, and are not required for the payment of outstanding bills or debt payments.  

Members of the delegation appeared split Friday on whether to accept the proposed memorandum or continue with efforts to use the formula to get more revenue from Gunstock.

The original legislation was enacted during a troubled period in the relationship between the manager of the county-owned ski area, Fritzie Baer — the legendary “Man in the Red Hat’’ who had run the area since 1950 and was fired in 1959 — and the Belknap County Commission, which had overseen the operations of the ski area since it opened in 1937.

The law removed day-to-day control of the area from the commission and placed it in the hands of a five-member board appointed by the County Delegation. It required that at least one member of the board be an experienced skier and that another have experience in finance, banking or accounting and it set forth parameters for the county to receive funds from the profits realized by what was then known as the Belknap County Recreation Area.

The county, with a large infusion of funds from the Works Progress Administration, had developed the ski area and ski jumps in the late 1930s as a recreational facility to further economic development of the county. The area was self-supporting financially until 1991, when, in the wake of  three disastrous ski seasons in a four-year period, it had to seek taxpayer support to make annual payments on a $10 million bond issue from the mid-1980s which had financed an expansion of the ski area in order to make it more competitive with other ski areas in the state.

Over a nearly 10-year period county taxpayers paid $6.2 million of Gunstock’s debt. Since then, Gunstock has paid back about $3.4 million and has been working to establish capital and operating reserve funds to allow it to get through bad years without taxpayer support.