Marc Abear: Considerations about Gunstock management should be put into context

To The Daily Sun,

A Reason Foundation review of government financial statements found 221 local governments reported running golf courses in their 2020 financial reports. Of those 221 local governments, 155 local governments lost money operating public golf courses that year. In the aggregate, these 155 local governments lost a total of $61 million in taxpayer money operating golf courses in fiscal year 2020.

In contrast, 62 of the 221 local governments broke even or turned a profit on their public golf courses in 2020. In the aggregate, these 62 governments made $16 million via their public golf courses in fiscal 2020. Four governments did not provide net income results.

This is excerpted from an article in Reason: reason.org/commentary/155-local-governments-across-the-u-s-lost-a-total-of-61-million-operating-public-golf-courses-in-2020

Why bother with this article? Well, Belknap County is a local government. It owns and operates a recreational facility called Gunstock. Gunstock is a local institution. It has an advocacy and it has its detractors. It has had good years and it has stuck the Belknap County tax payers with a bill for its default. None of that makes Gunstock good or bad. It makes Gunstock a typical local, government run, recreational facility... sort of like the golf courses.  

We should put Gunstock considerations into context. Perhaps looking at how other local government operated recreation facilities perform isn’t a bad place to start. Skiing is a sport Mr. Tom Day, general manager of Gunstock describes as one in which 3% of people participate. Golf has a somewhat higher participation rate. Both are indisputably recreational activities. Recreation is something people cut from their budgets when economic times get tight.

So the question becomes: What does this study of economic performance of the 221 local governmentally controlled recreational facilities tell us about future expectations for Gunstock? Is Gunstock setup so much better than the golf courses? Is it better run? If it is, what is everyone scrapping about?

Then there’s the question of whether public recreation areas are the proper function of government. If you think Gunstock is a good investment for local government to make then ask yourself this question: Would you invest your money in a business knowing your upside potential is capped at 1.75% and you retain all of the business risk plus debt?

Gunstock has debt on its books. Its capital equipment is old and in need of replacement. Yes, it has a loyal customer base. But its revenue stream is largely determined by a 16-week weather dependent season. Have you checked the financial performance of Gunstock against the nationwide results of other ski areas by using the Annual Statement Studies Book? That’s the bankers’ bible for measuring business performance for lending purposes.

This is not written to take a position for or against Gunstock. The point is to ask: Are you making an emotional decision either for or against Gunstock There isn’t sufficient information publicly available to determine whether the recently proposed Master Plan is fiscally responsible. That much is fact.

Marc Abear

Meredith