Gunstock renews pitch for $600K noteBy BEA LEWIS
Union Leader Correspondent
August 21. 2018 9:34PM
GILFORD — Gunstock Mountain Resort is again asking the Belknap County delegation to authorize the borrowing of $600,000 in revenue anticipation notes.
In June, the delegation voted 9 to 6 to defeat such a request, leaving the management of the county-owned recreation area to develop a plan to limit spending on summer and fall operations until the lion’s share of their revenue comes in during the ski season.
Gunstock General Manager Greg Goddard told the Gunstock Area Commission on Tuesday that the austerity plan called for $350,000 in expense reductions coupled with use of the resort’s operating reserves to make due without a line of credit to draw from.
While the resort was able to reduce expenses by $372,000 in 90 days, Goddard reported, a combination of high humidity followed by persistent rain combined to substantially reduce projected revenue.
If the weather trend continues, Goddard said, the resort could be in the red by as much as a half-million dollars by November.
“I don’t think any of us want to see us unable to make ski season,” Goddard said in recommending that that the Gunstock Commission vote to authorize management to return to the delegation to ask for a bridge loan.
As the property is county-owned the Gunstock Commission must obtain authority from the delegation to borrow money in the event that default on the debt would become the obligation of taxpayers.
Under questioning by Gunstock Commissioner Brian Gallagher, Goddard said the intent was to use the line of credit to replace the weaker than expected revenue. The manager said the austerity plan would continue but cautioned that some of the savings were realized by deferring spending that will eventually need to occur.
This spring, the resort announced it was facing a nearly $471,000 loss for fiscal year 2017-2018, which runs from May 1 to April 30th, a drop of $1.3 million from the $831,583 profit it enjoyed the prior year.
If revenues go up, Goddard said, the intent would be to only draw against a portion of the revenue anticipation notes.
Commission Chairman Steven Nix said a line of credit for a company the size of Gunstock is a normal occurrence in the business world.
Once the commission is able to get over the current funding hurdle, Nix said, it’s important the strategic plan be reviewed so they don’t find themselves in a similar situation in the future.
Several delegation members have made it known they believe the time has come for Gunstock to be added to the tax rolls and suggested it be leased to an independent operator.
Rep. Ray Howard, R-Alton, who attended Tuesday’s meeting, has opposed granting borrowing authority, maintaining it’s time for Gunstock “to stand on their own feet.” He has also voiced concern about a quasi-governmental entity competing with traditional businesses.
“I suspect other ski areas and seasonal businesses are in the same boat. Banks understand that and that is what a line of credit is all about,” said Commissioner Russell Dumais.
On a motion by Robert Durfee, seconded by Ruth Larson, the commission voted unanimously to authorize Goddard to go before the delegation to seek permission to borrow up to $600,000 in revenue anticipation notes to be repaid no later than April 1, 2019, from operating receipts from the 2018/2019 ski season.
The delegation has posted a meeting and vote on the issue for Aug. 29 at 6 p.m. at the County Complex.
During its Tuesday night meeting the Gunstock Commission also voted unanimously to approve increasing the price of an adult lift ticket by $4 to $92. Director of Marketing and Sales Mike Roth recommended the increase, noting it was a dollar less than the price set last year by Mount Sunapee, which has recently been acquired by Vail Resorts.
Nix opened the meeting by calling for a moment of silence in memory of Doug Irving, the resort’s director of operations for 44 years, who died unexpectedly on July 24 at age 67.
During the meeting it was also disclosed that on Aug. 10 Goddard accepted the resignation of Steven Blakney who had served as the resort’s director of finance for the past 11 years.
In his letter of resignation, he wrote, “In recent months the fun has gone away, replaced with uncertainty and an unclear future for Gunstock.”
Some other unexpected expenses and losses incurred in recent months at the resort include a transformer failure linked to a June 13 electrical storm; a flood in the rental shop when the sump pumps were turned off and an alarm failed to sound; and plugged storm drains that allowed flood water and mud to enter the guest services lodge. The resort’s liability is about $20,000 in insurance deductibles.
Income and ridership for both the Adventure Park and Mountain Coaster were both down compared to the prior year.