Gunstock Expansion Plans

[Major]

Originally Posted by FlyingScot

I have not written anything about bonuses--if you have a newspaper article or minutes of a meeting or any sort of substantiation that money was spent improperly, other than an anonymous person supposedly in the know, please share. Otherwise you should not assert malfeasance.

Similarly, unless you can point to specific reporting that is wrong, you should not criticize LDS et al. They appear to have provided great coverage here

You are unwittingly making my point. (I am assuming you meant "I have not seen anything written about bonuses".) You haven't seen anything written because the LDS is covering only one side of the story. Although I do seem to recall seeing something about the bonuses in the LDS.

The Granite Grok reported --

"The general manager of Gunstock, who is already believed to be the highest-paid employee in Belknap County government, with a base salary of $180,250 per year + benefits, received a cash bonus of an additional $40,000.

With a base salary of $123,600 + benefits, the Gunstock Chief Financial Officer received a cash bonus of $23,484.

And 3 other employees , with base salaries of $95,004; $96,096; and $71,774 (all plus benefits) received cash bonuses of $18,069; 17,370 and $10,000, respectively.

Total bonuses paid to all employees added up to $151,873, but most of those bonus monies went only to the “top” people."

[John Mercier]

It was in the LDS.
A letter from Norm Silber on September 22nd of last year.

Performance Bonuses would also happen under a private operation.
The County of Belknap would only receive whatever the formula for payout was... and I believe that GAC followed that formula.

[FlyingScot]

Originally Posted by Major

Do you deny that the management team awarded themselves big bonuses without seeking any approval? That's a fact, I think.

Originally Posted by Major

You are unwittingly making my point. (I am assuming you meant "I have not seen anything written about bonuses".) You haven't seen anything written because the LDS is covering only one side of the story. Although I do seem to recall seeing something about the bonuses in the LDS.

The Granite Grok reported --

"The general manager of Gunstock, who is already believed to be the highest-paid employee in Belknap County government, with a base salary of $180,250 per year + benefits, received a cash bonus of an additional $40,000.

With a base salary of $123,600 + benefits, the Gunstock Chief Financial Officer received a cash bonus of $23,484.

And 3 other employees , with base salaries of $95,004; $96,096; and $71,774 (all plus benefits) received cash bonuses of $18,069; 17,370 and $10,000, respectively.

Total bonuses paid to all employees added up to $151,873, but most of those bonus monies went only to the “top” people."

Your first post suggests there was something improper. According to your second post, the Grok (which is not a real newspaper, but obviously a political organization), did NOT report that anything about the bonuses was improper, they only reported the bonus amounts.

As for the amounts--$220,000 is definitely a lot of money, but that is likely less than a private sector CEO of an operation the size of Gunstock would earn. Similarly, big bonuses going to the top people--this is also like the private sector. You should be careful what you wish for...

[rocket21]

Originally Posted by FlyingScot

As for the amounts--$220,000 is definitely a lot of money, but that is likely less than a private sector CEO of an operation the size of Gunstock would earn. Similarly, big bonuses going to the top people--this is also like the private sector. You should be careful what you wish for...

The general manager of Cannon Mountain made $89,559.50 in 2021.

[John Mercier]

Originally Posted by rocket21

The general manager of Cannon Mountain made $89,559.50 in 2021.

State Employee... not exactly a group being operated like a private business.

[FlyingScot]

Originally Posted by rocket21

The general manager of Cannon Mountain made $89,559.50 in 2021.

I have no idea of the specifics on that particular situation, but that is an insanely low amount of money for a person with that kind of job.

More importantly though--if keeping executive pay low is important to you, the last thing you should want is a for-profit group on the mountain. Corporations pay their executives much more than states, cities, nonprofits; and also much more than middle managers. As a beneficiary of this disparity, I'm not complaining, just pointing it out

[rocket21]

Originally Posted by FlyingScot

I have no idea of the specifics on that particular situation, but that is an insanely low amount of money for a person with that kind of job.

1) Ski industry pay tends to track much lower than other sectors. Nevertheless, Cannon is a larger facility than Gunstock.
2) Government employment typically carries robust benefit packages. I do not know what the benefit packages are at Gunstock, but I suspect they are much more generous than other mid-sized ski areas.

Originally Posted by FlyingScot

More importantly though--if keeping executive pay low is important to you, the last thing you should want is a for-profit group on the mountain. Corporations pay their executives much more than states, cities, nonprofits; and also much more than middle managers. As a beneficiary of this disparity, I'm not complaining, just pointing it out

If Gunstock were leased to a private operator, executive and staff pay wouldn't be taxpayers' issue. The lease proceeds would be. If using the Sunapee model, Gunstock would provide the county with significantly more revenue than the current model, while offloading the risk of bad seasons and bad debt.

[John Mercier]

Originally Posted by rocket21

1) Ski industry pay tends to track much lower than other sectors. Nevertheless, Cannon is a larger facility than Gunstock.
2) Government employment typically carries robust benefit packages. I do not know what the benefit packages are at Gunstock, but I suspect they are much more generous than other mid-sized ski areas.

If Gunstock were leased to a private operator, executive and staff pay wouldn't be taxpayers' issue. The lease proceeds would be. If using the Sunapee model, Gunstock would provide the county with significantly more revenue than the current model, while offloading the risk of bad seasons and bad debt.

The lease proceeds are the only thing we should have been worried about even without it being privatized. It wasn't like they were violating the ''lease''; they made the payments as specified.
No private operator has ever even offered to take over the area, so your point is moot... since that option doesn't exist and wishful thinking will not make it happen.

The only privatized options placed on the table have been for food and lodging. There is an occasional look at further rec formats, but many of those come and go.

But all of that is over... the management team are back, the GAC is reformed, and all that is left is the $30K that will most likely end up in the lap of Silber and Sylvia.

[rocket21]

Originally Posted by John Mercier

The lease proceeds are the only thing we should have been worried about even without it being privatized. It wasn't like they were violating the ''lease''; they made the payments as specified.

That is not an accurate statement. It was only a few years ago (different management team & GAC) that Gunstock refused to make payments to the county. And there's also history of Gunstock not covering its debt payments (again, different management team & GAC).

Originally Posted by John Mercier

No private operator has ever even offered to take over the area, so your point is moot... since that option doesn't exist and wishful thinking will not make it happen.

Also not an accurate statement. Without an RFP or RFI, private operators aren't going to make an offer. If the county ever decided to issue an RFP, there would be quite a few qualified responses.

[John Mercier]

So we punish the GAC and management team for what others did in the past?
WOW.

The new GAC, appointed by the current delegation with the blessing of Silber/Sylvia, could have made such a request... it chose to rehire the management team.

Your horse is dead.
The only open item on the agenda is the $30K.

No private entity with any financial backing is going to support an out of the way ski area that has no room for expansion in the food and accommodations area... even Sunapee had large lawsuits against the State on the issue.

[Cobaltdeadhead]

Sunapee under Vail is the perfect example of exactly what we don't want to happen to Gunstock. I'm sure it makes a lot of money, but Vail runs that place like garbage. Very slow and timid on snowmaking, horrible F&B operations, uncomfortably crowded and considerably more expensive than Gunstock.

[Major]

It is apparent that what I do not know about the legal entanglements between the delegation, the County Commissioners, the Gunstock Area Commissioners, and the full time staff can fill volumes. I appreciate the education.

However, at some level, doesn't the county delegation control the finances of the county budgets? And if so, are there mechanisms in place for setting salaries and awarding bonuses? For example, did the senior leadership of the Sherriff's department or the county nursing home receive merit bonuses. I guess I shouldn't have much heartache about the bonuses if they were awarded in a proper manner.

And why is the GAC and the full time employees against an audit? I was a managing partner in a law firm for 8 years. If one of my partners, or our firm's bank, wanted to audit our books, I would welcome such a request. If I went kicking and screaming against it, wouldn't that raise issues to the other stakeholders?

And finally, why is the GAC making political contributions? Shouldn't a government owned entity be agnostic?

[jeffk]

It seems to me there is a critical distinction between Gunstock and other government agencies. Gunstock is a profit generating business. Other government agencies are taxpayer funded necessary evils. Government usually does not “own” or run businesses and the current mess surrounding Gunstock is a prime example of why not.

The philosophy of a business is that it is profitable to all involved. Owners (in this case the County), managers, affiliated vendors, etc. It is absolutely normal that the management of a corporation vote itself bonuses and significant salaries. The expertise of these people is in demand and if the success and profits they generate are not shared with them, they will go elsewhere.

Government does not make a profit. It does not generally understand the necessities of business. They talk about “accountability to taxpayers” and demand audits so they can niggle over small things to assume control over something that they have NO idea how to manage. An example is the $500 campaign donation to Sununu. This is a typical action for a business to take. It is a TINY issue that would have been a Nothing Burger to a business. Even for Gunstock, this should have been a simple suggestion to management that in the future the Commission would prefer that no political donations be made. But government officials can’t solve problems like that. They must make it into some type of major, disruptive problem.

As to an audit, the Country is receiving $7+ M? in earnings from Gunstock this year and has gotten good money in the past years. The resort has a good reputation and improving facilities that draw more customers. Are the people wanting an audit saying that they get NO financial reports from management? That’s absurd. What an audit will be used for is to deep dive for spending that a business would routinely make but government might not. Then the government troublemakers will make ridiculous attacks on management.

Let’s think about the likely outcome of this. The current management gets fed up and leaves. Any decent managers would look at this mess and want nothing to do with it. They can make more money elsewhere. Gunstock would probably end up with political cronies that have no clue how to run the place. Profits would drop and the facilities would go downhill.

Instead of a fishing expedition audit, maybe the politicians should respectfully sit down with the management and ask them about any expenditures they might want more information about.

Government in charge of a business is a bad idea. Government micromanaging a business to government standards is a disaster.

[Descant]

Originally Posted by jeffk

It seems to me there is a critical distinction between Gunstock and other government agencies. Gunstock is a profit generating business. Other government agencies are taxpayer funded necessary evils. Government usually does not “own” or run businesses and the current mess surrounding Gunstock is a prime example of why not.

The philosophy of a business is that it is profitable to all involved. Owners (in this case the County), managers, affiliated vendors, etc. It is absolutely normal that the management of a corporation vote itself bonuses and significant salaries. The expertise of these people is in demand and if the success and profits they generate are not shared with them, they will go elsewhere.

Government does not make a profit. It does not generally understand the necessities of business. They talk about “accountability to taxpayers” and demand audits so they can niggle over small things to assume control over something that they have NO idea how to manage. An example is the $500 campaign donation to Sununu. This is a typical action for a business to take. It is a TINY issue that would have been a Nothing Burger to a business. Even for Gunstock, this should have been a simple suggestion to management that in the future the Commission would prefer that no political donations be made. But government officials can’t solve problems like that. They must make it into some type of major, disruptive problem.

As to an audit, the Country is receiving $7+ M? in earnings from Gunstock this year and has gotten good money in the past years. The resort has a good reputation and improving facilities that draw more customers. Are the people wanting an audit saying that they get NO financial reports from management? That’s absurd. What an audit will be used for is to deep dive for spending that a business would routinely make but government might not. Then the government troublemakers will make ridiculous attacks on management.

Let’s think about the likely outcome of this. The current management gets fed up and leaves. Any decent managers would look at this mess and want nothing to do with it. They can make more money elsewhere. Gunstock would probably end up with political cronies that have no clue how to run the place. Profits would drop and the facilities would go downhill.

Instead of a fishing expedition audit, maybe the politicians should respectfully sit down with the management and ask them about any expenditures they might want more information about.

Government in charge of a business is a bad idea. Government micromanaging a business to government standards is a disaster.

JeffK makes some good points. You may be right on different scales, BUT in NH there are examples of government run businesses that are successful. Obvious to most is the state liquor outlets. Another is the state park system which is self supporting. In Hillsborough County the county nursing home is a profit maker.

If I remember correctly, when Mueller, et al, started leasing Sunapee, it was pretty shabby and the renewable 10 year leases allowed them to invest in fixed assets that led to more skiers and other improved revenues. Nobody wanted to lease Cannon, but the money from Sunapee that went to Cannon improvements led to increased skier visits and revenues there too.

[rocket21]

Originally Posted by John Mercier

So we punish the GAC and management team for what others did in the past?
WOW.

I don't think anyone is suggesting the GAC and management team be punished for actions for which they were not responsible. The past is relevant to the delegation, in that they a fiduciary responsibility to ensure protect taxpayers by ensuring these problems don't recur.

Originally Posted by John Mercier

No private entity with any financial backing is going to support an out of the way ski area that has no room for expansion in the food and accommodations area.

Wachusett is one of the most successful ski areas in the country and its operator has virtually no ability to expand. The operator bid on the New Hampshire areas (Cannon/Sunapee) knowing they'd have to focus on existing operations.

Originally Posted by Descant

JeffK makes some good points. You may be right on different scales, BUT in NH there are examples of government run businesses that are successful. Obvious to most is the state liquor outlets. Another is the state park system which is self supporting.

The NH state park system is self-supporting in name only. It is heavily subsidized from the general fund on a capital basis and also has significant deferred maintenance.

Originally Posted by Descant

If I remember correctly, when Mueller, et al, started leasing Sunapee, it was pretty shabby and the renewable 10 year leases allowed them to invest in fixed assets that led to more skiers and other improved revenues. Nobody wanted to lease Cannon, but the money from Sunapee that went to Cannon improvements led to increased skier visits and revenues there too.

Both ski areas had numerous qualified bids. The Cannon lease was supposed to be awarded at the same time as the Sunapee lease, but an unknown party was able to get the state to pull it at the last minute.

Sunapee was a 20-year lease with two 10-year automatic renewals. Without the millions in Sunapee revenue (and millions in general fund dollars), Cannon would have been in jeopardy.

Originally Posted by Cobaltdeadhead

Sunapee under Vail is the perfect example of exactly what we don't want to happen to Gunstock. I'm sure it makes a lot of money, but Vail runs that place like garbage. Very slow and timid on snowmaking, horrible F&B operations, uncomfortably crowded and considerably more expensive than Gunstock.

Vail was a dumpster fire in New Hampshire last year. That said, Gunstock was no bargain at $96/day.

Originally Posted by jeffk

As to an audit, the Country is receiving $7+ M?

No, the county receives about $300K from Gunstock from the most recent fiscal year.

I believe the $7M figure is what's in the bank, which I suspect is a lot of "restricted" cash (e.g. 2022-23 season pass revenue). A much better situation than a few years ago, when Gunstock couldn't get through the off-season without a county-backed bridge loan.

[John Mercier]

Wachussets? A little different than out-of-the-way Gunstock.
And the operator, Okemo, sued the State for the expansion...
so what they ''knew'' seems to be different than what you are projecting.

But if you feel strongly about it...
Suggest to the GAC that you would like to lease the area...
Lay out formal proposal and bring forth your financials to show you can cover it... and maybe they will.

Other than that... the horse is dead.
The only issue is the $30k.

[rocket21]

Originally Posted by John Mercier

Wachussets? A little different than out-of-the-way Gunstock.

Both are mid-sized, day-trip areas located less than two hours from millions of people, and are facing capacity issues with their current footprints. Some might suggest that Wachusett has perfected the model.

Originally Posted by John Mercier

And the operator, Okemo, sued the State for the expansion...
so what they ''knew'' seems to be different than what you are projecting.

That's not quite what happened...

Originally Posted by John Mercier

But if you feel strongly about it...
Suggest to the GAC that you would like to lease the area...
Lay out formal proposal and bring forth your financials to show you can cover it... and maybe they will.

Members of the GAC and Belknap County Delegation have both expressed the opinion that they do not have the authority to lease the ski area.

[John Mercier]

One is 50 minutes, and the other wouldn't have any effect on hotels/motels/STR if it were closer.

So again the papers got it all wrong?

If they don't have the authority to private lease... then why are you focusing on leasing it like Sunapee?

[Cobaltdeadhead]

Comparing Gunstock to Wachusett is disingenuous. Wachusett has millions more people within an hour drive than Gunstock.

Rocket is focused on a lease for the same reason as Sylvia. That's his ideology. He has a website fully devoted to ripping the state for how they run Cannon. Even links articles from right wing propaganda "news" agency Granite Grok

http://www.taxpayersforcannon.com/news.php

[Descant]

Originally Posted by John Mercier

One is 50 minutes, and the other wouldn't have any effect on hotels/motels/STR if it were closer.

So again the papers got it all wrong?

If they don't have the authority to private lease... then why are you focusing on leasing it like Sunapee?

Right! Maybe lease is the wrong word? I'm sure if there were an RFP issued, two parties could come up with an imaginative agreement/arrangement. It just takes willing participants. With all due respect to the delegation,, not all members of the delegation are willing. At the state level, Administrastyive Services has expertise that the ;legislature can look to. I'm not sure Belknap County has a parallel body. There are/were some very experienced folks on the GAC. I hope a level of trust there can be re-established.

[John Mercier]

Originally Posted by Major

It is apparent that what I do not know about the legal entanglements between the delegation, the County Commissioners, the Gunstock Area Commissioners, and the full time staff can fill volumes. I appreciate the education.

However, at some level, doesn't the county delegation control the finances of the county budgets? And if so, are there mechanisms in place for setting salaries and awarding bonuses? For example, did the senior leadership of the Sherriff's department or the county nursing home receive merit bonuses. I guess I shouldn't have much heartache about the bonuses if they were awarded in a proper manner.

And why is the GAC and the full time employees against an audit? I was a managing partner in a law firm for 8 years. If one of my partners, or our firm's bank, wanted to audit our books, I would welcome such a request. If I went kicking and screaming against it, wouldn't that raise issues to the other stakeholders?

And finally, why is the GAC making political contributions? Shouldn't a government owned entity be agnostic?

The Delegation approves the County budget... but does not set salaries/etc; that is the County Commission, an elected body.

The GAC hires for Gunstock and approves their budget... the Delegation only has the authority to appoint the GAC members on a specified format.

Gunstock is independently audited every year and has been for many years. Ness stopped this year's annual audit... when he became chair. The full time employees/management hasn't really expressed opposition to the audit.

The political contributions were approved by the GAC... which approves the budget for Gunstock.

[Major]

Originally Posted by John Mercier

The Delegation approves the County budget... but does not set salaries/etc; that is the County Commission, an elected body.

The GAC hires for Gunstock and approves their budget... the Delegation only has the authority to appoint the GAC members on a specified format.

Gunstock is independently audited every year and has been for many years. Ness stopped this year's annual audit... when he became chair. The full time employees/management hasn't really expressed opposition to the audit.

The political contributions were approved by the GAC... which approves the budget for Gunstock.

Okay, I think we are getting somewhere. Thank you for the helpful information. I have a few more questions.

The Delegation approves the budget, I get that. I work better with analogies. In my firm, the firm's directors set salaries and bonuses for the firm's staff (assistants, paralegals, HR, IT, Accounting, etc.). As a member of the Management Committee, we reviewed the directors' recommendations and made changes that we saw fit to make. So I guess I'm asking does the Delegation have the ability to change a budgetary item or to make suggestions to expenses, including salaries? If so, it appears to me that the Delegation has some level of control of these issues. If not, then that's fine too, I guess.

I read today in the LDS that Gunstock is subject to an annual audit that is authorized by the GAC and conducted by a third party. In reading between the lines, it appears that the new leaders of the Delegation wanted to conduct its own audit with it's own third party auditors. Again, using an analogy, let's say Gunstock was a private entity, and was the subject of a sale to a Buyer. If Gunstock denied the buyer's request for an independent third party audit, but instead insisted that the Buyer rely on Gunstock's own third party audit, wouldn't that raise red flags? I go back to a statement that I made earlier, if I ran a business (which I do), I would welcome any and all audits to establish trust and transparency. The last thing I would do is rely on "we've always done it this way and you should be happy with it" mentality. And to my earlier points, wouldn't have the GAC and the full time management been better off taking this approach rather than being insulted?

And finally, you did not answer my question about the political contribution. I read, like you, that the GAC approved (and has always approved) this type of political contribution. I get it. That doesn't make it right. Gunstock cannot have it both ways -- being treated as a private entity and as a public concern -- it is a public concern and the appearance of impropriety of dolling out political contributions far outweighs its benefits.

[StevenGilford]

Originally Posted by Major

And to my earlier points, wouldn't have the GAC and the full time management been better off taking this approach rather than being insulted?

If you believe Silber, Ness and Strang, they were just "asking questions and providing oversight"

If you believe just about everyone else including the majority of Gunstock staff, Ness and Strang were using this sham "audit" approach as a way to legitimize their toxic micromanagement behaviors and harassment of the management team.

I believe the latter, so don't think that the full-time management team should have just gone along with it.