Gunstock Bailout

Gunstock bailout

Rep Raymond Howard has facts on his side

2018 has presented Gunstock with some tough sledding on the fiscal front.  As we approach the November 6th election Gunstock and its financial woes has been used as political fodders.  In recent letters 1, 2, to the Laconia Daily Sun a candidate (a current Gunstock commissioner) and a former Gunstock commissioner have written a jumble of incoherent misleading scribblings aimed at the integrity of Rep. Howard.

After a number of years being run by the Belknap County Commissioners, the Gunstock Area Commission was formed to resolve problems associated with the ski area being run by the County Commissioners. This ignores the actual problem which is a government body trying to run a competitive business. 

One of the problems of a government run business is moral hazard.  The taxpayers are on the hook for any failures but management reaps rewards if things run reasonably well.  In the ski industry 2-3 years of bad weather can be expected and plans for such need to be in place.  The late 1990’s put Gunstock in a position which required a hard choice; shut it down, or go to the taxpayers to keep it running.

On May 11, 2000 the County Delegation handed the bill to the county taxpayers:

Gunstock 2000 Memorandum
May 11, 2000 Gunstock Memorandum of Agreement

Contrary to Rep. Howard’s critics the county taxpayers are on the edge of having to pick up another $6 million in bonds which Gunstock is having difficulty servicing.  The Gunstock Commission has failed over the past 17 years to build enough reserves  to get through one summer without a Revenue Anticipation Note.  Let’s not forget the downgrade of the county’s bond rating earlier in 2018 whereas Moody’s cited Gunstock as a risk factor in that decision.

This should not be taken as an assault on any of the current or past commissioners.  The problem is that government is not capable of running a business and shouldn’t even ever attempt to do so.  It’s time to find a way to turn over the keys to a qualified operator.

Belknap County Finances

As we approach the end of 2018, reviewing the past year and planning for the future I am happy to report that the fiscal condition of the county is in good shape.  Looking at the year end projections, the county will have budgeted approximately $600,000 more than was necessary for operations.

In a system of checks and balances such as we have in the county, the Board of Commissions and the Delegation have differing roles.  The Commissioners propose a budget for which they will ultimately have the responsibility of managing.  The Delegation reviews and adjusts the budget, and then make the appropriation for such.  Never forget; ‘make the appropriation’ means forcing the property owners of the county to give over their money.

Because we are taking money from taxpayers, as a member of the Delegation, I believe there should be no excess in the budget.  It’s not hard to understand that if there is ‘excess’ money available, someone is going to come up with a ‘need’ to spend it.  On the other side of that equation, the Commissioners have a harder time managing the county when there is less money available.  As you can imagine they would prefer to have as much money available as they can get.

In early 2018, I went through the budget in great detail and presented an absolute bare bones budget to the Delegation.  I had pared down the Commissioners’ budget to $27,129,560 which still would require an 11% increase in county taxes; a budget so shockingly low, it was quickly dismissed.  As we close in on the end of 2018, and setting aside unplanned events, that amount would have left the Commissioners $110,000 short of funding for operations.  Off the top of my head I know of $18,000 that was spent ‘because it was available‘.  Yes, cutting spending by $100,000 would require hard choices for management; citizens have hard choices every day – food, medicine, and rent.

CORE Program

The county Commissioners do a lot of finger pointing, and blame the Delegation for not ‘fully’ funding the CORE program.  One commissioners’ ego is so large as to drive him to take out a full page advertisement chastising those who question what ‘fully‘ funding is.  Whereas there is more left unspent in the budget than was taken out of funding for the CORE program, and given the commissioners’ claims that they have authority to spend to the bottom line of the budget; the question should be why have the commissioners not used all of the money in the budget to provide CORE programming?

I’ll give you a hint to the answer; it is likely that ALL inmates that could get CORE programming likely did get that programming.  The requirements for the terms of the inmates are such that they must be sentenced for a period long enough to receive the programming.  The real question is how many inmates qualify and does their sentence align with the programs availability?  The issue is not as black and white as the commissioner would like the public to believe.

Unexpected Revenue

In our county run nursing home we take care of a number of patients who are on Medicaid.  Through a complex scheme of money shuffling the county receives funding from the Federal government to partially compensate for their care.  This funding is called ProShare.  The county had planned on receiving $1.2 million in ProShare revenue but received $3.9 in July.  The Department of Health and Human Services wanted half of the excess revenue returned to the State so that they could use it to fund a private company working on Substance Use Disorder.  The rump of the Delegation went along with this scheme and gave over $1 million taxpayer dollars away because it was available.

Looking Ahead

The county Commissioners are currently in the process of building the 2019 budget.  They will produce a budget that is padded sufficiently as to require very little actual management and fluffed up enough to top off their desired ‘fund balance’ level.  A new Delegation will be sworn in on December 5th and will assemble in the county the following week to hear the commissioners’ budget proposal.