Squaw CEO questions Olympic Valley finances, viability
OLYMPIC VALLEY, Calif. — The CEO of Squaw Valley and others are questioning the proposed town of Olympic Valley’s economic viability and whether incorporation may decrease service levels throughout the greater North Tahoe/Truckee region.
In an April 7 letter to Placer County’s Local Agency Formation Commission, Andy Wirth, president and CEO of Squaw Valley and Alpine Meadows, urged the agency to carefully review the Incorporate Olympic Valley proposal, weighing evidence in support and against the endeavor.
“It cannot be denied that the success of a new city as proposed is inextricably linked to and dependent on the success of Squaw Valley,” Wirth wrote in the letter, signing it on behalf of Squaw Valley Ski Holdings.
According to an IOV-financed fiscal analysis, the proposed town would be economically viable, generating $484,000 in annual surplus, based on $4.74 million in revenue — mainly from transient occupancy and property taxes — and $4.26 million in expenses.
In his letter, Wirth questioned the finances, and residents have too, according to statements provided to the Sierra Sun by Squaw Valley.
“I’ve looked at the proposed budget and question whether the IOV proponents have adequately stress tested their numbers,” said Larry Tomlinson, an Olympic Valley resident and retired corporate treasurer for Hewlett Packard, in one of the statements. “What happens when the next financial meltdown comes and we can’t fund the legacy costs, which may threaten Olympic Valley with bankruptcy?”
When asked to comment Wednesday on Wirth’s letter and the statements questioning IOV’s efforts, the group’s chairman, Fred Ilfeld, said he was disappointed.
“I’m disappointed that they don’t trust the local population to make wise decisions for the valley,” said Ilfeld, who lives in Olympic Valley.
When reached by phone Wednesday, Wirth said his letter represents a voice beyond just Squaw Valley.
“The voice is not ours — the voice is on behalf of the community,” he said.
On Dec. 19, 2013, the IOV group submitted a formal application to LAFCO outlining the plan for the town of Olympic Valley, including public service providers and town boundaries, which includes Squaw Valley ski resort.
In his letter, Wirth wrote that, if incorporation succeeds, IOV makes two assumptions — that Squaw will continue to be competitive in the marketplace, and any development at the resort will be economically successful.
“If development that is necessary to keep Squaw Valley competitive is restricted, or if weather, economic factors or the new (town’s) failure to invest in public infrastructure or services serve to depress profitability, this will likely leave the new (town) without sufficient funds to be self-supporting,” he wrote.
As part of the application process, LAFCO will commission a comprehensive analysis by a neutral party to consider revenue and expenses and determine fiscal viability of the proposed town.
If incorporation succeeds, Placer County tax revenue would flow to a town covering a number of square miles, but containing “only 538 registered voters,” Wirth wrote.
“Removing (that revenue) … will deprive both Olympic Valley and the greater Placer County of economics of scale and much needed dollars to fund services and improvements that benefit all of us,” he wrote.
In addition to LAFCO’s fiscal analysis, negotiations on a revenue agreement between IOV and Placer County must happen to ensure incorporation doesn’t harm the county financially, Ilfeld said.
“It’s equivalent to alimony,” he said previously.
That expense will be factored into the final fiscal analysis, Ilfeld said.
Afterward, public hearings would be held, with LAFCO eventually voting to approve, deny or conditionally approve incorporation.
In his letter, Wirth proposed an idea of alternate town boundaries that exclude Squaw Valley.
“Squaw Valley believes that a full and comprehensive study, including consideration of alternate boundaries, is the only way LAFCO can effectively consider and weigh all relevant factors as required during the incorporation review process,” he wrote.
Another concern is if the incorporation effort is representative of the community.
He stated that there are roughly 7,500 homeowners — full-time property owners, time-share owners and/or part-time residents — within boundaries of the proposed town, yet only 538 registered voters.
To become a town in California, a minimum of 500 registered voters must live within proposed limits, a requirement Olympic Valley meets.
If LAFCO approves incorporation, an election would follow, in which a simple majority — more than 50 percent of Olympic Valley registered voters — must vote in favor.
According to previous reports, incorporation was triggered in part by Squaw Valley’s village expansion project. Despite a scaled-back proposal unveiling in December 2013, the incorporation effort continued.
“We are not anti-development,” Ilfeld said. “We are not pro- or anti-development.”
Rather, it’s more of an issue of local control.
“We think it makes sense to have decisions made by the residents that live in the valley,” Jamie Schectman, an IOV board member, said recently. “We believe local land use, planning and services, as well as how to spend use of tax dollars, should be decided by the community, not by administrators on the other side of the mountain in the foothills.”
If voters approve incorporation, another election would determine a five-member town council.
An extra layer of government is another concern, said Ciro Mancuso, a longtime Olympic Valley homeowner, in a provided statement.
“There is a proven public process that has been working for 60 years,” said Mancuso, whose daughter is 4-time Olympic skiing medalist Julia Mancuso. “I’ve worked with Placer County Planning Services for decades and they’ve always worked collaboratively, been open and transparent, and we just don’t need another layer of government oversight.”
Ilfeld said it’s not likely an incorporation election could take place in time for this November.