Opinion: IVGID’s financials are simply not sustainable
Special to the Bonanza
IVGID General Manager Steve Pinkerton, in his Oct. 15 column, acknowledged IVGID is government and it was no surprise that the venues aren’t profit driven.
But that doesn’t mean we shouldn’t expect them to break even. Cost recovery is the goal of most government services that are not basic necessities like schools.
He has the audacity to claim that the Champ golf course requires “nominal” support, when in fact for the last several years it has required a subsidy well in excess of a million dollars.
With our new “transparent” monthly reporting, we no longer include depreciation or capital expenses , so it looks like we’re doing terrific. Does he think the tooth fairy will pay for the roughly $650,000 worth of Champ course capital improvements planned for 2015-16?
He refers again to the flawed study presented at a Diamond Peak Steering Committee meeting that indicates Diamond Peak outperforms other small ski areas in the Pacific West, when he knows the figures are bogus.
IVGID understates central services costs, and overstates revenues making our venues look good on paper. It doesn’t pay income or property taxes. Besides, with a capital intensive business like the ski industry, studies that don’t include capital expenses and debt service are worthless. Last year’s subsidy was more than $2 million.
Local government typically provides modest recreational facilities and services that will be affordable for everyone in the community (the concept of social equity promoted by the National Parks and Recreation Association — IVGID is a member).
But when it provides more elaborate facilities used by fewer than 25 percent of the parcels, it better break even (or come close) and not rely on local taxpayer subsidies.
Mr. Pinkerton insists the public demands certain levels of service. But how does he know when fewer than 25 percent of the parcels have a person who actually uses the golf or ski area?
So a minority is dictating the level of services to be paid for by the rest of us. Budget discussions revolve around increased services and service levels and added expense, never about cutting costs or what the new services will cost.
IVGID hardly ever shares the actual costs with the public or the Board. For years they’ve been told venues make a profit! No wonder people keep asking for more.
Maybe if everyone could see the real cost of providing those services and amenities they would understand their demands perhaps exceed what they want to pay for. Maybe they’d recognize why others don’t want to subsidize their facilities/activities.
Some people embrace the Rec Fee (you’d love it if you’re among those who benefit most from the huge subsidies, like the golfer he quotes), but I believe just as many do not, especially those (including several CPAs) who have carefully examined those records IVGID was willing to share and concluded that our financials are misleading, if not downright deceptive.
In a poll 2 years ago on which venues should be self supporting, all Trustees (including current Trustees Hammerel and Devine) agreed on Golf and Ski.
If IVGID cannot run operations on a cost recovery basis, maybe it should consider abandoning some of them (the consultant suggested the Board tackle this exercise at the Strategic Plan workshop, but the subject was apparently entirely avoided) or look for better ways to deliver those services.
The community didn’t ask IVGID to acquire the beaches — it was the developers who had promised private beaches to the community, and then couldn’t produce. The developers were our first Trustees (how convenient) and used the GID as a mechanism to be able to assess the property owners for improvements and amenities they should have provided.
They promised the Rec Fee would never exceed $50 and told the county that the ski and golf venues would be privately owned and operated.
We’re a small community and should support basic amenities like the Rec Center and parks that offer a variety of activities for almost every member of the community, using the nearly $3 million of property and sales taxes IVGID receives, but for the rest, we should determine fees using the same philosophy our Utilities department uses to calculate water/sewer rates: pay for what you use.
The Board should give clear direction to staff to present costs for every program and service offered or proposed, and except for the Rec Center and Parks, budget for cost recovery, setting fees appropriately.
With over $50 million of capital improvements in the pipeline over the next 5 years, IVGID’s current financial model is simply not sustainable.
Judith Miller is an Incline Village resident and a member of the Incline Village/Crystal Bay Citizens Advisory Board.