Mt van Hoevenberg: Untapped Commercial Value

Snowballs wrote

So what happened to the 6.8 million dollars? Where is it at? Why isn't it listed as an asset, money ahead in the bank?

Anybody know of any missing piece to this puzzle? Please add it.

I apologize if I confused things by throwing the $6.8 million depreciaton amount into the discussion.  Let me try to clarify.
Go to ORDA's audited financials, here and flip forward to Page 17, the Stmt of Revenue & Expenses.

See where the Operating Loss is $13.731 million?  That includes a Depreciation charge of $6.859 million.  
If you don't count the depreciation charge, ORDA's loss is $6.9 million.  The reason you might not count the depreciaton charge is because depreciation is a "non-cash item" (that's an accounting term).  It's money that was spent in prior years on capital improvements (lifts, lodges, etc) whose costs are being spread out over multiple (as much as 40) years.  When talking about ORDA's funding from taxpayers, the focus is on their Operating Loss EXCLUDING non-cash items, because that's the amount taxpayers will need to pony up.  You don't have to fund non-cash items in the current year because they were funded when the improvement was done.  That's why the state's appropriation (plus the town's) for operations is much less than their operating loss. There's nothing fishy with that, it's standard accounting for an entity like ORDA.

One more thing:  The fact that ORDA is an Authority means that we actually get audited financial statements, and that's a good thing.  In Belle's case, the ski area is run by the DEC and there is no such thing as audited financials for a Department of state governmnent, much less one minor facet of that department's operations.  For ski  areas in the private sector, unless the ski area is owned by a publicly traded corporation, public disclosure of financial statements is not required.  And even in the case of publicly traded corporations, you don't get financial results on a resort-by-resort basis, only for the total properties of the corporation.  My point is that ORDA is relatively transparent compared to other parts of state government and compared to privately held ski areas.

Adk Jeff wrote

 That includes a Depreciation charge of $6.859 million.  

...depreciation is a "non-cash item" (that's an accounting term).  It's money that was spent in prior years on capital improvements (lifts, lodges, etc) whose costs are being spread out over multiple (as much as 40) years.  

There's the rub. It's not a "cost" if the State gave ORDA the money for those capital improvements. If the 6.8 mill was contributed by the State, all at once or over time, then there was no cost to ORDA, hence no loss to ORDA and should not be deducted from the bottom line profit. I would venture to say most, maybe all ORDA capital improvements have been paid for by the State. So it comes down to, who paid for the capital improvements? Not sure we can verify that.

ORDA equipment/property maintainance costs would be listed in another expense line.

Everything maybe all fine and dandy at ORDA.

That's correct SB.  All of the improvements were paid for by the State over the history of those facilities.  You're also correct that maintenance is included in operating expenses.

it appears that depreciation is part of the Orda financials but you covered my point since this a non cash expense and what really matters is what the state and local govt's need to put into Orda yearly non cash expenses really don't belong in their equation

a x-c operation has much less to depreciate compared to an alpine ski area though

in an earlier post i brought up Orda corp overhead and management costs - at the risk of thread creep (which I seem to be pretty good at) do we have a handle on how much is going to the Orda fat cats and other "overhead" not directly related to running the venues?

ausable skier wrote

in an earlier post i brought up Orda corp overhead and management costs - at the risk of thread creep (which I seem to be pretty good at) do we have a handle on how much is going to the Orda fat cats and other "overhead" not directly related to running the venues?

Just what's in the audited finaancials, linked a few posts back.  On a per-man-hour basis I suspect that ORDA's personnel costs are high, but that just reflects a problem with NY state govt in general, rather than a problem specifically with ORDA.  You're not going to find individual salaries of "fat cats," but I expect the guys at the top are paid roughly in line with top guys in comparable positions in the private sector.

Adk Jeff wrote

That's correct SB.  All of the improvements were paid for by the State over the history of those facilities.  You're also correct that maintenance is included in operating expenses.

If so, then depreciating them is very deceptive.....How can one depreciate what one did not pay for ? It goes against the premise of depreciation...." The required variables for calculating depreciation are the COST and the expected life of the fixed asset."

http://www.assetaide.com/depreciation/calculation.html

http://accountinginfo.com/study/dep/depreciation-01.htm

Taking an imaginary loss......and then subtracting real dollars from the bottom line profits is fraudulent. Furthermore, when these physical assets do go ka-plunk, the State will/has replaced them for ORDA.

" IF " this is a common accounting practice/deception by State agencies/authorities it doesn't make it correct, acceptable or proper. Simply just another way to deceive and fleece the taxpayers by authorities who face no chance of prosecution or being held accountable.

Bet the IRS would disapprove a private business taking a depreciation tax deduction for something that cost the business nothing and will be replaced for free. In fact, that would be taxable income not a tax deduction.

When the Convention Center opens, ORDA will be able to show another imaginary loss and then go to Albany to get millions more even though no actual dollars were ever lost. Neat trick, eh?

Still the looming question, where's the 6.8 million dollars ? Simply saying it's an acceptable accounting method doesn't change the reality that there's still 6.8 mill somewhere that was not lost due to depreciation.

Snowballs wrote

If so, then depreciating them is very deceptive.....How can one depreciate what one did not pay for ? It goes against the premise of depreciation...." The required variables for calculating depreciation are the COST and the expected life of the fixed asset."

I'm guessing you're not going to like this answer SB.  But, in an indirect way, ORDA did pay for the improvements.  NYS appropriated the money to ORDA, and ORDA then spent it on the improvements (lifts or whatever).  That's how the asset gets onto ORDA's books, and how they then depreciate it.

Snowballs wrote

When the Convention Center opens, ORDA will be able to show another imaginary loss and then go to Albany to get millions more even though no actual dollars were ever lost. Neat trick, eh?

Well, not exactly.  The state's not funding the non-cash portion of the operating loss.  I know, that's a double negative.

Adk Jeff wrote

ausable skier wrote

in an earlier post i brought up Orda corp overhead and management costs - at the risk of thread creep (which I seem to be pretty good at) do we have a handle on how much is going to the Orda fat cats and other "overhead" not directly related to running the venues?

Just what's in the audited finaancials, linked a few posts back.  On a per-man-hour basis I suspect that ORDA's personnel costs are high, but that just reflects a problem with NY state govt in general, rather than a problem specifically with ORDA.  You're not going to find individual salaries of "fat cats," but I expect the guys at the top are paid roughly in line with top guys in comparable positions in the private sector.

Here's what the NYRA fat cats earn. They fought hard keep it under wraps, but the State made them reveal it. It should be noted that they set/approve/create their own raises.

President Charles Hayward - $475,000   He has called himself underpaid.

Chief Financial Officer Ellen McClain - $350,000

Chief Information Officer Thomas Till - $275,000

Vice President David Smuckler - $265,000

General Counsel Patrick Kehoe - $423,000

Chief Operating Officer Hal Handel - $455,000

Read more: http://www.timesunion.com/local/article/NYRA-pay-increases-A-good-wager-1444994.php#ixzz1cQ1MDVpO

Wonder if the ORDA board sets it's own wages? It's flat out BS that it's not readily avaliable public info what they earn. It should be. Maybe the Post Star will Foil the info.

Yeah, I know about the NYRA salaries.  I sincerely don't beleive that level exists in ORDA.

Adk Jeff wrote

 On a per-man-hour basis I suspect that ORDA's personnel costs are high, but that just reflects a problem with NY state govt in general, rather than a problem specifically with ORDA.  You're not going to find individual salaries of "fat cats," but I expect the guys at the top are paid roughly in line with top guys in comparable positions in the private sector.

Hourly pay scales for Orda  hourly workers are between $8 and 12 per hour.  They only get benefits if full year full time and there are very few of them - about 20 at WF. No one is getting rich working for Orda on an hourly basis and these are jobs that end as soon as Orda sees business fading in many cases such as snow makers.  This is one area that DEC and Bell do not cut costs as well as Orda as I understand that the DEC workers make much more and are not as easiliy laid off - this is why they say Orda will save money if they run Bell.  I'd say fix the DEC don't dump Bell on Orda.

I suspect that upper management makes big money and has big time perks such as trips to the Olympics or Europe that made news a few years ago.  Publicly traded companies have to publish salary, bonus and perks for their executives - Orda should have to do the same.

ausable skier wrote

 I suspect that upper management makes big money and has big time perks such as trips to the Olympics or Europe that made news a few years ago.  Publicly traded companies have to publish salary, bonus and perks for their executives - Orda should have to do the same.

Agreed. These State agencies/authorities often operate on the fringe with a veil of secrecy even from other government officials. It's why I cross-examine what they do on here. Very few do.

Case in point is the ORDA board's salary and compensation as Aussie noted. Other government officials compensations are readily available. The Governor, legislators and right on down. Their raises and such are voted on in a public manner and the record is readily avaliable to Joe Smoe, the Press,et al.

Not so with these State agencies/authorities. One would be very hard pressed to get any access let alone a true answer. That's not a good thing at all.

Another example is the NY State Thruway Authority. Several years ago they refused to open their books to an outside State audit even though they are required by a newly enacted State law to do so. Billions of dollars pass through that Authority. One has to ask why not comply with the law ? It's public money. It's a State Authority, bound by Law.

The answer is they're hiding something.

Snowballs wrote

Case in point is the ORDA board's salary and compensation as Aussie noted. Other government officials compensations are readily available. The Governor, legislators and right on down. Their raises and such are voted on in a public manner and the record is readily avaliable to Joe Smoe, the Press,et al.

Not so with these State agencies/authorities. One would be very hard pressed to get any access let alone a true answer. That's not a good thing at all.

Payroll information is available for all NYS employees, including ORDA.  Ted Blazer makes $175K as President/CEO of ORDA.  I didn't look up every single individual, but the ones I looked up were all well under $100K.  Those pay levels are not excessive.

Cool. Thanks Jeff.

Just to flesh it out...Wonder what their total compensation is ? We'll probably never know. Many of those jobs have very lucrative perks. Trips, early and lucrative retirement, full benefits for retirement ( some include family members ).

Time to move on.

Adk Jeff wrote

Ted Blazer makes $175K as President/CEO of ORDA. . . Those pay levels are not excessive.

That's good money. I'd do that job for $100K!  

SB, it's basically State benefits - retirement, health care etc.  Yes, it's a pretty rich benefits package, same as for any state worker, teacher, etc.
MC - Yup, I'd do it for that too. I'd want hazard pay though for all the scrutinizing by the NY Ski Blog crowd.

Adk Jeff wrote

Ted Blazer makes $175K as President/CEO of ORDA. . . Those pay levels are not excessive.

When people say someone else's pay is excessive, it raises a red flag.  Excessive compared to what?  In the private sector, what does a CEO earn when s/he runs an organization with comparable revenue, comparable number of employees and assets?  I don't know, I'd be curious to find out.

This thread has gone in interesting directions that I didn't anticipate.  I appreciate the education on depreciation.

Peter, not to speak for Matt, but I think his comment was tongue-in-cheek, hence the smiley thing.
My response to him was tongue-in-cheek as well.
I think (hopefully) we've put to rest any argument that ORDA executive compensation is excessive.  It's not, and I mean that seriously.
You're right:  it's been an interesting discussion.
Jeff

thanks for the info i agree the executive salaries are not excessive - where did you find them?

Orda does send executives on fact finding missions to the world cup, world championships and Olympics.  Not sure what facts they are finding.

So if the money is not going to the employees where does it go that they are not turning a profit?  The less commericial venues has be be part of the answer but not all of it.  In a year like last year where no snow was made after early Feb and strong skier days at WF and Gore they should have made good profit.  Some where there is a black hole that the money is going into just not sure where.

Adk Jeff wrote

 I'd want hazard pay though for all the scrutinizing by the NY Ski Blog crowd. 

Pardon us, your Highness. It's called democracy..

Scrutiny of public employees is extremely legitimate regardless of how some feel to the contrary. There's hardly been anything near excessive here.

ausable skier wrote

  Some where there is a black hole that the money is going into just not sure where.

Agreed. I still think the depreciation charges by ORDA are a shell game, no matter what Jeff says. The State GRANTS money to ORDA for improvements AND to replace equipment so there's no real loss. ORDA then deducts "millions in depreciation" from real dollars.

Unlike a private business that has to pay for it/replace it themselves AND therefore takes a depreciation charge to reflect the loss and thus reduce their tax liablity ORDA pays no taxes, has no need to lower their tax liabilty.

Adk Jeff wrote

 SB, it's basically State benefits - retirement, health care etc.  Yes, it's a pretty rich benefits package, same as for any state worker, teacher, etc.

How do you know that ? I've seen some extremely lucrative retirement packages for Government heads.

Furthermore, the vast majority of private sector employees have no employer retirement as the Gov does. Private sector pays their 401, etc, sure there's some employer contribution, but it's nothing like what Gov employees get. Government employees don't pay Social Security fees either. Their private fund is paid for by the governement and it's fully funded.

Many of us will have to work to 70, while Gov employees will retire much, much earlier, some in their 40s with close to full pay and free/very cheap heathcare.

Many Gov employees can retire after a mere 20-25 years. Legislators get great pensions and retirement healthcare after a just few years, less than 10, plus " office " expenses.

Not excessive?

snowwwwwwwwwwballs either your enter key is stuck or the forum has a technical glich - this is posted 3 times