Chair to ORDA: ‘We’ve got to run a business’
New CFO reports gloomy numbers
LAKE PLACID — The state Olympic Regional Development Authority’s board of directors didn’t mince words last week when relaying how it views the Lake Placid-based state agency’s current financial situation and the board’s desire to secure ORDA’s debt moving forward.
J. Patrick Barrett, chairman of ORDA’s board of directors, said at the authority’s board meeting last week that ORDA is “aware of the fact that we need to make this organization more self-sufficient.
“Not counting on the state,” he added. “It will take some time, but we will get there.”
Barrett said this after ORDA’s new chief financial officer, Peggy Evatt, relayed a gloomy financial report to the board just four months into her tenure. She followed first-year ORDA President and CEO Mike Pratt’s more upbeat and positive report about improvement projects at various ORDA facilities, including the elevator atop the Whiteface Veterans Memorial Highway, the ski jumps’ refrigerated in-runs and the Olympic Center’s roof.
“My report is not as exciting as Mike’s, I’m sorry to say,” Evatt said as she began.
She reported that for the authority’s 2016-17 fiscal year, its net operating loss before depreciation was $2.87 million greater than had been anticipated in the authority’s budget.
She said she compared 2016-17 fiscal year’s numbers to the three-year average, as opposed to comparing directly to the 2015-16 fiscal year numbers because 2015-16 was poor for the authority due to what’s come to be known as “the winter that wasn’t” with an extreme lack of snowfall and warm winter weather.
With that, Evatt reported ORDA’s net income before depreciation for 2016-17 was a loss of $12.22 million. This was compared to an average loss over the preceding three years of $14.47 million.
“So we actually had less of a loss by 2 million and 200 thousand [dollars],” Evatt said.
Total revenue in 2016-17 was $33.3 million, an increase of about 5 percent over ORDA’s previous three-year average of $31.65 million.
Net personal service expenses for the authority were up 1 percent in 2016-17 compared to the three-year average, to $31.99 million. Non-net personal service expenses for the authority were down 7 percent to $13.52 million.
Evatt also reported that the authority’s revenue was under budget by 11.9 percent. Net personal service expenses were under budget by $961,213, and non-net personal service expenses for ORDA were under budget by $666,000.
Numbers as of July 31
Evatt said the authority’s revenue over the first seven months of the year was $909,235 behind where is was for the seven months ending July 31, 2016. Meanwhile, net personal service expenses through this July 31 were up by $562,000, and non-net personal service expenses were up by $485,000.
“So as a whole, we are ahead of last year in the wrong way,” Evatt said.
ORDA board Vice Chairman Joe Kelly asked Evatt if this was due to construction projects the authority is undertaking.
“Probably some to do with that,” Evatt said. “A lot of it is do to timing, just when things are cut off. They are fairly close at this point — just matters when the bills come in.”
With regard to net operating income before depreciation for this year as of July 31, Evatt said the authority is under budget by $1.28 million.
These underwhelming financial numbers come on the heels of a changeover in leadership at the beginning of this year. Longtime ORDA President and CEO Ted Blazer announced last December he’d step down, and Pratt, the former general manager at ORDA’s Gore Mountain Ski Center in North Creek, succeeded him, starting at the beginning of 2017. Pratt then hired Evatt, his former longtime business manager at Gore, to the ORDA CFO position in May, succeeding Padraig Power.
ORDA’s balance sheet
Evatt also spent several minutes discussing the authority’s current ratio of assets versus liabilities and relayed that ORDA is not in an ideal position there, either.
She said the authority’s current and quick asset-to-liability ratios are under 1.
“Both of those ratios should be over 1,” she said. “And they are all less than 1. So it means our company is not very liquid.
“And some of this, too, is timing: just when we get our money, when we get our cash for appropriations and things like that. But the balance sheet is not very strong. We keep bringing in money, but we always need to look at our balance sheet to see where we stand.”
Getting tough on debts
Barrett made it clear to those in attendance that with the disappointing financial news, he feels the authority needs to be tougher with its debt collection and to “not let people take us for granted.
“I think management should be aware of the feeling of the board,” Barrett said. “Where people say, ‘Well, we can go to ORDA; we don’t have to pay them,’ to hell with that. We’ve got to run a business, and it’s a business.”
Barrett was speaking about the conversation that arose as the board passed a resolution to write off more than $30,000 in unpaid debt from the former National Sports Academy school in Lake Placid that declared Chapter 11 bankruptcy and closed in 2015. Barrett and board member Art Lussi said allowing debts to climb into the tens of thousands of dollars for extended periods of time was “unacceptable.
“And I know we have a challenge working with community partners like NSA or Northwood [School] or the New York Ski Educational Foundation,” Lussi said. “But we cannot be their bankers. That’s not our job. And I just think this is an example where, when a debt goes over $10,000, we have to be a lot tougher. Maybe we say, ‘You can’t skate on our ice until you pay your bills.'”
Pratt responded that ORDA’s financial team is monitoring unpaid debts reaching into 30, 60 and 90 days, cutting off credit and pursuing collections straight through the state attorney general’s office.
“I don’t know why NSA, why we weren’t more aggressive with them,” Pratt said, “but I’m sure it was just the hope they could resurrect their viability.”