After a second consecutive disappointing season, Eaglecrest Ski Area officials are staring down a $100,000 revenue shortfall, and they’re not yet sure how they’re going to balance their budget.
“To make ourselves whole for the FY ‘16 budget, we’re going to need approximately $100,000,” Eaglecrest Director Matt Lillard told the Empire after the ski area’s finance committee meeting Monday evening. “When we have to address our shortfall this year, we’re going to rely on our endowment and any sources we can band together.”
Eaglecrest is owned by the city and operates as an enterprise fund, but it is not a true enterprise fund because its revenues and expenses don’t match, City Finance Director Bob Bartholomew said by phone Tuesday. In a situation like this, the city typically picks up the shortfall provided the Assembly approves, he said.
As a part of the normal budgetary procedure, Eaglecrest will be meeting with the Assembly in April. At its meeting Monday, the ski area’s finance committee decided that Eaglecrest will be asking for an increase in city funding for the coming fiscal year. In FY ‘16, Eaglecrest received about $660,000 in city funding, which is down from what it received a couple years before.
“We went from a high of $750,000 a couple years ago to what we got this year,” Lillard said. “Now we’re asking to get some of those reductions back.”
Eaglecrest will be asking for $700,000 in city funding for FY ’17, but that doesn’t address the ski area’s current budgetary woes. The $100,000 revenue shortfall will likely also be addressed when Eaglecrest officials meet with the Assembly in April, Bartholomew said.
Though Lillard doesn’t yet know how the ski area will make itself whole, relying entirely on Eaglecrest’s endowment isn’t desirable, he said. Pulling $100,000 from the endowment would leave it only about a third of the size it is currently. And in an industry that lives or dies by the weather, it’s not a bad idea to keep a rainy-day fund.
Still, Lillard and other members of the Eaglecrest finance committee are hopeful that the mild winters of the past two seasons are outliers, not the new normal. Though it’s nearly impossible to predict what the weather holds in store for future ski seasons, the fact that that the past two seasons were exceptionally bad is certifiable. In terms of snowfall, the past two seasons are the worst on record for Eaglecrest.
The ski area was open for 69 day this past season, but it still struggled to escape the ghosts of the previous year’s miserable five-day season. Lots of skiers were justifiably hesitant to buy season passes heading into this year after they were not refunded last year. Few people were surprised when this season got off to a rocky start, failing to hit its previous season-pass sales mark.
This was problematic for Eaglecrest because season-pass sales typically make up 70 percent of its winter revenue. This meant that the ski area would have to rely on its daily ticket sales in a way that it never had before, and for a while it was working. A couple good snowstorms in November and December led to a couple days that saw record-setting sales for daily passes.
“The hope was that given good snow, we’d make up the revenue with ticket sales, but then the weather turned on us and as the snow dwindled, skiers stopped coming,” Lillard said.
After closing portions of the mountain due to a lack of snow, the ski area closed for the season last weekend. The past two seasons were certainly bad for skiers, but they “could’ve been worse” from a fiscal standpoint, according to Lillard.
“It’s not always the nicest thing to say, but it’s true,” he said.
The last time Eaglecrest saw a couple bad winters in a row was from 2002 to 2004. The snowfall was still better in those years than in was in the past two years, but during that time the ski area went almost $1 million into the hole.
The way Bartholomew sees it, “it’s always a risk” funding a weather-dependent venture like Eaglecrest. But he’s glad that the ski area officials have been more frugal of late than they were in the early 2000s.
“At this point I think Eaglecrest and the board have been pretty prudent in managing their resources,” he said. He added it’s worth at least allowing them to try and have a successful season even when the weather doesn’t seem to want to cooperate.
• Contact reporter Sam DeGrave at 523-2279 or sam.degrave@juneauempire.com.
