Marble Mountain relying on credit: AG report

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Marble Mountain base lodge is seen in this undated photo.

By Daniel MacEachern

TC Media

ST. JOHN’S — The annual auditor general’s report says the Marble Mountain Development Corporation needs better control of its bank account.

Acting auditor general Wayne Loveys’ report, released Wednesday afternoon, identified several problems with the corporation, which has its office in Corner Brook, and its management of the ski facility.

Among them:

‰    The corporation has run a deficit for each of the last five years, requiring an annual provincial operating grant as well as an approved line of credit of $2.1 million guaranteed by the province, of which $1.9 million has been spent by the corporation.

‰    Because the corporation’s bank indebtedness, interest expenses and bank charges total $164,115 for the three years ending April 30, 2011.

‰    The company’s ski lift operations have run a deficit in each of the last three years, totalling $1,359,224. A major expense related to the ski lift is a contract for management of the service, but a review of the contract found that after it expired in 2005, it was renewed for a three-year period and then three two-year periods, expiring in 2014, without any further public tender. Weekly invoices from the contractor, required by the contract, have not been submitted, and the corporation has also paid expenses of the contractor including vehicle rental ($7,232) and snow gun rental ($5,650), among others, despite those expenses not being covered by the contract.

‰    The use of fuel for the three snow groomers ($51,000 in the year ending April 30) is not monitored, and the corporation doesn’t know if the fuel is being used for vehicles other than the groomers.

‰    Six purchases totalling $119,295 were not tendered as required, including two snowmobiles, costing $32,705.

In its response, the corporation acknowledges its financial difficulties, and says it has been examining alternatives to reducing its dependency on the line of credit.

“However, given the limited cash flow and operational demands, there are no foreseeable opportunities for reduction of this debt,” says the response. Elsewhere in the response, the corporation says it will review its procedures and update them as required.

Difficult couple of years

Bob Pike, chairman of the corporation’s board of directors, told TC Media the ski facility has had a difficult couple of years.

“With the auditor general’s report, I have to say I’m somewhat disappointed with the result, but at the same time I will say that we certainly accept the content of the report and I have to thank the auditor general and his team for the effort they put into this,” he said, adding the report brings a lot of opportunity for improvement.

“But I think we have to recognize that Marble Mountain’s corporate management team has experienced unprecedented turnover in recent years. But if you look at where we’re at now and where we’re going, we have a new general manager in place, and we have a new manager of finance in place. And because of that, we’re well underway to making improvements in many areas.”

Derek Dalley, minister of Tourism, Culture and Recreation, said the report has identified several areas that require attention.

“I’m confident that the corporation will be compliant with the AG’s recommendations,” he said. “As for the actual finances of Marble Mountain and the challenges that they’ve had, I think we fully recognize, particularly the past couple of years, it’s been a bit of a struggle. The weather’s certainly hampered a lot of the opportunities for Marble Mountain.‚

“As well, they’ve gone under some significant changes with respect to senior management and leadership. We’re optimistic. They started skiing this year on Boxing Day. They have snow. We have new leadership. They’ve got some new ideas, so as a government, certainly as a department, we’re confident that they’re on the right track to be much more successful.”

The Telegram

Organizations: Marble Mountain Development, TC Media

Geographic location: Marble Mountain, Corner Brook

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Recent comments

  • Snow pro
    January 30, 2012 - 22:47

    Did anyone here know that Mr.Pike is a new member of the board and holds a high ranking position within The Fortis Corporation? I suspect he knows a little about running a solid business? Did anyone here know that the new manager, Mr. Beckett, (with only 1 year here at Marble so far) has many years of ski resort operations management, with his most recent and relative work experience being that of of a management team member at Whistler/Blackcomb!! I think Mr.Pike and Mr.Beckett both wold like to see Marble Mountain run as a successful business, and perhaps they should be given a chance to turn things around. Government spending is always a difficult and challenging issue and real public concern...but surely closing Marble Mountain is not a viable regional decision. If you were to poll many professionals throughout the region, medical, health, educational, institutional.......many would say Marble is a huge lifestyle attraction for them, and if it goes, they may gone as well. Don't fret when the western region cannot attract medical specialists when it starts to strip itself of one of the largest lifestyle elements of the west coast! No, it isn't simple, yes it is challenging....but all out negativity towards this facility is just plane silliness. From potholes to moguls and from orthopedic wait-times to lift lines............help find a solution rather than just point out problems........

    • David
      February 02, 2012 - 17:35

      When people (and notably any Newfoundlander), want to defend something that logic dictates is simply indefensible, something that has no economic basis or sense whatsoever, they tend to avoid mentioning any numbers, figures or statisitcs like the plague. Instead, they couch everything in touchy-feely vagueries, relying on the inherently immeasureable, emotional and illogical (lifestyle....expensive-but-necessary 'bait' for health care workers...). And if successful in getting everyone to ignore any semblance of financial reality, anything is possible...and you end up with all the wonderfully viable, well-thought-out things that we have always bought or created in Newfoundland...ta-daaa! As far as a guy leaving Whislter for Marble Mountain, and you're implication that this indicates career competence and sound decision-making? To that I say: Really?!

  • CBer
    January 27, 2012 - 17:39

    To all of you people who said "Just shut it down"... you must not know anyone who works at the hotels, drives a taxi, works in a restaurant, or relays on tourism to make a living. Every year, Marble's spending is available for public viewing online. It is no surprise that due to a few unpredictable winters they are losing some money. Just ask yourself how many people in this area are just getting by thanks to the tourists that come here every winter? John, if everyone was like you, we would not have universal health care, or an all access K-12 education system. Why don't we all just pay for what we use... to hell with the rest of them... right? I guess you are one of the lucky ones that makes money without relying on the west coast winter season. You are all forgetting the most important part of this article. There seems to be a small few at marble that are misusing public funds..... Sounds like there needs to be another public inquiry.

    • David
      January 29, 2012 - 19:13

      "....a few unpredictable winters..." FYI, your credibility is lost here ---- gone. "......we would not have universal health care....." Now we're in BS mode. First, what an incredibly unintelligent, baseless suggestion. Second: Notwithstanding that, in case you haven't been paying attention our health care system is neither 'universal' nor an example of a government success story. It is virtually bankrupt, is played like a violin by politicians for election, and provides false comfort to healthy but naiive Canadians that they'll be taken care in a timely way when they get sick. And third, given that governemnt cannot even provide the most basic of public services (like health care), why in the name of all that is holy would anyone in their right mind think that they could or should be making "investments" (urp!) in things like ski hills? If they would have put all the money sunk into Marble Mountain into WMRH equipment and facilities instead, I'll bet winter "medical treatment visitations" would be a bigger, more successful, more appreciated, more important, and more humane economic generator for the area.

  • Llewellyn
    January 27, 2012 - 09:55

    Close 'er down b'y!

    • Anita Brake
      January 27, 2012 - 20:03

      With all due respect Min. Dalley and Mr. Pike, your comments are laughable! OK, so I get it.... you are "Greenhorns" on the Marble scene and have uninformed staff feeding you this crap. Do you honestly believe that "unprecedented turnover" and "weather" are responsible for the woes of Marble? Yikes. Not unlike another operation down on Mill Road, the business of Marble Mountain is BROKEN! The product (lifts, rentals, booze, and burgers) has been priced way out of the reach of locals and the ridiculous cost of airfares (Halifax, St. John's, Toronto, etc.) to Deer Lake puts us in the Tremblant, Whistler, and Utah arena for tourists. As for "...some new ideas..." ,sorry guys, there was far more fun and energy happening up there in the 80's in the leaky, sewn together, tin can trailers than there is now! Get a new GM, Marketing Manager, and Board who embrace change and who can run it like a business and not a government agency. That... or mothball the place!

  • ted
    January 26, 2012 - 21:23

    like i always said we got nobody to run nothing in this province/in this case with marble mountain who is looking after the books to see where all of this money is going to.i think we need new replacments to take care of it.

  • Time for change
    January 26, 2012 - 21:05

    Well well ... finally some accountability for Marble Mountain. Mr Pike to say that "unprecedented turnover of Management in recent years" is false. The previous General Manager was there quite a few years so stop with the excuses. Marble is a fantastic asset in our region but need to be run like a business. A number of things need to change... Most of the board needs to go. Appoint board members that actually know something about skiing, running a business and marketing. The negative and incompetent management and staff also need to go (which unfortunately would be most). The only department at the hill that runs functionally is the rental shop. If this was a private sector buisness the Board as well as department managers would all be fired. These managers are on well above average salaries... not bad for only working for three and a half months of the year. Where can I get a job like that :)

  • off da rock
    January 26, 2012 - 19:54

    well, here we go again. ever notice that we dont often get the best to manage these facilities, usually some political back door patronage thank you. sert it up as a not for profit society witha board of directors who have talent and vision. play by the rules, and you have to monitor like no tomorrow the consumable products; the stuff that can easily disappear or get misused, gas, generators, vehicles. without security and control, it spirals quicky. bar code readers for lift tickets stops the invisible patrons from using the facilities thanks to their friends on the hill, more to follow from mount washington ski hill, bc

  • fred
    January 26, 2012 - 16:49

    If any part of the management crowd reads this,I have a used snowmobile for sale. About twenty years old and not in the best of condition but I will let it go for $12,000.00

  • David
    January 26, 2012 - 12:56

    At first glance, this would seem to be an unfortunate week of local economic news, a poor juxtaposition of unrelated 'bad news' stories... the mill, now Marble Mountain. But in actuality, it is very revealing to consider how these stories are related. Marble Mountain could be considered one example of why Corner Brook is in the enormous pickle it's in....in the same 25 years that it was becoming patently obvious that the mill in Corner Brook was inevitably on its way out, the provincial government focused its attention on a long term taxpayer-funded program to build Marble mountain into a 'resort'...albeit one with too short a winter, too small a local market, and, bluntly put, simply not enough of a value propostion for tourists. Tens of millions were spent on lifts, snowmaking and a new daylodge....everyone was pleased, and more importantly, pleased quickly. Voters were happy and politicians basked in the glow. It could probably be said that the Marble Mountain initiatives, and the Canada Games episode, started Corner Brook off down a path of "More Recreation and Nothing But" for the past 25 years. Politicians could toss money at some shiny bobble, like a new rink, get shovels digging, and be there for the ribbon cutting in a few months. What Corner Brook needed much more acutely at that time was innovative, strategic ideas, strong, steadfast leadership, and financial expenditures on things that didn't necessarilt lend themsleves to photo ops......underpinnings to make Corner Brook and western Newfoundland more attractive to private investment, expenditures that would support economic competitiveness. But that wasn't in the cards...no politicians prefer to back things that they can't schedule a ribbon-cutting appointment for, and in fact might even fail....and Newfoundland politicians are more gutless and less cerebral than most. For those advocating government to NOW step up and think of something for Corner Brook ----well, that ship sailed some 25 years ago, and the luxury of time to put things in place and slowly advance initiatives went with it, It's now panic time yet again.....throw out some politicians, replace them with new ones....step up the rhetoric of Grenfell University, that tired old Danny diversion....and without doubt, blame the Harper government for all of it.

  • John
    January 26, 2012 - 10:24

    Same old, same old BS. Why should I support that hill when I do not ski. Pay your ouwn way or fold.Enough handouts.

  • speedy
    January 26, 2012 - 09:40

    And just think the average Joe Public thought there was lots of money being made upon that mountain, only to find out it mostly comes from tax payers dollars.

  • george p b
    January 26, 2012 - 08:48

    There NEEDS to be a serious change of attitude. The is NO excuse for not requiring tenders, and for not insisting on weekly reports to comply with the contract. This is poor stewardship. Mr Pike seems quite cavalier with other people's money. If he were working for a corporation, he would be fired on the spot, & investigated for fraud. There needs to be a new "captain" who knows how to run a taut ship...

  • Jack
    January 26, 2012 - 08:45

    Since Marble Mountain is Newfoundland and Labrador Government owned Ski Resort, I don't understand why there would be concerns about its deficit and credit problems?

  • Charles
    January 26, 2012 - 08:33

    TIME TO SHUT THIS PLACE DOWN.