Full audit report attached

UPDATE: Town leaders apologize for Snow Bowl funding debacle

Audit cites mismanagement of town funds, straying from best practices
By Susan Mustapich | Apr 18, 2017
Photo by: Susan Mustapich Members of the audience ask questions at the April 18 Select Board meeting regarding the finances of the Snow Bowl redevelopment.

Camden — Three quarters of a million dollars of the town of Camden's surplus fund was spent over the past few years to pay for Snow Bowl redevelopment expenses, according to Ron Smith, managing partner of RHR Smith & Co., hired to audit the finances of the project.

He told town leaders April 18 the town had strayed from best practices and had mismanaged funds.

After public comments and questions, longtime Select Board members John French, Jim Heard and Don White apologized to residents.

Heard said, "This is a time for one of the Select Board members to fall on a sword. We've known for some time this would not be a pretty picture. I feel ashamed, embarrassed, pissed that I wasn't more insistent getting the information from [former Town Manager] Pat [Finnigan] that we needed. If I weren't vacating this position in a couple of months, I would resign right now. The reason I'm not resigning this evening is, there is plenty of work to do in the next two months. I'd like to apologize to everyone in this room, to everyone who elected me."

The voter-approved plan for funding a $6.5 million expansion of Snow Bowl ski trails, lifts and snow-making, and to build a new lodge, authorized $2 million to be paid by the town, solely from the proceeds of a special bond. The remaining $4.5 million was to be paid for with funds raised by the Ragged Mountain Recreation Area Foundation.

Smith said the foundation had paid $3.8 million to date for the redevelopment. Bob Gordon, Ragged Mountain's president, has said in the past few months that the foundation has paid all of the invoices submitted to it by the town.

Smith said expenses to date for the Snow Bowl redevelopment total $6,547,528. This does not include the lodge, which has not been built.

According to Smith, spending on the Snow Bowl redevelopment, and the movement of funds, reached into many different parts of the town budget. He said the audit revealed mismanagement and that the town of Camden had strayed from best practices.

"In looking at this, it took us into every aspect of the town's business," Smith said. "It would take us to sewer, recreation, general government, parks and recreation. Everything had a tentacle attached to it. We thought we were going to be able to tell a simple story. It wasn't simple at all; it was a story of how the town did business."

Regarding the $743,134 taken from the surplus to pay for the project, Smith said:

"That has put a drain on the town's cash flow. We need to do something about that. This is really impacting your general fund."

Smith never mentioned the name of former Town Manager Patricia Finnigan, who resigned in January, soon after the Select Board called for the audit. Smith did say that there was no written agreement between the town and Ragged Mountain Recreation for the redevelopment, and that this placed the town in the position of general contractor. He said the town "was ill-equipped to play that role."

In a four-page report produced by RHR Smith, the auditors wrote:

It was noted that the Town was the General Contractor for the Ragged Mountain Redevelopment Project with sole financial authority and responsibility. Several upper level management personnel at the Town shared in this responsibility. During the project, many change orders were produced which affected the overall cost of the project. It appears that revised budgets were not done or approved to account for this. Furthermore, it appears that there was no plan of action on the town's part to evaluate existing costs and project cost overruns.

Smith said he had had nothing but cooperation from the town management currently in place, who he has worked with during the audit, and expressed confidence in Ragged Mountain's commitment to the partnership.

He said Camden must rebuild its surplus fund. The town had $2.8 million in surplus, according to the 2013 audit; $2.7 million in surplus, according to the 2014 audit; but only $1.3 million in surplus, according to the 2015 audit.

Smith said financial practices over the past few years continued into the beginning of 2017. He said his firm would work very hard over the next two weeks to produce an accurate picture of where the town's finances are to date.

White apologized, and called the audit a "wake-up call." White, who is up for reelection in June, promised past mistakes would not be repeated.

French called the circumstances revealed by the audit probably the worst thing that has happened during his tenure on the board. He apologized for thinking town management could handle the Snow Bowl redevelopment project, because they had done trail work and lift work before.

"We're trying to make it right and get back on track," French said. "I think we're headed in the right direction. I do apologize for what happened. I'm very sorry."

Toward the end of the audit discussion, Interim Town Manager Roberta Smith urged RHR Smith to finalize the annual audit for 2016, because it was needed by printers for the annual town report.

Chris Backman, RHS Smith principal and audit director, said he was waiting for town approval of the Snow Bowl redevelopment audit figures, as well as a draft 2016 audit.

Private meetings and the audit

On Jan. 11, the Select Board voted to authorize $12,000 for the Snow Bowl redevelopment audit, following a closed-door meeting regarding a personnel matter. On Jan. 18, the Select Board held another closed-door meeting regarding a personnel matter. Immediately after the meeting, Finnigan submitted her resignation.

The Select Board has not discussed any connection between the audit and Finnigan's resignation.

Private citizen inquiry into town finances

The audit is connected to an investigation of the town of Camden's financial management of the Snow Bowl redevelopment conducted by a private citizen.

Chris Morong, owner of Mt. Battie Car Wash, filed a Freedom of Access request with the town in 2016 to obtain financial information on the Snow Bowl redevelopment. He received the information in mid-December and then spoke to Select Board members about his findings in late December.

Earlier in 2016, Morong was a member of a short-term budget team tasked with advising the Select Board on the Snow Bowl's 2017-18 budget. As he asked questions about the ski area's finances, he learned that Finnigan had not invoiced Ragged Mountain Recreation Area Foundation for more than $300,000, which the town had spent on the ski mountain's redevelopment.

Ragged Mountain confirmed in February that it had paid the town of Camden for all of the invoices that were submitted to the foundation.

Courier Publications reporter Susan Mustapich can be reached at 236-8511 or by email at smustapich@villagesoup.com.

Comments (2)
Posted by: Nancy Harmon Jenkins | Apr 20, 2017 09:21

"the town ha[s] strayed from best practices and ha[s] mismanaged funds": "The town" is made up of people, voters, tax payers, elected officials, hired personnel. Someone or several someones among all of these MUST know where three-quarters of a million dollars went. It didn't just wash down the drain. Or did it? Is there to be no accountability? When I think of the uses to which that money might have been put, it makes me sick to my stomach. And, much as I love and value the Snow Bowl, it makes me wonder if we, the town, should put even one more penny into that black hole.

Posted by: Mary A McKeever | Apr 19, 2017 15:12

What a sad commentary of the Snow Bowl's financial distress. I cannot fathom how a grass root project with free labor turned into a highly financed conundrum! And financed such a huge debt to boot. Is it criminal to take town coffers, to foot the bill of over-mismanagement?

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