HomeMy WebLinkAbout2006-2007 MAA Financial Statements
IlSLER Medford I
Certified Public Accountants
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MT. ASHLAND ASSOCIATION
FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007 AND 2006
WITH
ACCOUNTANTS' REVIEW REPORT
MT. ASHLAND ASSOCIATION
Years ended June 30, 2007 and 2006
Contents
Paqe
Accountants' review report
1
Financial statements:
Statements of financial position
2
Statements of activities
3
Statements of cash flows
4
Notes to financial statements
5-11
Supplementary Information:
Schedules of functional expenses
12-13
I ISLER Medford I
Certified Public Accountants
and Business Advisors
ACCOUNTANTS' REVIEW REPORT
Board of Directors
Mt. Ashland Association
Ashland, Oregon 97520
We have reviewed the accompanying statements of financial position of Mt. Ashland Association (a
non-profit corporation) as of June 30, 2007 and 2006, and the related statements of activities and
cash flows for the years then ended, in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public Accountants. All information
included in these financial statements is the representation of the management of Mt. Ashland
Association.
A review consists principally of inquiries of Company personnel and analytical procedures applied to
financial data. It is substantially less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the
accompanying financial statements in order for them to be in conformity with generally accepted
accounting principles.
Our review was made for the purpose of expressing limited assurance that there are no material
modifications that should be made to the financial statements in order for them to be in conformity
with generally accepted accounting principles. The information included in the accompanying
Schedules of Functional Expenses is presented only for supplementary analysis purposes. Such
information has not been subjected to inquiry and analytical procedures applied in the review of the
basic financial statements, and we are not aware of any material modifications that should be made
thereto.
This report is intended solely for the information and use of the Board of Directors, management, and
others within the Association and is not intended to be and should not be used by anyone other than
these specified parties.
~~,,",cl,LLc..
Isler Medford, L.L.C.
Medford, Oregon
August29,2007
1555 E. McANDREWS, SUITE 301 . MEDFORD, OREGON 97504-5533 . (541) 779-7641 . FAX (541) 773-8001
medford@islercom · wwwislermedford.com
$ 170,060 $ 302,368
6,636
286,996 728,512
638 4,120
5,022 76,892
14,975 17,117
484,327 1,129,009
4,059,312 3,337,410
(2,055,831 ) (1,811,165)
2,003,481 1,526,245
756,735 832,290
$ 3,244,543 $ 3,487,544
MT. ASHLAND ASSOCIATION
Statements of Financial Position
June 30, 2007 and 2006
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ASSETS
Current assets:
Cash and cash equivalents
Cash restricted for green chair program
Investments
Accounts receivable
Prepaid rent and deposits
Inventory
Total current assets
Buildings and equipment
Less accumulated depreciation
Net buildings and equipment
Contributed facilities lease - net
Total assets
LIABILITIES & NET ASSETS
Current liabilities:
Accounts payable - trade
Accrued expenses
Current portion long-term debt
Deferred revenue
$ 49,406
47,463
25,825
395,082
517,776
173,820
173,820
691,596
1,789,576
763,371
2,552,947
$ 3,244,543
Total current liabilities
Long-term liabilities:
Note payable
Total long-term liabilities
Total liabilities
Net assets:
Unrestricted
Temporarily restricted
Total net assets
T otalliabilities & net assets
See accompanying notes to financial statements and accountants' report.
2
2006
$ 5,164
18,872
443,813
467,849
467,849
2,187,405
832,290
3,019,695
$ 3,487,544
MT. ASHLAND ASSOCIATION
Statements of Activities
For the years ended June 30, 2007 and 2006
2007 2006
Changes in unrestricted net assets:
Revenue and support:
Service fees:
Ski lifts $ 1,589,758 $ 1,722,969
Ski shop operations 297,923 323,321
Cafe 224,200 226,449
Lodge and bar 196,253 188,458
Ski school 218,959 196,441
Other income 14,159 40,045
Total service fees 2,541,252 2,697,683
Other support:
Contributions 316,750 309,609
Investment Income 34,555 22,423
Unrealized gain on investments 35,132 16,757
Total other support 386,437 348,789
Total unrestricted revenue and support 2,927,689 3,046,472
Expenses:
Program services:
Ski lifts 1,569,406 1,449,400
Ski shop operations 280,909 . 205,429
Cafe 225,667 247,397
Lodge and bar 175,895 173,227
Ski school 156,201 123,032
Total program services 2,408,078 2,198,485
Supporting services:
General and administrative 702,719 686,380
Marketing 214,721 164,104
Total supporting services 917,440 850,484
Total unrestricted expenses 3,325,518 3,048,969
Decrease in unrestricted net assets (397,829) (2,497)
Temporarily restricted net assets
Contributions 214,361 206,377
Net assets released from restriction (283,280) (308,360)
Total decrease in temporarily restricted net assets (68,919) (101,983)
Total decrease in net assets (466,748) (104,480)
Net assets at the beginning of the year 3,019,695 3,124,175
Net assets at the end of the year $ 2,552,947 $ 3,019,695
See accompanying notes to financial statements and accountants' report.
3
~.._-,._.._-,._._--_.._--_.~._._-----
MT. ASHLAND ASSOCIATION
Statements of Cash Flows
For the years ended June 30,2007 and 2006
2007 2006
Cash flows from operating activities:
Change in net assets $ (466,748) $ (104,480)
Adjustments to reconcile change in net assets to net
cash provided by operating activities:
Depreciation 244,667 225,766
Amortization of contributed lease facility 75,555 75,555
Unrealized/realized gains on investments (35,132) (16,757)
Interest and dividends reinvested (23,353)
Gain on disposition of buildings and equipment (159,760)
Decrease in accounts receivable 3,482 3,296
Decrease (increase) in prepaid rent and deposits 71,870 (74,642)
Decrease in inventory 2,142 890
Increase (decrease) in accounts payable - trade 44,242 (12,249)
Increase (decrease) in accrued expenses 28,591 (22,326)
(Decrease) increase in deferred revenue (48,731 ) 62,422
Net cash used by operating activities (103,415) (22,285)
Cash flows from investing activities:
Cash payments for the purchase of investments (300,000)
Proceeds from sale of investments 500,000 250,000
Cash payments for the purchase of buildings and equipment (721,902) (268,095)
Proceeds from the sale of buildings and equipment 365,000
Net cash (used) provided by investing activities (221,902) 46,905
Cash flows from financing activities:
Acquisition of long-term debt 239,598
Payment of long-term debt (39,953)
Net cash provided by financing activities 199,645
Net (decrease) increase in cash and cash equivalents (125,672) 24,620
Cash and cash equivalents at the beginning of the year 302,368 277,748
Cash and cash equivalents at the end of the year $ 176,696 $ 302,368
Supplemental data:
Interest paid $ 12,196 $
See accompanying notes to financial statements and accountants' report.
4
MT. ASHLAND ASSOCIATION
Notes to Financial Statements
June 30, 2007 and 2006
Note 1 - Summary of sianificant accountina policies
Purpose of Orqanization
Mt. Ashland Association (the Association) is a nonprofit organization established under the laws of the
State of Oregon to provide educational and recreational opportunities to the members of the general
public in Jackson County, Oregon. The Association offers comprehensive winter recreation services
and educational programs to residents of Southern Oregon and Northern California through the
operation of the Mt. Ashland Ski Area. Mt. Ashland prides itself on being affordable to families and
youth and is host to an average of over 94,000 skier visits per season. Over 2,000 youths participate
in Mt. Ashland's after-school programs.
The Association provides and continues to develop new ways to contribute to our youth and many
educational programs and related benefits to the communities of Southern Oregon and Northern
California. The Association expects to continue the following programs and expand on the
educational awareness programs; such as our after school youth ski and snowboard, ski/snowboard
school, kids club, mountain geology/snow science and environmental/youth summer service. The
approximate costs of providing these programs were $ 250,803 and $ 303,785 for the years ended
June 30,2007 and 2006 respectively.
Basis of Accountina
The accompanying financial statements have been prepared on the accrual basis of accounting in
accordance with accounting principles generally accepted in the United States of America.
Basis of Presentation
The Association has adopted Statement of Financial Accounting Standards (SFAS) No. 116,
"Accounting for Contributions Received and Contributions Made", and (SFAS) No. 117, "Financial
Statements of Not-for-Profit Organizations." SFAS No. 117 establishes standards for external
financial reporting by not-for-profit organizations and requires the Association to report information
regarding its financial position and activities into three classes of net assets according to externally
(donor) imposed restrictions. SFAS No. 116 requires that unconditional promises to give (pledges) be
recorded as receivables and revenues, and requires the organization to distinguish between
contributions for each net asset category in accordance with donor imposed restrictions. Descriptions
of the three net asset categories as presented on the Statement of Activities are as follows:
1) Unrestricted net assets have no donor imposed restrictions.
2) Temporarily restricted net assets have donor-imposed restrictions that will expire in the
future.
3) Permanently restricted net assets have donor-imposed restrictions, which do not expire.
Unrestricted net assets consist of the general operating fund of the Association and are available for
use at the discretion of the Board of Directors.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results could differ from those
estimates.
5
MT. ASHLAND ASSOCIATION
Notes to Financial Statements
June 30, 2007 and 2006
Note 1 - Summary of sianificant accountina Dolicies (Continued)
Income Tax Status
The Association is a not-for-profit organization that is exempt from federal income taxes under Section
501 (c)(3) of the U.S. Internal Revenue Code. The Association has also been classified as an entity
that is not a private foundation within the meaning of Section 509(a) and qualifies for deductible
contributions as provided in Section 170 (b)(1 )(A)(iii). There was no unrelated business income for
the years ended June 30, 2007 and 2006.
Buildinas and Eauioment
The Association capitalizes all expenditures for buildings and equipment if they are considered to
benefit future periods. Purchased buildings and equipment are carried at cost and are considered to
be owned by the Association. Donated buildings and equipment are carried at the approximate fair
value at the date of donation. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets.
Cash and Cash Eauivalents
For purposes of the statement of cash flows, the Association considers all unrestricted highly liquid
investments with an initial maturity of three months or less to be cash equivalents. The carrying value
of cash and cash equivalents approximates fair value.
Investments
The Association has invested funds with Charles Schwab Mutual Fund and the State of Oregon
Treasurer's Local Government Investment Pool (LGIP). Funds invested with Charles Schwab are
held by Patten Investment Advisors, Inc. Funds invested with the LGIP are held by the City of Ashland.
All investments are recorded at market value. Investment income includes interest and dividend
income resulting from the investment of funds. Unrealized and realized gains or losses resulting from
the difference in the market value and the cost of investments and the sale of investments are
reported in the Statement of Activities.
Accounts Receivable
Accounts receivable are stated at the amount management expects to collect from outstanding
balances at year-end.
I nventorv
Inventory consists of food, beverages and ski area related retail merchandise. Inventory is valued at
cost. Cost is determined using a first-in, first-out method of inventory valuation.
Advertisina
Advertising costs are expensed as incurred. Advertising expense for the years ended June 30, 2007
and 2006 totaled $83,867 and $51,303 respectively.
6
MT. ASHLAND ASSOCIATION
Notes to Financial Statements
June 30, 2007 and 2006
Note 1 - Summary of sianificant accountina policies (Continued)
Revenue
The Association's revenue is derived primarily from ski operations including season pass sales, lift
ticket sales, retail sales, lodge and bar sales, cafe sales, equipment rentals and ski school income.
Sales revenue is recognized when purchases are made, with the exception of season pass sales.
Season passes sold during the "Spring Pass" promotion cover the entire following ski season.
Management defers this revenue relating to the following season into the following fiscal year or until
earned. Deferred revenue for the years ended June 30, 2007 and 2006 was $395,082 and $443,813
respectively.
Note 2 - Buildinas and Eauipment
The following is a summary of equipment, ski rental equipment, furniture and fixtures, and leasehold
improvements which comprise the buildings and equipment account, stated at cost less accumulated
depreciation. Renewals and betterments are charged .to the asset accounts while maintenance and
repairs, which do not improve or extend the lives of the respective assets, are expensed in the current
period. Depreciation of property and equipment is provided on the straight-line basis over the assets
estimated useful life as follows: equipment - 5 to 15 years; buildings - 25 years; leasehold
improvements - 5 to 39 years.
2007 2006
Equipment $1,721,130 $1,326,761
Buildings 42,000 42,000
Leasehold improvements 373,031 292,733
Expansion project - construction in progress 1,923,151 1,675,916
Total buildings and equipment 4,059,312 3,337,410
Less accumulated depreciation 2,055,831 1,811,165
Net buildings and equipment $ 2,003,481 $ 1,526,245
Depreciation expense "for the years ended June 30, 2007 and 2006 was $244,667 and $225,766
respectively.
Note 3 - Operatina Leases
The Association leases space for its business office, which expires on July 11, 2008 with options to
renew for three one-:year extensions for $1,500 per month. For the year ended June 30, 2008 the
lease commitment is $18,000 for the Association's business office. The Association also leases
certain ski area assets that were purchased from donated funds to the City of Ashland. This lease
term expires on June 30,2017. Future minimum lease payments as of June 30, 2008 are $1 per year
through 2017, for a total lease commitment of $10. A mobile unit is leased by the Association for the
amount of $171 per month. This lease expires on April 3, 2008. For the year ended June 30, 2008
the lease commitment is $1,541 for the Associations mobile unit.
7
MT. ASHLAND ASSOCIATION
Notes to Financial Statements
June 30, 2007 and 2006
Note 3 - ODeratina Leases (Continued)
The City of Ashland received donations from the general public to purchase certain ski area assets on
Mt. Ashland which are located on land leased from the U.S. Department of Agriculture/U.S. Forest
Service. These ski area assets are leased by the City to the Association for $1 per year. Upon the
lease expiration date, June 30, 2017, the Association has the option to extend the lease term for an
additional 25 years ending June 30, 2042. This lease requires the Association to maintain the leased
ski area assets at an agreed "Minimum Liquidation Value," which was stated at $200,000 in 1992.
The "Minimum Liquidation Value" is subject to an escalation provision tied to the Consumer Price
Index (CPI). If the Association fails to maintain the leased ski area assets at the "Minimum Liquidation
Value," the Association is required to pay the deficiency into a trust fund maintained by the City of
Ashland. As of June 30, 2007, no funds have been required to be transferred into this trust fund.
In 1994 the Association recorded the lease as a contribution stated at the ski area assets fair value for
the 25-year term of the lease. This fair value was estimated at $ 2,833,300 and capitalized. The
lease is amortized as Facility Lease Expense over the assets economic life to reflect the relative value
of the lease. Amortization expense for the year ended June 30, 2007 and 2006 was $75,555 and
$75,555 respectively. The following ,summarizes the remaining asset value related to the contributed
facility lease:
2007
2006
Contributed Facility Lease
$ 2,833,300
$ 2,833,300
Less: Accumulated Amortization
2,076,565
2,001,010
Net Contributed Lease Value
$ 756,735
$ 832,290
The Association also records the approximate yearly value of the lease as temporarily restricted
revenue and facility lease expense. The estimated yearly value of facility lease expense for 2007 and
2006 was $178,920 and $178,920 respectively.
The Association assumed the underlying obligation of the City of Ashland's special use permit with the
U.S. Department of Agriculture, Forest Service, for the use of the ski area land for the construction,
operation and maintenance of a winter sports area. This use permit provides for termination upon
breach of any permit condition or termination at the discretion of the Regional Forester or the Chief of
the U.S. Forest Service. The permit expires July 4, 2017, with an annual fee based upon a weighted
formula applied to various revenue classifications. The adjusted fees for the years ended June 30,
2007 and 2006 were $37,316 and $ 36,890 respectively.
8
MT. ASHLAND ASSOCIATION
Notes to Financial Statements
June 30, 2007 and 2006
Note 4 - Temporarilv Restricted Net Assets
As described in Note 1, the Association reports financial information regarding its financial position
and activities into three classes of net assets according to externally (donor) imposed restrictions.
These classes consist of unrestricted net assets, temporarily restricted net assets and permanently
restricted net assets. Temporarily restricted net assets have donor-imposed restrictions that will
expire in the future. Upon expiration of the donor-imposed restrictions, funds are released from
restriction and expensed categorically in alignment with their functional category. The activity of these
funds is represented on the Statement of Activities. Temporarily restricted net assets consisted of the
following at June 30, 2007 and 2006:
Net assets released from restriction
Cash released from restriction
Contributed facilities lease
Contributed facilities lease amortization
2007 2006
$ 35,441 $ 27,457
178,920 178,920
214,361 206,377
28,805 53,885
178,920 178,920
75,555 75,555
283,280 308,360
$ (68,919) $ (101,983)
Contributions
Cash contributions
Contributed facilities lease
Temporarily restricted contributions
Net assets released from restriction
Total decrease in temporarily restricted net assets
Note 5 - Functional Allocation of Expenses
The costs of providing various program and supporting services have been summarized on a
functional basis in the statement of activities. Accordingly, certain costs have been allocated among .
the program and supporting services benefited.
Note 6 - Concentration of Credit Risk
Mt. Ashland Association provides educational and recreation opportunities to the members of the
general public in Jackson County, Oregon. The Association relies heavily on public support and
patronage of outdoor winter recreation which in turn is dependent upon the overall weather conditions
of the Southern Oregon region.
9
MT. ASHLAND ASSOCIATION
Notes to Financial Statements
June 30, 2007 and 2006
Note 7 - Pension Plan
Mt. Ashland Association provides a 401 (k) retirement plan for its employees. Employees in Job
Classifications 1, 2 and 3 are eligible upon the completion of one year of services and attainment of
age 21. Employees may defer a percentage of their compensation up to the Code 402(g) deferral
limit as described in the company's basic plan document. The Association makes a matching
contribution of a minimum of 3% of gross pay per employee, and may make an additional matching
contribution at the discretion of the Board of Directors. The contributions for the plan years ended
June 30, 2007 and 2006 were $ 15,285 and $ 18,695 respectively.
Note 8 - Deposits in Excess of Insured Limits
At June 30, 2007 the Association had deposits in excess of FDIC insured limits of $ 109,751.
Note 9 - Lona-term debt
Future principal requirements
for years ending June 30,
Note
Payable
2008
2009
2010
2011
2012
Thereafter
$ 25,825
28,427
31,292
34,446
37,917
41 ,738
Total
$ 199,645
10
MT. ASHLAND ASSOCIATION
Notes to Financial Statements
June 30, 2007 and 2006
Note 10 - Purchase Commitments
Mt. Ashland Association entered into a purchase commitment of Green Tags with the Bonneville
Environmental Foundation (BEF) on August 30,2006. Each Green Tag represents the environmental
attributes associated with the generation of one Megawatt-hour of electricity from electric generating
facilities that rely exclusively on wind, solar, geothermal, hydro and biomass renewable energy
sources. Mt. Ashland Association is committed to purchase seven hundred and sixty Green Tags at
eight dollars each per year over the lease term. For the year ended June 30, 2007 the Association
purchased $ 4,680 in Green Tags. The commitment term ends on June 30, 2009. The purchase
commitment for the year ended June 30,2008 and June 30, 2009 is $ 7,020 and $ 7,020 respectively.
Note 11 - Continaencies
Mt. Ashland Association is currently involved in two legal disputes centered on their proposed Area
Expansion Project. The first is as an intervening party with the U.S. Department of Agriculture (USFS~
over the legality of their Record of Decision. Currently, a decision by the U S Court of Appeals-9'
Circuit is pending.
With regard to the second dispute, Mt. Ashland Association has filed suit against the City of Ashland,
holder of the Special Use Permit for operating the ski area, for breach of contract.
Mt. Ashland Association believes that there is a very remote chance of loss in either of the above
mentioned disputes. Total expenditures to date that might be affected by these incidences is
estimated at $1,400,000. These are funds that have already been expended by Mt. Ashland
Association for research, studies, planning and legal cost associated with the Expansion Project.
11
SUPPLEMENTAL INFORMATION
MT. ASHLAND ASSOCIATION
Schedule of Functional Expenses
For the year ended June 30, 2007
Ski Lift Ski Shop Cafe Lodge & Bar Ski School
Operations Operations Operations Operations Operations TOTAL
Revenues
Sales $ 1,587,811 $125,165 $ 224,200 $ 180,129 $ 218,959 $ 2,336,264
Rental income 167,313 16,124 183,437
Repair income 5,445 5,445
Other income 1,947 1,947
Total revenues 1,589,758 297,923 224,200 196,253 218,959 2,527,093
Expenses
Advertising 890 59 949
Automobile expense 60,870 508 34,422 95,800
Communications 9,000 9,000
Cost of goods sold 61,994 94,876 41,952 198,822
Depreciation 242,584 22,936 18,352 25,756 4,166 313,794
Dues & subscriptions 485 25 395 905
Education 585 540 1,068 2,193
Employee benefits 123,817 12,105 6,549 3,816 18,866 165,153
Licenses, permits & fees 57,838 305 640 784 59,567
Interest expense 11,748 11,748
Meals & entertainment 230 537 767
Meetings 450 450
Occupancy 180,855 180,855
Salaries & wages 607,802 158,293 89,156 58,491 115,592 1,029,334
Payroll tax 61,872 16,554 9,333 6,151 12,444 106,354
Professional fees 216 216
Repair & maintenance 114,378 2,989 1,495 1,652 764 121,278
Supplies 40,913 3,110 2,739 1,389 2,847 50,998
Travel & lodging 2,829 563 3,392
Utilities 42,868 2,527 1,266 46,661
Water testing 9,842 9,842
Total expenses 1,569,406 280,909 225,667 175,895 156,201 2,408,078
Increase (decrease) in
net assets $ 20,352 $ 17,014 $ ( 1 ,467) $ 20,358 $ 62,758 $ 119,015
See accountants' report.
12
MT. ASHLAND ASSOCIATION
Schedule of Functional Expenses
For the year ended June 30, 2006
Ski Lift Ski Shop Cafe Lodge & Bar Ski School
Operations Operations Operations Operations Operations TOTAL
Revenues
Sales $ 1,489,493 $ 150,399 $ 226,449 $ 173,065 $ 196,441 $ 2,235,847
Rental income 165,221 15,393 180,614
Repair income 7,701 7,701
Other income 73,716 73,716
Gain on sale of assets 159,760 159,760
Total revenues 1,722,969 323,321 226,449 188,458 196,441 2,657,638
Expenses
Cost of goods sold 56,119 100,348 45,961 202,428
Salaries & wages 638,056 100,778 73,425 71,438 90,640 974,337
Payroll tax 70,176 11,595 8,394 6,069 10,694 106,928
Employee benefits 88,986 3,695 2,305 6,670 12,947 114,603
Occupancy 178,920 32,396 211,316
Maintenance & repair 196,922 8,943 13,272 19,557 4,595 243,289
Depreciation 226,944 24,299 17,257 23,532 4,156 296,188
Automobile expense 49,396 49,396
Total expenses 1,449,400 205,429 247,397 173,227 123,032 2,198,485
Increase (decrease) in
net assets $ 273,569 $117,892 $ (20,948) $ 15,231 $ 73,409 $ 459,153
See accountants' report.
13