HomeMy WebLinkAbout1998-99 Ski Ashland Financial Report
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MT.. ASHLAND ASSOCIATION
dba SKI ASHLAND
ACCOUNTANT'S REVIEW REPORT
and
FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
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CONTENTS
ACCOUNTANT'S REVIEW REPORT
FINANCIAL STATEMENTS
Statements of financial position
Statements of activities
Statements of cash flows
Notes to financial statements
PAGE
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2
3
4
5-8
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MOSS-ADAMS LLP
CERTIFIED PUBLIC ACCOt:NTANTS
ACCOUNTANT'S REVIEW REPORT
Board of Directors
Mt. Ashland Association
dba Ski Ashland
We have reviewed the accompanying statements of financial position of Mt. Ashland Association
(a non-profit corporation) as of June 30, 1999, and 1998 totals for comparative purposes only, and
the related statements of activities, and cash flows for the year 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 ofMt. Ashland Association.
A review consists principally of inquiries of association 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.
'-L~
October 25, 1999
Medford, Oregon
A member of
Moores
Rowland
11:11111:'.11(1):'.11
1
An association of independent
accounting firms throughout the world.
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MT. ASHLAND ASSOCIATION dba SKI ASHLAND
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Mt. Ashland Association, (the Association) dba Ski AsWand, is an
Oregon non-profit corporation organized to provide educational and recreational
opportunities in Jackson County, Oregon to members of the general public. The
Association ,operates and manages the ski area on Mt. Ashland under the terms of a lease
agreement with the City of Ashland, Oregon.
The Association provides many educational programs and related benefits to the
community. These educational programs are Ski Wee, After School Youth Ski, College
Lesson, Ski School, Beginners, Mountain Geology, and Environmental. The approximate
costs of providing these programs were in excess of $524,000 for the 1999 year. The
Association expects to continue ; these programs and to offer new and expanded
educational programs in the future.
The Association is exempt from Federal income tax as an organization described in
Section 501(c)(3) of the Internal Revenue Code. Contributions to the Association are tax
deductible by the donor as provided in Section 170 of the Internal Revenue Code.
Accordingly, these financial statements do not include a provision for income taxes.
Basis of Accounting - The financial statements of the Association have been prepared on
the accrual basis of accounting. The accounts are organized into three separate funds
depending on the limitations and restrictions placed on the use of these funds by the donor
for the temporarily restricted fund and by the Board of Directors for the board designated
unrestricted fund.
All donor-restricted support is repOl;ted as an increase in temporarily restricted net assets,
depending on the nature of the restriction. When a restriction expires (that is, when a
stipulated time restriction ends or purpose restriction is accomplished), temporarily
restricted net assets are reclassified to unrestricted net assets and reported in the statement
of activities as net assets released from restrictions.
The temporarily restricted fund includes contributions the donor restricts as to use or for a
period of time. Included in contributions is the contributed lease facility donated by the
City of Ashland of$175,742 and miscellaneous donations of$51,611.
The Association has established a Board Designated Fund (reserve account) of
$1,797,507, of which $500,000 has been designated as a contingency fund for future
operations and $1,297,507 as a reserve fund to provide for future ski area improvements
and programs.
Investments - The Association has invested monies with the City of Ashland, Oregon in a
short-term pooled investment account, stocks and mutual funds. These investments are
recorded at market value. Investment income includes interest and dividend income plus
realized gains or losses resulting from~e sale of investments. Unrealized gains or losses
resulting from the difference in the market value and the cost of investments are reported
in the statement of activities.
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MT. ASHLAND ASSOCIATION dba SKI ASHLAND
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inventories - Inventories are stated at the lower of cost or market, with cost determined
using the fIrst-in, first-out method.
Comparative Information - The Association presents comparative financial information
for the prior year in total rather than by net asset class. Such summarized financial
information does not include sufficient detail to constitute a presentation in conformity
with generally accepted accounting principles. The summarized prior year information
should be read in conjunction with prior year's financial statements.
Capital Assets - Capital assets are stated at cost. Depreciation of capital assets is provided
on the straight line method over their estimated useful lives.
Equipment
Property improvements
Leasehold improvements
Building
June 30,
1999 1998
$ 1,034,143 $ 824,542
560,014 228,215
67,909 23,725
42,000 42,000
1,704,066 1,118,482
717,050 528,017
$ 987,016 $ 590,465
Less accmnulated depreciation
During fiscal 1999, significant capital asset additions included a chair lift and slope
improvements - $293,566; Bombardier Sno-Cat - $126,000; a trailer - $29,705; a ticketing
system - $15,541; and various other projects of $120,772.
Contributions - The Association recorded $175,742 of contributions during fiscal 1999
from the City of Ashland as contributed facility lease and $51,611 from others. The City
of Ashland leases the ski area facilities to the Association for $1 per year. The present
value of the estimated fair value of the facilities utilized is capitalized and being amortized
to lease expense over the economic life of the assets being utilized.
Use of Estimates - The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Fair Value of Financial Instruments - The fair value amounts of the Association's
financial instruments approximate their carrying amounts.
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t~_:.
MT. ASHLAND ASSOCIATION dba SKI ASHLAND
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - INVESTMENTS
Investments are recorded at market value and consisted of the following at June 30, 1999:
Market
value
Cost
City of Ashland
short term
investment
account
$ 1,247,580
$ 1,247,580
Smith Barney
money funds
31
1,247,611
549,896
$ 1,797,507
31
1,247,611
549,896
$ 1,797,507
SEI mutual funds
NOTE 3 - INVENTORIES
Inventories consisted ofthe following:
June 30,
1999 1998
Ski shop merchandise $ 7,450 $ 9,395
Food and beverages 1,893 1,842
$ 9,343 $ 11,237
NOTE 4 - LEASES
The City of Ashland, Oregon purchased the ski area assets on Mt. Ashland, which are
located on leased land, from the U.S. Department of Agriculture, Forest Service, and
leased these ski area assets to the Association for $1 per year. The lease with the City of
Ashland expires December 31, 2017. The Association has an option to extend the lease for
another 25 years to 2042. The lease requires the Association to maintain the leased ski
area assets at an agreed "Minimum Liquidation Value," which was $200,000 for 1992.
The "Minimum Liquidation Value" is subject to an escalation provision tied to the
Consumer Price Index (CPI). If the Association does not maintain the leased ski area
assets at the "Minimum Liquidation Value," the Association is required to pay the
difference into a trust fund maintained by the City of Ashland. As of June 30, 1999, no
funds have been transferred to this trust fund.
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t';:-";: _'.-__~~'
MT. ASHLAND ASSOCIATION dba SKI ASHLAND
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - LEASES (Continued)
To record the contribution of the fair value of the use of the ski area assets for the 25 year
term of the lease, the Association has recorded the contributed facility lease asset. The
capitalized amount of the contributed facility lease is being amortized to facility lease
expense over the economic life of the contributed assets. Facility lease expense for 1999
and 1998 was $331,092. Facility lease expense for fiscal years 2000 and 2001 will be
$331,092 per year. Facility lease expense for fiscal years 2002, 2003 and 2004 will be
$178,920 per year.
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 land for the
construction, operation and maintenance of a winter sports area.
The permit expires July 4, 2017, with an annual fee based upon a weighted formula
applied to various revenue and gross fixed asset classifications. The fees for the years
ended June 30, 1999 and 1998 were $56,073 and $45,085, respectively. The use permit
provides for termination upon breach of any condition or at the discretion of the Regional
Forester or the Chief of the U.S. Forest Service.
The Association rents office space for $1,100 per month.
NOTE 5 - PENSION PLAN
In 1995, the Association adopted a defined contribution profit sharing plan which covers
all full time employees over 21 years of age with at least one year of service.
Contributions to the plan are at the discretion of the Board of Directors. Contributions for
the 1999 and 1998 fiscal years were $16,512 and $14,046, respectively. The 1999
contribution is included in accrued expenses at June 30, 1999.
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