Published On: Wed, Apr 2nd, 2014

Snowshoe CEO says RAD would be fair

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Under a proposal to create a quasi-municipality called a resort area district (RAD) at Snowshoe Mountain, resort management would enjoy a four-seat majority on the seven-member governing board.

Snowshoe Mountain CEO Frank DeBerry acknowledged as much, but said the proposed RAD gives property owners more representation than they have now.

“There’s always that concern, especially in the early days, that the resort would essentially create a bully pulpit with their four seats and do whatever they want,” he said. “So, budgets, bylaws, any borrowing, resort service fees, any impact-full decisions, automatically, by law, require a super-majority of six of seven votes. So, you can’t do anything without at least everyone from the, call it the business side and at least two of the homeowner representatives agreeing.”

DeBerry said three seats at the table is better than none.

“The way that it works today is, their deed’s set up,” he said. “Everybody has to pay Snowshoe to do work and Snowshoe has to do work – use that money to do work. That takes care of roads and fire service and transportation and grounds maintenance and public safety. Those are things right now that that’s all focused on. Essentially, the way it’s set up, the homeowner has absolutely no say whatsoever. It says right in the deed, ‘at Snowshoe’s discretion.’ I believe that is bad for the homeowner because they don’t get a say in how their money is getting spent. And it’s bad for Snowshoe – it gives the perception of Snowshoe as the fox in the henhouse.”

A West Virginia law, passed last year, authorized the creation of RADs. Under the law, only property owners within a district have the right to vote for three property owner representatives. The restriction of voting rights based on property ownership brings into question the law’s constitutionality.

The U.S. Supreme Court held that property ownership can be a legitimate voting qualification in certain cases. In 1973, the Court held in Salyer Land Co. v. Tulare Lake Basin Water Storage District that property ownership was a valid qualification in an election for a water district board of directors. In Salyer, the Court found that the water district’s activities disproportionately affected landowners and that the water district’s sole source of funding was a property assessment. The Court also took into consideration that the water district performed no general public services ordinarily attributed to a governing body.

The West Virginia RAD statute provides broader powers to a RAD than the water district involved in Salyer. A West Virginia RAD would have the right to levy assessments, collect fees, undertake public works projects and operate a police force.

In 1969, the U.S. Supreme Court struck down a property ownership qualification to vote in a school district election. The Court held in Kramer v. Union Free School District No. 15 that the restriction violated the Equal Protection Clause, by disenfranchising citizens “who have a distinct and direct interest in the school decisions.” In Kramer, the Court held that any statute restricting voting rights must survive “strict scrutiny” and serve a “compelling state interest.”

RADs similar to West Virginia’s have been authorized in Montana, but all members of the electorate – not just property owners – are allowed to vote.

DeBerry said Snowshoe’s initial guarantee of a four-seat majority might not last forever.

“Full acknowledgement that right now, we’re the controlling interest in commercial property and in undeveloped land,” he said. “The idea is that this is something that should last into perpetuity. It should be good for Snowshoe and the community 50 years from now. The idea is to make sure that commercial interests, no matter who owns commercial property, that they always have a say, and that, if there’s undeveloped land to be developed, that the people who own that have a say.”

DeBerry presented the RAD creation petition to the county commission on March 18. The commission can create a RAD if no more than 25 percent of Snowshoe residents oppose the idea.

The CEO said he formed an organizing committee, consisting of himself, a group of homeowners and an attorney, to draft RAD bylaws.

“The next step in this will be in the bylaws,” DeBerry said. “That’s where a lot of the rubber will hit the road and we’ll make sure there are plenty more protections for individual stakeholders.”

Currently, with a condition written into most deeds, Snowshoe Mountain collects an assessment from property owners, known as the Mountain Top Assessment, or MTA. The annual MTA cannot exceed 1.5 percent of the property value. The resort collects approximately $2.4 million every year with the MTA.

DeBerry said MTA revenue is insufficient for resort area improvements.

“To improve, absolutely, it’s insufficient,” he said. “It barely keeps up with maintaining what we have. This was a bad winter for potholes, right? We don’t have nearly the money we need in that fund to adequately repair the potholes on the mountain this year.”

“Owners asked me today, ‘when will you pave over my road?’ BeBerry added. “I said,’according to the funding trend right now – never.’”

Included in Snowshoe’s RAD petition is a draft RAD budget of $3.1 million, which includes the $2.4 million from the MTA and new “resort service fee” (RSF) revenue of $728,000. The petition states that the initial RSF will be two percent on a variety of retail transactions, but that the elected RAD board would make the final determination on the RSF rate, which can be as high as five percent.

“We would add a half-million dollars to the MTA,” said DeBerry. “All of a sudden, we can take care of the roads, for example. We can enhance public safety and we can set aside capital reserves, so that when a road needs complete repaving, this becomes the primary source by which we would do that.”

“If we add this resort service fee – it’s really more of a burden to Snowshoe than anyone else, because we’re the ones who are going to have to contribute the most, said DeBerry. “If Snowshoe has to add to the cost of a vacation, then we’re going to have to manage that and keep our prices down in order to allow for that fee to be included.”

The RAD would be authorized to levy a property assessment in order to fund specific projects. The maximum assessment rate would be set by the RAD board.

DeBerry said he prefers that an assessment is never imposed.

“What I think the ideal situation is, is that the resort service fee is able to build up the capital reserves to prevent us from ever having to levy any sort of assessment,” he said.

DeBerry would prefer to see the RAD pay for more county deputies, rather than forming its own police force.

“Nobody that lives at Snowshoe believes they have adequate police protection,” he said. “Our true feeling is that we believe that, for the amount of taxes that we pay, we should get more services from the county.”

“We would love to come up with an agreement whereby the county would be able to provide more consistent law enforcement up at the mountain, and we could use service fees to help supplement that.”

The RAD would avoid liability for officer misconduct if it relied on Sheriff’s deputies, rather than creating its own RAD police force.

If the Snowshoe RAD is approved, it would be the first RAD in West Virginia. See future editions of The Pocahontas Times for more coverage of the ongoing RAD process.

About the Author

- Geoff Hamill can be contacted at gshamill@pocahontastimes.com