Home > Crank, Design the Details, Economics, Editorial, Health, Hickory Hills, Parks and Recreation > The payback of our municipally owned ski-hill

The payback of our municipally owned ski-hill

Thank you

Tuesday crank: Hickory Hills

Listening to the City Commission last night discuss Hickory Hills operation as if all it is a drain on the City budget was frustrating. Of course, there was the sentimental call to maintain the hill, someway, somehow, but focusing on the idea that the City must do so solely by making up $70,000+/- it spends on the Hill’s operation per year is short-sighted.

Left out of the discussion is any recognition of the economic impact the recreational program has on the City. It’s as if this service, and this service alone, needs to somehow break even or make a profit. Yet, no other city service does; directly, at least. Indirectly,  all of them contribute to the economic well-being of our community including the municipal owned and operated ski hill.

Using gross generalizations and an economic impact equation from famed parks and recreation expert John Crompton, we can get a rough guesstimation of the economic reasons the City Commission’s approach has been anything but business like–the truth of the matter is, they have spent little effort evaluating the economic impact of Hickory Hills.

Here’s the equation:

(Number of visitors) X (Avg. spending per visitor) X (multiplier) = ROI 

The first two numbers we have throughout the history of the hill. The multiplier represents the ripple effect of monetary exchanges (and, in advanced studies, saved) through the community and for our low-budget purposes is best used in a range. I’d say the multiplier is safely be between 3 and 10. This represents the fact that people who ski at Hickory Hills also purchase things directly related to the activity, go out to dinner as part of the activity, pay coaches and trainers, and pay higher real estate prices to live in a community with such a unique opportunity.  In addition, this equation could also include the hundreds of volunteer hours and thousands of dollars donated to the hill through the Grand Traverse Ski Club and other sources.

Using numbers from 2009, and erring on the conservative side because this math is taking place on only one cup of coffee, this equates to a return on investment in the community of  between a quarter and 3 quarters of a million dollars. That is real money, circulating in the community, and a chunk of it coming back to the Government Center on Boardman Ave., someway, somehow. I also think this is far too low and that the real number is much higher.

Real Numbers

Recently the Traverse City Chamber of Commerce and Traverse Bay Area Youth Soccer released a regional economic impact study of two soccer tournaments (PDF) held in the region. The direct spending that occurs from these tournaments in the region over two weekends totals $3.4 million dollars. For comparison, the total annual budget for parks and recreation in the entire region (including all townships, villages, the City, and Grand Traverse County) is $3.7 million. A small portion of that $3.7m investment is in soccer fields that generate almost an equal amount of economic activity in just two weekends.

The City Commission needs to change the discussion of Hickory Hills from how much it is costing us, to what are the gains we can achieve by operating a valued recreational opportunity. Or, what we will lose if the political will isn’t there to keep it open.

The money in recent years spent on a tubing run concept would have been better spent working with the Chamber on running some numbers on the true impact of the place.  In the end, it still might not be worth $70,000, but is it worth $50,000? $40,000? We don’t know until someone seriously looks at the numbers.

The ‘solution’ may still include a third-party taking over the operations, but we should do so realizing that it is still a valuable, both socially and economically, asset to the community.

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NOTE: As of yesterday I served as chairperson of the City’s Parks and Recreation Commission. Last night, the City Commission appointed me to Planning Commission where, albeit in a different role, I still plan on being an advocate for sensible investment in our public spaces.  

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  1. Scott Howard
    November 13, 2012 at 9:44 am

    Well put, Gary. I couldn’t agree more. As a kid I used to ski at hickory until my arms gave out and I couldn’t hold on any longer. As a parent, I love watching my children do the same thing. Looking at Hickory as a liability rather than an asset to be further cultivated is short-sighted.

  2. Brian Bourdages
    November 13, 2012 at 11:22 am

    Gary – you just adequately captured a HUGE part of the discussion about all of our region’s recreational resources that is often sorely lacking. While I didn’t have the good fortune of having Hickory Hills as a kid since I grew up downstate, I get the same enjoyment as Scott of seeing my boys and their buddies skiing until I have to drag them home or the hill is closed. That and I might run into Scott and his family or other friends while warming up in the Lodge are the other “values” that can’t be calculated on any formula. That’s a town character and quality of life factor that makes these places the entire reason why I work and live here and work to further protect and provide these types of assets. Thanks for such a thoughtful commentary🙂

  3. November 13, 2012 at 11:29 am

    I agree with Scott, except I think ‘short-sighted’ is too nice of a term.

    Your post highlights a number of very important issues with our City government and our community as a whole. Not only did my wife and I also grow up skiing at, and enjoying Hickory Hills immensely (year-round), but our kids really enjoy it, too. Its value to our family is immense, going back four generations now. Hickory Hills’ value to our community is enormous – too large to be solely quantified in dollars, as good a job as you did, Gary.

    From a political/budgetary viewpoint, your are not going to ‘balance’ the City’s nearly-$14 million dollar budget by closing a ski hill that ‘costs’ $70,000 annually. That’s half of one percent of the annual City budget! Half of 1%… Try looking at the personnel costs that the City supports, both today and in the coming decades. Now THAT is where the budgetary focus should remain. I know it’s daunting, but the only way to ensure fiscal health for our fair City looking forward is to tackle the budget items with an actual impact on our bottom line.

    Gary’s point about NO other city service directly paying for itself, let alone turning an annual profit, is also right on the mark. Why is Hickory Hills different than the Parks & Rec budget as a whole, or the Road Commission, or the pay and benefits packages for the City Commissioners? Does the new Dog Park have to be in the black? How about the major, multi-million dollar renovations to our bayfront?

    Finally, the last time the City Commission discussed ‘closing’ Hickory Hills in order to ‘save’ half of one percent of their budget outlay, their meeting was swamped with well over 100 area residents loudly voicing their support of Hickory Hills, and the Commissioners and the Mayor climbed all over each other to publicly announce their support for the ski hill. [Record-Eagle story here: http://record-eagle.com/local/x1199104429/City-commissioners-back-Hickory-Hills%5D

    …That was not even six months ago. How dim are these Commissioners? It’s like they enjoy swaggering up to the hornets’ nest and whopping it with a stick just to see if the community is still paying any attention…

    I know that’s more than two cents, but what gives?

  4. November 13, 2012 at 11:41 am

    Mike, and everyone, I appreciate the comments. I didn’t attempt to capture all of their discussion last night, which to the City Commission’s credit was focused on keeping Hickory Hills open, and even at one point recognizing a new lodge is needed. We don’t need to demean anyone’s intelligence level here, as in your “dim” comment.

    All I attempted to do here is point out what is missing from the discussion. I think they are setting it up for failure if the only discussion is locating 70 thousand dollar bills to balance a spread sheet line item. Step back, think bigger, and reach out to the community as a whole and they may find there’s real economic value they aren’t currently recognizing.

  5. November 13, 2012 at 1:29 pm

    Years ago, it was pointed out how expensive ANY swimming pool is….they never break even…and no one is trying to ban swimming pools….because of the benefits. The Hick is a part of Traverse City history, many of our younger lives revolved around the place. Remember the cry about the potential of losing Bardon’s Wonder Freeze last summer? The populace rallied when they heard of the loss. Same thing happened last budget cycle in City Hall….you don’t take away the institutions….that IS our Quality of Life. We ignore the treasure of Boardman Lake, an in-town lake that most cities would kill for, because we are blessed with two incredible bays…Hickory Hills is another under-appreciated, under-utilized treasure…..it’s Traverse City’s Central Park…and I don’t think any one in New York is proposing to shutting down their incredible institution….no matter what it costs…..The Hick is a diamond in the rough…Love IT…..forever.

  6. Brian H
    November 13, 2012 at 10:24 pm

    Mike, I have found that most City Commissioners and Staff to be supportive of Hickory Hills. The main obstacle seems to be from those that are supposed to be leading Staff and the Commission agenda.

  7. Raymond Minervini
    November 14, 2012 at 8:10 am

    Great post, Gary. You (and most of the comments above) are right on the mark in how we look at certain City functions. Hickory Hills is a very valuable community asset in so many ways– its cost is only half the equation.

  8. November 14, 2012 at 10:45 am

    Right on the mark, John. NYC’s Central Park has an annual budget of something like $46 million.

  9. November 15, 2012 at 9:53 am

    Mike is absolutely dead on about the silliness of focusing discussion of city budget problems on such a relatively small expenditure. I would encourage people to go to the city’s website – at the panel on the right is a link for a municipal performance dashboard. This was required by the governor as a condition of revenue sharing, and the financial info it contains is similar to what I used to share on my PlanforTC website. The important numbers are the percentage of our pension obligations that are funded (71%, a worsening trend), the percent of our other post-employment benefit obligations (e.g. retiree healthcare) that are funded (43%, a declining trend), and the debt per capita ($2,075, or over $30 million total).

    In light of these real financial problems, the handwringing over $70,000 for a popular ski hill is a sideshow. The current city manager conducts this sideshow annually – he puts a popular program on the chopping block as a way of inciting the public and putting city commissioners on the defensive about city revenues and spending. I am afraid the sideshow will continue until there are enough votes on the commission to replace the manager with someone willing to tackle the real issues – instead of playing these games year after year while the long-term structural problems worsen. The votes were not there while I was serving, but for those with concern and new energy there is an election coming up next year.

  10. Mary Ann Moore
    November 16, 2012 at 2:52 pm

    Gary, with the exception of the Beach and the cemetery the programs and departments in the city pay for themselves. The enterprise systems even give back to the city 5% of gross income. Several years ago we voted to let the county take over the senior center ( a 1/10 of 1% millage) ending a $100,000 annual expense to the city. Since city skiers account for 50% of users (winter only) the city should pay 50% of costs.

    Unfortunately, the cemetery will never pay for itself due to perpetual care promises made years ago and still being made. The beach attracts tons of tourists in the summer and the proximity to downtown means lots of action at our stores and restaurants downtown. Hickory is a local attraction and is constantly being cited for costing a $100,000 for rich kids to learn to ski. There is more pressure than you realize to shut down Hickory and spread the rec money into different (and cheaper) winter sports.

    If you can think of a way to get some revenue from the disc golf crowd that would help. In the meantime the city is getting squeezed financially by the pension system and that ballooning cost means fewer dollars to spend on recreational pursuits for our local families. That’s what all the talk and nostalgia is about. We’re hoping for a small millage in ’14 to cover cost of operation. When that happens there will be a significant funding drive to get groups and individuals to donate to the building of a new lodge.

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  11. November 17, 2012 at 1:00 pm

    Thank you for the response, Mary Ann. A more regional spread of the cost of this recreational service is indeed welcome, but not at the cost of holding the program hostage due to issues related to pensions and an unbalanced approach between departments. A few years ago, I recall a cost savings measure proposed by then Mayor Bzdok and Commissioner Gillman regarding the robustly staffed engineering department. If I recall correctly, there were three options that would have saved the city 6 figures annually without any loss of service. The City Commission was not interested. As well, the tax cut that was passed a few years ago was never pitched as, “we are going to cut taxes and then cut services.”, so perhaps it is time to revisit it.

    Over the last three years, the Parks and Recreation Commission was consistently ignored when advising on the management of Hickory Hills. In the current year, the parks and recreation commission has been completely excluded from the discussions between the City Commission and the Joint Recreation Authority and the Grand Traverse Ski Club. It is as if the volunteer body charged with advising on the parks doesn’t even exist. This is a critical mistake, as these are members of the community with ideas and energy that they want to contribute. At one point, the P&R Commission was interested in conducting a community wide input process for the future of Hickory Hills; it was met without support.

    You mention revenue from the disc golf crowd and the P&R Commission has made recommendations concerning summertime revenue…those too have been unsupported or ignored by staff and the City Commission. Perhaps you could speak with the current Parks and Recreation Commission to investigate those further; their monthly meeting is the first Thursday of the month at 6:30pm.

    Two recommendations that I recall being made during my term were to:
    1) install one or two cement donation tubes. This has been recommended more than once and each time the report back was that the City Treasurer was not interested. And, 2) allow basic vending at the lodge during the summer. It is a 24 hole golf course, players get thirsty, and they will pay. These are just two small ideas, easily implemented.

    It needs to be recognized that there has been an annual Throw for Joe disc golf event over the last two years. It has raised money for a scholarship fund at the high school and has raised money directly donated to the City to go towards the maintenance of Hickory Hills. (Throw for Joe, N. Express).

    I understand that there is pressure to close down the ski operations and I understand your task on the commission is difficult, but I also understand that to close Hickory Hills is a political driven idea. Most residents expect local government to provide services that add value to the community, both socially and economically, that can never directly pay for themselves. The streets, sidewalks, and parks all fall into that category.

    My point here, is that those services do have economic benefit once we pull back and investigate their impacts. What would home property values be in Slabtown without Hickory Hills? Does it add any economic value to those properties and others in the City? If so, what is it worth to maintain?

  12. mikecgrant
    November 17, 2012 at 1:42 pm

    Commissioner Moore, I’m looking on the City’s website and there are several other departments listed that I doubt, as you put it, “pay for themselves.” For example, just to choose probably the two most obvious ones, the police and fire departments don’t pay for themselves by a long shot. As well as I wonder about the attorney, engineering, HR, the manager, parks and rec, and streets departments. I doubt these departments pay for themselves because, at least to my (admittedly limited) knowledge, they don’t generate any, or very much, revenue. So are you really being accurate when you write that most of the City departments “pay for themselves”?

    I suppose you might reply that, of course, some of these other departments don’t pay for themselves, but we fund them because they provide essential city services that enhance and protect the lives and property values of city residents and property owners. Police and fire, for example. I think Gary’s point, though, is that just like police and fire, Hickory Hills enhances the lives and property values of city residents and property owners, and its value (like police and fire) should not necessarily judged by whether it, in and of itself, breaks even every year or makes money. Particularly when, as I think Gary astutely points out, the existence and operation of the ski hill undoubtedly results in increased property values, at a minimum in Slabtown, which don’t directly appear on HH’s bottom line but do generate property tax revenue.

    That isn’t to say that I don’t think we should be open to taking a more regional approach to the management and funding for Hickory Hills. Placing it under the TC/Garfield joint park/rec authority would likely be a good step to take, assuming that means Garfield is bringing some money to the table. Perhaps the park/rec authority should even be expanded to cover all of the “urbanized” townships, meaning East Bay and Elmwood.

    I would also be curious to get your thoughts on the issue raised by former mayor Bzdok. As far as it does appear that the shortfall at Hickory Hills is a bit of a rounding error in terms of the City’s overall balance sheet. I do wonder why it’s getting such attention when there appear to be much bigger fish to fry, as far as getting the City’s fiscal house in order.

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