Vernon OKs Mountain Creek settlement

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  • New CEO of Mountain Creek Joe Hession addresses the special joint meeting between the VTC and VTMUA.

  • Council President Jean Murphy reads from a prepared statement.

  • PHOTOS BY MARK LICHTENWALNER The joint meeting between the Vernon Township Municipal Utilities Authority (right) and the Vernon Township Council.

VERNON — Mountain Creek and Vernon Township appear to be on their way to resolving the resort’s longstanding sewer debt.

At a joint meeting between the township Council and township Municipal Utilities Authority, both boards approved the agreement.

“I think it’s a good step forward,” Councilman Mark Van Tassel said, immediately following Thursday night’s special joint meeting.

According to Vernon Township Mayor Harry Shortway, the agreement features an immediate payment of $918,00 from Mountain Creek. It creates a revenue stream from Mountain Creek through ticket sales to opay obligations, a $200,000 cash collateral trust fun to be replenished for any amount that is withdrawn. Pump House 2 is to replaced by the township but Mountain Creek to repay the township.

But most importantly, the owed $28,000,000 will not be on the township ratepayers.

Mountain Creek filed for bankruptcy in May of 2017, and in July sought to relieve itself of $28 million owed specifically to the VTMUA.

All five regular members of the VTMUA voted in favor of approving the settlement. The township council reached a 4-1 vote, with Councilwoman Sandra Ooms being the lone holdout. She did not publicly state a reason.

Council President Jean Murphy read from a prepared statement, announcing that the council plans to enact an ordinance declaring, “the current and future owners or operators of Mountain Creek will collect a service fee that will be held in trust for Vernon Township, and utilized to repay the sewer debt.”

Without reaching this settlement, the $28 million would have fallen on the backs of Vernon residents.

“The alternative to this agreement is,” Murphy stated, “that we would have to send a bill, we would be required to send a bill to every homeowner.”

The most current demographic data for Vernon shows 8,622 households, with $28 million in debt to repay, that would mean every household would receive a bill for around $3,250.

Murphy assured the public, that with final approval of this settlement, that would not happen.

”Mountain Creeks success equals Vernon’s success,” Murphy said, “because the township will benefit by receiving the funds we need to stabilize the sewer debt for the next 20 years.”

Murphy admitted that the agreement, “was not perfect,” and acknowledged that the last 19 months since the bankruptcy filing have been difficult, with some, “heated discussion.”

In addition to the service fee to be charged by Mountain Creek, there is also a requirement for cash to be replenished to the trust, in the event that they fail to collect the municipal fee.

The original deal with Mountain Creek to build the sewer system was struck in 2005, and required the resort to pay 100 percent of any shortfall in money to pay back the VTMUA. “Meaning that if the money collected from the users was not enough to cover the debt service payments, and sewer operating costs, Mountain Creek was responsible to pay the difference, or shortage,” Murphy explained.

Murphy explained that this deal, “was not recorded as an assessment, so it could not become a lien like property taxes and utilities.”

The deal was revised in 2012, and determined Mountain Creek would only be responsible for 63 percent of any shortfall in payments. Murphy noted that the 2012 agreement, “undermined or removed many of the safeguards that were put in place to protect the township.”

Murphy noted that the new agreement was designed to collect the funds from the 2012 agreement.

Joe Hession, Vernon native and new CEO of Mountain Creek spoke at the end of the meeting, and acknowledged the trouble between the resort and the town.

“I understand that this has been a very long battle between the town and Mountain Creek,” Hession said. “My goal is to mend this relationship and have it go in a great way.”

Hession just recently gained controlling interest in Mountain Creek from the Koffman family, who were never able to deliver on the lofty promises they made, which at one time included an indoor waterpark, and even a Swedish-style spa.

Editor’s Note: This article has been updated with more information from Thursday night's meeting and quotes from involved parties.

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