ASHLAND — The Rogue Group Sierra Club questioned the Mount Ashland ski area’s financial health Monday, but ski area managers said the club’s diagnosis is inaccurate and misleading.

At an Ashland press conference, the Sierra Club’s Tom Dimitre produced figures that he said suggested the ski area is nearly "insolvent," and could be vulnerable to bankruptcy after a bad snow year.

"We have concerns about the viability of the ski area, and whether it’s a good idea to expand," Dimitre said.

Dimitre’s charges marked the latest fusillade in the Sierra Club’s four-year battle against proposals to expand the publicly owned ski area atop Mount Ashland.

The club went to court in a failed effort to prevent construction of a new septic system at the ski area and opposes building new ski trails on undeveloped national forest land adjacent to existing trails.

The club favors more modest expansion proposals that would not require timber cutting on roadless, undeveloped public land in the Rogue River National Forest.

Responding to the allegations, the ski area’s general manager, Jeff Hanson, said the Sierra Club used accurate financial information, but painted "an unattractive picture that’s not an accurate picture of the organization’s financial situation."

Tom Reid, a certified public accountant and a member of the ski area’s board of directors, said the ski area has "a strong balance sheet, plenty of working capital, and virtually no debt.

"To bring up bankruptcy and liquidation," Reid said, "is completely inappropriate."

Dimitre produced several charts to support the club’s argument. One showed a precipitous decline in the money the ski area has set aside for expansion — from $1.4 million in 1998 to less than $200,000 in 2001. Another showed a steep descent in the ski area’s annual net operating income (money left after expenses) — from nearly $700,000 in 1995 to just $25,000 in 2002.

Reid said the figures are accurate, but the Sierra Club is manipulating them to create "fear and uncertainty."

He noted that the ski area spent more than $800,000 of the money allocated for expansion to build the new sewage treatment plant, a project which would be included in any expansion proposal. The ski area also bought new snow-grooming machines and a used chairlift for the proposed expansion.

Hanson said the ski area’s annual operating income declined dramatically after the 1994-95 season (its third in public ownership) because managers began to spend in areas where they had scrimped during their early years, when they felt a strong need to save.

"We operated in an extremely frugal manner at first," he said. "We had fewer lift operators, fewer groomers and fewer ticket sellers. People were so happy we were here, they forgave a lot of shortcomings."

Hanson said net operating income has held relatively steady in the range of $100,000 to $200,000 per year since then.

Dimitre’s chart showed the ski area lost money only during the 2000-2001 season.

"That was the second-driest year in a hundred," Hanson said. "Nobody in the ski business made money that year."

Dimitre called for broader public discussion about how the publicly owned ski area plans to fund its proposed expansion plans.

"One of our questions has always been, ‘How are you going to pay for the expansion?’ " he said.

"The people who own the ski area need to know what’s happening."

Reid said it’s impossible to talk about financing without knowing what level of expansion the U. S. Forest Service will permit. The Forest Service plans to release its draft environmental impact statement for the expansion proposal late this winter.

Reach reporter Bill Kettler at 776-4492, or e-mail bkettler@mailtribune.com