Mount Baw Baw alpine resort is expected to close all ski lifts from Monday, despite bumper snow falls in the past week and threats of legal action from furious business owners.
The shock decision raises further concerns over the financial viability of the alpine resort, which has received more than $13 million in taxpayer funding since 2008, but is expected to announce another huge loss this year.
The Mount Baw Baw Alpine Resort Management Board, which is under mounting pressure to appoint a private operator, blamed the announcement on one of the "worst winter seasons for many a year".
"The management team has analysed historical snow depth and visitor number data and looked at weather bureau predictions to make some decisions," said resort chief executive Stuart Ord in an email to Mount Baw Baw business owners. Over the past week, Mount Baw Baw received more than 20 centimetres of snow, with skiing conditions described as "perfect" on the resort's website.
Last Tuesday, resort management received correspondence from Wisewould Mahony Lawyers representing Mount Baw Baw Ski Hire, which stands to lose significant business because of the early closure of the lifts. "Such action, if implemented prior to the end of the snow season will have a severe adverse affect on our client's business and it will suffer loss and damage", the legal letter warned.
Mount Baw Baw Ski Hire is owned by German-born Franz Reiter, 79, who founded a ski-school on the mountain in 1967. Several skiers, including some interstate visitors, have also purchased $25 lift passes on discount website Groupon, which will not be honoured.
Resort management has responded by placing one lift on standby from Monday.
Sam Kerley has been a member of Mount Baw Baw's Benbullen Lodge for the past 39 years and said the popular ski field had been "buggered" by poor management over the past decade. She was planning to ski at Mount Baw Baw but has been forced to revise her plans.
"You see all this money spent on the wrong things, but hardly anything has been put into improving the runs or getting new towbars. Baw Baw has always appealed to working families, who don't need fancy restaurants," Ms Kerley said. Mr Ord said a minimum of one lift would be on standby and operated "commensurate with snow levels, visitor numbers and resort revenues".
He recently confirmed that the involvement of a private operator was under consideration, following appointment of Belgravia Leisure to manage the state-owned Lake Mountain Alpine Resort last December.
"A decision has not been made as to whether private investment will be sought. If this decision were to be made, a competitive expression-of-interest process would be conducted," Mr Ord said. In 2011, Mount Baw Baw's former chief executive, Leona Turra, was the subject of an independent inquiry by consultancy firm Deloitte, after a whistleblower raised serious probity concerns.
Ms Turra, who received a salary of more than $200,000, cited poor health when she suddenly resigned in 2011 and has consistently denied any wrongdoing. The Deloitte report was never made public.