Board of Trustees
Minutes of Meeting
due notice, a meeting of the board of trustees of the Mad River Glen
Cooperative was convened at on
Call to Order
President Michl called the meeting to order at
Approval of Prior Minutes
Upon a motion duly made by Mr. Michl, and seconded Ms. Steines, it was unanimously
To approve the
Judy Larson DiMario noted the spelling of her name is Larson not Larsen.
Irma Heeter wanted the board to know she supports the design of the new shareholder pin, and asked the board to consider keeping separate budgets for advertising and promotion of the Co-op versus marketing of the ski area. Mr. Michl responded that the board is currently discussing the topic.
his comment, which was not meant to be a political statement, micro management
or a personal attack on anyone, Paul Finnerty reported the sighting of a MRG
poster advertising discounted lift tickets for sale at the Hunger Mountain
Co-op. The Hunger Mountain Co-op is an upscale food co-op catering to people in
Mr. Bleier respectfully asked the chair to maintain meeting order and curtail general interruptions of those who have the floor to maintain orderly train of thought. He noted this was the case with himself at the last board meeting. He then reiterated his comment from the last meeting regarding re-instatement of the women’s telemark division of the Triple Crown competition because he feels more women will participate if there was a separate division, and feels there is strong shareholder support for the division. Ms. Heeter concurred.
Shawn Kalkstein stated the proposed mission statement contained a split infinitive and the proper wording is either “forever to protect” or “to protect forever.” The board responded the proposed wording is already included on the ballot, which has already been mailed out to the shareholders and unfortunately cannot be changed at this point.
following is the
Things continue to work well outside. Saturday March 1, lift 2 went down for the day with a power problem. A transformer owned by GMP had gone bad. The good news is this explains the problem we had last month that I wasn’t satisfied we had solved the problem. GMP incurred cost. Currently working with GMP on their service shortfalls and new distribution upgrade.
We continue to get great articles written about us from the ESWA.
Many of our J3’s and 4’s will be going to states. The race program is showing some good results after being built up from nearly nothing.
Talking with 2 different parties about taking minutes for meetings when Margo departs.
Share sales continue to do well. We sold 8 shares for the month against a budget of 7. YTD we have sold 28 against a budget of 23. We tendered 4 shares for the month.
Cash flow is in great shape. Should not impair our capital request this year. Total cash at the end of February is $804,000 including the $150,000 single reserve.
February P&L looks good. We held expenses while revenue went up.
Budget work for next year has already begun. We will be focusing on some increased revenues through pricing and making some cuts on expenses to get into a $200k-$225k net op income range. We need this number to support our 20-year capital plan.
<<<end of report>>>
In response to Mr. Coleman’s question, Mr. Wimble stated share sales figures are up partially due to good response to the new information packets and a good winter.
The board unanimously accepted the management report.
February Profit & Loss (see attached)
Financial results of operation for the last month and for the fiscal year to date may be summarized as follows:
Marketing income mostly includes fees collected for outside advertising contained in the Area Guide. The Basebox expenses also include cafeteria student wage reported at the bottom of the column. Credit card service charges have not been billed hence is not reported to date. Marketing expense is under budget because some of the Co-op specific marketing has been billed to Cooperative expenses, which is over budget.
Finance Committee Report (see attached)
Ms. Steines summarized the Finance Committee’s funding analysis looking at different funding options to meet future capital expenditures. Performing the analysis was identified as one of the board’s strategic plan initiatives. In order to analyze the options the committee made assumptions about capital needs and short fall(s) after operating income. The committee looked at different operating income scenarios and determined potential funding sources as follows:
· share sales – friendly debt
· bond sales to shareholders – viable option, first bond issue was successful
· line of credit – will not fund our long term funding requirements
· bank loans – not an option because of high interest rates and our status as a small business
· re-mortgage property – requires shareholder approval, rates would not be favorable
· National Historic Register – not a viable option, would not cover the single
· other observations – need to maximize revenue and minimize expenses
Once the scenarios were considered and funding sources evaluated, the following recommendations were made:
- maintaining an opening net operating income in the range of $167,000 - $200,000 to minimize or eliminate any need for debt
- in the event debt becomes necessary we recommend increased share sales and if necessary, a bond issue
- maximizing revenue recommendations, which are reviewed by the committee annually
Ms. Steines will make a similar presentation at the annual meeting.
Mr. Meier explained the 1 share tendered for every 10 shares sold or 6 month waiting period was set to reduce the potential for high cash output. The bylaws allow redemption of shares when replacement capital is available. The board at that time (Nov 98) made the decision to allow redemption of shares as stated above once 1656 shares were sold.
In response to Mr. Kalkstein’s question, Mr. Wimble feels the ticket price is relatively price elastic because we saw growth in both midweek and weekend ticket sales this year after the increased ticket price.
FY 2003 Capital (see attached)
Mr. Wimble submitted a list of capital improvements for 2003 divided into three tiers and recommended the board approve the $120,000 tier 1 and tier 2 projects allowing Mr. Wimble to prioritize the tier 2 projects at his discretion to equal the $120,000.
The following formula is employed to calculate available funds for capital improvement.
5 year average operating income + share sales - single reserve (75K) and 1.5 X debt Service = total available funds
Available funds = $120,000 Already spent = $37,300 Balance = $82,700
The rental shop/locker project includes relocating the locker room to the Ski Patrol shed with the rental shop taking over the existing locker room space. The rental shop is an income producer, runs out of rental equipment on busy days, and more space would allow better service and increased income.
The Birdcage project would include replacement of the gable ends and new siding. Mr. Wimble would like to use Adirondack style siding, but is unsure if it will be compatible with the existing trim. This does not include adding a larger deck to the structure.
Electrical upgrades take into consideration possibility of burying all overhead power lines. Mr. Wimble continues to negotiate with GMP to determine who is financially responsible for the upgrades. Any burying of power lines would incorporate proper accommodation of drainage.
Mr. Michl stated the 2003 capital project list does not offend the vision and value statement. Mr. Coleman reported the Facilities Committee has reviewed and supports the proposed capital improvement plan.
With regard to the cash flow statement, Mr. Wimble would like to pay the $90K insurance fee up front to eliminate the $500 finance charge. He feels our cash situation is good and can afford the outlay.
Upon motion duly made by Mr. Michl, and seconded Ms. Steines, it was unanimously
VOTED: To approve the capital expenditures for the balance of FY 2003 totaling $83,000 including the tier 1 projects and the tier 2 projects, which will be prioritized at Mr. Wimble’s discretion.
Mr. Coleman suggested adding a separate capital reserve fund to the budget to begin accruing monies for future capital projects. After discussion the board decided to wait until June to review the financial situation before committing to an additional reserve fund.
Communications Protocol (see attached)
The board accepted the MRG Co-op Communications Protocol with one recommendation, which is to use job titles instead of names.
The redundancy built into the protocol is to eliminate potential time lapses when Andrew and/or Eric are out. Carbon copying the GM on all communications will assist in emergency postings and/or communications.
Mr. Moulton thanked Mr. Wimble for developing a clear, simple, and workable protocol.
Facilities: Mr. Coleman reported that the Facilities Committee sent out requests to a number of local and shareholder architects for the initial preparation of the master planning/visioning effort. Two architects responded. One suggested the Co-op host a one-day design/visionary charrette with a number of architects. This would result in a good representation of what the Co-op is looking for, and identifying a direction. The cost would be inexpensive (trade possibility) for the product. The second response requested a clear statement of work from the Co-op, which the architect would then respond to.
The charrette would require the board or committee to identify the major questions and issues before going forward, such as:
- what is the “grandfathering” threshold(s)?
- what are the biggest issues that will confront us in the next 20 years (parking, etc.)?
- once the strategic plan is complete we can use it to help create the frame work.
Mr. Coleman would like to have a master plan developed in one year. The board supported the committee going forward with the project as described.
Finance: see above
Shareholders Relations: Mr. Moulton reported the committee continues to meet on the first Tuesday of the month. Recent attendance has been light, which he attributes to good skiing. Summer attendance is generally higher. He received good enthusiasm on the shareholder lapel pin. Mr. Moulton shared Mr. Heeter’s proposed design. The pin will be a self-funded item and could be a positive revenue producer.
There was general discussion about the pros and cons of having the pin as a true revenue producer, not just covering the wholesale and handling costs, and where and how the revenue would be used. Get more shareholder feedback on the proposed design.
The pin could be the start of a shareholder line of products.
Mr. Moulton recommended pricing out the pin at a variety of order quantities to determine the best option.
Upon motion duly made by Mr. Shultz, and seconded by Mr. Michl, it was
VOTED: To authorize Mr. Moulton to proceed with the shareholder pin, consider the design approved, purchase them at an affordable cost with a reasonable retail price, and try to get them for the annual meeting.
VOTING: In favor: Coleman, Eaton, Michl, Moulton, Moats, Putnam, Schultz, Steines
Mr. Bleier clarified his dissenting vote, because he would like to see more owner input on the design.
Mr. Moulton asked the board for comments and feedback on the draft community plan, which he has emailed to the board.
Board Development: Ms. Steines reported the committee will be holding a conference call meeting next Wednesday at 7:00 p.m. to discuss a procedure to bring new board members on to the board. She specifically requested that Mr. Moats and Mr. Moulton participate since they have most recently gone through the process.
Elections: Mr. Bleier reported the candidates’ forum went well and both the transcript and audio are available on the web. Ballots and candidate bios have been mailed. There was a bit of a glitch because two bios had to be corrected/edited after they had been printed.
He suggested the language be corrected on the ballot because the “box” to be checked is actually a “line.” He also asked that the candidate bios be posted on the upstairs’ bulletin board as well as the down stairs Co-op bulletin board because he feels they are a good Co-op selling tool. Mr. Shultz suggested posting banners on both boards directing people to the opposite board.
Mr. Bleier clarified the first bio reprint and associated costs were due to corrections of factual information. It is the Election Committee Chair’s responsibility to review the bios on a factual basis, which he failed to fully execute and therefore caused the reprinting of the first bio. The second bio reprinting was on behalf of management who requested several changes, which the committee and the candidate indulged. Mr. Bleier noted the second bio had in fact passed the committee’s review and criteria for being factual. The changes made to the second bio were at management’s suggestion. He also noted he was unsure of the protocol in this circumstance. Mr. Michl commended the work of the Election Committee and Mr. Bleier in particular and stated that the additional costs were warranted given the importance of the election process.
Personnel: Mr. Michl
stated the draft GM performance appraisal will be covered in executive session.
He also identified the need to update the GM job description. Ms. Steines
suggested the job description should be updated after the performance appraisal
has been finalized.
20th Committee: Mr. Moats reported the article in the recent Co-op News sums up the status of the project. He will be in the Valley over the next week and plans to meet with Ms. Pratt, Mr. Burley, MRG community members. He has been speaking with a planning/engineering group, at no cost to the Co-op, who have participated on similar projects who are investigating the reality of the project with regard to Ms. Pratt’s prices and Mr. Burley’s estimated development costs. The planners are familiar with mixed conservation/development projects and have participated with other similar ski area projects. Mr. Moats hopes to develop some “ball park” figures, which will help identify next steps. Many shareholders have raised concern with conservation funding sources that have strings attached. He has spoken to shareholders who are active with conservation efforts who feel there may be funding for pure conservation of the parcel. He feels a combination of funding sources (e.g. conservation and limited development) will be the most likely scenario to make the project viable. Other shareholders have raised concern with the impact, viability, and tone of the project. He stressed the desire to cause no negative financial impacts to the Co-op. He feels the majority of shareholder do not ski 20th Hole and are not interested in building houses, therefore the project must stand on its own merits. He will update the board again at the next meeting and asked for continued feedback from board members and shareholders.
Ms. Steines complimented Mr. Moats on the article in the Co-op News and felt it was well written and clearly explained the possibilities. Mr. Bleier concurred.
New Business/Further Shareholder Comment
In response to Ms. Heeter’s question, Mr. Moats responded that Act 250 has not been contacted yet because we are not at a level of detail in the process to put a draft plan before the commission. He has been contacted by a shareholder who is on the Fayston board and is willing to discuss the local permitting process. Once we are confident with a direction and a plan we will look more closely at the permitting details. Ms. DiMario offered her assistance and knowledge of the State permitting process.
Mr. Kalkstein raised concern with Mr. Bleier’s comments about the changes made at management’s request to candidate(s) bio(s). He feels proper government oversight does not include editing a candidate’s political statement. Mr. Bleier requested the item be discussed further in executive session. Mr. Wimble added the committee, not management, should have caught the correction. The candidate was given the option to correct a factual error.
Ms. Pierce praised the shareholder pin design and feels it could become an historical collectors item. She complimented Mr. Bleier and the elections committee for a job well done in making the process clear and understandable.
Mr. Finnerty asked that the annual meeting dates be posted on the public MRG web page as well as the shareholder only web page. He also would like to see a month by month listing of events on the site.
Mr. Wimble asked for clarification about who is responsible for determining what “valid Co-op business” is when releasing the shareholder list. The board agreed that if the shareholder’s request was clear then management could release the list. If management is unclear they can refer the request to the board for determination.
Upon motion duly made by Mr. Michl, and seconded Mr. Coleman, it was unanimously
VOTED: To authorize management to release the shareholder list to a shareholder who has requested the list per Co-op policy and who has stated valid Co-op business. If requested by the General Manager the shareholders request may be reviewed and approved by the Board of Trustees or Executive Committee if it is a time sensitive matter.
At 7:25 p.m. the board entered into executive session and resumed open session at 8:20 p.m.
There being no further business to come before the board the meeting adjourned at 8:20 p.m.
Margo B. Wade
A true record.
Lu Putnam, Secretary
a. February Profit & Loss
b. FY 2003 Capital
c. Draft Finance Committee Funding Analysis
d. Communications Protocol