MAD RIVER GLEN COOPERATIVE
BOARD OF
TRUSTEES
MINUTES OF MEETING -
Final
September 10, 2005
After
due notice, a meeting of the board of trustees of the Mad River Glen
Cooperative was convened at 8:00 AM on September 10, 2005 on the 3rd floor of the Basebox
at Mad River Glen Ski Area in Fayston, Vermont.
Trustees Jay Appleton, Paul Finnerty, Rick Moulton, Mary
Schramke, Jed Kalkstein Bill Reynolds, Steve Mackenzie were present. Deb
Steines was present on the phone. Geordie Hall was present on the phone for
the discussion of the SCFC. Also present was President Jamey Wimble as well
as several shareholders.
CALL TO ORDER:
Jay
Appleton called the meeting to order at 8:00 AM.
APPROVAL OF MINUTES
VOTED:
To approve the minutes of July 2, 2005.
Jay
stated that the November meeting would be on November 5th.
Shareholder Comments
No comments.
Management Report
The Management report is attached for reference. We are
spending a little more on advertising due to the economy and Hurricane Katrina.
Financial Report
The financial report is attached for reference. Jamey
commented that we anticipate our Net Income would be around $120k which is
about $100 less than budget.
Single Chair Rebuild Update
Jamey met with Tom Sanford and Jan Leonard of
Doppelmayr/CTEC for an update; steel prices are going up which will affect the
cost of our rebuild. Biggest concern is the cost of transport has doubled
since April because of gasoline prices, which will also affect the total cost.
Everything still on target and looks good. Two items we are not clear on yet,
one is the variance on the chair gate opening to the front needs to be
resolved, and second, environmental protection requirements for lift tower
restoration work in the parking lot. The towers have lead paint, and we need
to follow environmental regulations for its removal and containment. It was
discussed that the state actually owns the parking lot but this has never been
an issue in the past as our septic system is in the parking lot. At one time
the state approached Betsy to purchase the lot but she declined. The Act 250
process is under way for the project and the application should be submitted
within two weeks.
The removal of the towers might be delayed in order to move
materials up the hill for the tower base construction. Helicopters will be
used to take the towers to the parking lot, and then to return them to the
mountain. It is anticipated that the project will be completed and load tested
by Green and Gold 2006.
Committee Reports
Executive – Jay Appleton reported that the Executive
Committee took action to approve the hiring of Christine Graham our consultant
for the Single Fundraising. Jamey Wimble has met with her and she has spoken
with Jay Appleton and the some members of the SCFC.
Finance – No action.
Facilities – Jamey Wimble reported that septic test
pits on the mountain for potential house lots have not been excavated.
Homeowner Easement – Deb Steines has reclused herself
from the vote as she is a homeowner and a friend of the Schoenholz.
Jamey Wimble has presented an easement request from
homeowner Eric Schoenholz on Schuss Pass. The easement request was for a
replacement septic disposal field located at the bottom of the Lower Antelope
trail. Jamey worked on this with Peter Monte in prior years and Steve Kantor
currently. The value of the land came from the Town assessment per acre value
of Eric Schoenholz’s house lot and applied that to the portion of MR’s property
that is affected. The basis of Eric Schoenholz land is $52,800 for 0.3 acres,
thus the 0.16 affected acres for the septic is $26,400. Since an easement was
requested rather than fee-simple ownership, the proposed price would be 50% of
the derived value, or $13,200
The Chair reminded the Board that that this decision would
set the precedent for future easement requests and to consider the vote
carefully. There was much discussion surrounding the methodology and cost of the
easement. .
Homeowner Bob Rogers commented on the appearance of gouging
the homeowner and that the approach should be more reasonable. Upon questioning
from the Chair, he suggested setting the easement price at 10% of the
assessment-derived value. Shareholder Shawn Kalkstein commented that he felt
this was a good compromise.
Citing conflict of interest and the Trustee Code of Conduct,
Paul Finnerty requested Deb Steines refrain from further comment because she is
a homeowner/trustee and a friend of the homeowner; she objected but agreed to
speak as a shareholder and homeowner only.
Jay Appleton suggested we look at the formula in two
sections; first we take the assessed value of the lot for the value of the
easement area, and then look at the percentage allocation. A question was
raised as to whether the formula adequately reflect the existing guidelines, it
was agreed it did. It was agreed that the basic formula is appropriate. The
percentage of 50% was then discussed; Mary Schramke voiced her disagreement
with the 50% and felt it should be lower. There was much discussion
surrounding the value of the land and the percentage that should be used.
Geordie Hall suggested we come up with something that will stand the test of
time, and should be based on appraised value, not assessed value. Paul
Finnerty reflected upon his fiduciary responsibility to the Co-op. Bill
Reynolds stated that the bottom line question is ‘what is the easement worth’.
It was noted that the Co-op would no longer be able to place a structure on the
easement area or use it for anything else other than skiing.. Bill Reynolds
continued that the Board has a fiduciary responsibility to receive fair market
value for all rights to property granted to others, and that he would vote
based on that responsibility. Steve Mackenzie stated that the board should
vote on the formula, and then if a homeowner had an issue with the calculation
they could request a different decision; it was also generally agreed that the
formula is a guideline and anyone who feels that it’s assessment is unfair
based upon individual circumstances can ask for relief
Upon a motion by Paul Finnerty and seconded by Steve
Mackenzie it was favorably voted on by Jay Appleton, Paul Finnerty, Steve
Mackenzie, Jed Kalkstein Rick Moulton, and Bill Reynolds, and opposed by Ms
Schramke and Geordie Hall, with Deb Steines reclusing herself from the vote,
VOTED: Approve the granting of the septic easement
as memorialized in the quit claim deed Eric Schoenholz requested for the price
that was determined by Jamey and Co-op council, $13,200.
Bob Rogers, speaking for the homeowners, expressed his
disappointment with the price. Mary Schramke opposed the decision and
requested that consideration be given to the fact that Eric Schoenholz had used
Co-op property in the past for their old septic and we should look favorably on
his efforts to move it off the road. Leigh Michl suggested that efforts should
be made to have the grantee homeowner present at future meetings for such request
decisions.
Single Chair Finance Committee Update – from Geordie
Hall
Geordie Hall thanked Jamey Wimble, Eric Friedman and Sharon
Crawford for their co-operation and time commitment in working with the
committee; and he thanked Jay Appleton for his support and time. He alsoe alHeHe thanked the committee especially Charlie
Tipper, Leigh Michl and Al Russell, everyone has been there when we needed
them. Mr. Hall reported that early in their work, the Single Chair Finance
Committee (SCFC) realized that the reconstruction of the Single Chair
represented the opportunity to capitalize the Co-op through a national capital
campaign. A successful campaign would free up the existing capital reserve fund
for other projects such as replacing the Birdland chair or Basebox
renovations. A successful campaign would also avoid the cost of debt
financing. After a search by the SCFC, the Co-op retained Christine Graham to
assess the potential and develop the capital campaign plan. The SCFC
identified tax deductibility for donations is a key question, which Christine
Graham will help answer.. Partnering with organizations such as the
Preservation Trust of Vermont (PTV), and the Stark Mountain Foundation (SMF)
are being explored. Donations directly to the Co-op might also be tax
deductible. Leigh Michl commented that they are trying to anticipate problems
before they occur. Charlie Tipper described the PTV his meetings with Paul
Bruhn (Executive Director),,and that it has shown interest in involvement for
matching grants. A research study has been funded with a matching grant with
SMF and PTV, to compile historic documentation and photographs for future
documents; this document can be used to solicit future donation associated with
historic preservation. Rick Moulton questioned whether the PTV could be a pass
through organization; Charlie Tipper commented that they were ready to discuss
that with us. Leigh Michl commented on SMF involvement and tax deductibility.
The SMF charter does state to preserve the single chair, the SCFC is trying to
determine how the SMF can participate and to what extent. Mr. Michl is raising
the questions to get answers now. Can any foundation donate to the Co-op? To
what extent can SMF and others participate? Leigh Michl is having discussions
with Wally Tapia, a leading accountant in Vermont for charitable organizations,
to answer these questions. This is a very complicated situation, which is new,
especially when the complexity of the Co-op and shareholders is considered.
The possibility of donations made directly to the Co-op, marked for the
preservation of the Single, as being tax deductible is being addressed by Wally
Tapia for the committee. The Co-op is very close to meeting the IRS’s
definition of a non-profit and this aspect is being explored. Bob Rogers,
treasurer of the SMF, stated that the SMF is expecting a letter next week from
Wally Tapia on how SMF or any non-profit can donate to the Single Chair after
reviewing SMF charter and non-profit law. Christine Graham will be considering
all aspects of this in her recommendation and will be advising the committee as
soon as she has a preliminary feel for the direction the fundraising should
take. Christine Graham is building a ‘giving pyramid’.
The back-up financing plan for the Single rebuild is bank
debt. Mr Wimble reported that financing cost is anticipated to be 6.5% but
for 6.83% we could do a long-term 20-year debt with no penalties for early
payoff for a loan under $1.0 million. This would be worse case scenario. This
would enable us to proceed with the Single reconstruction and pay off the basis
with donations as the capital campaign proceeds. Currently the committee is
recommending the Co-op proceed with a campaign for $1.54 million which includes
the administrative costs to proceed with the fundraising, calculated at 10% of
the campaign target of $1.4 million. .
Upon a motion by Geordie Hall and seconded by Paul Finnerty
it was unanimously voted to approve,
Motion: That the Board authorize the SCFC to include
in their plan an additional $140,000 for administrative costs associated with
fundraising for the Single Chair.
What is termed the “retail component” of the capital
campaign has been put together by by Eric Friedman. This includes such things
as share sales and selling the existing single chairs. This will be launched as
part of the overall capital campaign.
Christine is engaged for the planning phase only to
determine what we can expect in donations and direction. Christine will be
interviewing approximately 30 individuals to help with anticipating level of
donations and what strings might be attached. We are hoping for a preliminary
update by Green and Gold, with a full report to the Board by the November board
meeting. Rick Moulton commented on timing, that he would want to target
individuals prior to the end of December for tax purposes. It was also
commented that the Jamey should bring the Co-op’s tax accountant into the mix.
The Board will present a status report of activities at the Town Meeting in
October.
Back to Committee Reports:
Board Development – Bill Reynolds and Mr. Finnerty
are working on policy governing employee participation on the Board, but it is
not ready for action at this time. They are discussing amending the Trustee
Code of Conduct and how the board should be self-regulating; or whether we need
to articulate a policy for employee-trustees or for board members that are
members of another particular group.
Personnel – No action.
20th- - No action.
Shareholder Relations – Geordie is no longer co-chair
on the Shareholder Relations Committee (SRC) due to his activities with SCFC.
Steve Mackenzie will replace him. Mary Schramke, Chair, is exploring
decentralization of committee acitvities into regional subcommittees. She
suggested that NY, Boston, NJ, Connecticut, and Vermont have regional
committees, working with the ski lodges to foster regional organizations. She
would like to provide shareholder events for them to be involved in, and to
socialize with. The goal for this year is to branch out to shareholders for
more involvement; this will be investigated especially over Green and Gold.
The plan would be to use the SRC to foster community. Mary Schramke will test
the shareholder base to find if there is involvement interest. Rick Molton
suggested they could be involved in the retail sales for the single chair, and
with social events; caution must be maintained to avoid overlap with designated
staff functions. A suggestion was made to have clubs host a happy hour before
the board meeting.
Shareholder Comments – Shawn Kalkstein commented that
the Board should continue to pursue the proper assessed value of property for
the purpose of easements.
Bill Heinzerling questioned whether contractors were being
lined up for the chair replacement; Jamey Wimble commented that he has two
bidders. He also commented that committees should meet periodically; his
comment was specifically related to the Facilities Committee. Rick Moulton
commented that committees should meet when they have something to discuss.
Bill Heinzerling also commented that we should all be proud of the progress
made on the Single Chair.
ADJOURNMENT
There
being no further business to come before the board, the meeting adjourned at
11:12 AM.
Respectfully
submitted, Deb Steines
A
true record.
ATTEST:
__________________________________________
Debra
Steines, Secretary
