Mad River Glen
Cooperative
Board of Trustees
Meeting
Minutes: Saturday,
June 2nd, 2007
Draft: Pending Review
After due notice, a meeting of the Board of Trustees of the
Mad River Glen Cooperative was convened at 8:09 a.m. on Saturday, June 2nd,
2007 on the third floor of the Basebox at Mad River Glen Ski Area (MRG) in Fayston, Vermont.
Trustees Jay Appleton, Paul Finnerty, Jed Kalkstein, Eric
Schoenholz, Rick Moulton, Lars Bruns, Bill Reynolds (phone), and Geordie Hall (phone)
were present. Steve Mackenzie was absent.
Also present was President Jamey Wimble, Marketing Director Eric Friedman. Shareholders in attendance included Lu Putnam
and Bill Heinzerling.
CALL TO ORDER
Jay Appleton, chair, called the meeting to order at 8:09 a.m.
REVIEW OF MINUTES
Regarding the draft March 3rd minutes, Eric
Schoenholz moved to accept the minutes, Jed Kalkstein seconded. All trustees present approved the March 3rd
minutes as-is, without changes.
Regarding the April 8th minutes, Jed Kalkstein
moved to accept the minutes, Paul Finnerty seconded. All trustees present approved the March 3rd
minutes as-is, without changes.
ELECTION RESULTS
Jay Appleton read the Board of Trustee election results from
the April 7th vote into the record as follows:
In State:
Bill Reynolds – 460 (X)
Lars Bruns – 449 (X)
Robin “Rocky” Bleier - 315
Out of State:
Jed Kalkstein – 528 (X)
Management Report
Jamey Wimble reported that things on the mountain this
summer are fairly quiet other than the Single work. He noted that Eric Friedman is working with
other ski areas to create a promotion intended to increase college passes. Jamey Wimble mentioned that we have seen a
decline in college passes that we want to address. Rick Moulton asked about teaming with Middlebury
Snow Bowl. Jamey responded that our
biggest gap in the college market is from the Burlington area which is where we want to target.
Jamey Wimble reported that share sales are doing really
well. We had very aggressively planned
for 150 shares to sell this year, and so far we are at 124 and going well. 9 shares sold were sold in May at the new
price of $2000.
Jamey Wimble reported that the Single project is progressing
well; the helicopter will fly the towers down to the main lot on Tues.
6/5. Jamey Wimble recently had a meeting
with CTEC that went very well. He
reported lots of good progress and that the project is on schedule. Preparations are complete to fly the towers
out and no problems with the towers were found.
The helicopter is planned to return in August to help
pour the new footings and to return the sandblasted and repainted towers into
position. The current return station counterweight
at the summit will be removed, and a new one fabricated. Regarding a recent change in plans, Jamey
noted that the existing cable will not be reused due to difficulties and damage
to the line as a result of the spooling process. Jamey Wimble asked for a 2nd
inspection which confirmed the damage.
CTEC will pick up 2/3 of the cost to install a new cable with the Coop’s
share being$18k. This means we will not
need to worry about new cable for 25-30 years.
CTEC will allow us ~3 yrs to pay this additional cost.
The mountain crew has been busy, breaking up the drive components
and repainting in the vault. The existing
concrete in the vault looks good.
A question was asked regarding the power alternatives for
the new drive. An additional primary
drive diesel engine (if desired in the future) would be easy to bring in and
hook up. The design of the new lift took
this into account. This addition of a
diesel primary engine would cost about $100k and would compliment the new
electric drive.
Jamey continued his report and discussed a financial review
of the numbers from April. Tickets sales
look good due to the mad card breakage, and the expenses were kept low,
too. At this time Jamey Wimble and
Finance committee chair Eric Schoenholz continue to project that we will break
even for the year.
Regarding the Single Chair Campaign: Through Stark Mountain Foundation and
Preservation Trust of Vermont we currently have $486k in cash. Finance committee chair Eric Schoenholz noted
that for the year the ending fiscal year cash position will be better than
projected thanks to the increased share sales.
Regarding the saving of parts from the original single,
Jamey mentioned that we will save both bull wheels and pulleys, in addition to
the ring and pinion gear. These components
are all set aside and will likely be temporarily located behind the maintenance
shed until we determine what to do with them.
Board Chair Jay Appleton, Jamey Wimble, and shareholder Jito Coleman have formed
an informal committee to determine how best to display these historically
significant antique parts. Please
provide input if you have ideas.
Rick Moulton asked about the opportunity to consider new
paint colors for the lift base station (vault/crows nest) and requested a more traditional
color other than the existing “summerhouse beige”.
Financial Report
Jamey Wimble and Finance committee chair Eric Schoenholz
took questions from the board regarding the financial budget and projections
provided. Jamey Wimble confirmed that change
orders on the single project to date include the change from Trex to wood chair
seat slats, the downhill capacity change, and new cable for the lift.
Lars Bruns inquired if the new lift value will help us from
a depreciation perspective in years to come.
Jed Kalkstein mentioned that it would, although our loss carry-over from
prior years is over $1m from a tax perspective.
It was noted that all campaign moneys raised as part of the campaign are
taxable
to the coop. (Even if they were tax-deductible to the donor.).
A question was asked about the standard or expected default
rate on pledges from a fundraising perspective.
Consultant Christine Graham had previously mentioned that there is very
low default on pledges once someone makes a pledge.
Single Chair Campaign
Jamey Wimble reported that we are still getting good
activity with the campaign, and we are closing in on $1.2M. The campaign doesn’t end until March
2008. We expect a large donation coming
in through SMF for Tower 1. There are many chairs still available for donors to
sponsor a chair and there are only 3 towers left, number 1 will likely go very
soon.
Jamey Wimble reported that the booth at the Waitsfield Farmers
market has started and is going well. Lars
Bruns asked Board members to please volunteer if you are in town this summer on
a Saturday or at least help out for a bit. George Hall echoed the request for
volunteers. Many Sugarbush and “never-skied-Mad
River Glen” skiers are getting good information regarding the mountain at the
market. More volunteers are needed to
help out on Saturdays through September, please contact Lars Bruns @ Lars@madriver.com . The Board thanked Lars for his leadership in
proposing and managing the booth.
Green and Gold weekend will feature the lift opening an hour
early for those who sponsored towers and chairs. These donors will have the opportunity to ride
on the chairs that they sponsored.
There will be a temporary all-donor plaque at this year’s Green
and Gold weekend, but it will not be final.
Eric Friedman added that we are also planning on putting the donor list
online to encourage donations and confirm the names are current and
correct. This list will also be included
in the 60th anniversary book.
BUDGET AND TICKET PRICING
Jamey Wimble presented the staff’s budget and pricing
recommendation. Eric Schoenholz then presented the Finance committee
recommendation which echoed the staff recommendation with no changes.
Jamey Wimble also reported that last year, we really went
after expenses, cutting $40k out of the budget.
Workman’s comp and general liability went down. The bad insurance rate effects from the 9/11/2001
attacks are finally beginning to settle out of the insurance market. There are also now 3 competitors in the
market that helps reduce our costs.
George Hall noted that he observes a lot of former MRG people
skiing at Sugarbush and wanted to discuss how we can bring back the
locals. Eric Friedman mentioned that we
are becoming more dependent on local patronage since the valley is not drawing
more out of town/out of state skiers. A
Vermonter’s pass and ticket are difficult for us to price because we do not
want to give non-shareholders a better deal than our shareholders.
Discussion continued regarding expenses and savings. Lars Bruns asked how much of last year’s
expense cuts/savings were continued in the proposed budget for next year. Jamey Wimble mentioned that carry-forward
cuts include continued outsourcing of IT work, reduced marketing help and spend,
and reduced spending on basebox bands.
Paul Finnerty inquired about the possibility of reducing beer prices. Jay Appleton echoed Paul’s concern and
encouraged keeping beer prices at a minimum.
Lars Bruns inquired about the Triple Crown and encouraged its return
next season.
Shareholder Lu Putnam mentioned that she would be disappointed
if we didn’t do the Triple Crown as it gets good press out west. Lu also mentioned that we should consider
adding more social activities during the holiday week if/when we have good snow. She also inquired about extending the bar
hours and noted that our closing procedures should be looked at.
Finance committee chair Eric Schoenholz, reiterated that the
Finance committee fully supported management’s proposal for the 2007-2008
budget and pricing. Eric Schoenholz also
mentioned an interest from the Finance committee to look at our vision and
strategic plan in relation to marketing aspects and pricing strategy given the
competition. What is our environment? Who are our competitors? What is the currently pricing and strategies against
the competition?
Eric Friedman mentioned that he supported looking at this in
conjunction with the strategic plan this fall.
He encouraged more input and discussion from the strategic plan to
better provide him with marketing direction.
Eric Friedman also suggested getting some outside perspective from other
skiers outside of our community….as well as examining data from the National
Ski Areas Association and Vermont Ski Area Association.
Rick Moulton expressed concern on customer retention given
last year’s season. Eric Friedman stated
that he wants more direction from the strategic plan. Jay Appleton noted the Board’s interest in
this year’s strategic planning initiative and noted both the Finance committee
and the Board’s desire for more information/perspective on competition before this
year’s strategic planning discussion.
Upon motion duly made by Jed Kalkstein and seconded by Rick
Moulton it was unanimously:
Voted: That the Board
approve the staff and Finance committee recommendation for 2007-2008 budget and
pricing.
Following the vote, Paul Finnerty thanked the management and
the Finance Committee for preparing the data and providing their rationale
behind the recommendation.
Share Redemption Suspension discussion
Finance Committee Chair Eric Schoenholz recommended continuing
the share redemption suspension per the recommendation of the Finance Committee. The rationale was that redeeming shares would
cause capital to either be taken from the bank or from the incoming share sales
when it is required to
fund the Single chair project.
Discussion was also had regarding cooperative bylaw section 9.6
regarding share redemption pricing and the requirement of the coop to pay the
lesser of the net value of the ski area per share or the cost of the
share. Eric Schoenholz noted that to pay
for share redemption would eventuallyrequire
additional financing which was not recommended.
Shareholder Lu Putnam asked about further clarification on
the shareholder redemption figure. Jay
explained that the bylaws in section 9.6 (Redemption) regarding the amount that
the redeeming shareholder should receive is to be either the net value of the
ski area per share or the face value of the share whichever is lesser. Our recent bad ski seasons have impacted our
Balance Sheet, lessening the net value of the ski area and the value per
share. The Single chair and campaign
will likely dramatically improve the net value per share next year.
Jed Kalkstein mentioned he was concerned about public
relations in regards to the currently low net value per share. Jed Kalkstein recommended continued
suspension of share redemption until after the single project is paid off and net
asset value of the coop is increased.
Bill Reynolds felt that our first priority is maintaining
the financial health of the mountain and encouraged following the finance
committee recommendation to continue the redemption suspension.
No action was taken by the Board to change the existing
suspension of share redemption. In
September the Board will again revisit shareholder redemption suspension.
Discussion regarding future Board meetings ensued. The next Board meeting will be on July 14th. George Hall would like the Board to begin
conversation on examining the shareholder redemption clause in Section 9.6. Jay Appleton mentioned that the other part of
the July meeting will include other coop business and a discussion of the APR
as stated in the bylaws.
Paul Finnerty mentioned wanting to discuss consideration of
an APR mailing insert for this summer.
Paul Finnerty was interested in considering adding a voluntary form in
the mailing to solicit shareholder contributions to an employee fund for staff
appreciation. Jamey Wimble mentioned
that a bonus program is in place. Jay Appleton
mentioned that he will look at the agendas for future Board meetings to discuss. No action was taken.
Shareholder Lu Putnam asked again about the Triple Crown –
regarding marketing expense and supported the contest. Lu felt it brings in people and good mountain
interest.
Eric Schoenholz reminded all in attendance about the
importance of keeping pricing and competitive discussions private and
confidential until announced.
COMMITTEE REPORTS
The exec committee did not meet. Finance committee provided recommendation
earlier re: budget/pricing. No other
committee met or reported.
EXECUTIVE SESSION
The Board met in executive session from approximately
11-11:30am.
NEXT MEETING
Upon review of the calendar, it was determined that the next
meeting of the Board will be on Saturday, July 14th at 8am on
the third floor of the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston,
Vermont.
ADJOURNMENT
Rick Moulton motioned to end the meeting, which was seconded
by Paul Finnerty. All approved. The meeting was adjourned @ 11:37am.
Respectfully submitted, Lars Bruns
A true record.
Attest:
_________________________________
Lars Bruns, Secretary
