Mad River Glen
Cooperative
Board of Trustees Meeting
Minutes – Saturday,
November 10, 2007
Draft – Pending
Review
After due notice, a Board of Trustees meeting of the Mad
River Glen Cooperative was convened at 8:00 a.m. on Saturday, November 10th,
2007 on the third floor of the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston, Vermont.
Trustees Jay Appleton, Paul Finnerty, Eric Schoenholz, Rick
Moulton, Geordie Hall, Steve Mackenzie, Lars Bruns and Bill Reynolds (joining
~9am by phone) were present. Trustee Jed
Kalkstein was absent. Also present were President Jamey Wimble and Marketing
Director Eric Friedman. Shareholders
Penny Parson, Bill Heinzerling, and Alan Moats were in attendance.
CALL TO ORDER:
Jay Appleton, chair, called the meeting to order at 8:07
a.m.
REVIEW OF MINUTES:
Regarding the draft October 6th minutes, Rick Moulton
moved to accept them and Steve Mackenzie seconded the motion. All trustees present approved the October 6th
minutes as-is, without changes by a vote of 7-0.
OPENING SHAREHOLDER COMMENTARY:
Shareholder and Single chair campaign volunteer Penny Parson
addressed the board with hopes for a better ski season than last year and to
ask for additional participation of Board members with the campaign. Penny felt that many Board members are/were
not out there participating in the campaign as much as they could. Penny expressed the desire to have broader Board
member visibility to our shareholders and asked the Board to be campaign
ambassadors. She highlighted the increased
burden the campaign has had on staff and felt the Board members could do more
to help out.
MANAGEMENT REPORT (Jamey Wimble):
The mountain is considering the placement of a small (four
foot tall) Unicell antennae, to be placed on the roof of the existing birdcage
building. Potential income looks to be
~$20,000/year from Unicell as part of a five year lease. This could provide the mountain important
non-snow related revenue as well as provide an unobtrusive convenience of cell
coverage on the mountain.
The Callie’s corner handle tow bull wheel needed to
be replaced this fall. The state tramway
would not allow us to perform a rebuild as we had planned, so we needed to buy
a new one for $5,000.
Pre-season pass sales were about even with last year to date. Season pass sales are slightly lower, and Mad
Card sales are slightly higher. Sugarbush
is again offering a $500 corporate pass for full access to both North and South
mountains this season. This deal is hard
to beat, so we need to give a killer customer experience to our patrons. The Triple Major college pass sales yielded a
strong increase over last year’s number.
Single project – For all intents and purposes, the lift
construction project is now complete.
The load test this past week passed very well with the state tramway
board. One brake was adjusted as a
result of the test and overall it was very very smooth. MRG and Dopplemayer/CTEC were both
complimented by the two state tramway inspectors who were onsite to perform the
test. The chairman of the tramway board
was also on hand to participate. Upon
questions from Geordie Hall and Lars Bruns regarding speed/capacity, Jamey
mentioned that we are looking to run the lift at ~550FPM (feet per
minute). Historically, we would run it between
450/500 FPM. This season we may be able
to run it slightly faster since there are fewer chairs on the line and they are
a further distance apart. We will need
to adjust the speed for safety and comfort especially for loading and unloading. During the test we ran it close to 690FPM as
required by the tramway board.
The Single campaign is over $1.35M YTD. There were two share sales last month against
a budget of four. There are 42 shares
that are currently listed to be redeemed.
Monthly financials – preseason sales are good and are on, or
near budget. The annual financial audit
is back, and we came out with a very small ($10,080) operating profit for the
06-07 season. We are currently “into the
bank” for ~$700,000 for the Single Chair mortgage.
Geordie Hall wanted to commend management for making a small
profit given the warm fall and late winter last season. Jamey credited his employees for helping out
in tough times, some working without pay and taking on other jobs.
FINANCIAL REPORT (Jamey Wimble):
Jamey reviewed the October financials with the
board. We were very close to budget and
there were no questions from the Board.
Jamey then reviewed “total project cost” of the single project now that it
is nearly complete and that we know all of the change orders, administration fees,
and projected cost of money given the current campaign status, etc. The total project cost is estimated to be
approximately $1.893M. This assumption of
cost includes the contract cost to CTEC including price escalation and all of
the change orders, cost of the campaign including the PTV covenant and
administrative cost, and the cost of capital of the mortgage. The cost of capital assumes that future pledges
will be paid in the last month of the year, and only existing pledges and
donations ($1.35M) will be received.
Additional donations will decrease the interest expense associated with
the cost of the loan for the project.
(Bill Reynolds
joined the meeting by phone during Jamey’s report.)
FY2007 FINANCIAL STATEMENTS (Eric Schoenholz):
The Finance committee met on November 9th and
reviewed the results of the 2007 audit. The
Finance committee has two minor outstanding questions for the auditor regarding
(1) how the Single construction was accounted for and (2) understanding the
level of Cash on the Balance Sheet in regard to a few notes in the audit.. The Finance Committee has requested to
understand the answer to these questions before officially recommending to
approve the audit. Paul Finnerty requested
to see a complete copy of the audit. Geordie
Hall made a motion to allow the executive committee plus Paul Finnerty to
accept the recommendations of the finance committee regarding the audit
approval. Bill Reynolds seconded the
motion which was approved by a vote of 8-0.
SHARE REDEMPTION SUSPENSION:
Upon review of the current financials, the Finance
committee sympathized with staff and board members regarding the difficult
situation of share redemption suspension.
We currently have ~$800k in cash to run the operation. The Finance committee expressed concern in
redeeming shares given that we will need to pay off ~$84,000 in debt in June
when the shareholder “Sunnyside Double” bonds come to term. Geordie Hall felt that there was too much
hanging over us in terms of debt for the single and pending bond payoff to
allow redemption at this time. Jay felt
that we can’t keep suspending redemptions forever. In reviewing the suspensions, it was noted
that ~10-15 shareholder redemption requests are greater than two years
out. Steve MacKenzie, Rick Moulton, and
Geordie Hall requested the Finance Committee to come back with a plan/barometer
for the Board to consider. Steve
MacKenzie also requested a specific timeframe for when we will begin
redemptions. This will help the board
consider allowing some of the oldest requests to be redeemed if the financial
picture can support them. The Finance
committee requested to wait until January (after the holiday period) to revisit
this item. The Finance committee will
make a recommendation following their January meeting which will occur shortly
after the new year.
SINGLE CHAIR CAMPAIGN UPDATE (Geordie Hall):
Green and Gold weekend was very successful. We sold an additional 14-15 chair sponsors
and held a nice dinner for the tower donors.
Geordie thanked Deb Steines for organizing this dinner. Geordie
mentioned that the campaign booth in the basebox also received some good
pledges.
Geordie commended Eric for the excellent job with the tickets
inviting the chair donors to attend the opening on 12/15 and be the first to
ride their chair that morning.
Echoing shareholder Parson’s opening remarks, Geordie
requested that the Board members increase their participation in the last
stretch of the campaign. Geordie asked
the board to assist in future shareholder Telemarketing efforts, which were
discussed as an excellent way to speak with shareholders. Geordie also asked to move the next board
meeting to Saturday, December 15th to coincide with the New Single
Chair / Opening Day ceremonies. If the
campaign is able to meet the $1.54M campaign goal, the committee will then seek
to sell the sponsorship of all chairs and to have 100% shareholder
participation in the campaign.
The focus is on selling all of the chairs and significantly
increasing shareholder participation. If these two objectives are accomplished,
then we will exceed out campaign goal and optimistically could cover the entire
project cost.
STRATEGIC PLAN REVIEW:
Geordie Hall asked about the purpose of this topic in
the agenda since there was a lot of material to review including the strategic
plan and the marketing plan. Chair Appleton mentioned that
the strategic plan helps direct much of our marketing and customer
communications and we review it yearly. Eric Friedman then talked about the
importance of understanding the NSAA (National Ski Area Association)
statistics/numbers, age demographics, and industry trends and changes,
etc. Some of trends are definitely going
to continue, especially less overall skiers as the baby boomers age. Eric Friedman then highlighted some comments
from his marketing plan and areas he would like board input in interpreting
aspects of the strategic plan. Eric Friedman
asked the Board to review the plan and assist in the definition regarding the “perception
of value”. What is value? Eric Friedman felt that our key to success is
providing a great experience to each of our customers. Also important is our commitment to our
environment. Eric Friedman felt that we
could be the environmental conscience of the ski industry. Eric Friedman and Lars Bruns referenced the
concept of Net Promoter Score (NPS) and encouraging additional positive Word of
Mouth (WOM) promotion from our customers.
Chair Appleton
then talked about the importance of our sense of community and keys to customer
service. Rick Moulton talked about the
historic strategic planning exercise and about the importance of our special and
unique mountain experience. Rick talked
about the concept of the sport of skiing being more important for Mad River
Glen than providing “frilly amenities”.
Rick encouraged mountain purity and the maintaining our unique mountain
experience. Geordie Hall mentioned that
families are doing more together now because people have less time. “Sugarbush is expanding their services to be
a destination resort. That’s not MRG and
isn’t where we’re headed, but we’re not necessarily catering to families like
we can.” Geordie talked about doing more
to get 70+ and children to come to MRG.
He felt that we need to be able to help families and adjust to the changing/aging
demographics. Geordie Hall challenged
the Board and Eric Friedman with determining what will be the next big thing
like the Mad Card. Can we bundle more
products/services together? Eric
Friedman mentioned we’re seeing degradation in the 13-20 year olds segment
group and felt that our experience at MRG may not be for everyone. He concluded that teenagers ski where their
friends are, and often have friends who snowboard…we also lose skiers who want a
terrain park. Geordie mentioned that the
cricket club could be at capacity.
The group then discussed capacity controls and the
overall customer experience. There was
also discussion of wait times and capacity restrictions that impact and may be
degrading our customer’s overall experience.
Eric Schoenholz supported that concept and felt that long lift lines and
facilities stretched to capacity do negatively affect our customer’s
experience. Eric asked if we could
create a better customer experience by finding a way to limit over-crowding? “Could we enable a way to guarantee/enable
access to the mountain that is not overcrowded?
Can we look at ways to enable people access to the hill without waiting
in lines and crowded facilities?” Paul promoted enhancing the experience in the
base area….specifically with music. Paul
then asked if we are following the Strategic Plan and if we have been following
the recommendations, committees, etc. The
group discussed seeking greater involvement of the shareholders. The group also discussed with Jamey doing
some research this season to understand wait times in the single and how the
waits may or may not correspond to our parking lot capacity.
Bill Reynolds asked what process we want to follow to review
the plan. “What is the prioritization of
our goals in the plan?
Environmental? Word of mouth marketing? Geordie Hall felt that we should follow a
process to get the best value out of the effort.
Lars Bruns asked Jamey for his thoughts. Jamey responded with the suggestion to have
the board asses the plan and determine:
1) Are
we following it?
2) Do
we need to assess today’s market and MRG’s current situation to propose
adjustments?
3) Are
we on base, do we want/need to change, what are the tweaks?
Chair Appleton
agreed. Further discussion ensued
regarding our average ski day per season and environmental/global warming impacts
(are they getting shorter). Should we
increases prices? Would fewer skiers
help our capacity and still maintain/improve our finances? The Board then discussed needing to re-assess
some of our financial models and consider making some adjustments or running
multiple scenarios. Jamey Wimble, Eric
Schoenholz, and Lars Bruns then mentioned and discussed a current initiative underway
to review our planned capital expenditures over the next 10-20 years, and how
this could/should fit into the strategic plan.
Further discussion continued. Rick Moulton advised that we hold on to our
different-ness and embrace our diversity.
Others requested that we get a bigger piece of the “weekday skier
market” pie?
The Board discussed and agreed that we need to determine
what is desired to be accomplished as part of the Strategic Plan assessment,
and how we can get there. All agreed
that we have a need for specific recommendations for updating the strategic
plan and a need to identify some actions as a result of these changes. Can we define what a quality experience means
…in the parking lot, in the lift line, in the cricket club, in the base area,
in the birdcage, etc.?
Chair Appleton
suggested forming a temporary Strategic Plan sub-committee to assess and
recommend topics for consideration? Eric
Friedman identified three main aspects he was interested in hearing more about
in regards to the strategic plan including value, customer experience, and
financials given current state of the market and MRG situation analysis.
The Board then concluded that any Strategic Plan discussions
should include shareholders – and ensuring and encouraging that non-Board
members also had a voice.
Chair Appleton
then recognized the floor for any shareholder comments. Shareholder Alan Moats commented on value and
the original strategic planning process discussions. He mentioned that at the time, one meaning of
value meant “young families need to be able to afford to ski”. Another concept that was part of the initial
planning was the value of the MRG experience ”….we are almost a caterer of a
great experience, through word of mouth and the interpersonal contact – sharing
and encouraging that with everyone including employees. Inviting and growing younger demographics.” Shareholder Moats suggested that the
Strategic Plan was intended to be a living document, but that any changes
should be taken quite seriously.
The Board then concluded and agreed that we have a limited
capacity where the quality of the experience can change and degrade during our
busiest times. Alan mentioned he’d be
interested in participating in a one-off group.
Rick, Eric Schoenholz and Lars also volunteered. The Board agreed that Eric Friedman should also
be on it too.
The Strategic Plan Assessment sub-committee will need to
seek additional shareholder involvement.
Any shareholders interested can contact Lars Bruns at Lars@madriver.com. This sub-committee’s goals will be to:
1) Determine Strategic Plan Assessment topics in time for
the December 15th Echo deadline.
2) Seek out additional shareholder participation and input
2) Prepare for and discuss these topics during the end of
year shareholder town hall meeting
3) The sub-committee will then meet once or twice to prepare
Strategic Plan revision recommendations for presentation at the Shareholder
Annual Meeting in the spring.
Actions needed:
1) Meet
between now and Dec 15th to determine topics to discuss and provide for the
Echo publication
2) Get
the strategic plan discussion topics into the Echo and prepare for the shareholder
town meeting
3) Meet
in January
4) Provide
a Board report in February
5) Present
the outcome and any suggested additions/changes at the Annual Meeting in the
spring.
OTHER COMMITTEE REPORTS:
No new reports.
Shareholder comments:
Shareholder Heinzerling asked if we ever caught the
thefts/criminals from the break-in last year?
Jamey Wimble responded that the police believe that they found the group
that did it, but that the evidence was not strong enough to prosecute them for
the MRG crime. The group was prosecuted
for other thefts. Shareholder Heinzerling
also suggested bringing back the lunch sled for the lift lines on busy days.
EXECUTIVE SESSION:
The board went into executive session after which no
actions were taken by the board.
CLOSING SHAREHOLDER COMMENTS:
No comments.
NEXT MEETING:
Upon review of the calendar, it was determined that the next
meeting of the Board will be on Saturday, December 15th on the third
floor of the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston,
Vermont. The meeting will begin just following
the New Single / Opening ceremonies if the mountain is closed, and at 5pm if
the mountain is open.
ADJOURNMENT:
Jay made a motion to adjourn the meeting, seconded by Bill
Reynolds. The meeting was adjourned
after an 8-0 vote to adjourn at 12:38pm.
Respectfully submitted, Lars Bruns
A true record.
Attest:
_________________________________
Lars Bruns, Secretary
