Board of Trustees Meeting; June 7, 2008
Board of Trustees
Meeting
Minutes –Saturday,
June 7th, 2008
After due notice, a meeting of the Board of Trustees of the
Mad River Glen Cooperative was convened at 8:00 a.m. on Saturday, June 7th,
2008 in the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston, Vermont.
Trustees Jay Appleton, Lars Bruns (Vice-Chair), Paul
Finnerty, Liz Godwin (Secretary), Geordie Hall (dep. 10:26), Betsy Jondro (dep
12:40), Jed Kalkstein (arr. 8:08), Bill Reynolds (Chair), Eric Schoenholz (Treasurer) were present. Also present were President Jamey Wimble,
Marketing Director Eric Friedman, and approximately ten shareholders
Call to Order:
Trustee Reynolds called the meeting to order at 8:06
a.m.
Commendations:
Trustee Reynolds
opened the meeting by thanking Trustee Appleton for his prior service as Board
Chair. He also commended President
Wimble and staff for their hard work during last season.
Approval of Minutes of March 3, 2008 and
April 6, 2008 (Action):
|
Motion
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Made by
|
2nd by
|
Aye
|
Nay
|
|
Approve minutes
of March 3, 2008, and April 6, 2008
|
Trustee Hall
|
Trustee Jondro
|
8
|
0
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Shareholder Comments
Shareholder Penny
Parsons spoke on behalf of Stark Mountain Foundation (SMF) encouraging the
Board and mountain management to do anything possible to combat climate change,
including education of shareholders.
Shareholder Chris
Havilland reiterated the content of his email to the Board regarding lift lines
and ticket prices, and expressed his desire to hear what people thought with
respect to whether the lift line issue needs to be addressed. Mr. Havilland thinks that the cap on ticket
sales is ineffective at current set point.
Management Report
President Wimble
summarized the management report (see attached).
Board Q&A:
Trustee Reynolds
asked when online retail is expected to be up and running; President Wimble
responded that the plans are to start next week and have it operational before
the end of FY ’08.
Trustee Hall
clarified that every aspect of operations is included in the carbon footprint
calculations.
Shareholder S.
Kalkstein inquired as to how out-of-state skiers’ commutes are calculated, to
which Marketing Director Friedman replied an analysis was done of our database
of out-of-state shareholders and an average was computed.
Trustee Hall
clarified that we are indeed using Native Energy as part of the carbon offset
program (money stays in Vermont).
President Wimble
commented that at an industry conference, he found that we are “out in front by
about one and a half years” in terms of “greenwashing.”
Trustee Hall
commended Stark Mountain Foundation & management for
their proactively implementing the carbon neutral initiative and clarified that
donor plaques will be fixed on chairs.
Trustee Finnerty
inquired as to where share sales are in terms of goals; President Wimble
advised that we have sold 31 with a goal of 40 for FY ’08.
Trustee Hall
inquired as to annual savings once double bond is paid off. President Wimble advised that we will save
$8K/yr.
Financial Report
President Wimble
asked for questions on the financial report.
Clarifications:
We have worked with
PTV and our auditors to adjust payments to better plan and manage financial implications
to the cooperative..
We are looking to
amend grant amount from PTV from current $1.648M to $1.85M. The remainder would go into a maintenance
fund. We are trying to cover costs up
front and avoid using a maintenance fund.
PTV seems amenable to this arrangement, which would enable us, not PTV,
to control the funds.
Single Chair Campaign Update (Action)
Trustee Hall noted
that we’re over the goal by about $20K.
Seventeen chairs still need sponsorship.
Approximately 45% of shareholders have donated. We would like to increase this, but no more
massive efforts will be expended.
Shareholder Deb Steines’ survey indicated that three
shareholders wanted their tower plaques moved.
Shareholder S.
Kalkstein asked if those people have been informed that they are in a minority;
Trustee Hall informed him that a detailed discussion did occur with said
shareholders.
Trustee Finnerty
inquired as to what would prohibit chair sponsors from asking for chair plaques
to be moved as well if we were to approve Trustee Hall’s motion; Trustee Hall
stated that they certainly could but the Board would then need to discuss it.
Trustee Reynolds
asked if there has been talk of outreach to increase participation, to which
President Wimble & Trustee Hall replied that the number of people who have
donated is actually greater than the number of people who voted yes on the
single restoration.
Trustee Hall
reminded those assembled that the midstation and base are still available for
naming @$100K and $250K, respectively.
Trustee Appleton asked what the
status was of the Single Chair Campaign Committee (SCCC) and whether it should
continue to exist.
Trustee Hall
recommended “winding down” the leadership gifts committee but letting SCCC
continue for a while.
The Stark Mountain
Foundation may not have a Gala this year due to the MRG 60th
anniversary celebration instead. Stark
Mountain Foundation would like to dovetail in with that and do fundraising in
some way.
|
Motion
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Made by
|
2nd by
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Aye
|
Nay
|
|
Move to modify Gift Acknowledgement Policy to read as
below.
To the current policy:
·
All
plaques on towers, the mid-station
and base station will be placed with modest conspicuousness, in keeping with
the culture of Mad River Glen.
Plaques, with the exception of the all donor plaque, will be no more
than 4”x 6”. In the case of towers,
plaques will be attached to the lower portion of the tower base in a location
that is visible by skiers or hikers at ground level, rather than those riding
on the Single Chair. The appearance of
the signs (materials, colors, font style, etc.) will be consistent and will
be based on a design approved by the Co-op President.
Add the
following verbiage:
·
Tower Donors will be given the choice of
placing plaques in one of two places:
1) Leaving
the current placement facing uphill readable only by hikers and skiers as
specified above
2) On
the right side of the tower (the side next to the uphill chairs) so that it
is readable by a passenger in a chair. Due to the construction of the towers
e.g. the placement of the joining plates and the fact that the diagonal bars
are not at 45 degrees and vary in position relative to chair height, these
plaques will vary slightly in their height relative to a chair. That is, they
may be slightly above or below safety bar level but in all cases, will be
readable by someone in a chair. Every effort will be made to keep the plaques
above safety bar level optimally 12” above the bar.
·
Final determination of the plaque placement
according to the above guidelines is the sole responsibility of the General
Manager.
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Trustee Hall
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Trustee Jondro
|
9
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0
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Capital Plan (Action)
At the March
meeting, Tier I was approved which would entail spending about $95K.
President Wimble
requested to go to Tier II in part and change Tier I to reflect a change in
price of Basebox basement renovations from $20K to $56K and a change in price
of a new Hedco snow gun from $20K to $5K to do a rebuild instead. The proposed increase in spending is from
approximately $95K to $114.8K.
Trustee Hall asked
if management had looked into getting more lockers. President Wimble noted that they are very
expensive; he met a company representative that would do all installation and
would take some of profit.
Trustee Kalkstein
asked how much we currently make on lockers downstairs; President Wimble
responded that we are stuck at fifty cents whereas most places charge two
dollars.
Trustee Hall asked
how many get used; Marketing Director Friedman stated that on a busy weekend
they are all in use. President Wimble is
looking to move the vending machine and put in shelves to accommodate backpacks
and bags. Trustee Hall recommends pegs
as well.
Trustee Reynolds
asked about the seat pads for Lift 2; he thought more pressing needs existed
(e.g. roofs, Stark’s Nest, etc.).
President Wimble noted that we can’t really do much roof work given the
budgetary constraints; seat pads have been noticed by many and it would be good
customer service to replace them.
Trustee Hall
clarified what the “edger” is – it’s a ski tuning machine.
Trustee Jondro
asked if we could we add a snack bar to the line on busy days. President Wimble replied that it would be
labor-intensive and we’re often short of people by five. Trustee Jondro suggested possible use of
volunteers for that purpose.
President Wimble
would like to put in a contingency for a third tiller; the one we have now
works, but Pete fears it could come apart.
We could get a rebuilt one for $7.5K if ours breaks down. One of the next capital items is to look at
the snowcats. The bonus would be having
a backup tiller. Last year we got new
tiller barrels; this would be a new tiller.
Trustee Hall
clarified that total increase for capital expenditures is $37.7K. The total would be $125K plus $7.5K
contingency.
Trustee Kalkstein
asked what the $50K entails for renovations.
President Wimble replied that it was mostly flooring – it’s very
expensive to put in safe flooring for ski boots that can be cleaned easily –
we’re looking at a rubberized material but that increases the cost
greatly. Concrete would present a slip
hazard.
Trustee Bruns
confirmed that the new bathrooms would be more aesthetically appealing.
|
Motion
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Made by
|
2nd by
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Aye
|
Nay
|
|
To approve President
Wimble’s request to do all adjusted tier I and priority 1&2 in tier 2 for
total of $125K plus $7.5K tiller contingency
|
Trustee Hall
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Trustee Godwin
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9
|
0
|
Budget and Ticket Pricing (Action)
President Wimble
proposed the following for 2008-2009:
·
changing
mid-week ticket price from $35 to $39
·
changing
weekend ticket price from $54 to $60
·
changing
holiday price from $56 to $64
·
instituting
a Family Mad Card (FMC) at $179 (instead of $129) if the purchaser wants the
free kids’ pass
·
increasing
Mad Card (MC) price by $10 to $129
·
shareholder
ticket prices would be at a 15% discount
In 2007, we saw an
increase in visits but lost revenue.
Ancillary departments increased revenue by a good deal and there was a
5% increase across the board for passes.
Going to “one MC purchase per child” was considered to be too large a
change from the previous policy.
Trustee Finnerty
asked how many MC purchasers buy it just for the free pass. President Wimble said that the estimate is
approximately 940 but 750 was chosen as a conservative number to do the
ticketing model.
Trustee Hall
inquired about breakage; Marketing Director Friedman thought there was none;
President Wimble thought there was some.
President Wimble noted that this program has been successful; we can
look at the attrition rate and see if there is elasticity in price.
Trustee Appleton asked if
subsequent MC purchases go to a lower rate? (Yes)
Trustee Godwin
asked if we could keep the shareholder version of Family MC at $109. Marketing
Director Friedman clarified that shareholders’ kids under12
ski for free merely for purchasing something and paying APR on time.
The Board expressed
that shareholders don’t know that and that we need to publicize that more.
Shareholder S.
Kalkstein asked what happened to “kids under 12 ski
free?” Answer: that is still available for shareholders, FMC
purchasers, and any adult season pass purchaser, as long as they are registered
by Oct. 15.
Our new prices are still below 50th
percentile compared to last year prices at other areas.
Shareholder
purchases constitute:
70% of midweek day
tickets
35% of MC’s
65% of season
passes
Trustee Hall asked
if there was any limit to how much we could discount for shareholders? Trustee Finnerty noted that because we’re a cooperative,
there is a legal limit. President Wimble
noted that there is nothing in the bylaws; latti Lucian (sp?) one of original
Co-op people (wrote by-laws) recommended a discount around 10% - not too big. Another shareholder pointed out that there is
“no magic number;” some non-profits discount 50%. Trustee Appleton
stated that food co-ops get a very small discount.
President Wimble
noted that $40K
in shareholder discounts on tickets and passes was lost and he doesn’t
recommend a deeper discount. Shares get
paid back rather quickly for a family of four.
Marketing Director
Friedman said that people do ask “what do I get?” when they buy shares, but
it’s not the main reason they buy.
Trustee Hall wanted
to know if we ask why people redeem shares.
Marketing Director Friedman answered that the main reasons are divorces,
bankruptcy, life changes.
Trustee Jondro
noted that she sees the opportunity to grant bigger discounts or have special
deals for shareholders once we’re off and running.
President Wimble
reminded the Board that competitors are doing things to attract skiers; our
hands are sometimes tied with respect to these things due to our needing to be
aware that shareholders have to get the best deal.
Question: can we increase weekend prices even more?
Trustee Bruns said
that the Finance Committee discussed it but noted that making it more expensive
can increase frustration of people on line.
President Wimble said that American Express (AmEx) gives feedback on
customers; 35% of our AmEx-using customers have income under $50K (this
represents less than 30% of total credit card users). The Mad Card was the only way some people
could afford to ski at all!
Trustee Kalkstein
stated that we can give discounts when appropriate on bad weather days; he
thought we were being too cautious with day ticket pricing. We have a huge increase in costs; people are
expecting price increases across the board.
Trustee Hall noted
that families are cutting back on driving; they’ll be hard-pressed to decide to
come if our
prices are too high.
Trustee Jondro said
that an 11-14% increase on day passes is going to affect people with less
disposable income; we need to be cautious about that.
President Wimble
didn’t like the idea of turning away someone who’s driven six hours because we
hit a ticket cap.
Trustee Jondro was
very concerned about good will when we’re very crowded.
Trustee Hall stated
that there are a lot of variables besides good snow that go into whether we
have crowds or not. We need the data
first.
Trustee Kalkstein
reiterated that we need to study factors in great detail if we’re going to try
to establish a low price/cap, but that a better strategy was to start with a
higher cap and incrementally move it downward until we reach the point of
comfort.
Discussion ensued
of Trustee Schoenholz’s proposal: set a
meaningful limit on number of people on the mountain (we lack the data on this
right now) – shareholders and season pass holders can ski any day; all others are
subject to the limit. Allow reservations
to be made for people who pay in advance, at a premium. Guarantees higher quality
experience for those who come.
It’s not just liftlines that affects quality; it’s parking, Basebox,
staff burden, etc.
Current day ticket
limit is 1200
Trustee Kalkstein
stated that we don’t have the money to fund RFIDs and scanners and such, that
it was undesirable from a ski experience perspective, and that the additional
information we’d get from such a system is minimal.
President Wimble
noted that Marketing Director Friedman went out four times to measure lines –
they were almost always about 40% passholders.
The question is, what is an acceptable line when you pay a premium to
reserve a ticket?
President Wimble
believed that we need to be around 700 paid tickets to be at acceptable for
someone paying a premium; in the ski industry, that is
a big deal.
Trustee Godwin
wondered why we should even charge a premium.
President Wimble responds that we would need to make up the revenue lost
due to capping sales
Trustee Kalkstein
said that we don’t have to decide today, but it’s good to start the
conversation.
Trustee Jondro said
that we don’t have to decide on reservation system until later; could set
ticket prices today and set up the system later. She proposes a subcommittee to discuss this.
Trustee Appleton noted that yes,
we have a data problem. He’s noted that the number of day skiers
could be 900 with a big line, but other days 900 with a more reasonable
line. Weather, other factors are in
there as well. Weather is such a
difficult variable to constrain that he understands the reluctance to make big
price increases and have a horrible year.
Trustee Bruns
suggested discussing in a smaller group about liftlines and data gathering.
Trustee Schoenholz:
asked for present shareholders’ and individual Board members’ input on what
would be a reasonable liftline at current price; answers included:
1h, 30 min, 20 min, 30 min, 20 min, 45 min, 20 min
Shareholder Betsy
Pratt asked how much money was made on the Triple Major Pass (TMP)? Answer: There was more revenue on that than our own
college pass issued in prior years.
Total was $62-63K. Marketing
Director Friedman said that 5% of all passes were college students; mid-week is
when most of them utilized the pass.
President Wimble noted that there was a noticeable bump when colleges
were on break in January.
Marketing Director
Friedman pointed out the long-term value of the TMP – some of our best
customers were Vermont
college students at one point.
Shareholder Pratt
said she would rather see a cheap mid-week pass with no weekends.
Trustee Hall stated
that the Board has given Management latitude to discount as necessary.
President Wimble
said that when we had one ticket price, we had a bunch of deals for those who
were proactive. Trustee Hall recalled
that the yield on a day ticket is only $35.
Trustee Finnerty
pointed out that this was his sixth time on this topic as trustee and that
pricing is more art than science. Every
year, we say we need more data. He
thinks quality of our data is not sufficient e.g. how many MC purchasers have
<12 passes. He said this should be
readily known yet we don’t know and should commit to a plan to generate data
over next year.
President Wimble
said that we uncoupled mid-week and weekend ticket prices due to a drop in
revenue during that time frame.
Trustee Bruns noted
that the Board is listening and discussing and paying attention to shareholder
input and that input is appreciated. The
topic at hand is of interest this year due to our good snow year. The Strategic Planning Committee (SPC) and
Finance Committee (FC) have discussed it, as has the Board. He noted that small changes can have very
significant impacts. We have a current
customer experience that some believe is not optimal, and a future more optimal
state. We don’t know what changes are
required to achieve that state. Trustee
Bruns reiterated the need to spend time specifically dedicated to this type of
discussion so we can determine the degree and types of changes needed to effect a better customer experience.
Question: Can we
spend “board development” money to get data the board wants?
10:04 five min recess (Chair Reynolds)
10:14 return to meeting
Attempts were made
to set September meeting date; Board decided to do so online.
Trustee Godwin
volunteered to put together data-gathering proposal for next meeting and
reiterated that we could make use of shareholder volunteers for gathering said
data.
This topic falls
under SPC purview.
Trustee Appleton was ready to
vote for recommendations of the FC and staff on pricing.
Trustee Schoenholz
said that there are two basic scenarios:
worst-case – just enough snow to open but not selling tickets; best-case
scenario – he’s asked President Wimble to put together a plan for those (not
full budget) for the fall meeting.
President Wimble said he will include cash flow with those.
President Wimble
noted that we’ve eliminated some discounts, and are using a 12-yr. avg. for
skier visits. We have a $40K contingency
for fossil fuel problems.
Question: Is MRG resistant to recessions and gas
shortages? We don’t have records from
the 70’s; President Wimble will ask Ken Quackenbush about that.
Trustee Schoenholz
noted that the line item for facilities is down. President Wimble said that’s due to an extra
month of operation last year due to good snow.
Trustee Kalkstein
wanted giveaways and comps tracked with respect to what would
revenue have been w/out comps.
Trustee Schoenholz noted that there were $120K
in day ticket comps this season.
Shareholder S.
Kalkstein commended Trustee Bruns & Trustee Finnerty for bringing up the
lack of data. He proposed use of a bar
code to track skier usage and recommended communicating to shareholders that
technology would enable action with respect to liftlines.
Trustee Jondro
recommended approaching Middlebury
College or UVM marketing
departments for students to help with data collection.
|
Motion
|
Made by
|
2nd by
|
Aye
|
Nay
|
|
To adopt the
2008-2009 budget and ticket pricing as proposed by staff and rec. by FC
|
Trustee Appleton
|
Trustee Kalkstein
|
9
(Trustee Hall by
proxy)
|
0
|
Share Redemption Suspension (Action)
Trustee Schoenholz
stated that the Finance Committee (FC) had looked at the situation and cash on
hand and recommended ending the suspension of redemptions (with the caveat that
the schedule of redemptions be at management’s discretion, but preferably done
by the end of FY 07-08).
Trustee Finnerty
inquired as to where replacement capital is coming from; Trustee Schoenholz replied
that it was from shares sold.
President Wimble
said that debt being carried will be cut by over 50% next year, which will help
with capital as well.
|
Motion
|
Made by
|
2nd by
|
Aye
|
Nay
|
|
To lift the
suspension on share redemptions and to resume redemptions according to the
redemption policy.
|
Trustee Appleton
|
Trustee Bruns
|
9
(Trustees Hall,
Kalkstein by proxy)
|
0
|
National Historic Register (Action)
President Wimble
has been in contact with National Historic Register (NHR) as to whether the
$4000 grant is still available to write a nomination for NHR. We had held off because we didn’t want to
affect the Single Chair Capital Campaign (SCCC).
President Wimble
doesn’t know if it’s still on table because personnel have changed at NHR and a
deadline in April has passed.
Trustee Appleton asked if we
could take the money but not submit the application yet.
Marketing Director
Friedman was not sure grant was still available and points out that it’s a lot
of work to go through just to decide not to do it. He recommends deciding first then accepting
money.
Trustee Jondro
asked why there would be any opposition to this and is informed that some
people think there would be restrictions.
Marketing Director
Friedman pointed out that in the past, some had
considered listing all of MRG, which would have been “no problem.”
Trustee Finnerty
stated that NHR has been used at times to block development near NHR properties
and creates standing for people to intervene on behalf of the NHR property.
Trustee Appleton stated that
there are no real downsides to being on the register if the property is not
taking federal funds, and recommended taking it to the shareholders for
discussion.
Marketing Director
Friedman stated that he thinks that NHR is one of best things we can do toward
the “preserve and protect” mission.
Discussion
ensued: the expectation is there that if
you take the money, you will submit an application. When you do that is open to
interpretation.
Trustee Godwin
volunteered to write a “pro” white paper for shareholders regarding NHR.
Trustee Appleton made a point of order:
this is the first discussion about it in a while and it’s better to discuss it
now and act later.
Trustee Godwin
wanted to put the information out to shareholders; Trustee Jondro pointed out
that the most recent Echo had gone out already.
Several members did
not feel ready to make the decision without input from counsel or other sources
of information.
The question was
raised as to whether this would be a Board decision or put to shareholders for
a vote.
Trustee Appleton stated that
doing this would require educating shareholders about the restrictions (or lack
thereof) that NHR designation entails.
Trustee Godwin will
send Board a proposed white paper on pro’s of registry (both scenarios: Single
Chair only, MRG area).
This topic will be
on the agenda for September for discussion and President Wimble may have info
on whether there’s money available for the application process.
Trustee Schoenholz
stated that it would be great to have a presentation to the Homeowners’
Association at Green and Gold Weekend.
Other Committee Reports
Executive
Committee (Trustee Reynolds reporting)
The Executive
Committee had acted (4-0) to authorize the management to negotiate w/Alpine
Options to take over the retail shop on-mountain.
The Executive
Committee had voted to authorize a subcommittee to examine volunteer
opportunities for shareholders. Board
attempted to appoint Trustee Godwin as chair.
Trustee Finnerty
pointed out that formation of this subcommittee may not be urgent business and
therefore may be against by-laws, and that it could not be accomplished during
this Board meeting because it was not announced in advance as an action
item. Discussion is tabled, to be put on
agenda for September meeting.
The Executive
Committee had voted (4-0) to redeem the share of a shareholder who was filing
bankruptcy.
Elections and
Board Development Committee (Trustee Finnerty reporting)
Trustee Finnerty
reminded the Board that the Carver model was originally adopted for governance
of the Board of Trustees and that he would like to re-educate the Board
regarding the model at some future date.
Shareholder S.
Kalkstein commended the current Board on the process of the meeting.
|
Motion
|
Made by
|
2nd by
|
Aye
|
Nay
|
|
To form a special
committee to study volunteerism opportunities at the Cooperative.
|
Trustee
Schoenholz
|
Trustee Godwin
|
Tabled until
September due to protocol
|
|
Motion
|
Made by
|
2nd by
|
Aye
|
Nay
|
|
To go into
Executive Session.
|
Trustee Bruns
|
Trustee Appleton
|
9
|
0
|
11:15 AM Executive
Session – Personnel
The Board came out
of Executive Session at 13:15.
Action Items
|
Motion
|
Made by
|
2nd by
|
Aye
|
Nay
|
|
To adopt the
General Manager’s compensation package as discussed in Executive Session.
|
Trustee Appleton
|
Trustee
Schoenholz
|
7
|
0
|
|
Motion
|
Made by
|
2nd by
|
Aye
|
Nay
|
|
To amend the
Financial Control Policy.
|
Trustee Kalkstein
|
Trustee
Schoenholz
|
7
|
0
|
1:19 Adjourn
|
Motion
|
Made by
|
2nd by
|
Aye
|
Nay
|
|
To adjourn.
|
Trustee Finnerty
|
Trustee
Schoenholz
|
7
|
0
|
