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Mad River Glen Cooperative

Board of Trustees Meeting

Minutes – Saturday, February 8, 2014

 

After due notice, a meeting of the Board of Trustees of the Mad River Glen Cooperative was convened at 5:00 p.m. on Saturday, February 8, 2014 on the third floor of the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston, Vermont.

 

Trustee

Attendance

Trustee

Attendance

Elkind (Chair)

Present

Holtan

Present

Stetson (Vice-Chair)

Present

Liu (Treasurer)

Present

Anderson (Secretary)

Phone-in

Lesure

Absent

Godwin

Present

Palola

Absent

Jondro

Present

 

 

 

Also present was President Wimble. There were approximately ten shareholders present.

 

5:03 Call to Order

 

Trustee Elkind (Chair) called the meeting to order at 5:03 and welcomed the assembled shareholders to the meeting. He extended a special thanks to the employees at MRG for their hard work during a “roller-coaster winter” and announced upcoming board meetings.

 

5:04 Shareholder Comments and Questions (SHC’s/SHQ’s)

 

SHC: Shareholder Bleier advocated tweaking and refining “what we’ve currently got” vs. increasing snowmaking capacity. “Profit, People, Planet” – we need to look at latter two. He thinks snowmaking (SM) would not only be a huge capital expenditure but that operating it would be cost-prohibitive and lead us to “financial disaster.” He pointed out that midweek skier visits can only grow so much and we’re already “maxed out” on weekends when snow is good – thinks we can’t realize a big ROI on snowmaking. He also brought up “micromanagement” of the mountain terrain (in terms of people doing things like shoveling snow and moving it around, doing summer work, putting down hay, seeding, etc.) and that this is a big part of managing snow cover. Investing in small financial risks might be helpful vs. a huge capital outlay plus operational costs for increased snowmaking.

 

5:11 Approval of Minutes

 

Motion

Made by

2nd by

Aye

Nay

Abstain

To approve the minutes of January 11, 2014.

Jondro

Stetson

7

0

0

 

Motion

Made by

2nd by

Aye

Nay

Abstain

To approve the phone meeting minutes of January 21, 2014.

Jondro

Holtan

7

0

0

 

 

5:13 Management Report (Financials) and Fundraising Committee Report

 

Financials:

 

January was a very poor month financially. We only did 10% of budget on ticket sales for the month. NOI was way down and cash is low as of February 1. Four times our cash position has been lower than this (2007 was $100k lower at this time of year). We are behind budget YTD NOI by a good margin.

 

SHQ: Do you anticipate running out of cash?

A: We met with financial advisors to make sure that doesn’t happen; will have to adjust summer spend. We also have a line of credit we can tap if necessary but we’ve never had to do that and hope not to have to do that in future.

 

Trustee Holtan then spoke about the Fundraising Committee’s recommendation that we engage Demont Associates (DA) to continue their work with MRG on a capital campaign. DA are confident that MRG has the resources and support to raise the funds we need to ensure viability into the future, and have a 96% success rate with former clients. She noted that during the planning study, MRG and Demont sought the opinions of SH’ers, identified their priorities, and revised the campaign initiatives as a result of SH input. Mountain preservation and sustainability is now the foremost priority, followed by Skier safety & Service, Youth & Family Development and Community Preservation. Land acquisition of the 19th/20th was a significantly lower priority than previously assumed and deferred to a later time.

 

Motion

Made by

2nd by

Aye

Nay

Abstain

To accept the recommendations of Demont Associates from the planning study.

Jondro

Elkind

7

0

0

 

Motion

Made by

2nd by

Aye

Nay

Abstain

To engage the services of Demont Associates for Phase I* of a five-year capital campaign to commence in February 2014.

Holtan

Elkind

7

0

0

 

Discussion on the motion:

 

*Phase I will run from Feb 2014 to Dec 2015 and will lay the groundwork for a capital campaign. This will involve: putting systems in place to draft campaign policies and procedures, establishing endowment funds, training volunteers to serve on committees drafting a case for support (which includes Q&A, talking points, named gift opportunities), obtaining advance gifts, and developing a guiding plan, which will be drafted during 2014 and finalized in October 2014 – this document will enable potential donors to see what MRG needs, what their money would be used for, how it would help the MRG community, and how it would ensure sustainability. The comprehensive plan will include a 5-year pro forma financial that will consider operating income and additional share sales.

 

Q: Will we have enough info r.e. snowmaking to be able to incorporate that into this guiding plan?

President Wimble: water source is the main sticking point and could take long time to figure out.

 

At some point we need to consider when SH votes would have to take place regarding large expenditures, such as on snowmaking infrastructure.

 

Trustee Holtan clarified that though there would be up-front expenditures on fundraising, these would eventually be paid for through donations. One positive of going with DA would be that there would be no additional demands on staff at MRG, as there was in the Single Chair Capital Campaign (SCCC).

 

Trustee Liu pointed out that even in the unlikely scenario that we were to be in the 4% of DA clients who do not reach their goals, the contract comes with a 45-day cancellation notice. The Finance Committee (FC) determined that if we were to decide to stop because a campaign was not gaining traction, we could be looking at roughly $170k of unrecoverable costs. Given the historical NOI of the mountain, it “wouldn’t be great” to take on that amount, but with buffer of working capital and President Wimble’s ability to manage the mountain through tough seasons, the FC concluded that not moving forward is not really an option; from a risk/reward standpoint it was worth committing; therefore the FC recommends retention of DA.

 

Trustee Elkind pointed out that DA’s fees are tied not to calendar but to actual monies raised, which is a plus. He wondered aloud if our SH’s are informed enough about what we need to do? He recalled Trustee Hall’s presentation in the days of the SCCC, including a recommendation that we adopt a “university fundraising model,” after which we commenced a planning study in Oct 2012 to look into this.

 

SHQ (Deri Meier): Would operation profits be considered as part of this?

A: Of course - mountain ops and share sales would supplement what we get through philanthropy.

 

 

5:48 PM Management Report (continued)

Operations:

 

 

65th Anniversary Gala was a big hit. About 200 people attended and the food and firework got HUGE kudos from the MRG community.

 

Snowmaking operations stopped mid-January due to lack of water. We covered most of our normal snowmaking terrain but did not get S-Turns, Waterfall, or lower Rockefellers.

 

Requests are coming in for MC refunds due to bad snow year. Policy is (and always has been) no refunds. It is a very discounted ticket and the tradeoff is the chance taken with that purchase.

 

Snowmaking:

 

In response to three sub-par snow years, the SH survey, and interviews from the planning study, the Board and management have been working on the potential for upgrading our existing system and/or expansion options for snowmaking. Management has designed five options (including upgrading existing), and has calculated the acreage, storage needs, and water needs for each option. These options have been sent out for preliminary quotes. We are also working with a hydrologist on potential water sites including but not limited to utilizing ground water. The intention is to have some cost estimates on the different scenarios of snowmaking coverage to present to shareholders at the annual meeting to get feedback. There is a “white paper” on snowmaking on the Forum and the Coop web site that explains what we have and outlines the challenges to obtaining more snowmaking coverage.

 

Share Sales:

 

Sold four for January against target of four. May be two tender requests in the queue.

 

6:03 PM Proposal: Snowmaking Exploratory Committee (SEC)

 

Trustee Stetson introduced the proposal for the SEC (attached), which would form to help support President Wimble’s research into possible expansion of our snowmaking capacity. This would only be to consider the options, not to commit to them.

Motion

Made by

2nd by

Aye

Nay

Abstain

To form a committee to focus on snowmaking and other alternatives to increase the number of skiable days within our stated calendar and to support the efforts currently being made by President Wimble to research snowmaking options for the future (SEC to be active through December 2014).

Stetson

Liu

5

0

0

 

Discussion on the motion:

 

Trustee Jondro asked President Wimble if this committee would actually be of help to him; he said yes, it would help him focus on mountain day-to-day operations.

SHQ (Linc Prescott): Are we going so far as to look at plastic mats in certain areas, etc.?

A: the committee and President Wimble would be working in close concert on such ideas; Trustee Elkind echoed that the committee descriptor might be tweaked to include the fact that they will also discuss non-snowmaking options for snow cover optimization (this was amended).

 

SHC (Jay Appleton): Suggested a “sunset date” for the committee; this was incorporated as an amendment to the original motion.

 

6:21 PM Straw Poll on Snowmaking

 

Motion

Made by

2nd by

Aye

Nay

Abstain

To include a straw poll on April ballot to understand SH preferences and priorities as they relate to SM’ing.

Trustee Elkind

Trustee Stetson

5

0

0

 

 

Committee & Working Group Reports

 

Board Development Committee

 

Proposed Slate of Candidates for 2014 Election:

Out of State (Godwin terms out): John Tobin and Meg Hourihan

 

In-State (Jondro terms out): Jon Anderson (incumbent) and Russ Bowen

 

 

Motion

Made by

2nd by

Aye

Nay

Abstain

To approve the proposed slate of candidates for the 2014 election.

Trustee Elkind

Trustee Holtan

5

0

0

 

 

6:21 PM Action Item Review

 

See below for action item list.

 

6:25 PM Adjourn

 

 

Motion

Made by

2nd by

Aye

Nay

To adjourn

Trustee Elkind

Trustee Stetson

4

0

 

 

Action Item

Responsible Party

When

Create a campaign structure with sub-committees.

Board

ongoing

Find interested and knowledable individuals to join the Snowmaking Exploratory Committee

Trustee Stetson

New

 

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