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After due notice, a meeting of the Board of Trustees of Mad River Glen Cooperative was convened at 4:30 p.m. on, January 6, 2001, at the Basebox, at Mad River Glen Ski Area in Fayston, Vermont. Trustees Bleier, Eaton, Kirkpatrick, Meier, Michl, Russell, Schultz, were present (comprising the entire Board of Trustees). The Cooperative's president, Mr. Eaton, presided. The minutes were kept by the secretary, Mr. Bleier, with assistance from corporate counsel, Peter Monte.

 

Minutes of Past Meetings:

After discussion and upon motion duly made and seconded, it was unanimously

VOTED: To approve as corrected the minutes of the November 20, 2000, meeting of the board of the board of trustees.

Shareholder Comments:

Mary Kirkpatrick observed that the Basebox's cooler for drinking water was empty. She stated that free water should be available at all times. The general manager replied that staff was working hard to keep a cooler full of bottled water available in the Basebox while the boil water order remains in force. Staff expects the boil water order to be lifted this week, which should solve the problem by restoring the drinking fountain to operation.

 

Rich Aiken noted that lifts now close at 3:45 p.m. (rather than 4:00). He complained that this earlier closing imposes on skiers who leave work early to catch a couple of runs but now may miss their last ride. The general manager responded that safety is the primary reason for the earlier lift closing. During December and January, closing time varies between 3:30 and 4:00, depending on the available light to assure that there will be adequate time remaining to allow the ski patrol to sweep all trails in daylight.

 

Mr. Bleier stated that notice of this meeting was not posted in the Basebox. The general manager took responsibility for this oversight explaining that the ski area had just completed its busiest week of the season, the meeting scheduling is one week earlier than usual during the month, and the posting was simply overlooked.

 

General Manager's Report:

Robert Ackland, the general manager, had circulated a detailed written report to the trustees before the meeting. A copy of this report is appended to these minutes. The general manager orally summarized the highlights of his report.

 

Mad River Glen Ski Area opened on December 15, a week ahead of schedule. Heavy rains caused the ski area to close on December 17, but it re-opened on December 19. At the end of December, Mad River Glen was 25% ahead of budget for skier days for the year. Favorable weather conditions and this summer's investment in snow making equipment resulted in the completion of snow making operations in record time.

 

During Christmas week, the ski school was sold out for three days and the race program was operated at full capacity. The naturalist program conducted 'Tubbs Day' on December 30 and experienced a great turn out. All available equipment was used for the event.

 

The general manager characterized food and beverage service during Christmas week as a 'disaster'. The food service manager's employment has been terminated. A consultant has been hired to re-organize and oversee food and beverage operations. The general manager is confident that the Basebox has an excellent staff but proper management is needed to restore service to the desired level.

There are now 1,829 shares of the Cooperative sold. In addition, 109 defaulted shares have been recovered and resold by the Cooperative. Share sales during December were disappointing — 4 were sold from a target of 8. January sales are more encouraging — 5 shares were sold in the first six days. The leads pool is increasing.

 

The general manager requested that the assistant general manager, Jamey Wimble, summarize the water supply problem which now plagues the ski area. Mr. Wimble informed the meeting that the wells failed their annual coliform bacteria test. The problem probably arose when contamination was introduced during pump replacements this summer. This is the first known test failure for the ski area wells.

 

Because the ski area did not have chlorination equipment, the boil water notice would have remained in effect for sixty days. Chlorination equipment has now been installed at a cost of $3,000 and the first post-installation water samples are being tested. Staff expects the water system to be back in full operation before the Martin Luther King weekend which begins January 13.

 

The assistant general manager also informed the trustees about a breakdown in the Birdland lift during Christmas week: an electrical problem caused the electrical panel for the lift to literally blow apart. All electrical circuits and the control panel have been rebuilt and the lift is now back in operation. Repair costs are not yet know but there may be some insurance reimbursement.

 

Mr. Bleier informed the meeting that he witnessed the Birdland control panel misfunction. He commended the lift operators for their prompt and immediate response which avoided any injury in a potentially dangerous situation. Mr. Bleier also commended staff for snow making and grooming since the ski area opened and observed that capital expenditures for a new cat and new snow making equipment appears to be money well spent.

 

Financial Results:

Financial results of operations for last month and for the fiscal year to date may be summarized:

 

Period Income Expense Profit (Loss)
Dec. 2000 $256,000 $212,000 $42,800
YTD $621,000 $441,000 $200,000

Cash on hand December 31, 2000: $354,000

 

The general manager stated that December Basebox expenses were higher than budget primarily because of unexpected repairs required for the dishwasher and refrigeration systems.

The general manager observed that the ski school, rentals and daycare services all showed significant revenue increases.

 

Tiered Capital Plan:

The general manager circulated his most recent list of proposed capital expenditures with each expenditure assigned a priority — (1) 'must do'; (2) 'should do'; (3) 'like to do'; (4) 'nice to do'. The general manager explained that this listing was submitted for discussion only so staff could receive and evaluate comments from the trustees and owners. The general manager requested that the final plan should be approved at the March trustee meeting to allow adequate time to implement the 2001 expenditures which would begin in May 2001.

 

Mr. Michl observed that his analysis would turn on an evaluation of what provision must be made for replacement of the single chair. The seven figure cost for that replacement is the key to capital expenditure planning, in his view, and the draft plan includes many items which probably should be postponed until after the single chair is replaced. The general manager concurred that the single chair is the pivot around which the Cooperative's capital planning must turn. He observed, however, that the condition of the single chair and the need for its replacement is subject to debate. Last summer's test reveal that there are no apparent problems with the lift. The general manager cautioned, however, that prudence requires that the capital plan to include provision for a possible breakdown of the single chair.

 

Ms. Steines suggested that non-skid flooring be added to the plan for safety reasons. Mr. Bleier suggested that the capital plan should include more provisions for bridges and culverts to allow earlier opening of the ski area and better conditions throughout the season.

 

Mr. Michl observed that if the general manager could identify an effective return on investment for proposed capital expenditures, he would support moving those expenditures to tier one. The general manager replied that tier one is intended to include only items mandated by legal or safety requirements. Tier two is the proper priority for items promising a favorable return on investment.

 

Mr. Meier requested that the finance committee should determine before the March meeting what expenditure level is affordable for the Cooperative for capital expenditures during 2001. Mr. Michl, chair of the finance committee, agreed to have this information available.

 

Strategic Planning:

The general manager invited the trustees to begin a dialogue to establish a process for 'big picture' planning for the Cooperative including soliciting owners' views and trustee debate to form the policies which will be the building blocks for the Cooperative's future.

 

Mr. Coleman suggested organizing a series of seminars, each to air a selected issue. Mr. Coleman proposed that owners be invited to state their views at these seminars but the objective would be for the trustees to acquire information and opinions so the board can provide leadership to the owners and staff on strategic issues.

 

Mr. Coleman observed that the trustees have ample time to devise an appropriate process. All available and affordable capital expenditures for the next two years will be those most urgent items on tiers one and two, all of which are indisputably needed. These commitments imposed by necessity will give the Cooperative time to organize before the trustees have the luxury to confront strategic issues like the future of children's plans.

 

Mr. Michl stated that this strategic planning process is one of the two primary functions of the board of trustees. (The second primary trustee function is to hire management to implement the trustees policies which define this strategic planning). To keep matters in perspective, Mr. Michl reminded the trustees that the capital plan is a tactical plan which implements the basic strategy.

 

It was the sense of the meeting that the strategic planning process will commence after the ski season. In the meantime, the president and the chair of each standing committee will be the core of a study group. This study group will present to a later trustee meeting a proposed process to begin long-range, strategic planning.

 

New Business:

Mr. Russell, chair of the board development committee, informed the meeting that the committee is soliciting candidates for the board of trustees. He encouraged the trustees and owners present to remind owners who may be interested in candidacy to contact him.

 

Mr. Eaton requested that the general manager describe management's present policy regarding ticket sales on busy days; specifically when ticket sales are terminated and whether tickets are always available to shareholders. The president has heard numerous complaints from owners and patrons when ticket sales were terminated on Sunday during New Year's weekend.

The general manager informed the board that on Sunday, December 31, the ski area stopped selling tickets at 9:45 a.m. At that time the parking lot was full and all facilities at the ski area were over taxed. It is management's policy that no shareholder should be denied a ticket on any day if the shareholder can find a parking space, or otherwise be transported to the ski area. He is aware, however, that at least one shareholder who did not require a parking space was inadvertently turned away.

 

Eric Freidman, marketing director, defended the advertising virtue of limiting ticket sales on busy days. Mad River sometimes has a reputation for long lift lines. If the public is aware that Mad River always limits day ticket sales, it will encourage patronage throughout the season. In fact the limitation has practical application only during three or four of the busiest holidays during the entire ski year.

 

Mr. Meier suggested that the ski area should do both — limit sales to the general public at a level low enough to assure all shareholders can be admitted. He stated that the trustees would need additional data before they could specify what should be the maximum number of non-shareholder tickets sold on any day.

 

It was the sense of the board on a trial basis to leave it to management discretion on a trial basis to determine when to terminate ticket sales to the general public but to assure that owners can always purchase a ticket.

 

Mr. Schultz suggested that while this trial is underway, the trustees should also consider whether higher ticket prices are appropriate on 'powder days'. Mr. Bleier and Mr. Michel concurred.

 

Future Meetings:

The board established the following schedule for meetings:

 

February 10, 2001 at 4:30 p.m.: Town Meeting
March 17, 2001 at 4:30 p.m.: Trustee Meeting (Re-scheduled from March 10 to avoid a conflict with the Telefest)
April 7, 2001 at 4:30 p.m.: Annual Meeting of Owners

 

Executive Session:

The trustees entered executive session at 6:30 p.m. to discuss personnel and compensation matters. The general manager was invited to attend the executive session. The trustees resumed open session at 6:45 p.m.

 

General Manager's Work Schedule:

The Board agreed that the general manager should have a four day work week from June through August. The Board also urged the general manager to take a weekly day off during the ski season and to utilize all four weeks of his vacation time.

 

Adjournment:

There being no further business to come before the meeting, after discussion and upon motion duly made and seconded it was unanimously

VOTED: To adjourn.

Adjourned accordingly at 6:50 p.m.

A true record. ATTEST: Robin 'Rocky' Bleier, Secretary

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