After due notice, a meeting of the board of trustees of the Mad River Glen Cooperative was convened at 8:00 a.m. on November 10, 2001, at the Basebox at Mad River Glen Ski Area in Fayston, Vermont. Trustees Bleier, Coleman, Eaton, Michl, Putnam, Russell, and Steines were present (Kirkpatrick and Shultz were absent). The Cooperative’s president presided. Margo Wade kept the minutes.
Call to Order
President Russell called the meeting to order at 8:09 a.m.
Kay Fiorenza asked for the definition of Shareholder Comments. President Russell explained that 10 minutes was allocated at the beginning of the Board of Trustees meetings for shareholders to address the board. The board requests that shareholders stand at the podium, speak their name and keep their comments to three minutes. Ms. Fiorenza stated that it was difficult to hear the discussion at the meetings; she had not received her purchased copies of the May 12, June 27, and August 10 meeting minutes and asked if the minutes had been approved yet. She asked what is "Gear Page." She suggested the board reconsider the early start time of the meetings adding that it is a hardship for some and would be difficult for people to attend with poor road conditions in the winter. Further she does not agree with the structure of the shareholder comment portion of the meetings and suggested that the board review the policy and allow shareholder comments at the end of the meeting.
Mr. Russell thanked Ms. Fiorenza for her comments and suggested that the front row of chairs could be brought closer to the conference table, and/or that Ms. Fiorenza bring a chair as close as necessary to enable her to hear the discussions. With regard to the minutes, they are posted on the web site, and mail status for those who purchase them will be checked. Mr. Wimble explained that "Gear Page" is on the web site where MRG merchandise is available for purchase. Mr. Russell stated that a majority of the trustees chose the 8:00 a.m. off-season meeting start time. Once the ski area opens the meetings will be begin at 5:00 p.m. allowing enough time for folks to clear the base box after skiing. If time allows shareholder comments will also be heard at the end of the meeting. The current shareholder comment system was proposed in August for a three month trial period, this being the end of the trial, therefore the board needs to discuss under new business.
Review September Meeting Minutes
After brief discussion, upon motion duly made by Mr. Michl, and seconded Mr. Bleier, it was unanimously
VOTED: To approve the October 6, 2001 meeting minutes with minor typographical corrections.
Mr. Bleier asked for future minutes to include a list of people who send a letter to the board. President Russell replied that it would be unfair to treat letters differently than emails and phone conversations. Ms. Putnam added that the Shareholder Relations Committee had been tasked to address this issue, but did not discuss it at their last meeting. She questioned which letters the committee is to address. Ms. Steines responded that the letters would have to be defined (categorized) and suggested that each method of communication be identified and then present to the board how each method is to be addressed. Mr. Russell suggested referring to the blue book for the policy addressing how shareholders or trustee can communicate with the entire membership.
The following is the November 10, 2001 Management Report as submitted.
Capital Projects are nearly all complete. They have gone very well. The Maintenance building now complete came in $19,000 over budget. (See capital projects for explanation)
Water is an issue for snowmaking. We do not have the flow in the stream that we normally do this time of year. If the drought continues our snowmaking capabilities will be limited. This would affect our race program and early and late season top to bottom skiing. We will make adjustment to our plan as we get closer and see what we have for water to work with.
Outside operations are ready for start up. (Let it snow)
6 shares were sold for the month against a budget of 7
There were 464 shareholders delinquent on their APR as of 10/1/01. A reminder letter has been sent out and if APR is not paid by Dec. 1, a $25 late charge will be assessed.
Pre Season Sales:
Pass sales are up $63,526 over the total for all of last year. (See pass sales comparison)
Audit work on our end is done. Sharon and Ernie did a great job organizing material and making preliminary adjustments, which made the accountant’s time at the mountain shorter. We should have a draft by the end of the month and review at the Dec. meeting
Preliminary October P&L looks great. Net ordinary income is $82,000 ahead of budget.
Cash Flow for the end of 2001 looks good, even if we have a late start. (see attached cash flow).
Due to the events of September 11th we will be cautious with expenses until we see what the impact on us might be.
We have selected 11 International Students to work for the winter. They will arrive around December 15th and depart around April 1. Labor market is still very lean even with the events of September 11th.
In response to Mr. Michl & Ms. Steines’ questions, Mr. Wimble replied that all lifts excluding the single have been inspected; the water supply has been inspected and will be inspected again in January.
Mr. Michl requested a phone meeting with himself, Ms. Steines, and the auditors once the preliminary report has been submitted. Mr. Wimble replied that the preliminary report should be ready next week.
Mr. Eaton asked how the search for international employee housing was progressing. Mr. Wimble responded that he has one house lined up and a second house will be confirmed shortly.
In response to Mr. Bleier’s questions, Mr. Wimble replied that the stream flow is better, the brook is not at its usual seasonal level, but he is still concerned about the level of the water table. He has spoken to Nate and Sally about a slightly different snow making plan if the level does not continue to improve.
Mr. Bleier commended the person responsible for getting a pedestrian crossing sign placed at the bottom of the parking lot on Rt. 17.
The board agreed to accept the management report.
October Profit & Loss Statement
Financial results of operation for the last month and for the fiscal year to date may be summarized as follows:
Cash on hand: $578,507
Mr. Russell congratulated the staff on net ordinary income total of $302,967, a very impressive number. A job well done everybody.
Capital Projects Update
Mr. Wimble explained that the report shows the capital for 2001. We will be seeing some of the money next year for what was actually approve for the capital year to October 1.
In response to Ms. Steines’ question, Mr. Wimble replied that the dashes on the report represent monies yet to be spent. In some cases work has been done, but bills have not been received. Mr. Russell suggested that the groomer sales negative number should be included in the report.
In response to Mr. Bleier’s question, Mr. Wimble replied that alpine inventory expenditures will not be complete until March, though the inventory has been received. It is customary industry practice to bill for product in the spring with no interest accrued.
Mr. Russell acknowledged the inclusion of the formula explanation.
In response to Mr. Eaton & Mr. Russell’s questions regarding the formula explanation, Mr. Wimble replied that share sales were budgeted at $119,000 or 80 shares; the budgeted $126,000 does not include turnover on defaulted shares, but that the actual totals do. According to the formula we are projecting to spend less than our formula would allow.
Cash Flow Statement
In response to Mr. Russell’s question, Mr. Wimble responded that only one cat (groomer) sale is included in the statement. He expects the buyer of the second cat to bring payment today.
Pre Season Sales Report
In response to Ms. Steines’ questions, Mr. Wimble responded that he expected midweek pass sales to increase closer to the season because many of the purchasers of midweek passes tend to "sit on the fence" until the December snow falls; and the full pass increase in sales he attributes to the increase in the sale price of the passes and the smaller difference in cost between the midweek & value, and value & full passes. Mr. Wimble also pointed out that the report includes sales through the October 15th not the $6,000 or $7,000 received since the 15th, which brings the increase over last year to approximately 18%.
In response to Ms. Putnam’s comment about the drop in student passes, Mr. Wimble responded that he hopes to go after that market more aggressively next year with a joint student pass. The Stowe and Smugglers passes are hard to keep up with and he anticipates Sugarbush will want to keep up with Stowe in that market.
In response to Mr. Russell’s question about the 23% increase in kids passes, Mr. Wimble responded that the kids free pass is tied to much of the $70,000 worth of Mad Cards sold. The Mad Card is reported as ticket sales and not accounted for until it is in-house. Mad Cards are not available once the area opens for the season and a substantial number do not get redeemed. Mr. Bleier asked if owners received Mad Card information. Mr. Snow replied that they did, but the shareholder discount was better than the Mad Card price. Mr. Bleier added that the number of discounted Shareholder tickets is limited and that the Mad Card makes a good gift.
Further discussion about the free kids pass confirmed that the program has been very successful, but Mr. Wimble pointed out that many are never picked up. No cap on the number of passes was established, only the October 15 purchase date. Kids skiing with the free pass must be skiing with an adult, except kids who are shareholders.
In response to Mr. Russell’s question, Mr. Wimble responded that the projected dollar value of total passes sold should be 6% to 8% above the October 15 reported figures.
The board generally discussed committee minutes, which will be posted on the "Committee" web page. Mr. Bleier suggested that committee minutes be attached to the board meeting minutes for those owners without web access. Ms. Steines suggested that the item be referred to a committee to develop and present a policy on how to publish committee minutes to the board. Mr. Bleier added that the bylaws stipulate that all meetings are open to owners and since most people can not attend meetings, minutes are the next best thing, and minutes should not be subjected to board approval. Ms. Putnam added that committees should be able to post their minutes on the web page with a statement at the top that identifies them as committee and not board approved. Mr. Russell added that with his understanding of the roles that the board and individuals play, that policy governance of the committees should require the committees to report to the board; the report should have board review and then be accepted by the board at a regular meeting. Mr. Bleier felt strongly that meetings are open to owners and is concerned about board censorship. He further feels that board review of committee minutes is contrary to the letter and spirit of the bylaws. Mr. Russell raised the concern with confusion caused by published information that may differ between committee minutes or recommendations, and board minutes or acceptance, or not, of recommendations. Mr. Michl agreed with the concern that strategic or sensitive information should not be out on the web before board review.
Upon a motion duly made by Ms. Steines, and seconded Mr. Eaton, it was
VOTED To refer the development of a policy on publishing of committee meeting minutes back to the Board Development Committee for recommendations to be presented to the Board of Trustees.
In favor: Coleman, Eaton, Michl, Russell, Steines
Against: Bleier, Putnam
Mr. Bleier pointed out that the Board Development Committee usually meets in executive session, thus excluding owners from meetings. Ms. Steines replied that most of the work preformed by the Board Development Committee was done by email communications and phone conversations.
Facilities: Mr. Coleman reported that no meeting had been held last month. He is in the process of compiling the building plans, status reports, maps, topos, and pictures. Master planning will begin at the next meeting.
In response to Mr. Russell’s question, Mr. Wimble responded that he had not yet submitted facilities projects for next year, but that he and Mr. Coleman are working on closing the door to the single engine room to lower the level of noise. Board members encouraged this endeavor.
Finance: Ms. Steines reported that the next meeting is scheduled at 2:00 p.m. on November 28th via conference call. At the last meeting the committee discussed the possibility of limiting ticket sales and how to analyze the effects. This item will continue to be discussed and no policy changes will be recommended for this year. The same with late payments on APRs: Ms. Crawford did not see any reason to change the current process. The committee will watch closely the current APR process for further analysis. The committee continued the discussion on patronage rebate, final recommendations are being written. At that this point we are looking at between $18,000 and $25,000 for an estimate. We are still waiting for the final statements. We are hoping to present those numbers to the board at the next meeting.
In response to Mr. Michl’s question regarding the initial $70,000 estimate, Ms. Steines responded that the calculation based on the percentage of shareholder dollars spent is much lower than the prior year.
In response to Mr. Bleier’s question, Mr. Wimble
responded that once you have used up your $200 APR in Mad Money you need to purchase more Mad Money in order for it to be tracked. Shareholder cash expenditures are not tracked. Mr. Bleier further questioned the incentive for shareholders to purchase additional mad money. Ms. Steines added that once finalized the figures should be publicized and this gives us an opportunity to get the word out about what it means to use mad money and how that effects your patronage rebate.
Mr. Bleier stated that the Mad Money program is confusing and could be better explained to owners.
Mr. Wimble reported that the estimated taxes for the year will be zero. $250 will be sent to the State to stay on their books. We will have over $200,000 loss to carry forward after this year.
In response to Ms. Putnam’s question, Ms. Steines responded that ticket sales are currently limited at 1200, which was surpassed approximately six days last winter. Ms. Putnam added that about 2/3rds of the responders to the shareholder survey supported limited tickets sales. Ms. Steines responded that we do have limited ticket sales. Mr. Michl added that time does not allow lowering the number and getting the word out fairly. He also pointed out that the committee was just looking at the financial aspect of limiting ticket sales further. There are marketing, community relations, PR, parking aspects that also need to be addressed before the limit is lowered.
Shareholders Relations: Ms. Putnam reported that the committee met quickly last month. She has recently completed and distributed, by email, the shareholder survey results, which Mr. Snow will post on the web shortly. Essay responses still need to be correlated.
Mr. Russell requested for a copy of the survey to be included with the survey results because it is difficult to understand in its current format. Mr. Eaton suggested putting the results in a matrix. Ms. Steines suggested that we have learned lessons this year about how to report the results and will be better prepared for next year’s survey. Mr. Snow suggested that a summary of results be explained in an introduction for each question.
Mr. Bleier suggested clarification when talking about "posting material on the web" concerning public versus owner access. The board agreed that the survey results are for owners not the public. Ms. Putnam asked if the survey could be posted once it has been clearly tabulated. The trustees agreed that they all had seen the draft and that posting of the survey on the owner web page was appropriate.
Ms. Putnam further reported that the committee was still working on rights and responsibilities, and better ways to communicate.
At Mr. Bleier’s request the board discussed a resent letter sent to the Valley Reporter by Mr. Graham. Mr. Coleman suggested that the Co-op put this matter to bed ASAP. Mr. Coleman supported the board’s position, as stated at the last meeting, on the Burton advertisement/snowboarder issue. In response to Mr. Wimble’s question, Mr. Bleier responded that he believed he clearly represented to Mr. Graham that he could redeem his share if the area did not change the snowboarding policy, but that the contract was clear about the non-refundable $150. Mr. Bleier stated that he feels personally slighted and wanted to respond to the letter or have the Co-op respond. Mr. Russell stated the management has clearly stated that they have a game plan regarding the situation and does not feel the board should take action at this time. Mr. Michl added that it is difficult to win in the press.
In response to Mr. Michl’s questions, Ms. Putman and Mr. Snow responded that the committee is planning to do a random sampling survey with specific question some of which were raised by last years survey and some of which will be specifically for shareholders; and it will be publicized in the Echo and on the web page that the survey is taking place and available upon request. Mr. Michl also suggested that the survey be made available on the web, which would have many advantages. Mr. Bleier suggested digesting the results of the current survey, which will hopefully trigger more feedback and fine tuning of next years survey.
Mr. Bleier took the opportunity to commend Mr. Snow’s efforts to date. The board concurred. Mr. Russell also commended all of the work preformed by the committee, including Irma Heater, on tabulating the surveys.
Board Development: Mr. Russell reported that the committee communicated, via email, discussions included strategic planner selection and bylaw amendments, both of which are discussion items for the board today. Mr. Eaton was added as a member to the committee.
Mr. Bleier asked if the Board Development Committee was planning to meet this month. Mr. Russell responded that no meeting was scheduled at this time. Ms. Steines added that the committee preformed much of its work by email. Mr. Bleier pointed out that the committee is not meeting, but presenting reports to the board, therefore owners are not privy to the meeting discussion.
Personnel: Mr. Russell reported that no meeting was held last month and the committee had nothing to report at this time.
20th Committee: Mr. Russell reported that the committee met last month and looked over maps, made introductions, and generally began the process. No action was taken and no recommendations are ready at this time.
Committee members include: Al Russell, Chair; Dot Helling, Jamey Wimble, Deri Meier, and Spencer Wright.
Mr. Russell briefly discussed the process the Board Development was assigned the task of choosing a strategic planner to come talk with the board. Patricia Floyd from Warren, VT was selected. She has an impressive resume with experience in many areas including the ski business. She would also like to meet with and get ideas from the board and if agreeable to come back to present a time table and plan of action to develop a long term strategic plan for the co-op. He raised a concern with potential conflict of interest since she has worked with Sugarbush. The timing may not be great, although taking advantage of the season may be to our benefit in that out of state folks are more frequently available than in the summer. Ms. Steines asked if trustees would be interested in seeing a strategic plan from a non-profit organization she sits on the board of. Trustees generally responded in the affirmative.
Ms. Fiorenza asked what will be the duties of the strategic planner for Mad River. Ms. Steines responded that she would facilitate the preparation of a strategic plan, giving us guidance through the process. She will be making a presentation and has an agenda she will follow today, which will help us to determine if we are interested and then she will come back with a proposal.
Mr. Russell stated that the process for amending the bylaws needs to begin now if the board wishes to bring the amendments to the owners at the January and February meetings.
Mr. Eaton reported that the Board Development Committee was gathering information and discussing with the co-op’s legal council the conflict of interest issue and will be presenting recommendations to the board at the December meeting.
The board discussed the Shareholder Relations Committee’s recommended amendments, which were email to the board by Mr. Branschofsky regarding changes to §2.7 and §5.7. The recommendations require a two-third vote of the board for termination and/or suspension of an owner from meeting(s). Ms Putnam noted that the proposed bylaw changes were drafted by Mr. Branschofsky of the committee who had done extensive research on the policies of other cooperatives and that the committee felt that it would be prudent to emulate the "disciplinary "practices of other longer established cooperatives.
Mr. Bleier explained the committee’s reasons for the recommendations are to protect an owner’s right to attend meetings and participate. He mentioned that the committee felt that a drastic action such as suspension from multiple meetings or expulsion from the Cooperative warranted a 2/3-majority vote. Ms. Heater added that the committee’s primary concern was owner suspension from multiple meetings.
Mr. Russell clarified that loss of skiing privileges was not part of the proposed amendments. Mr. Wimble and his staff had the sole right to remove skiing privileges for cause. Further that ownership does not protect one from loss of privileges if the rules are broken. Mr. Coleman requested that the discussion be kept to the proposed amendment, including termination and exclusion from meetings.
Mr. Bleier, seconded by Ms. Putnam made the following
MOTION To amend §2.7 to require that ownership may be terminated for sufficient cause by two-thirds vote by the board of those trustees present and voting.
Motion was defeated three in favor (Bleier, Coleman, Putnam), four opposed (Eaton, Michl, Russell,
Mr. Bleier, seconded by Ms. Putnam made the following
MOTION To amend §5.7 to include "Exclusion from multiple meetings and or finite time period shall be approved by two-thirds vote by the board of those trustees present and voting, provided that such person is accorded a fair hearing, including adequate notice of the change and time to speak and present evidence."
Mr. Coleman explained he will vote against the motion because he feels the fair hearing is inappropriate for taking disciplinary action and does not support the two-third requirement for disciplinary action.
Mr. Bleier explained his basis for support of the amendment is the unfortunate incident at a meeting in the spring and underlining political influences of the board which this amendment is designed to safeguard against and minimize political intrusions.
Mr. Eaton pointed out that the politics on the majorities side are no greater that the politics on the minorities side.
Ms. Steines stated that she does not see a resounding need for bylaw change in either case.
Mr. Michl stated that he is very sensitive that these are extraordinary measures and that a bylaw change is not needed.
Mr. Russell stated that he does not support the motion because he feels that people are under the misconception that these protect their skiing privileges or other rights and the wording is inappropriate, further that the amendment does not protect and owner as the committee intends. He further added, that specifying that a minority (1/3) can block an action, is in opposition to the spirit of majority rule, the extreme example being to require a unanimous vote, essentially gives one trustee the power to make (or block) policy.
Mr. Bleier reminded the Board that the Chair is empowered to remove a disruptive owner from a meeting, thus assuring that meetings are safeguarded against an individual who is disruptive. The removal of an owner from future meetings (by a vote of the board at a current meeting) is of serious concern to the committee as it restricts an owners right to observe and participate at meetings and with it, free expression. He reiterated the committee’s concern for the right of a person with a minority opinion to be able to voice that opinion without drastic repercussions. A 2/3 vote would help assure that an owner would not be banned from future meetings based on the emotions of the moment, thus allowing the Board time to reflect and consider the ramifications of such a drastic action.
Motion was defeated two in favor (Bleier, Putnam), five opposed (Coleman, Eaton, Michl, Russell, Steines).
Mr. Russell stated that the three month trial for the current structure for Shareholder Comments portion of board meetings was up for review this month.
Upon a motion duly made by Ms. Steines, and seconded Mr. Bleier, it was unanimously
VOTED: To continue the current shareholder comment meeting structure as adopted at the August 10, 2001 Board of Trustee meeting.
Ms. Heater asked that when the board considers the strategic planner candidate the board take into consideration the candidate’s knowledge and understanding of Mad River Glen.
There being no further business to come before the board, after discussion and upon a motion duly made by Mr. Eaton and seconded by Mr. Coleman it was unanimously
VOTED: To adjourn.
The meeting adjourned accordingly at 11:05 a.m.
Margo B. Wade
A true record.
Robin "Rocky" Bleier, Secretary
ATTACHMENTS TO THESE MINUTES
A. October 2001 Profit & Loss Statement
B. Capital Projects Update & Maintenance Building breakdown
C. Cash Flow Statement
D. Pre Season Sales Report