MAD RIVER GLEN COOPERATIVE
Minutes of Board of Trustees' Meeting Held on November 11, 2000
After due notice, a meeting of the Board of Trustees of Mad River Glen Cooperative was convened at 9:05 a.m. on, November, 11, 2000, at the Basebox, at Mad River Glen Ski Area in Fayston, Vermont. Trustees Bleier, Coleman, Eaton, Kirkpatrick, Michl , Steines were present. Trustees Meier, Russell, and Schultz were absent. The Cooperative's president, Mr. Eaton, presided. The minutes were kept by the secretary, Mr. Bleier, with assistance from corporate counsel, Peter Monte.
The trustees meeting package included letters received from shareholders since the last meeting and the general manager's replies.
Kay Fiorenza objected to the delay of three months (between July and October) for mailing and publication of the July meeting of the board of trustees. The board debated the merits of publishing minutes of the meetings before they were reviewed and approved and other means to expedite informing shareholders of board actions. A new approach is required because of the new schedule of infrequent trustee meetings during the summer and the resulting delay in finalizing minutes. It was the consensus of the trustees that minutes should not be published before they are approved and there is no efficient mechanism for amendment and correction of minutes outside of the meeting process. The general manager routinely prepares a meeting summary which identifies topics considered and formal action approved at each trustee meeting. The trustees directed the general manager to publish his informal summary of trustee meetings promptly following the meeting on the website and (whenever there is no trustee meeting scheduled for a month) by mailing to subscribers of the trustees minutes.
Mr. Bleier observed that the ski area's road side sign is not effectively utilized for advertising purposes. Mr. Bleier also commented that he concurred strongly with Suzanne Meier's letter to the board observing that the Cooperative should continue offering shareholder discounts.
Ms. Steines commented on a letter questioning the recent increase in club ticket prices. Ms. Steines is a member of the homeowner's association and handles the homeowners' club ticket purchase. She has observed a steady drop in purchases since the Cooperative was formed. This year club ticket purchases amounted to less than $400, probably because many homeowners are now owners of the Cooperative and use available shareholder discounts in preference to the less advantageous club ticket purchase. She suggested that club tickets should be discontinued unless volume increases substantially.
After discussion and upon motion duly made and seconded, it was unanimously
VOTED: To approve as corrected the minutes of the October, 7, 2000, meeting of the board of trustees.
Robert Ackland, general manager, delivered a detailed report in writing to the trustees before the scheduled meeting. At the meeting, he summarized highlights of the written report. Staff encountered unexpected delays in the construction and state approval for the new surface lift. Staff has resolved those problems and the Mighty Mite should be ready when the ski area opens. Other pre-opening preparations are keeping staff busy but should be completed in ample time for opening.
The general manager has hired a new Basebox manager (Ron Gulyas) and a new chef (Glen Gutterson). Both are well qualified and are preparing the Basebox for opening. The general manager has experienced less difficulty than expected in filling other staff positions. Training of the groomers appears to be the primary staffing challenge.
The forestry management plan is completed and volunteers have begun implementation. On the last volunteer workday, 258 man hours were contributed (which equates roughly to $2,840 of avoided payroll cost).
Season pass sales are slightly behind last year's ($315,000 this year contrasted with $329,000 last year). A drop in mid week passes is the major cause of the shortfall. Overall, however, the general manager is pleased with the level of pass sales.
1,089 children have enrolled in the 12 and under program (in contrast to last year's1,800). The new "Mad Card" generated $43,000 in sales, an amount substantially above expectations. College pass sales remain a disappointment which staff attributes primarily to the snowboarding exclusion. Staff is actively exploring new promotions to attract students to Mad River Glen.
A new booth has been prepared for ski shows. Staff is pleased with the outcome and will use the booth at the Boston ski show this month.
The newest issue of Powder magazine ranks Mad River's single chair lift as among America's top ten ski lift rides.
The general manager informed the trustees that counsel has filed formal arbitration proceedings against Mad River Corporation to resolve disputes about the amount required to discharge the purchase money mortgage for Mad River Glen Ski Area. Counsel informed the trustees that early discussions hold out hope of an early resolution either through settlement or formal determination by the arbitrators.
The general manager circulated a final policy he had prepared to determine when the ski area will be opened and closed. There are no substantive changes between this policy and the last draft reviewed by the trustees. The factors which will determine the general manager's decision to open or close the ski area are: skier's safety, potential damage to the mountain terrain, availability of staffing, cost and revenue analysis, and accommodation of season pass holders.
Opening and closing of the ski area will be publicized through all available means: posting to the ski report and snow telephone, posting to the website, posting to the list server E Mail list, posting at the base area and a press release.
The general manager informed the trustees that five shares were sold in October (two below the October goal). To date 1,821 shares have been sold (including the resale of 108 defaulted shares). Mr. Hatoff, share sale manager, informed the trustees that his inventory of leads for sale prospects is fewer now than in past years. The share sale manager is developing share promotions tied to the Cooperative naturalist program and to national organizations of cooperatives in an effort to develop new leads.
The general manager circulated detailed financial statements. A summary of those financial statements include the following:
Cash on hand, October 31, 2000: $348,000 (at the end of October, l999, $528,700 cash was in hand).
The general manager concluded that FYE 2001 is off to a good start. There are adequate financial resources available for staff to prepare the ski area properly for opening. Snowfall will determine whether the Cooperative enjoys financial success this year.
The trustees commended the general manager for preparing a new report format to track on a monthly basis the Cooperative's cash flow, profit, loss, and comparisons to budget.
The general manger informed the trustees that the annual audit is nearly complete. There have been no significant adjustments. The latest draft report of the auditors shows a net operating loss for FYE 2000 of $239,409 and an operating loss of $29,281. Both of these figures represent a substantial improvement from projections available at the annual owners meeting in April 2000.
The general manager circulated a report showing a list of all capital projects, their status, and actual costs compared to budget. Highlights of this report include the following:
Mr. Bleier encouraged management to continue its aggressive capital spending plan. He asserts that capital spending is a good investment which will save money over the long term. The general manager agreed that capital expenditures are a wise and necessary outlay. He reminded the board, however, that this year's spending level is higher than the Cooperative can sustain. This year's high expenditures were made possible by financial reserves the trustees had established and prior planning which allowed staff to give important needs the required timely attention.
Mr. Michl, chair of the finance committee, reported. During the summer and early fall, when the trustees' meeting schedule is reduced, the finance committee has met regularly with management to review the Cooperative's financial operations. The finance committee is also striving to create a long-term planning model for the Cooperative.
The general manager encouraged the trustees to consider long-term planning and policy issues. If the trustees articulate a vision of goals and strategies for the future, staff will be guided better in making day-to-day decisions. For example, the articulation of long-term goals would enable staff to make better decisions on the size and direction of programs like the ski school and race programs and for making base area improvements.
The trustees discussed various processes to initiate this strategic planning. Ms. Kirkpatrick suggested that the process should begin with a series of forums inviting comment from interest groups within the Cooperative over the winter months followed by a trustee retreat in the spring to digest and discuss this information. Mr. Bleier suggested using the list server to prompt organized comment from owners on a different topic each week. The trustees requested that the general manager prepare a list of topics to serve as building blocks for the winter discussion and to acquire shareholder involvement in the strategic planning process.
Mr. Michl updated the trustees on progress with the creation of the Stark Mountain Foundation. He informed the trustees that the articles and bylaws are almost completed --- they need tweaking to satisfy IRS requirements and should be finished next week. The foundation has adequate money in hand to complete the formation process and to file for IRS approval of the foundation's status as exempt under Code Section 501 (c) (3). The foundation remains on track for a formal announcement at either the owners meeting or over the Fourth of July weekend in 2001 (depending on timing of the IRS approval).
The general manager circulated a written APR Policy which details the steps the Cooperative will take to enforce the payment by owners of delinquent Advance Purchase Requirements and, ultimately, determination of ownership for those who persist in delinquency. After discussion and upon motion duly made by Mr. Coleman and seconded by Ms. Kirkpatrick it was unanimously
VOTED: To approve as policy 2000-2 the Delinquent APR Policy dated November 2, 2000, presented by the general manager (a copy of this policy is appended to the minutes of this meeting).
The trustees entered executive session at 11:00 a.m. to discuss contract and litigation issues. The general manager, assistant general manager and legal counsel attended the executive session. The trustees resumed open session at 11:20 a.m.
The president informed the trustees that he had explored options to enhance the general manager's title. The title "general manager" puts him at a disadvantage when dealing with outsiders because it implies that he is a staff employee rather than the chief officer of the Cooperative. The president reported that legal counsel advised against the use of the title "president" because Vermont statutes governing cooperatives required that the office of president be held by a trustee. Accordingly, the president recommended the use of the title "chief executive officer". After further discussion and upon motion duly made by Mr. Michl and seconded by Mr. Coleman it was unanimously
VOTED: To authorize the general manager to use the title "chief executive officer" of the Cooperative.
The general manager observed that a trustee meeting and "town meeting forum" is now scheduled for December 9. Attendance at the town meeting by owners will be sparse unless the ski area is open. After discussion and upon motion duly made and seconded it was unanimously
VOTED: To schedule the December board meeting and owners town meeting forum for December 30, 2000, (rather than December 9) at 4:30 p.m.
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 11:45 a.m.
A true record.
ATTEST: ___________________________________________ Robin "Rocky" Bleier, Secretary
ATTACHMENTS TO THESE MINUTES:
! General Manager's Report ! Policy 2000-2, Delinquent APR ! Final Policy in Opening and Closing Ski Area