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Board of Trustees Meeting; November 14, 2009

Minutes –Saturday, November 14, 2009

DRAFT

 

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, November 14, 2009 on the third floor of the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston, Vermont.

 

Trustees Lars Bruns (Treasurer), Jim Elkind, Liz Godwin (Secretary), Geordie Hall, Betsy Jondro, Jed Kalkstein (Vice-Chair), Gary Lange, George Lesure, and Bill Reynolds (Chair) were present.President Jamey Wimble was also present.There wereno shareholders (“SH”) in attendance.

 

8:06Call to Order

Trustee Reynolds called the meeting to order at 8:06 a.m.

 

8:06 Shareholder Comments (SHC’s)

(none present)

 

8:06 AMMinutes of July 11, 2009 (Action)

 

Motion

Made by

2nd by

Aye

Nay

Abstain

Absent

To adopt the minutes of October 3, 2009 as amended

Trustee Jondro

Trustee Elkind

9

0

0

0

 

 

8:07 AMManagement Report

 

In the past couple of weeks we have had lift and insurance inspections, both of which went very well.The state lift inspector commended MRG staff on having done an excellent job in preparing for the inspection.

 

Preseason sales went well. Pass revenue is down about 2% from last year, Mad Cards about 1%, and ski school about 5%. The race program took the biggest hit, being down nearly 20%. Most of this is due to families that pulled their kids from public school and enrolled them into GMVS. The biggest change in passes was that we sold fewer full passes and more Value (six-day) passes. Whether this is people backing off due to the current economic climate is uncertain.

 

We are adding credit card terminals to the cafeteria lines to make it easier for people to spend money. There will also be PIN pads at sales areas this year.We will encourage people to use debit instead of credit, as it will save us a lot of money in credit card transaction fees.

 

There will be an emphasis put on “green” initiatives this season, such as recycling changes in the Basebox and raising awareness about energy consumption. The Board has also formed an ad hoc committee to investigate this as well.

 

We have sent out a reminder letter for the 2009 pledges due.In the letter we also asked if those with pledges due from previous years could please help us by honoring those pledges.There is just over $30,000 in outstanding pledges. There is a total of $103,000 due in 2009.

 

Verizon is still interested in putting a tower on the mountain, perhaps on the Birdcage.

There was discussion about the Unicel contract and possible renegotiation of that.

 

Share Sales:

 

We have sold three shares for the month against a budget of four. There are twenty-one shares on the list for tendering. Based on last year’s audit, the estimated total dollar amount for pay off would be $21,500. We only sold nineteen shares last fiscal year. Following the By-laws, we could only tender nineteen shares.

 

 

8:20 AMFinancial Report

 

Financials look good; we are a little ahead of budget in both revenue and expense. However, expense is more on budget as some expenses are not entered yet and there is a $30,000 snow cat contingency in October.We will be using about $7,300 of that in November for tiller pumps. The Single loan balance is $66,000. There is $736,000 of cash on hand.

 

 

8:36 AMEmployee Bonus Guidelines (Action)

 

Trustee Bruns asked for Board input regarding whether the Board would like to have a program in place to provide monies to employees in years in which we do particularly well financially.Trustee Reynolds indicated his support for such a program to the extent that it could be done in a fiscally responsible way.Trustee Hall noted that the tough years are the ones in which employees really “roll up their sleeves” and help out and asked what ways we have to recognize that effort in not-so-good years.He suggested an ongoing employee recognition program that could be part of the budget (e.g. gift certificates).He said that the proposed program is not really an incentive program - it’s more like profit-sharing - a distribution of largess.He asked if we wanted something more comprehensive as an incentive program.Trustee Bruns stated that there are larger questions about performance management that were raised by this proposal.He does not want to bring HR questions to the Finance Committee (FC).Trustee Elkind was in favor of some sort of program that rewarded dedicated employees.Trustee Hall clarified that he was more in favor of individualized and ongoing recognition, which he thought had more power to encourage employees to go the extra mile than a profit-sharing program would.Trustee Kalkstein cautioned that a profit-sharing equation can become expected.If the goal is to maintain morale, the unexpected things are what work - even if routine, such as a gift card every week to “employee of week,” the person is still not expecting it.He supported budgeting money to support such a program.President Wimble indicated that he did not need additional budget funds to continue the spot reward program that he currently runs.Trustee Bruns asked if that would be a line item in the budget.Trustee Jondro suggested that there’s an opportunity to provide more benefits.For example, 50% off lift tickets go to local shops; perhaps we could solicit those shops for some employee discounts.She also noted that we already do profit sharing in good years.Trustee Kalkstein was concerned about employee morale and also noted that we have a very tight margin and are financially unhealthy when one factors out capital campaigns.Trustee Lange was in favor of a profit-sharing plan as long as we were fiscally careful about what we’d consider “profit” beyond capital expenditure (capex) needs and rainy day fund needs.Trustee Hall noted that if we were to include capex, we’d never pay out a bonus because our capex needs are so high.Trustee Bruns thought the FC should go ahead and consider a profit-sharing proposal based on Board interest.Trustee Hall pointed out that as far behind as we are on capex, there technically should be no “profit.”So we have to consider that there’s a tradeoff between funding capex and profit-sharing.Trustee Godwin clarified whether there wasn’t already a bonus program per Trustee Jondro.Trustee Bruns explained that one had existed but then was stricken from budget in lean years.Trustee Reynolds proposed a straw poll to determine whether the Trustees were in favor of an income sharing program.There was brief discussion about whether it would be a reward program for performance or whether it would be across the board.

 

Straw poll:should there be a sharing of some amount of the net operating income (NOI) that management deems in excess of necessary operating funds?Eight in favor, one recusal (Trustee Jondro).

 

Trustee Hall noted that the second part of the issue is the incentive program and that perhaps there should be Board guidelines.Trustee Bruns noted that Jamey is not askingfor help, so this could be approaching micromanagement.Trustee Kalkstein stressed to President Wimble that perhaps President Wimble might come to the Board with a proposal to address employee morale issues that he has brought up to the Board in the past.President Wimble pointed out that some of it is weather-related; it’s hard to be upbeat when there’s no snow.He noted that the Broomball game got people really fired up.Trustee Jondro agreed that things like parties go a long way.Board members encouraged President Wimble to be proactive and create a process or structure that would make it easier to respond when morale dips, instead of waiting until it happens.Trustee Lesure suggested putting employee recognition in the Echo.Trustee Kalkstein said the threshold should be lower for recognition.Trustee Hall suggested putting such recognition in the management report to Board so that we as members can give kudos to employees.

 

Regarding the profit-sharing, Trustee Jondro suggested that before making a huge jump in the trigger point at which there would be a payout, there might need to be an intermediate year where the trigger point is lower.Trustee Hall disagreed due to our pressing capex needs; other suggested calculating NOI after certain capex to avoid that problem.Others stated that clear communication of reasons and motives for the trigger point needs to happen with employees.

 

9:15 AMNational Register of Historic Places Update 

 

On October 27, Trustee Reynolds, Trustee Bruns, and President Wimble attended a meeting of the State Advisory Council on Historic Preservation (SAC).The SAC viewed a Single-only listing as nonviable given the historic nature of the entire area, especially the Basebox, which is architecturally significant as an example of Modern design incorporating solar heating.With regards to future renovations and/or replacement of buildings at MRG, the Council confirmed that listing on NHR would not impose any additional restrictions on what changes can be made.  The Council suggested having a Historic Structures Report done detailing the history, condition and plans for the area's buildings, which is something that UVM Professor Bob McCullough recommended to us as well.  This would assess what buildings and property are to be included in the district, what structures will be designated as "contributing," and would provide a plan for any changes/renovations prior to our submitting of the application for listing. 

 

Trustee Hall asked what the anticipated cost would be of the enterprise.Trustee Reynolds said it would be negligible due to the fact that Professor McCollough’s students could do the application for little or no compensation.President Wimble said it would be about $4000 without grant money, but that we could apply for some in the spring.

 

Trustee Bruns recalled his experience at the SAC meeting.He got the impression that the group is very interested in buildings in particular, and they were legitimately excited about the prospect of listing MRG as an area.He had asked the Act 250 expert about our future business needs including repairs, renovations, additions, etc.They pointed out that MRG had far more value as an operation ski area than not, and they fully intend to work with us to maintain our flexibility to make improvements that are necessary to our continued success as a ski area.He believed there was very close alignment between their goals and our Strategic Plan.

 

9:33 AMRecess

9:40 AMReturn

 

Trustee Elkind asked what next steps are in the process. Trustee Reynolds replied that Prof. Bob McCullough and his students at UVM were going to start the legwork for writing the report and nomination.Trustee Reynolds will continue to interface with Prof. McCullough.Trustee Godwin volunteered to inquire at Columbia University in NY to obtain copies of historical documents about the Basebox design.

 

 

9:45Strategic Plan (“SP”) Review

 

Trustee Bruns reviewed the strategic plan review process that had occurred to date.He restated that the mission statement was closely aligned withthe idea of listing MRG onthe National Register of Historic Places.He then called attention to particular items in the Plan that may be of Board interest.

 

Trustee Hall noticed that there was no “green” initiative listed under the “strategic initiatives” header.Trustee Bruns pointed out that the process typically involves SH input when updating the SP, and that it should be warned before being changed.Trustee Elkind suggested letting the “green committee” form and run for a bit before going back to the strategic plan.Trustee Kalkstein thought that because environmental stewardship was throughout the document, it was unnecessary as a separate item, but it would also not be a problem to add it.Trustee Reynolds suggested that at the next review of the SP we add said initiative.

 

Trustee Hall also reminded the Board that they had planned to report on how MRG was functioning as compared to the SP, yet this is not being done.Trustee Bruns said he did not recall such an action.He offered to provide said report immediately, and proceeded to describe the progress made in each area of the strategic initiatives.Trustee Hall opined that we as an area are not meeting most of the objections on the initiatives and should work harder on that.Trustee Reynolds cautioned that the initiatives are long-term and that progress on them is limited by available time and funds.Trustee Kalkstein stated that we had discussed several of them just today.Trustee Elkind suggested prioritizing the initiatives and revisting them yearly.Trustee Lesure suggested it for the next meeting.

 

Trustee Hall questioned whether our business model is sustainable.He suggested running a 20-year financial projection.Trustee Bruns stated that there already is a 20-year capex plan and reminded the Board that we spend a lot of time on tactical work and analysis.Discussion ensued about whether a weather-dependent business can accurately model a 20-year span and how we would go about attempting such a model.Trustee Hall agreed to spearhead an effort to begin that process.

 

10:23 AMSustainability Committee (Action)

 

Trustee Elkind introduced the concept of forming an ad hoc committee to focus on the environmental sustainability of the Co-op.He reminded the Board that being more “green” can have an impact on our ability to survive as an entity.Trustee Jondro added that the timing of this initiative is very good as funding sources are available for potential “green” projects.

 

 

Motion

Made by

2nd by

Aye

Nay

Absent

To create an ad hoc committee for the purpose of exploring ways that the Coop can become a more environmentally sustainable organization.

Trustee Reynolds

Trustee Kalkstein

9

0

0

 

 

10:22 AM Committee Reports

 

The Executive Committee approved one hardship request to tender a share.

 

The Board Development Committee had nothing to report.Trustee Reynolds reminded the Board that they should think about prospective candidates to solicit to run for the Board this season.

 

The Finance Committee met via conference call on November 13.The audit was not yet available so that will be reviewed in December.The FC will also discuss share redemptions and By-law compliance.If those by-laws are followed, only 19 of 21 shares will be redeemable.Trustee Jondro asked if the 21 included hardship requests; they do not.President Wimble noted that the preliminary audit is finished; there were no findings of note.We made $5000 last year before depreciation.Trustee Reynolds commended President Wimble and the FC for the excellent job they have done in handling the Coop’s finances and obtaining an audit with no findings.Trustee Hall also commended Trustee Bruns for his dedication and the professionalism with which he conducts FC meetings.

 

 

10:25AMNew Business

 

President Wimble announced that there was a Mad River Glen “Snow Dance” party at the Big Picture Theatre.

10:30 AMAdjourn

 

 

Motion

Made by

2nd by

Aye

Nay

Absent

To adjourn.

Trustee Kalkstein

Trustee Lesure

9

0

0

 

 

 

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