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MAD RIVER GLEN COOPERATIVE

BOARD OF TRUSTEES

MINUTES OF MEETING

November 8, 2003

 

After due notice, a meeting of the board of trustees of the Mad River Glen Cooperative was convened at 8:00 AM on November 8, 2003 on the 3rd floor of the Basebox at Mad River Glen Ski Area in Fayston, Vermont.

 

Trustees Alan Moats, Deb Steines, Jito Coleman, Jay Appleton, Paul Finnerty, Leigh Michl, Ken Eaton, and Rick Moulton were present. Lu Putnam was absent. Also present was General Manager Jamey Wimble and several shareholders.

 

CALL TO ORDER:

President Alan Moats called the meeting to order at 8:05 AM.

 

APPROVAL OF SEPTEMBER, OCTOBER MINUTES

Upon motion duly made by Deb Steines and seconded by Ken Eaton, it was unanimously

 

VOTED: To accept the minutes of the September 20, 2003 board of trustee meeting and the minutes of the October 4, 2003ShareholderTown Meeting.

 

SHAREHOLDER COMMENTS

There were no shareholder comments when Alan Moats opened the floor.

 

MANAGEMENT REPORT

Mr. Wimble asked if there were questions regarding the Management Report (copy attached).

 

In response to a question by Ms. Steines, Mr. Wimble indicated that the total proceeds from share sales for the fiscal year 2003 ended September 30th was approximately $22,000, net of share redemptions.

 

Mr. Moats and Mr. Wimble discussed season pass sales to date. Mr. Wimble commented that pass sales were strong as a result of higher prices and an increase in volume. He also noted that Mad Card sales were up significantly, evidence of the success of the 12 and Under Ski Free pass program. He also noted that, despite the low $33 per day average ticket cost for the Mad Card, the Mad Card was a significant contributor in its own right since a significant percentage of Mad Card ski days were never used by purchasers.

 

FINANCIAL REPORT

Mr. Wimble asked if there were questions regarding the Financial Report (copy attached).

 

Continuing the season pass discussion, Mr. Appleton noted that the Full pass revenues were up by 15%, despite only a 5% price increase. Mr. Wimble commented that much of this increase in volume was a result of (1) converting 5 and 6 day passes to Full passes and (2) sales to new passholders.

 

EMPLOYEES AS TRUSTEES

The board discussed the issue of allowing an unlimited number of employees to serve as trustees of the Co-op. The issue has been active at the board level since the formation of the Co-op, however, no resolution had ever been reached. Mr. Moats’ summarized the issue as follows: Employees as trustees creates potential conflicts of interest, concerns of confidentiality, and the potentially untenable relationship between the General Manager and an employee/trustee. That said, employees as trustees could bring considerable skill and vision to the board.

 

The discussion began with a summarization of other Vermont co-op policies on the issue. Mr. Finnerty stated that the Hunger Mountain Co-op limited the number of trustees to a minority (one-third). He also stated that the Washington Electric Co-op prohibited employees and employee family members from serving on the board of trustees. Jay Appleton reported that the Onion River Co-op had no restrictions on employees as trustees.

 

Mr. Moulton expressed his favor for allowing employees to serve as trustees. In addition to the value of the experience of employees, he pointed out that the actual definition of an employee was problematic. For instance, Mad River has a strong history and benefits from volunteers, especially the ski patrol. Not allowing volunteers to participate on the board if voted by the shareholders would exclude an inordinately large percentage of the population.

 

Mr. Finnerty expressed concern that if an employee/trustee recused themselves from all potential conflicts of interest, they could be incapable of fulfilling their responsibilities as a trustee. Therefore, employees who followed the Co-op’s trustee Code of Conduct could not be able to be effective trustees.

 

Mr. Coleman stated that, as a manager of a business, he would not allow employees to be trustees because full participation of the trustees could be curtailed by the presence of an employee, and vice versa. He also stated that he did not feel the issue was one of “employee rights”, because they are represented in other ways. In the case of Mad River, Mr. Coleman stated that experience has favored having responsibility delegated to a strong GM and, therefore, nothing should be done to diminish the GM’s ability to do an effective job. Ms. Steines stated that as a manager with 35 years of experience, she agreed with Mr. Coleman.

 

Mr. Michl expressed concern about employee/trustees as well. In addition to the reasons stated above, he mentioned the possibility that an employee/trustee may be inappropriately sympathetic to his manager, the GM, rather than antagonistic to the GM. He also pointed out that the argument that employees should be trustees to provide representation of an important segment of the shareholder population was spurious because trustees represent all shareholders, not particular shareholders or groups of shareholders.

 

Co-op counsel, Peter Monte, agreed that employees should not be allowed to be trustees. He based this conclusion on the fact that Mad River is a business at its core and must succeed as a business. Every GM at Mad River has been frustrated by employee/trustees and the GM was extremely valuable to the success of the Co-op.

 

When the discussion was opened to shareholder comment, three shareholders (Shawn Kalkstein, Rocky Bleier, and Ian Forgays) expressed their desire to see the present practice of allowing employees to serve on the board continue unchanged.

 

Mr. Moats summarized a variety of options that could be taken on the issue ranging from no restrictions on employee as trustees to a complete ban on employees as trustees. In between were several options including (1) having employees should recuse themselves from personnel and resource allocation issues based on the Trustee Code of Conduct, (2) employee/trustees to renounce their employee status during their tenure as trustees, or (3) a limitation on the maximum number of employees that could serve on the board. Regarding the first option above, Mr. Finnerty pointed out that an employee/trustee who did not follow the Code of Conduct could be removed under Article 4, Section 4.9 of the Bylaws. This section states that trustees may be terminated prematurely by the board with sufficient evidence and a fair hearing.

 

It was agreed to revist the issue at the January trustees meeting. Ms. Steines pointed out that this issue was not a board decision since it involved a change of the Bylaws. She stated that the discussion at the January meeting should be whether to have the board place the issue on the Annual Ballot.

 

TRUSTEE CODE OF CONDUCT

Mr. Finnerty presented a copy of the Trustee Code of Ethics to the board. When the issue came up in April, he had been concerned with the language:

 

As a Co-op trustee, I agree to abide by this Statement of Agreement. I agree that if, in the opinion of the majority of Co-op trustees, I have violated the letter or spirit of this agreement, I shall resign my position on the Board immediately and shall not seek to cause continued disruption to the Co-op and the Co-op Board for that action.”

 

He felt that this statement was contrary to Article 4, Section 4.9 of the Bylaws and that termination of a trustee was already covered in that section. It was also mentioned that the word “Member” should be substituted with “Shareholder”.

 

Upon motion duly made by Deb Steines and seconded by Alan Moats, it was unanimously

 

VOTED: To accept the Trustee Code of Ethics as amended by Mr. Finnerty.

 

COMMUNICATION

Role of Secretary

Mr. Moats mentioned the possibility of expanding the role of the Secretary of the Co-op beyond minutes to include board scheduling, alerting and reminding trustees of timelines and board responsibilities, and soliciting input of trustees and committees to Co-op written communications. The concept presented by Mr. Moats was agreed to in general and would be discussed in more detail at the Management/Board retreat in December.

 

Teleconferencing

Mr. Wimble mentioned that the possibility of purchasing teleconferencing equipment for internal use and for use by trustees who may, from time-to-time, have to call in to a meeting. While the cost of the unit was not significant, it was pointed out that usage charges could become meaningful. It was agreed that shareholders would not be allowed to participate through teleconferencing because of difficulty of conducting conversations. It was further agreed that trustees could participate in a board meeting by teleconference provided the technology was sufficient to provide clear communication and that the teleconferencing costs would be the responsibility of the trustee, not the Co-op.

 

BOARD ROLES

Mr. Moats initiated the discussion of the proper role of the board. He mentioned that several issues had been brought to the board’s attention that potentially were not board issues. As examples, he mentioned the issues of terrain parks, parties, and the July 4th barbeque.

 

Ms. Steines indicated that this is already summarized in the strategic plan. The board can make recommendations, but it is up to the GM to make decisions. Mr. Moulton expressed his agreement with this as far as the terrain park, but Coop sanctioned events such as the barbeque and the party have until now been put into board purview and financially subsidized by the board. Mr. Moats said that the board’s relationship with management is for general policy recommendations, not event planning.

 

A discussion ensued about the concept of establishing a fund from which the board could approve funds for community building activities. Mr. Michl pointed out that community development was one of the 8 Strategic Initiatives of the strategic plan. The board authorizes a budget to achieve all the objectives of the Co-op and it is the responsibility of management (the success of which would be covered in the GM’s annual review) to achieve the “community” goals and other goals of the Co-op.

 

Mr. Moulton expressed his opinion that the board should sanction every event. A policy should be in place that incorporates social events. Ms. Steines said that events are handled by management. The strategic plan states that events are GM duties. Mr. Michl said that there is a system of checks and balances in the strategic plan and in the performance assessment. Mr. Moulton said that we need to provide guidelines on what the community’s expectations are for sanctioned events. Mr. Michl suggested that the Shareholder Relations Committee should define “community” so the board would have a metric for judging management performance in this area.

 

NEW PRESERVATION CERTIFICATE FOR $1750

Mr. Wimble mentioned that, with the allowance of the conversion of shares of the Co-op to Preservation Certificates, a $1,750 Preservation Certificate would need to be created.

 

Upon motion duly made by Deb Steines and seconded by Mr. Moulton, it was unanimously

 

VOTED: To add a $1750 preservation certificate.

 

PATRONAGE REBATE

Ms. Steines said that the Finance Committee is not recommending a patronage rebate for at this time. After discussing the Co-op’s capital requirements, it was not deemed prudent to provide a patronage rebate to shareholders at this time.

 

Upon motion duly made by Deb Steines and seconded by Ken Eaton, it was unanimously

 

VOTED: To not recommend a Patronage Rebate.

 

COMMITTEE REPORTS

Finance:

Ms. Steines reported that she spoken with the auditors regarding issues related to the audit and management letter. The auditors were very pleased with the Coop’s performance on financial, accounting, and control issues. There were a relatively small number and amount of adjustments for the 2003 fiscal year. Mr. Moats also mentioned having spoken with the auditors, and that all feedback was positive.

 

Upon motion duly made by Deb Steines and seconded by Mr. Moulton, with one abstention by Jay Appleton, it was

 

VOTED: To approve the financial statements as presented by the auditors for fiscal year ending September 30, 2003.

 

Executive Committee Actions:

Mr. Moats described two recent actions of the Executive Committee. The first of these occurred 2 months ago. An abutting/adjacent homeowner needed to replace their septic. The board authorized Mr. Wimble to work with the homeowner and ensure that the work was in accordance with their current easement. The second executive action related to providing incentives for shareholders to refer sales of future shares. The executive committee retracted the incentive on the basis that this could be viewed as a commission and therefore a violation of securities laws.

 

Facilities:

Mr. Coleman reported on the design charrette meeting with various architects. There were 6 or 7 professionals present. Mr. Wimble and Mr. Coleman gave an overview regarding the critical and long-term issues.

Overview of issues

1.)    Parking – There is an issue regarding snowplowing – VTrans road maintenance crews could potentially eliminate parking for as many as 150 to 200 cars.

2.)    Improvement of base area and facilities – sketches were made of schemes and solutions. Most creative idea was to create a more intimate park-like space in the center, and relocate all cars and traffic to the other side of the ski patrol building.

3.)    Improvement of drop-off / pickup area for carpools and shuttles to alleviate parking pressure. The committee will need to get the presentation package to solicit community response.

4.)    Improve flow/functionality of Basebox – current configuration is a problem area. Locker space and a separate ski racing structure could help alleviate this.

Mr. Coleman mentioned that they plan to have the Norwich architectural design department do computerized CAD drawings. The committee has a complete package of drawings for anyone who wants to review them.

 

Election:

In the interest of soliciting a larger pool of candidates than previous years, Ms. Steines suggested that each board member make an effort identify one potential candidate interested in running for the board.

 

Ms. Steines reported having incorporated shareholder Rocky Bleier’s suggestions into the Election Procedures. She still needs to work with Mr. Finnerty on the Bylaw change regarding the deadline for mail-in votes. There was also the discussion of reporting the votes for each write-in candidate. No decision was made and the issue was tabled for future discussion.

 

Board Development:

Ms. Steines reported that the Management/Board retreat was scheduled for Saturday, December 6th, from 9AM to 3PM, and the location would be on the 3rd floor of the Basebox.

 

Mr. Finnerty also circulated a draft of the policy of releasing the shareholder list to shareholders for future follow-up (copy attached).

 

Finance:

The committee met on Monday, November 3rd. Ms. Steines has sent out a “final” funding analysis report (see attachment). Mr. Finnerty had a question regarding the $200 APR commitment per shareholder. Specifically, he asked what the effect of increasing the APR by a cost of living factor would be. Mr. Wimble reported that the positive financial gain of adjusting the APR would not be worth the confusion.

 

20th Hole:

Nothing to report.

 

Shareholder Relations Committee:

Mr. Moulton expressed concern regarding the board’s muddy response to request for a New Year’s party, especially because last year there was a negative reaction due to the lack of one. Ms. Steines commented that the perceived negative reaction was not really that significant – only 20 out of 1600 people gave negative feedback. Mr. Moats asked whether there is enough interest to warrant an event this year. Mr. Moulton replied that the Committee is interested in a get-together after town meeting. Mr. Wimble pointed out that on this particular year DUI issues were very visible in the Valley and he did not want to create a liability for the Co-op. Also, if there is a major snow event around that time, January 1st could be the season’s biggest ski day, and that would require staff to work very long hours. Mr. Moulton said that there has been some interest in a mixer on Saturday, December 27th. Mr. Moulton closed by saying that the Shareholder Relations Committee would like feedback on the shareholder community plan.

 

SHAREHOLDER COMMENTS

There was a discussion about whether volunteer ski patrol, part-time ski instructors and hosts should be regarded as “paid employees”. Mr. Wimble stated that hosts are not paid employees. Ski patrollers are considered paid employees, as are part-time instructors, but the latter are considered as such only when they are instructing. A shareholder asked about the 20th Hole committee, and when they were to meet. Mr. Moats replied that they meet on an as-need basis, and currently there are no issues that warrant a meeting.

 

ADJOURNMENT

There being no further business to come before the board, the meeting adjourned at 12:00 PM

 

Respectfully submitted, Leigh Michl

 

A true record.

 

ATTEST: __________________________________________

Leigh Michl, Secretary

 

Attachments

  1. Management Report
  2. Financial Report
  3. Trustee Code of Ethics
  4. Draft Policy on Release of Shareholder List
  5. FinanceCommitteeLongRange Plan

 

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