MAD RIVER GLEN COOPERATIVE
Minutes of Board of Trustees Held December 11, 1999
After due notice, a meeting of the Board of Trustees of Mad River Glen Cooperative was convened at 9:10 a.m. on December 11, 1999, at the Basebox, at Mad River Glen Ski Area in Fayston, Vermont. Trustees Bleier, Eaton, Kirkpatrick, Meier, Michl, and Shultz were present and voting throughout. Trustee Curtis was present and voting until he departed at 12:50 P.M. Trustee Singer was absent. The president, Mr. Meier, presided. Ms. Kirkpatrick, the secretary kept the minutes, with the assistance of Cooperative's counsel, Peter Monte.
Minutes of Previous Meeting
After discussion and upon motion duly made and seconded, it was unanimously
VOTED: To approve as corrected the minutes of the November 13, 1999, meeting of the board of trustees.
A shareholder in attendance inquired whether the new, reciprocal, free-skiing arrangement with Sugarbush allowed Sugarbush volunteer ski patrol members to ski free at Mad River Glen. Staff replied that volunteer ski patrol members at Sugarbush were not included in the free-skiing program.
Tracy Dale-Bancroft submitted a letter asking why persons over 70 years of age were not allowed to ski free at Mad River Glen. Staff will reply to shareholder Dale-Bancroft and inform him that Cooperative shareholders over 70 are allowed to ski free; non-shareholders over 70 are allowed five days of free skiing at Mad River and may purchase a seasons pass for $100.
The trustees received a letter from Jay Appleton thanking the Cooperative for giving him a framed aerial photograph of Stark Mountain (a parting gift for his service on the board of trustees).
General Manager's Report
Robert Ackland, general manager, reported to the trustees. He informed the trustees that weather had not allowed opening of the ski area yet. Although there was a snowstorm in November, it did not provide full coverage to the ski area. Staff decided that the forecast for warm weather in the following days did not warrant the effort required to move large volumes of snow for an early opening which would last only a few days.
Staff expects to open the practice slope next week unless forecasted warm weather upsets this plan. The snow making crew is ready and standing by for immediate action when weather permits.
Staff held its first mini retreat. The general manager explained his philosophy and expectations to staff. Staff discussed problems which should receive priority attention including a shortage of parking spaces at the ski area and difficulties newcomers have at the ski area in learning how to interact with staff and facilities. In response to the later problem, shareholder Fritz Branchofsky will organize a volunteer host and greeting program and will enlist shareholders to participate.
The State lift inspection is complete and all lifts at Mad River Glen have passed without problem. Groomers are on schedule for pre-season maintenance.
The November volunteer work day was completed. The general manager thanked participants for the good results of their efforts especially in clearing ice damage in Birdland.
The assistant general manager is continuing his dialogue with C-Tech regarding engineering and planning for the rebuild of the single chair lift.
The ski area experiences difficulty in hiring adequate staff. This is an industry-wide problem manifested at Mad River Glen by ten or twelve vacant lift operator positions and four vacant positions in the Basebox, including two cooks. Staff shortages will require management to hire more part-time employees. Staff has also instituted a cash reward program for employees who recruit a friend and has increased its help-wanted advertising. Shareholders are invited to refer any prospective employee to management.
Staff continues planning to manage the twelve and under free-skiing program enrollment. The general manager circulated a summary of program enrollment including the number of participants and their geographic distribution. The general manager also circulated a medical authorization/legal release form, which will be used for the program and a statement of a code of conduct and single-chair policy. The code of conduct requires civil behavior and safe skiing practices from program participants and imposes progressive discipline, which can lead to loss of free-skiing privileges for children who repeatedly offend the code. The single-chair policy requires free-skiers to use other lifts (unless accompanied by an adult) when the single-chair lift line exceeds thirty minutes.
Ms. Kirkpatrick questioned the variance between the final count of 1,800 participants and staff's statement at Green and Gold Weekend that there were 1,000 participants enrolled in the free-skiing program. The general manager explained that the statement of 1,000 was an error but he could not explain the details because the calculation was made before he was hired. The general manager stated that the program and its enrollment are now a reality and the task before the Cooperative is to minimize adverse impacts and to evaluate the program so it can be re-examined effectively when the season ends.
The general manager circulated a report prepared by the share marketing director, David Hatoff. 35 shares have been sold in the fiscal year beginning October 1, 1999 (the goal for the fiscal year to date was 25 shares). 11 of the 35 shares sold this year are re-sales of previously defaulted shares. Mad River night promotions continue. A recent promotion in Richmond showed promising results. All leads obtained through other means are being followed as well.
The general manager reported on each operating division. A new tuner is installed at the rent and repair shop. Ski patrol director, Pardee has begun work for the season. Ski school instructor training is underway. The race program has full enrollment and all coaches are hired. The Basebox seeks to hire required staff.
A New Years Eve party is planned from 9:00 p.m. to 1:00 a.m. to usher in the new millennium. Staff is considering whether to operate the single-chair to greet the first sunrise of the millennium over Stark Mountain.
The general manager commended the naturalist program on its organization and scheduled program. The department is ready to operate but is hampered by lack of snow.
Office staff duties have been re-arranged to allocate an administrative assistant part time to the marketing manager.
The triple crown challenge event has been improved. The event will be broadcast on the local ABC television affiliate, and prizes to be awarded are greatly improved and will include a trip to Red Mountain to participate in the Canadian national extreme skiing competition, a trip to Crested Butte and a Mad River canoe.
The Echo is printed and in the mailing process.
The general manager is beginning the effort to move the Cooperative's books of account to an accrual basis to assist in mid-year tracking of income and expenses. This process will not be completed until much later in the fiscal year but the general manager will flag interim reports where year-to-year comparisons are distorted by changes to the accounting method.
Capital investments for the new snowmobile and six wheeled mountain work truck are completed and the vehicles are on premises. Shareholder Jim Edgecomb has bartered to prepare an accurate plot plan of all facilities at Mad River Glen (a record of locations of all structures, conduits and other facilities is essential to future improvements and capital planning). Owner Jay Appleton will prepare a detailed forest management plan. The general manager and Mr. Appleton, a forester, are concerned by the rate of tree loss and damage caused by the recent ice storms and hurricane. Mr. Appleton's effort will pinpoint endangered tree species and geographic areas and the priority in which the reforestation efforts should be planned.
The November Income and Expense
The general manager presented a detailed statement of income and expense for November and for the fiscal year to date. He noted the following highlights:
Financial Results are Summarized
The president circulated the banking resolution which would substitute the new general manager as signing authority in place of the former general manager. After motion duly made and seconded it was unanimously (Mr. Bleier abstaining)
VOTED: That the Cooperative approve the banking resolutions presented to the meeting to substitute Mr. Ackland for Mr. Mazza as a signing authority for Cooperative accounts and that the proper officers be and they hereby are authorized to certify the adoption of this resolution to depository banks.
Fayston Education Fund
Ms. Kirkpatrick inquired about the status of the Cooperative's letters to its owners informing them of the Fayston Education Fund and its solicitation of money to reduce local property taxes. This summer, the Cooperative's trustees decided not to contribute Cooperative money to the Fayston Education Fund, and instead, to inform shareholders of the Education Fund's efforts so owners who wished could contribute directly.
The Cooperative's letter to owners has not yet been sent. The delay arises from the absence of an "anti" position statement for inclusion and a misunderstanding about whether the Education Fund had approved the proposed Cooperative letter. The trustees requested that staff accept the present draft as final and send it to shareholders promptly.
Committee Role and Structure
The president requested that the trustees address the memorandum he submitted at the last meeting proposing a reorganization of the trustees' structure and use of committees. The president's proposal was to establish six standing committees (the existing committees plus a new shareholder relations committee) with provision from time to time to establish temporary ad hoc committees to consider important special projects. The proposal would delegate to committees the task of detailed preliminary analysis of issues followed by a report to the board of the pros and cons of issues under consideration and a recommendation to the board of trustees for final action.
As required by the bylaws, each committee would be chaired by a member of the board of trustees. Other owners would be appointed to the committee by the board chair who would be responsible for assuring that committee membership reflects a balance of views to assure full consideration of issues and impartial recommendations to the trustees. Prospective committee members would be solicited by the public means available: notice of the annual meeting, web site postings, the Echo, etc.
The trustees discussed the president's proposal and suggested the following changes:
The trustees will continue their consideration of this reorganization at the next meeting.
Last spring, the board of trustees decided not to operate the retail shop at Mad River Glen as a Cooperative enterprise and instead to rent the shop to an independent retailer. A group of owners has requested that the trustees reconsider this decision and appoint a committee to study the issues so that the Cooperative is in a position and take over direct operation of the retail shop in March, 2000, when the present lease terms grant that option to the Cooperative.
Owners in attendance at the meeting expressed dissatisfaction with the present retail shop offerings including the lack of hard goods like skis, boots and technical ski wear, and the low quality of some of the merchandise offered.
The trustees asked the general manager what was staff's position on the issue. The general manager responded that the choice between direct Cooperative operation of a ski shop and operation through a lessee was a management decision, preliminarily at least. At root, the question posed is how best to run an operating department; and it is precisely to evaluate and make those decisions which is the reason why the Cooperative hires and pays a professional staff of managers. The pivot on which the ski shop decision must turn is whether the Cooperative has the financial and personnel resources to operate a retail shop with an acceptable level of risk, or if direct operation would threaten management's basic responsibility to conduct operations in a manner which promotes a sustained continuation of the Cooperative to accomplish its corporate purposes.
Mr. Schultz urged the general manager to consider an essential difference between the Cooperative and a traditional business enterprise. The Cooperative's staff and trustees must respond to "hot issues" important to its owners. Decisions of the Cooperative cannot be made on a purely financial basis but must incorporate the passion of Mad River Glen into the decision making process. The general manager responded that he was mindful of the points raised by Mr. Schultz but he believes strongly that the Cooperative must make sound business and financial decisions to sustain the Cooperative as a vehicle for the enjoyment and expression of the passion for Mad River.
Mr. Curtis observed that customer service is a valid criterion for business decisions. Because shareholders of the Cooperative its principal customer base, the desires of the shareholders is a proper ingredient in management decision making.
Ms. Kirkpatrick observed that the choice before the trustees is procedural: either to form a committee to evaluate the ski shop issue or to delegate that evaluation to management. She observed that management can solicit the views of shareholders during its evaluation. Delegating this question to management for evaluation and recommendation is an opportunity for a trial of that process.
Mr. Bleier objected to trustee referral of this question to management. He believes that management consideration is an undesirable reversion to the status quo.
Mr. Meier observed that the absence of a formal committee established by the board of trustees does not preclude interested shareholders from creating a working group to present information to management and thereby to influence the ultimate recommendation.
After further discussion and upon motion made by Mr. Curtis and seconded by Mr. Eaton it was:
VOTED: To direct management to make a timely recommendation to the board of trustees whether to renew the existing ski shop lease on March 15, 2000.
- In Favor: Curtis, Eaton, Kirkpatrick, Meier, Michl, Schultz.
- Opposed: Bleier
Resignation of Mr. Curtis
Mr. Curtis informed the trustees that reorganization of operations by his employer, Mad River Canoe Company, required that he relocate his residency to North Carolina. Because he holds office seat as a "in-state" trustee, he regretfully tendered his resignation as a trustee, effective immediately. Mr. Curtis thanked the Cooperative for the opportunity to participate on the board of trustees.
The president thanked Mr. Curtis for his valuable service and contribution to the Cooperative both as a member of the board of trustees and as an owner who shared demonstratively in the passions of Mad River Glen. After discussion and upon motion duly made and seconded it was unanimously
VOTED: To accept with regret Mr. Curtis= resignation from the board of trustees and to extend to Mr. Curtis the grateful thanks of the Cooperative for his service and contributions.
Judy Aiken reported for the communications committee. Although other communication measures remain under consideration by the committee, the committee recommends that the trustees approve and allocate funds for a newsletter promptly. She circulated cost estimates for two alternatives: 3 issues (January, February and March) at an estimated cost of $2,158 or 8 issues at an estimated cost of $5,754. The president observed that the February newsletter would overlap the scheduled issue of the Echo in February. The general manager observed that the newsletter will contain different information and, therefore, would not be redundant.
The trustees and shareholders in attendance made suggestions concerning contents of such a newsletter. The trustees also inquired about the source and accuracy of the cost estimates obtained by the committee.
Mr. Meier observed that a $6,000 expenditure could be better used for other more critical needs of the Cooperative. For example, $6,000 applied to the snow making budget would greatly improve passage over the glacier which now forms on Gazelle. Mr. Meier suggested that those shareholders who are interested in receiving additional communications from the Cooperative could pay a nominal subscription in the neighborhood of $15 per year and thereby provide funds necessary for a newsletter without diverting operating funds.
Mr. Michl observed that the proper role of the trustees was not to micro manage the newsletter but to determine whether and in what amount the Cooperative's budget should be increased to improve shareholder communications and to leave it to management to carry out the details of how many newsletters (or other communication programs) would most effectively use the additionally budgeted funds. After discussion and upon motion duly made by Mr. Michl and seconded by Mr. Shultz it was:
VOTED: To amend the Cooperative's budget for FYE 2000 to add $6,000 for expenses to improve shareholder communications in such manner as management shall decide.
In favor: Bleier, Curtis, Eaton, Kirkpatrick, Michl and Shultz.
The trustees entered executive session at 12:50 P. M. to discuss contract and personnel issues. Trustee Curtis departed when the executive session began. The trustees resumed open session at 1:10 P.M.
Appointment of Trustee to Replace Mr. Curtis
Mr. Bleier pointed out that section 4.10 of the bylaws authorizes the trustees to appoint a person to fill the vacancy on the board of trustees arising from Mr. Curtis' resignation. He suggested that the trustees should move promptly to appoint a successor.
Mr. Meier observed that only three trustee meetings are likely before the annual owners meeting in late March or early April. If the trustees conduct a search for suitable candidates, the replacement is likely to be available only for one or two of those meetings. He suggested that rather than naming the replacement trustee itself, the board could commit in advance of the annual meeting to appoint the shareholder who is the third leading vote-getter in the in-state trustee election at the annual meeting. This process, Mr. Meier suggested, would in effect allow the owners to designate the successor trustee through the democratic process.
Mr. Meier noted the bylaws require the replacement to hold office for the entire eighteen- month remainder of Mr. Curtis' un-expired term and the incumbent will hold a political advantage thereafter for re-election.
After discussion, the trustees took a straw vote which revealed that the trustees are evenly divided on which process to follow: Bleier, Kirkpatrick and Schultz favored immediate appointment by the trustees and Eaton, Meier and Michl favored advance commitment to the third-highest vote-getter. The trustees recognized that this deadlock effectively barred immediate appointment of a successor trustee. After further discussion and upon motion duly made and seconded it was unanimously
VOTED: To defer appointment of a replacement trustee until after the annual meeting to allow the trustees then to appoint the third-highest vote-getter in the in-state trustee election.
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 l:15 P.M..
A true record.
ATTEST:___________________________ Mary Kirkpatrick, Secretary