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Board of Trustees Meeting; December 12, 2009

Board of Trustees Meeting

Minutes –Saturday, December 12, 2009

DRAFT

 

After due notice, a meeting of the Board of Trustees of the Mad River Glen Cooperative was convened at 5:00 p.m. on Saturday, December 12, 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 was one shareholder (“SH”) in attendance.

 

5:04Call to Order

Trustee Reynolds called the meeting to order at 5:04 pm.

 

5:04 PMMinutes of November 14, 2009 (Action)

 

Motion

Made by

2nd by

Aye

Nay

To adopt the minutes of November 14, 2009 as amended

Trustee Jondro

Trustee Elkind

9

0

 

5:04Shareholder Comments (SHC’s)

 

SHC:Lu Putnam thanked management for opening this weekend and stated that she hoped that we would stay open during the week.

 

Trustee Reynolds reiterated those thanks and commended the Ski Patrol and staff for a successful opening on very short notice.

 

5:06PMManagement Report

 

Operations:

 

Snowmaking began on December 7.However, the snowmaking pump motor broke on the 8th, so it was sent out to be rewound, backed and dipped.It is unknown what caused the break.It was back on line as of December 11.The cost for repairs was $2,300.

 

Efficiency Vermont returned to do more work to determine areas of heat loss in the buildings by using an infrared camera.Several areas that were identified as major heat leaks were sealed.Trustee Hall asked if the patrol room was part of this survey, as there were still areas of the patrol building that were losing a lot of heat.Jamey mentioned that a door was replaced in the Patrol building.

Efficiency Vermont recommended that as we tighten up the buildings, we should have an engineer do an air quality test.As much as doors are opened and closed, it is probably not an issue, but it would be wise to check and see if a heat exchanger is needed.

 

Department heads returned to work on Dec. 1.Opening day was December 12.

 

Preseason sales for November were nearly even with last year and very close to budget, including both passes and Mad Cards.

 

It has been a very late start for most Eastern resorts with the mild November. A mild November does not hurt us at all as long as we can get and stay online before Christmas.

 

Trustee Bruns asked if Mad Card sales might be boosted by opening before the 15th.President Wimble hoped that would be so but did not have the data yet from today’s sales.

 

Share Sales:

 

No shares were sold for the month of November. We have sold three year-to-date (YTD) against a budget of three. We have twenty-one shares on the waiting list to be tendered. We only sold nineteen shares this past fiscal year.Adhering to the “one in, one out” rule, we could only tender nineteen shares. Total cash out would be approximately $27,500.

 

Financials:

 

November financials look good. Retail income was down a bit, so we have instituted a free shipping policy to try to boost sales. The September 30, 2009 audit numbers are in. Before amortization and depreciation we finished in the black at $5,474. After depreciation, amortization, and Single Chair income we finished with a $24,449 loss for the year.Trustee Hall asked about expense pre-payment and how that factored into the financials.

 

The next Echo is scheduled to come out by January 10, and it will advertise that there’s one last chance to donate by January 31 to the Single Chair Capital Campaign in order to have one’s name appear on the all-donor plaque.President Wimble expressed that every donation, no matter how small, is important because even small donations can add up to large dollar amounts.Having a maintenance account down the road will be invaluable for upkeep of the Single.Trustee Hall informed the Board that letters went out reminding donors about their pledges.President Wimble noted that a sizable number of payments were received this month, so it does appear that pledges are coming in.

 

5:14 FY 2009 Audit (Action)

 

President Wimble said that the auditors had no negative findings.In conjunction with the audit, the fiscal year end 2008-2009 share value was $1451.The auditors recommended that we might want to buy a software program to calculate depreciation, but it would be more cost-effective to continue to pay someone for the amount of time it takes to do that calculation manually. Trustee Bruns commended the staff for how much work went into the prep for the audit.He stated that the Finance Committee (FC) recommended approving the audit and that they had expressed pleasure that there were no findings.The FC had spent approximately forty minutes discussing the members’ concerns about cash flow.

The Board thanked Ernie and Sharon in particular for all their hard work on the audit.

 

Motion

Made by

2nd by

Aye

Nay

 

To approve the 2009 audit.

Trustee Kalkstein

Trustee Elkind

9

0

 

 

 

5:19 Share Redemptions (Action)

 

Trustee Bruns reported that members of the FC discussed this issue via email and outlined the financial situation informing their recommendation.

 

There are 21 shares that have been requested for redemption.As per the by-laws, only nineteen of twenty-one are eligible since only 19 new shares were purchased last fiscal year. ~$27569 is the total value for the nineteen shares. Cash flow is of concern given that we have a minimum of $110K of capital expenditures (capex) that we will have to spend this year (the I-beams under the office and the Schuss Pass bridge).Our average capex for other projects in a given year is approximately $40-80K.We therefore need to retain a good deal of our budgeted net operating income for this season and need to finish the year with >$140K to complete the above projects and enable a small amount of normal capex/summer work expense.MRG has only made that much money in six of the last thirteen years.

 

Due to these considerations, members of the FC unanimously recommended that the Coop should suspend share redemptions until we have a better picture of the 2009-2010 season financials.

 

Trustee Hall asked if the By-Laws required us to wait a full year or if we could redeem shares at any point in the year.Trustee Bruns replied that we must discuss share redemptions upon approval of the audit, but do not have to actually redeem them at that time.In the past, because the Board has historically tried to avoid denying requests forredemption, the Board has revisited the topic monthly when share redemptions have been suspended.He recommended waiting for the January meeting.Trustee Kalkstein recommended using the term “delay” rather than “suspend.”Trustee Elkind noted that we have done redemptions for hardship “out of cycle” and questioned whether requests should be delayed as well out of fairness to the shareholders who had filed for redemption.Trustee Reynolds replied that we should continue to look at each hardship case on an individual basis, and unless there are extraordinary financial circumstances for the Co-op, we should honor those because the ones that have come in have been “pretty dire.”Trustee Hall clarified the book value of a share and made sure that by deferring the discussion, we’re not going to cost people a significant amount of money.Various members replied that the value is set as of the fiscal year and was just announced today($1451), so a delay would not penalize shareholders.Trustee Kalkstein agreed that it would be prudent to hold off until after the Christmas holiday, but would not advocate for waiting much longer than that.He stated that he did not want to see the Co-op return to the position of having many shares backlogged for redemption.Trustee Bruns requested that the FC get the profit and loss numbers from December before the Board meeting in January so that the FC could make a recommendation for that meeting.

 

Trustee Reynolds asked President Wimble if we could defer maintenance work on the I-beams under the office if we were to have a catastrophic season.President Wimble replied that we might have bought another year or two with the repairs that were already made.Trustee Reynolds asked if deferring that work would add to its cost; President Wimble said perhaps, but not by much given the state of the construction market right now.Trustee Hall asked if we shouldn’t defer until after Presidents’ Week because that’s so critical to our financial situation.Trustee Jondro reiterated his point and asked “even if we had a good Christmas week, would we still feel comfortable redeeming shares?Why not wait until March?”Trustee Kalkstein noted that we paid $80K in share redemptions and still had a break-even year last season.The only scenario where he could see us not redeeming shares would be if we lost Christmas week.Trustee Bruns noted that prior precedents exist for us to at least have redemptions as an agenda item so as to keep in the forefront of our mind the fact that shareholders are waiting for a decision.He pointed out that at some level, we are withholding money from someone when we don’t redeem a share.He reminded the Board that we can also always pay a few out, not all of them.Discussion then ensued about a potential backlog of shares to be redeemed if the current economic climate continues.It was noted by the Board that Section 9.6 of the By-Laws states that “redemption shall be made only after replacement capital is obtained from another owner.”

 

Motion

Made by

2nd by

Aye

Nay

To accept the recommendation of the Finance Committee to defer discussion of share redemptions until the January Board of Trustees meeting.

Trustee Kalkstein

Trustee Lesure

9

0

 

 

5:40 PM Committee Reports

 

The Executive Committee had nothing to report.

 

The Environmental Sustainability Sub-committee (ESS) report was delivered by Trustee Elkind (Chair).Attempts are being made to attract members to the committee.Discussion ensued about grant money availability for commercial projects.Trustee Bruns commended management’s decision to use metal utensils in the eating areas.President Wimble replied that the use of metal utensils instead of plastic would continue in the Basebox all season.

The Board Development Committee had nothing to report but will be aggressively seeking candidates once the season is in swing.They will be speaking with prior years’ candidates to encourage them to run again.Trustee Reynolds reiterated that Board members should try to recruit shareholders to run for the Board.

The FC met via conference call on December 7.Trustee Bruns thanked the twelve people who called into that meeting and noted that there has been good attendance at FC meetings.He also thanked “Dr. Doom” [shareholder and former Trustee Eric Schoenholz] for his help in preparing a presentation for the upcoming Town Hall Meeting on December 26.

 

5:48 PMNew Business

 

Trustee Hall is meeting with people regarding the financial sustainability issue.He met with President Wimble regarding this and will be asking all the Board members for their opinions regarding sustainability.He plans to use this information to determine if there is an issue and if there is, he will describe it in a way that all stakeholders can understand.

 

 

Trustee Godwin reported that the Columbia University Avery Library archives do not include the plans for the Basebox as hoped; she will be following up on a few other potential libraries.

 

Trustee Godwin, who will be unable to attend the Town Hall Meeting on the 26th, asked for someone to take minutes at that meeting; Trustee Elkind volunteered.

 

5:52 PMAdjourn

 

 

Motion

Made by

2nd by

Aye

Nay

To adjourn.

Trustee Jondro

Trustee Lesure

9

0

 

 

 

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