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Mad River Glen Cooperative

Board of Trustees Meeting

Minutes: Saturday, June 2nd, 2007

Draft: Pending Review

 

After due notice, a meeting of the Board of Trustees of the Mad River Glen Cooperative was convened at 8:09 a.m. on Saturday, June 2nd, 2007 on the third floor of the Basebox at Mad River Glen Ski Area (MRG) in Fayston, Vermont.

 

Trustees Jay Appleton, Paul Finnerty, Jed Kalkstein, Eric Schoenholz, Rick Moulton, Lars Bruns, Bill Reynolds (phone), and Geordie Hall (phone) were present.Steve Mackenzie was absent. Also present was President Jamey Wimble, Marketing Director Eric Friedman.Shareholders in attendance included Lu Putnam and Bill Heinzerling.

 

CALL TO ORDER

Jay Appleton, chair, called the meeting to order at 8:09 a.m.

 

REVIEW OF MINUTES

Regarding the draft March 3rd minutes, Eric Schoenholz moved to accept the minutes, Jed Kalkstein seconded. All trustees present approved the March 3rd minutes as-is, without changes.

 

Regarding the April 8th minutes, Jed Kalkstein moved to accept the minutes, Paul Finnerty seconded.All trustees present approved the March 3rd minutes as-is, without changes.

 

ELECTION RESULTS

Jay Appleton read the Board of Trustee election results from the April 7th vote into the record as follows:

 

In State:

Bill Reynolds – 460 (X)

Lars Bruns – 449 (X)

Robin “Rocky” Bleier - 315

 

Out of State:

Jed Kalkstein – 528 (X)

 

Management Report

Jamey Wimble reported that things on the mountain this summer are fairly quiet other than the Single work.He noted that Eric Friedman is working with other ski areas to create a promotion intended to increase college passes.Jamey Wimble mentioned that we have seen a decline in college passes that we want to address.Rick Moulton asked about teaming with Middlebury Snow Bowl. Jamey responded that our biggest gap in the college market is from the Burlington area which is where we want to target.

 

Jamey Wimble reported that share sales are doing really well.We had very aggressively planned for 150 shares to sell this year, and so far we are at 124 and going well.9 shares sold were sold in May at the new price of $2000.

 

Jamey Wimble reported that the Single project is progressing well; the helicopter will fly the towers down to the main lot on Tues. 6/5.Jamey Wimble recently had a meeting with CTEC that went very well.He reported lots of good progress and that the project is on schedule.Preparations are complete to fly the towers out and no problems with the towers were found.The helicopter is planned to return in August to help pour the new footings and to return the sandblasted and repainted towers into position.The current return station counterweight at the summit will be removed, and a new one fabricated.Regarding a recent change in plans, Jamey noted that the existing cable will not be reused due to difficulties and damage to the line as a result of the spooling process.Jamey Wimble asked for a 2nd inspection which confirmed the damage.CTEC will pick up 2/3 of the cost to install a new cable with the Coop’s share being$18k.This means we will not need to worry about new cable for 25-30 years.CTEC will allow us ~3 yrs to pay this additional cost.

 

The mountain crew has been busy, breaking up the drive components and repainting in the vault.The existing concrete in the vault looks good.

 

A question was asked regarding the power alternatives for the new drive.An additional primary drive diesel engine (if desired in the future) would be easy to bring in and hook up.The design of the new lift took this into account.This addition of a diesel primary engine would cost about $100k and would compliment the new electric drive.

 

Jamey continued his report and discussed a financial review of the numbers from April.Tickets sales look good due to the mad card breakage, and the expenses were kept low, too.At this time Jamey Wimble and Finance committee chair Eric Schoenholz continue to project that we will break even for the year.

 

Regarding the Single Chair Campaign:Through Stark Mountain Foundation and Preservation Trust of Vermont we currently have $486k in cash.Finance committee chair Eric Schoenholz noted that for the year the ending fiscal year cash position will be better than projected thanks to the increased share sales.

 

Regarding the saving of parts from the original single, Jamey mentioned that we will save both bull wheels and pulleys, in addition to the ring and pinion gear.These components are all set aside and will likely be temporarily located behind the maintenance shed until we determine what to do with them.Board Chair Jay Appleton, Jamey Wimble, and shareholder Jito Colemanhave formed an informal committee to determine how best to display these historically significant antique parts.Please provide input if you have ideas.

 

Rick Moulton asked about the opportunity to consider new paint colors for the lift base station (vault/crows nest) and requested a more traditional color other than the existing “summerhouse beige”.

 

Financial Report

Jamey Wimble and Finance committee chair Eric Schoenholz took questions from the board regarding the financial budget and projections provided.Jamey Wimble confirmed that change orders on the single project to date include the change from Trex to wood chair seat slats, the downhill capacity change, and new cable for the lift.

 

Lars Bruns inquired if the new lift value will help us from a depreciation perspective in years to come.Jed Kalkstein mentioned that it would, although our loss carry-over from prior years is over $1m from a tax perspective.It was noted that all campaign moneys raised as part of the campaign are taxable to the coop.(Even if they were tax-deductible to the donor.).

 

A question was asked about the standard or expected default rate on pledges from a fundraising perspective.Consultant Christine Graham had previously mentioned that there is very low default on pledges once someone makes a pledge.

 

Single Chair Campaign

Jamey Wimble reported that we are still getting good activity with the campaign, and we are closing in on $1.2M.The campaign doesn’t end until March 2008.We expect a large donation coming in through SMF for Tower 1. There are many chairs still available for donors to sponsor a chair and there are only 3 towers left, number 1 will likely go very soon.

 

Jamey Wimble reported that the booth at the Waitsfield Farmers market has started and is going well.Lars Bruns asked Board members to please volunteer if you are in town this summer on a Saturday or at least help out for a bit. George Hall echoed the request for volunteers.Many Sugarbush and “never-skied-Mad River Glen” skiers are getting good information regarding the mountain at the market.More volunteers are needed to help out on Saturdays through September, please contact Lars Bruns @ Lars@madriver.com .The Board thanked Lars for his leadership in proposing and managing the booth.

 

Green and Gold weekend will feature the lift opening an hour early for those who sponsored towers and chairs.These donors will have the opportunity to ride on the chairs that they sponsored.

 

There will be a temporary all-donor plaque at this year’s Green and Gold weekend, but it will not be final.Eric Friedman added that we are also planning on putting the donor list online to encourage donations and confirm the names are current and correct.This list will also be included in the 60th anniversary book.

 

BUDGET AND TICKET PRICING

Jamey Wimble presented the staff’s budget and pricing recommendation. Eric Schoenholz then presented the Finance committee recommendation which echoed the staff recommendation with no changes.

 

Jamey Wimble also reported that last year, we really went after expenses, cutting $40k out of the budget.Workman’s comp and general liability went down.The bad insurance rate effects from the 9/11/2001 attacks are finally beginning to settle out of the insurance market.There are also now 3 competitors in the market that helps reduce our costs.

 

George Hall noted that he observes a lot of former MRG people skiing at Sugarbush and wanted to discuss how we can bring back the locals.Eric Friedman mentioned that we are becoming more dependent on local patronage since the valley is not drawing more out of town/out of state skiers.A Vermonter’s pass and ticket are difficult for us to price because we do not want to give non-shareholders a better deal than our shareholders.

 

Discussion continued regarding expenses and savings.Lars Bruns asked how much of last year’s expense cuts/savings were continued in the proposed budget for next year.Jamey Wimble mentioned that carry-forward cuts include continued outsourcing of IT work, reduced marketing help and spend, and reduced spending on basebox bands.Paul Finnerty inquired about the possibility of reducing beer prices.Jay Appleton echoed Paul’s concern and encouraged keeping beer prices at a minimum.Lars Bruns inquired about the Triple Crown and encouraged its return next season.

 

Shareholder Lu Putnam mentioned that she would be disappointed if we didn’t do the Triple Crown as it gets good press out west.Lu also mentioned that we should consider adding more social activities during the holiday week if/when we have good snow.She also inquired about extending the bar hours and noted that our closing procedures should be looked at.

 

Finance committee chair Eric Schoenholz, reiterated that the Finance committee fully supported management’s proposal for the 2007-2008 budget and pricing.Eric Schoenholz also mentioned an interest from the Finance committee to look at our vision and strategic plan in relation to marketing aspects and pricing strategy given the competition.What is our environment?Who are our competitors?What is the currently pricing and strategies against the competition?

Eric Friedman mentioned that he supported looking at this in conjunction with the strategic plan this fall.He encouraged more input and discussion from the strategic plan to better provide him with marketing direction.Eric Friedman also suggested getting some outside perspective from other skiers outside of our community….as well as examining data from the National Ski Areas Association and Vermont Ski Area Association.

 

Rick Moulton expressed concern on customer retention given last year’s season.Eric Friedman stated that he wants more direction from the strategic plan.Jay Appleton noted the Board’s interest in this year’s strategic planning initiative and noted both the Finance committee and the Board’s desire for more information/perspective on competition before this year’s strategic planning discussion.

 

Upon motion duly made by Jed Kalkstein and seconded by Rick Moulton it was unanimously:

 

 

Voted: That the Board approve the staff and Finance committee recommendation for 2007-2008 budget and pricing.

 

 

Following the vote, Paul Finnerty thanked the management and the Finance Committee for preparing the data and providing their rationale behind the recommendation.

 

Share Redemption Suspension discussion

Finance Committee Chair Eric Schoenholz recommended continuing the share redemption suspension per the recommendation of the Finance Committee.The rationale was that redeeming shares would cause capital to either be taken from the bank or from the incoming share sales when it is required to fund the Single chair project.Discussion was also had regarding cooperative bylaw section 9.6 regarding share redemption pricing and the requirement of the coop to pay the lesser of the net value of the ski area per share or the cost of the share.Eric Schoenholz noted that to pay for share redemption would eventuallyrequire additional financing which was not recommended.

 

Shareholder Lu Putnam asked about further clarification on the shareholder redemption figure.Jay explained that the bylaws in section 9.6 (Redemption) regarding the amount that the redeeming shareholder should receive is to be either the net value of the ski area per share or the face value of the share whichever is lesser.Our recent bad ski seasons have impacted our Balance Sheet, lessening the net value of the ski area and the value per share.The Single chair and campaign will likely dramatically improve the net value per share next year.

 

Jed Kalkstein mentioned he was concerned about public relations in regards to the currently low net value per share.Jed Kalkstein recommended continued suspension of share redemption until after the single project is paid off and net asset value of the coop is increased.

 

Bill Reynolds felt that our first priority is maintaining the financial health of the mountain and encouraged following the finance committee recommendation to continue the redemption suspension.

 

No action was taken by the Board to change the existing suspension of share redemption.In September the Board will again revisit shareholder redemption suspension.

 

Discussion regarding future Board meetings ensued.The next Board meeting will be on July 14th.George Hall would like the Board to begin conversation on examining the shareholder redemption clause in Section 9.6.Jay Appleton mentioned that the other part of the July meeting will include other coop business and a discussion of the APR as stated in the bylaws.

 

Paul Finnerty mentioned wanting to discuss consideration of an APR mailing insert for this summer.Paul Finnerty was interested in considering adding a voluntary form in the mailing to solicit shareholder contributions to an employee fund for staff appreciation.Jamey Wimble mentioned that a bonus program is in place.Jay Appleton mentioned that he will look at the agendas for future Board meetings to discuss.No action was taken.

 

Shareholder Lu Putnam asked again about the Triple Crown – regarding marketing expense and supported the contest.Lu felt it brings in people and good mountain interest.

 

Eric Schoenholz reminded all in attendance about the importance of keeping pricing and competitive discussions private and confidential until announced.

 

COMMITTEE REPORTS

The exec committee did not meet.Finance committee provided recommendation earlier re: budget/pricing.No other committee met or reported.

 

EXECUTIVE SESSION

The Board met in executive session from approximately 11-11:30am.

 

NEXT MEETING

Upon review of the calendar, it was determined that the next meeting of the Board will be on Saturday, July 14th at 8am on the third floor of the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston, Vermont.

 

ADJOURNMENT

Rick Moulton motioned to end the meeting, which was seconded by Paul Finnerty.All approved.The meeting was adjourned @ 11:37am.

 

Respectfully submitted, Lars Bruns

 

A true record.

 

Attest:

 

_________________________________

Lars Bruns, Secretary

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