After due notice, a meeting of the board of trustees of Mad River Glen Cooperative was convened at 8:10 a.m. on June 29, 2001, at the Basebox at Mad River Glen Ski Area in Fayston, Vermont. Trustees Bleier, Coleman, Eaton, Kirkpatrick, Michl, Putnam, Russell, Schultz, and Steines were present (comprising the entire board of trustees). The Cooperative's president, Mr. Russell, presided. The minutes were kept by the secretary, Mr. Bleier, with assistance from corporate counsel, Peter Monte.
The trustees thanked owner Heinzerling for a detailed letter commenting on suggested changes to the proposed maintenance building. Mr. Heinzerling's letter was referred to the facilities committee.
Owner Gamal Buhaina inquired what process the trustees followed to implement specific building projects. The chair responded that the facilities committee performs an information-gathering task and then reports its findings to the board of trustees. The trustees then recommend specific action to management. Mr. Coleman added that the trustees cannot be involved in every detail of daily operations and should dedicate the board's limited resources and time to strategic planning issues.
Owner Heeter opined that shareholder issues are a responsibility of the board of trustees. She suggested that it should have required a two thirds vote of shareholders to ban a shareholder from attending trustees meetings. The president stated that it would require a by law change to implement her suggestion.
Shareholder Guida stated that he was upset by the board of trustees= recent barring of a shareholder from attending trustees meetings. He stated that this exclusion seemed too severe and he requested an explanation. Trustee Kirkpatrick stated that the board did not wish to bury the issue but it cannot spend the whole day's meeting time debating the pros and cons of a judgment already made. She suggested that the Cooperative's legal counsel should prepare a memorandum explaining action for the trustees to approve and circulate. The trustees concurred in this suggestion.
Minutes of Past Meetings:
After discussion and upon motion duly made and seconded, it was unanimously (Kirkpatrick and Steines abstaining).
VOTED: To approve as amended the minutes of the May 12, 2001, meeting of the board of trustees.
General Manager's Report:
Mr. Ackland, the general manager, orally amended the report to state that ten shares of the Cooperative were sold during June. Total share sales for the fiscal year to date are 68 (compared to the budget of 66 shares).
After discussion and upon motion duly made by Ms. Kirkpatrick and seconded by Mr. Eaton it was unanimously
VOTED: To accept the general manager's report.
The general manager's report includes a summary of the Cooperative's current financial statements.
Financial results of operations for last month and for the fiscal year to date may be summarized:
Period Income Expense Profit (Loss) May 2001 $ 2,280 $ 80,990 $ (78,700) YTD $ 2,220,156 $ 632,236 $ 499,165
Cash on hand: May 30, 2001: $424,246
After discussion and upon motion duly made by Mr. Michl and seconded by Ms. Steines it was unanimously
VOTED: To accept the general manager's financial report.
The general manager circulated two proposed budgets denoted respectively as "1.0" and "1.1". Budget 1.0 calls for higher expenditures than budget 1.1.
Both budgets are "zero based" for expense, that is, each budget compilation was predicated on an initial determination of the amount of expense which would be required to support a level of service which the budget assumes. Both budgets are based on an assumption that the budgeted expenditures would generate revenues sufficient to cover those expenses. Both budgets assume that management will strive to reduce budgeted expenses to maximize net income if a poor ski season reduces the demand for services.
difference between the budgets is that budget 1.0 reflects substantial wage increases. These increases reflect management's efforts to identify underpaid positions and to increase compensation for those provisions to the market and a liveable wage. Budget 1.1 eliminates the "liveable wage" component of budget 1.0.
Budget 1.1 results in a 5% increase in overall expenditures from last year's budget. $46,000 of this increase is non-controllable expenditures (for example, increases in fuel cost, taxes and insurance). In addition, budget 1.1 includes $32,000 of increase for "accuracy items" i.e. an increase in this year's budget to reflect actual expenditures for identified budget items last year which had not been included in last year's budget but are expected to continue into the future.
Budget 1.0 includes reflection of the increase in the non-controllable expenses and in the accuracy items described above.
The general manager stated that his objection to budget 1.1 is that its savings are primarily attained by reducing levels of staffing. The general manager observed that it may be difficult to increase staff in mid season to meet the heavy demands of a good skiing season. It will be particularly difficult in mid season to hire staff for the Basebox and lifts. Adoption of budget 1.1 will also compel management to hire fewer foreign students at the beginning of the season and it will not be possible to obtain additional foreign students in the middle of the year.
Accordingly, the general manager recommends that the trustees adopt Budget 1.0 to enable management to plan and hire at levels adequate to meet demand if the weather produces a good skiing year. He emphasized, however, that management would remain vigilant and reduce staffing and other expenditures if snow does not materialize.
Mr. Michl observed that budget 1.0 assumes revenues in excess of $2,000,000, a figure which is higher than the historic average of Cooperative revenues. The general manager responded that the assumption underlying budget 1.0 was full operations which should generate full revenues. In addition, the general manager intends to continue efforts to increase skier yields and to reduce discounts.
Mr. Bleier inquired whether the general manager considers cross training of employees to allow the Cooperative to retain staff during slow business periods by re-assigning people to other jobs (for example by assigning a lift operator to trail maintenance when skier traffic is low). The general manager stated that cross training has always been a primary management objective, but the reality is that if the lifts do not turn, the lift operators must be laid off because there is no revenue to pay them.
Mr. Schultz asked the general manager to rank the "improvements" in service which budget 1.0 would create above those in budget l.1. The general manager ranked the improvements as follows:
1. Greater number of days of lift turning.
2. Implementation of liveable wage for employees.
3. Daytime janitor for the Basebox.
Mr. Michl inquired what risks were inherent in the revenue assumption of the proposed budgets. The general manager replied that at root, this is an issue of strategic planning for the trustees to decide after consultation with the shareholders. The fundamental choice facing the Cooperative is between higher levels of service, on the one hand, and lower prices on the other. Staff can manage the Cooperative to produce either outcome, whichever is directed to staff by the shareholders and by the trustees and shareholders.
After discussion and upon motion duly made by Ms. Steines and seconded by Mr. Michl, it was unanimously
VOTED: To approve budget 1.0 presented by the general manager to assure adequate provision of resources (especially staffing) to serve high consumer demands; but to direct management to reduce expenditures if projected revenues are not realized to produce an operating profit of $166,000 or more at year's end.
Finance Committee. Ms. Steines presented the report of the finance committee. A copy of her report is appended to the minutes of this meeting. Voting members of the finance committee now are: trustees Steines (chair) and Michl and shareholders Eric Schoenholz and Roy Liu.
Facilities Committee. Mr. Coleman presented a report of the facilities committee. A copy of the facilities committee report is appended to the minutes of the trustees meeting. Voting members of the facilities committee now are trustees Coleman (chair) and Bleier, and shareholders DeMarne, Brancohofsky, Heinzerling, Fiorenza.
Mr. Coleman summarized the observations and discussions of the facilities committee during their May walk-through of the existing and planned maintenance facilities for equipment. He also informed the trustees that the facilities committee continues its work on a master plan. A map of the existing base area structures is completed and an inventory of all structures at the ski area is underway. The committee will meet again on August 7 at 7:00 p.m. to begin its discussion of guidelines for facilities including maintenance and upkeep standards for the board to consider and direct to management.
The trustees inquired whether there was a conflict of interest between Mr. Coleman serving as a trustee and member of the facilities committee of the Cooperative, while he is also an officer of Northern Power Company (which may be a vender of diesel noise muffling and heat exchange equipment). Mr. Coleman stated that he strives to separate the roles. Potential business with the Cooperative is a very minor part of Northern Power's overall revenues. He will submit any sales proposals to management in the same manner as other bidders and will expect staff to evaluate the bid dispassionately. Mr. Coleman will abstain from involvement as a trustee in any consideration of Northern Power=s proposals as a vendor. The trustees accepted Mr. Coleman's proposals.
Shareholder Communications Committee. Mr. Bleier presented the report of the shareholder communications committee. Voting members of the shareholder communications committee are trustees Bleier (chair) and Putnam, and shareholders .
Mr. Bleier informed the trustees that the committee is still in the process of tabulating responses to the recent customer satisfaction survey. He summarized some of the noteworthy tabulations which have been completed:
- 505 replies have been received. The average age of responders is 38. The ratio of males: female responses is 3:1.
- 53% of respondents are pass holders. 76 of the 505 responders hold passes at other ski areas too.
- 89% of responders are alpine skiers, 27% are telemark skiers, 8% are snowboarders.
- 277 responders rank themselves "expert", 173 were advanced and 56 were intermediate.
- The top three rated items [on a scale of 1 to 5] for customer satisfaction were:
- 4.8 - terrain
- 4.7 - overall value for money spent
- 4.6 - ski patrol
- Bottom three rated items were:
- 3.5 - Birdcage
- 3.6 - Cleanliness
- 3.6 - Owner ability to communicate to management
- 75% of responders believe that the level of grooming was "just right"
- 64% of responders preferred a limitation of ticket sales on powder days to avoid overcrowding; 27% preferred a premium cost for tickets on powder days
Mr. Bleier summarized the survey by observing that overall there is a high level of customer satisfaction. Mr. Schultz observed that mathematically 3.0 is the middle of a 1 to 5 scale (not 2.5). Owner Diko observed that management should seek to improve any item ranked below 4.
Mr. Bleier informed the trustees that the shareholder communications committee has voted to make the following recommendations to the board of trustees:
- That the board of trustees merge the shareholder relations committee and shareholder communications committee into a single committee.
- That the board of trustees enhance vehicles for shareholder communication as follows:
- Suggestion Box: Establish a process for the shareholder communications committee to review suggestion box submissions and to report the results of their review to management and the trustees.
- Bulletin Board: Increase visibility of the bulletin board and scrupulously display notice of all planned events.
- The shareholder relations committee be designated as the formal conduit for shareholder communication to the board of trustees.
- List Server: Do not censure postings but publish rules of civil discourse.
- Chute: Make available a column in each publication for a message from the shareholder communication committee.
- Shareholder Liaison: This position should be staffed by a shareholder who is not an employee.
After discussion and upon motion duly made by Mr. Bleier and seconded by Ms. Kirkpatrick, it was unanimously
VOTED: To merge the shareholder relations committee and the shareholder communications committee into a single committee to be known as the shareholder relations committee.
Mr. Bleier, seconded by Ms. Putnam made the following:
MOTION: To assign to the shareholder relations committee the initial review of suggestion box contents for the committee to refer to management and the trustees for action.
Mr. Coleman spoke in opposition to the motion. He prefers the existing arrangement where management makes the initial review of suggestions and regularly provides the trustees with a written summary of suggestion box comments. He observed that the present system allows management to take immediate action where appropriate, while in contrast, the process suggested by the motion would interpose a delay before management learns about suggestions.
Mr. Russell also spoke in favor of the existing process where management conducts the initial review but suggested the existing process could be improved by more frequent summaries to the board of trustees.
The question was called on motion made by Mr. Eaton, seconded by Ms. Kirkpatrick and adopted by the board on a vote of 7 to 2 (Mr. Bleier and Mr. Schultz voting in opposition).
The motion was defeated, 2 in favor (Mr. Bleier and Putnam), 6 opposed (Coleman, Eaton, Kirkpatrick, Michl, Russell and Steines), 1 abstention (Schultz).
After further discussion, and upon motion duly made by Mr. Coleman and seconded by Mr. Bleier, it was
VOTED: To direct management to gather and to review the contents of the suggestion box and to compile and submit monthly to the shareholder relations committee a list of suggestion box comments.
Voting: In favor: Bleier, Coleman, Eaton, Kirkpatrick, Michl, Putnam and Russell Abstaining: Schultz
Mr. Bleier moved that the shareholder liaison position should not be held by an employee. The motion failed for lack of a second.
Board Development Committee: Mr. Russell reported for the board development committee. The committee is preparing a written conflict of interest policy. The committee has produced a bound volume containing the Cooperative's articles of incorporation, by laws, and all adopted board policies. The committee met last week with a professional facilitator to discuss methods and rules to promote harmony and efficiency and to avoid destructive strife in interactions between and among members of the board of trustees, shareholders and staff. The trustees met with leaders from other cooperative organizations and learned that the resolution of these conflicts is part of the growing pains those cooperatives had experienced. The board development committee and the board of trustees will continue these efforts.
After discussion and upon motion duly made by Ms. Kirkpatrick and seconded by Mr. Russell in was unanimously
VOTED: To assign to the shareholder relations committee the task of drafting a shareholder code of conduct and to submit a preliminary draft of the report to the full board at least ten days before the September meeting.
After further discussion and upon motion duly made by Ms. Kirkpatrick and seconded by Mr. Michl it was unanimously
VOTED: To authorize the executive committee to hire a facilitator to assist the board of trustees to develop a strategic plan.
Because of the late hour, the board voted to table new business.
The board voted to enter executive session at 11:45 a.m. to discuss personnel matters. The general manager, assistant general manager and legal counsel were invited to attend the executive session. The board voted to resume open session at 1:40 p.m.
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 1:45 p.m.
A true record.
ATTEST: ___________________________________________ Robin Bleier, Secretary
ATTACHMENTS TO THESE MINUTES:
- General Manager's Report
- Proposed Budget 1.0
- Proposed Budget 1.1
- Finance Committee Report
- Facilities Committee Report