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Board of Trustees Meeting; June 7, 2008

Board of Trustees Meeting

Minutes –Saturday, June 7th, 2008

 

After due notice, a meeting of the Board of Trustees of the Mad River Glen Cooperative was convened at 8:00 a.m. on Saturday, June 7th, 2008 in the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston, Vermont.

 

Trustees Jay Appleton, Lars Bruns (Vice-Chair), Paul Finnerty, Liz Godwin (Secretary), Geordie Hall (dep. 10:26), Betsy Jondro (dep 12:40), Jed Kalkstein (arr. 8:08), Bill Reynolds (Chair), Eric Schoenholz (Treasurer) were present.Also present were President Jamey Wimble, Marketing Director Eric Friedman, and approximately ten shareholders

 

Call to Order:

 

Trustee Reynolds called the meeting to order at 8:06 a.m.

 

 

Commendations:

 

Trustee Reynolds opened the meeting by thanking Trustee Appleton for his prior service as Board Chair.He also commended President Wimble and staff for their hard work during last season.

 

Approval of Minutes of March 3, 2008 and April 6, 2008 (Action):

 

Motion

Made by

2nd by

Aye

Nay

Approve minutes of March 3, 2008, and April 6, 2008

Trustee Hall

Trustee Jondro

8

0

 

 

Shareholder Comments

 

Shareholder Penny Parsons spoke on behalf of Stark Mountain Foundation (SMF) encouraging the Board and mountain management to do anything possible to combat climate change, including education of shareholders.

 

Shareholder Chris Havilland reiterated the content of his email to the Board regarding lift lines and ticket prices, and expressed his desire to hear what people thought with respect to whether the lift line issue needs to be addressed.Mr. Havilland thinks that the cap on ticket sales is ineffective at current set point.

 

 

Management Report

 

President Wimble summarized the management report (see attached).

 

Board Q&A:

Trustee Reynolds asked when online retail is expected to be up and running; President Wimble responded that the plans are to start next week and have it operational before the end of FY ’08.

Trustee Hall clarified that every aspect of operations is included in the carbon footprint calculations.

Shareholder S. Kalkstein inquired as to how out-of-state skiers’ commutes are calculated, to which Marketing Director Friedman replied an analysis was done of our database of out-of-state shareholders and an average was computed.

Trustee Hall clarified that we are indeed using Native Energy as part of the carbon offset program (money stays in Vermont).

President Wimble commented that at an industry conference, he found that we are “out in front by about one and a half years” in terms of “greenwashing.”

Trustee Hall commended Stark Mountain Foundation & management for their proactively implementing the carbon neutral initiative and clarified that donor plaques will be fixed on chairs.

Trustee Finnerty inquired as to where share sales are in terms of goals; President Wimble advised that we have sold 31 with a goal of 40 for FY ’08.

Trustee Hall inquired as to annual savings once double bond is paid off.President Wimble advised that we will save $8K/yr.

 

Financial Report

 

President Wimble asked for questions on the financial report.

 

Clarifications:

 

We have worked with PTV and our auditors to adjust payments to better plan and manage financial implications to the cooperative..

 

We are looking to amend grant amount from PTV from current $1.648M to $1.85M.The remainder would go into a maintenance fund.We are trying to cover costs up front and avoid using a maintenance fund.PTV seems amenable to this arrangement, which would enable us, not PTV, to control the funds.

 

Single Chair Campaign Update (Action)

 

Trustee Hall noted that we’re over the goal by about $20K.Seventeen chairs still need sponsorship.Approximately 45% of shareholders have donated.We would like to increase this, but no more massive efforts will be expended.

Shareholder Deb Steines’ survey indicated that three shareholders wanted their tower plaques moved.

Shareholder S. Kalkstein asked if those people have been informed that they are in a minority; Trustee Hall informed him that a detailed discussion did occur with said shareholders.

Trustee Finnerty inquired as to what would prohibit chair sponsors from asking for chair plaques to be moved as well if we were to approve Trustee Hall’s motion; Trustee Hall stated that they certainly could but the Board would then need to discuss it.

Trustee Reynolds asked if there has been talk of outreach to increase participation, to which President Wimble & Trustee Hall replied that the number of people who have donated is actually greater than the number of people who voted yes on the single restoration.

Trustee Hall reminded those assembled that the midstation and base are still available for naming @$100K and $250K, respectively.

Trustee Appleton asked what the status was of the Single Chair Campaign Committee (SCCC) and whether it should continue to exist.

Trustee Hall recommended “winding down” the leadership gifts committee but letting SCCC continue for a while.

 

The Stark Mountain Foundation may not have a Gala this year due to the MRG 60th anniversary celebration instead.Stark Mountain Foundation would like to dovetail in with that and do fundraising in some way.

 

Motion

Made by

2nd by

Aye

Nay

Move to modify Gift Acknowledgement Policy to read as below.

 

To the current policy:

<![if !supportLists]>·        <![endif]>All plaques on towers, the mid-station and base station will be placed with modest conspicuousness, in keeping with the culture of Mad River Glen.Plaques, with the exception of the all donor plaque, will be no more than 4”x 6”.In the case of towers, plaques will be attached to the lower portion of the tower base in a location that is visible by skiers or hikers at ground level, rather than those riding on the Single Chair.The appearance of the signs (materials, colors, font style, etc.) will be consistent and will be based on a design approved by the Co-op President.

 

Add the following verbiage:

 

<![if !supportLists]>·        <![endif]>Tower Donors will be given the choice of placing plaques in one of two places:

<![if !supportLists]>1)      <![endif]>Leaving the current placement facing uphill readable only by hikers and skiers as specified above

<![if !supportLists]>2)      <![endif]>On the right side of the tower (the side next to the uphill chairs) so that it is readable by a passenger in a chair. Due to the construction of the towers e.g. the placement of the joining plates and the fact that the diagonal bars are not at 45 degrees and vary in position relative to chair height, these plaques will vary slightly in their height relative to a chair. That is, they may be slightly above or below safety bar level but in all cases, will be readable by someone in a chair. Every effort will be made to keep the plaques above safety bar level optimally 12” above the bar.

 

<![if !supportLists]>·        <![endif]>Final determination of the plaque placement according to the above guidelines is the sole responsibility of the General Manager.

 

Trustee Hall

Trustee Jondro

9

0

 

Capital Plan (Action)

 

At the March meeting, Tier I was approved which would entail spending about $95K.

President Wimble requested to go to Tier II in part and change Tier I to reflect a change in price of Basebox basement renovations from $20K to $56K and a change in price of a new Hedco snow gun from $20K to $5K to do a rebuild instead.The proposed increase in spending is from approximately $95K to $114.8K.

 

Trustee Hall asked if management had looked into getting more lockers.President Wimble noted that they are very expensive; he met a company representative that would do all installation and would take some of profit.

Trustee Kalkstein asked how much we currently make on lockers downstairs; President Wimble responded that we are stuck at fifty cents whereas most places charge two dollars.

Trustee Hall asked how many get used; Marketing Director Friedman stated that on a busy weekend they are all in use.President Wimble is looking to move the vending machine and put in shelves to accommodate backpacks and bags.Trustee Hall recommends pegs as well.

 

Trustee Reynolds asked about the seat pads for Lift 2; he thought more pressing needs existed (e.g. roofs, Stark’s Nest, etc.).President Wimble noted that we can’t really do much roof work given the budgetary constraints; seat pads have been noticed by many and it would be good customer service to replace them.

Trustee Hall clarified what the “edger” is – it’s a ski tuning machine.

Trustee Jondro asked if we could we add a snack bar to the line on busy days.President Wimble replied that it would be labor-intensive and we’re often short of people by five.Trustee Jondro suggested possible use of volunteers for that purpose.

President Wimble would like to put in a contingency for a third tiller; the one we have now works, but Pete fears it could come apart.We could get a rebuilt one for $7.5K if ours breaks down.One of the next capital items is to look at the snowcats.The bonus would be having a backup tiller.Last year we got new tiller barrels; this would be a new tiller.

Trustee Hall clarified that total increase for capital expenditures is $37.7K.The total would be $125K plus $7.5K contingency.

Trustee Kalkstein asked what the $50K entails for renovations.President Wimble replied that it was mostly flooring – it’s very expensive to put in safe flooring for ski boots that can be cleaned easily – we’re looking at a rubberized material but that increases the cost greatly.Concrete would present a slip hazard.

Trustee Bruns confirmed that the new bathrooms would be more aesthetically appealing.

 

Motion

Made by

2nd by

Aye

Nay

To approve President Wimble’s request to do all adjusted tier I and priority 1&2 in tier 2 for total of $125K plus $7.5K tiller contingency

Trustee Hall

Trustee Godwin

9

0

 

 

Budget and Ticket Pricing (Action)

 

President Wimble proposed the following for 2008-2009:

<![if !supportLists]>·        <![endif]>changing mid-week ticket price from $35 to $39

<![if !supportLists]>·        <![endif]>changing weekend ticket price from $54 to $60

<![if !supportLists]>·        <![endif]>changing holiday price from $56 to $64

<![if !supportLists]>·        <![endif]>instituting a Family Mad Card (FMC) at $179 (instead of $129) if the purchaser wants the free kids’ pass

<![if !supportLists]>·        <![endif]>increasing Mad Card (MC) price by $10 to $129

<![if !supportLists]>·        <![endif]>shareholder ticket prices would be at a 15% discount

 

In 2007, we saw an increase in visits but lost revenue.Ancillary departments increased revenue by a good deal and there was a 5% increase across the board for passes.Going to “one MC purchase per child” was considered to be too large a change from the previous policy.

Trustee Finnerty asked how many MC purchasers buy it just for the free pass.President Wimble said that the estimate is approximately 940 but 750 was chosen as a conservative number to do the ticketing model.

Trustee Hall inquired about breakage; Marketing Director Friedman thought there was none; President Wimble thought there was some.President Wimble noted that this program has been successful; we can look at the attrition rate and see if there is elasticity in price.

Trustee Appleton asked if subsequent MC purchases go to a lower rate?(Yes)

Trustee Godwin asked if we could keep the shareholder version of Family MC at $109. Marketing Director Friedman clarified that shareholders’ kids under12 ski for free merely for purchasing something and paying APR on time.

The Board expressed that shareholders don’t know that and that we need to publicize that more.

Shareholder S. Kalkstein asked what happened to “kids under 12 ski free?”Answer:that is still available for shareholders, FMC purchasers, and any adult season pass purchaser, as long as they are registered by Oct. 15.

 

Our new prices are still below 50th percentile compared to last year prices at other areas.

 

Shareholder purchases constitute:

70% of midweek day tickets

35% of MC’s

65% of season passes

 

Trustee Hall asked if there was any limit to how much we could discount for shareholders?Trustee Finnerty noted that because we’re acooperative, there is a legal limit.President Wimble noted that there is nothing in the bylaws; latti Lucian (sp?) one of original Co-op people (wrote by-laws) recommended a discount around 10% - not too big.Another shareholder pointed out that there is “no magic number;” some non-profits discount 50%.Trustee Appleton stated that food co-ops get a very small discount.

 

President Wimble noted that$40K in shareholder discounts on tickets and passes was lost and he doesn’t recommend a deeper discount.Shares get paid back rather quickly for a family of four.

Marketing Director Friedman said that people do ask “what do I get?” when they buy shares, but it’s not the main reason they buy.

Trustee Hall wanted to know if we ask why people redeem shares.Marketing Director Friedman answered that the main reasons are divorces, bankruptcy, life changes.

Trustee Jondro noted that she sees the opportunity to grant bigger discounts or have special deals for shareholders once we’re off and running.

 

President Wimble reminded the Board that competitors are doing things to attract skiers; our hands are sometimes tied with respect to these things due to our needing to be aware that shareholders have to get the best deal.

 

Question:can we increase weekend prices even more?

Trustee Bruns said that the Finance Committee discussed it but noted that making it more expensive can increase frustration of people on line.President Wimble said that American Express (AmEx) gives feedback on customers; 35% of our AmEx-using customers have income under $50K (this represents less than 30% of total credit card users).The Mad Card was the only way some people could afford to ski at all!

 

Trustee Kalkstein stated that we can give discounts when appropriate on bad weather days; he thought we were being too cautious with day ticket pricing.We have a huge increase in costs; people are expecting price increases across the board.

Trustee Hall noted that families are cutting back on driving; they’ll be hard-pressed to decide to come if our prices are too high.

Trustee Jondro said that an 11-14% increase on day passes is going to affect people with less disposable income; we need to be cautious about that.

President Wimble didn’t like the idea of turning away someone who’s driven six hours because we hit a ticket cap.

Trustee Jondro was very concerned about good will when we’re very crowded.

Trustee Hall stated that there are a lot of variables besides good snow that go into whether we have crowds or not.We need the data first.

Trustee Kalkstein reiterated that we need to study factors in great detail if we’re going to try to establish a low price/cap, but that a better strategy was to start with a higher cap and incrementally move it downward until we reach the point of comfort.

Discussion ensued of Trustee Schoenholz’s proposal:set a meaningful limit on number of people on the mountain (we lack the data on this right now) – shareholders and season pass holders can ski any day; all others are subject to the limit.Allow reservations to be made for people who pay in advance, at a premium.Guarantees higher quality experience for those who come.It’s not just liftlines that affects quality; it’s parking, Basebox, staff burden, etc.

 

Current day ticket limit is 1200

 

Trustee Kalkstein stated that we don’t have the money to fund RFIDs and scanners and such, that it was undesirable from a ski experience perspective, and that the additional information we’d get from such a system is minimal.

President Wimble noted that Marketing Director Friedman went out four times to measure lines – they were almost always about 40% passholders.

 

The question is, what is an acceptable line when you pay a premium to reserve a ticket?

 

President Wimble believed that we need to be around 700 paid tickets to be at acceptable for someone paying a premium; in the ski industry, that is a big deal.

Trustee Godwin wondered why we should even charge a premium.President Wimble responds that we would need to make up the revenue lost due to capping sales

Trustee Kalkstein said that we don’t have to decide today, but it’s good to start the conversation.

Trustee Jondro said that we don’t have to decide on reservation system until later; could set ticket prices today and set up the system later.She proposes a subcommittee to discuss this.

Trustee Appleton noted that yes, we have a data problem.He’s noted that the number of day skiers could be 900 with a big line, but other days 900 with a more reasonable line.Weather, other factors are in there as well.Weather is such a difficult variable to constrain that he understands the reluctance to make big price increases and have a horrible year.

Trustee Bruns suggested discussing in a smaller group about liftlines and data gathering.

Trustee Schoenholz: asked for present shareholders’ and individual Board members’ input on what would be a reasonable liftline at current price; answers included:

1h, 30 min, 20 min, 30 min, 20 min, 45 min, 20 min

 

Shareholder Betsy Pratt asked how much money was made on the Triple Major Pass (TMP)?Answer:There was more revenue on that than our own college pass issued in prior years.Total was $62-63K.Marketing Director Friedman said that 5% of all passes were college students; mid-week is when most of them utilized the pass.President Wimble noted that there was a noticeable bump when colleges were on break in January.

Marketing Director Friedman pointed out the long-term value of the TMP – some of our best customers were Vermont college students at one point.

Shareholder Pratt said she would rather see a cheap mid-week pass with no weekends.

 

Trustee Hall stated that the Board has given Management latitude to discount as necessary.

President Wimble said that when we had one ticket price, we had a bunch of deals for those who were proactive.Trustee Hall recalled that the yield on a day ticket is only $35.

Trustee Finnerty pointed out that this was his sixth time on this topic as trustee and that pricing is more art than science.Every year, we say we need more data.He thinks quality of our data is not sufficient e.g. how many MC purchasers have <12 passes.He said this should be readily known yet we don’t know and should commit to a plan to generate data over next year.

President Wimble said that we uncoupled mid-week and weekend ticket prices due to a drop in revenue during that time frame.

Trustee Bruns noted that the Board is listening and discussing and paying attention to shareholder input and that input is appreciated.The topic at hand is of interest this year due to our good snow year.The Strategic Planning Committee (SPC) and Finance Committee (FC) have discussed it, as has the Board.He noted that small changes can have very significant impacts.We have a current customer experience that some believe is not optimal, and a future more optimal state.We don’t know what changes are required to achieve that state.Trustee Bruns reiterated the need to spend time specifically dedicated to this type of discussion so we can determine the degree and types of changes needed to effect a better customer experience.

Question: Can we spend “board development” money to get data the board wants?

 

10:04 five min recess (Chair Reynolds)

10:14 return to meeting

 

Attempts were made to set September meeting date; Board decided to do so online.

Trustee Godwin volunteered to put together data-gathering proposal for next meeting and reiterated that we could make use of shareholder volunteers for gathering said data.

This topic falls under SPCpurview.

Trustee Appleton was ready to vote for recommendations of the FC and staff on pricing.

Trustee Schoenholz said that there are two basic scenarios:worst-case – just enough snow to open but not selling tickets; best-case scenario – he’s asked President Wimble to put together a plan for those (not full budget) for the fall meeting.President Wimble said he will include cash flow with those.

President Wimble noted that we’ve eliminated some discounts, and are using a 12-yr. avg. for skier visits.We have a $40K contingency for fossil fuel problems.

Question:Is MRG resistant to recessions and gas shortages?We don’t have records from the 70’s; President Wimble will ask Ken Quackenbush about that.

Trustee Schoenholz noted that the line item for facilities is down. President Wimble said that’s due to an extra month of operation last year due to good snow.

Trustee Kalkstein wanted giveaways and comps tracked with respect to what would revenue have been w/out comps.Trustee Schoenholz noted that there were $120K in day ticket comps this season.

 

Shareholder S. Kalkstein commended Trustee Bruns & Trustee Finnerty for bringing up the lack of data.He proposed use of a bar code to track skier usage and recommended communicating to shareholders that technology would enable action with respect to liftlines.

 

Trustee Jondro recommended approaching Middlebury College or UVM marketing departments for students to help with data collection.

 

Motion

Made by

2nd by

Aye

Nay

To adopt the 2008-2009 budget and ticket pricing as proposed by staff and rec. by FC

Trustee Appleton

Trustee Kalkstein

9

(Trustee Hall by proxy)

0

 

 

Share Redemption Suspension (Action)

 

Trustee Schoenholz stated that the Finance Committee (FC) had looked at the situation and cash on hand and recommended ending the suspension of redemptions (with the caveat that the schedule of redemptions be at management’s discretion, but preferably done by the end of FY 07-08).

Trustee Finnerty inquired as to where replacement capital is coming from; Trustee Schoenholz replied that it was from shares sold.

President Wimble said that debt being carried will be cut by over 50% next year, which will help with capital as well.

 

Motion

Made by

2nd by

Aye

Nay

To lift the suspension on share redemptions and to resume redemptions according to the redemption policy.

Trustee Appleton

Trustee Bruns

9

(Trustees Hall, Kalkstein by proxy)

0

 

 

National Historic Register (Action)

 

President Wimble has been in contact with National Historic Register (NHR) as to whether the $4000 grant is still available to write a nomination for NHR.We had held off because we didn’t want to affect the Single Chair Capital Campaign (SCCC).

President Wimble doesn’t know if it’s still on table because personnel have changed at NHR and a deadline in April has passed.

Trustee Appleton asked if we could take the money but not submit the application yet.

Marketing Director Friedman was not sure grant was still available and points out that it’s a lot of work to go through just to decide not to do it.He recommends deciding first then accepting money.

Trustee Jondro asked why there would be any opposition to this and is informed that some people think there would be restrictions.

Marketing Director Friedman pointed out that in the past, some had considered listing all of MRG, which would have been “no problem.”

Trustee Finnerty stated that NHR has been used at times to block development near NHR properties and creates standing for people to intervene on behalf of the NHR property.

Trustee Appleton stated that there are no real downsides to being on the register if the property is not taking federal funds, and recommended taking it to the shareholders for discussion.

Marketing Director Friedman stated that he thinks that NHR is one of best things we can do toward the “preserve and protect” mission.

Discussion ensued:the expectation is there that if you take the money, you will submit an application.When you do that is open to interpretation.

Trustee Godwin volunteered to write a “pro” white paper for shareholders regarding NHR.

Trustee Appleton made apoint of order: this is the first discussion about it in a while and it’s better to discuss it now and act later.

Trustee Godwin wanted to put the information out to shareholders; Trustee Jondro pointed out that the most recent Echo had gone out already.

 

Several members did not feel ready to make the decision without input from counsel or other sources of information.

The question was raised as to whether this would be a Board decision or put to shareholders for a vote.

Trustee Appleton stated that doing this would require educating shareholders about the restrictions (or lack thereof) that NHR designation entails.

 

Trustee Godwin will send Board a proposed white paper on pro’s of registry (both scenarios: Single Chair only, MRG area).

This topic will be on the agenda for September for discussion and President Wimble may have info on whether there’s money available for the application process.

Trustee Schoenholz stated that it would be great to have a presentation to the Homeowners’ Association at Green and Gold Weekend.

 

Other Committee Reports

 

Executive Committee (Trustee Reynolds reporting)

 

The Executive Committee had acted (4-0) to authorize the management to negotiate w/Alpine Options to take over the retail shop on-mountain.

 

The Executive Committee had voted to authorize a subcommittee to examine volunteer opportunities for shareholders.Board attempted to appoint Trustee Godwin as chair.

Trustee Finnerty pointed out that formation of this subcommittee may not be urgent business and therefore may be against by-laws, and that it could not be accomplished during this Board meeting because it was not announced in advance as an action item.Discussion is tabled, to be put on agenda for September meeting.

 

The Executive Committee had voted (4-0) to redeem the share of a shareholder who was filing bankruptcy.

 

Elections and Board Development Committee (Trustee Finnerty reporting)

 

Trustee Finnerty reminded the Board that the Carver model was originally adopted for governance of the Board of Trustees and that he would like to re-educate the Board regarding the model at some future date.

 

Shareholder S. Kalkstein commended the current Board on the process of the meeting.

 

Motion

Made by

2nd by

Aye

Nay

To form a special committee to study volunteerism opportunities at the Cooperative.

Trustee Schoenholz

Trustee Godwin

Tabled until September due to protocol

 

Motion

Made by

2nd by

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