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Mad River Glen Cooperative

Board of Trustees Meeting

Minutes –Saturday, September 12, 2009

DRAFT

 

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, September 12, 2009 on the third floor of the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston, Vermont.

 

Trustees Lars Bruns (Treasurer) (by telephone), Jim Elkind, Liz Godwin (Secretary), Jed Kalkstein (Vice-Chair), Gary Lange, George Lesure, and Bill Reynolds (Chair) were present. Betsy Jondro and Geordie Hall were absent. President Jamey Wimble and guest speaker Bob McCullough were also present. There was one shareholder (“SH”) in attendance (9:00 arrival).

 

8:07 Call to Order

Trustee Reynolds called the meeting to order at 8:07 a.m.

 

8:07 Shareholder Comments (SHC’s)

(none present)

 

8:07 AM Minutes of July 11, 2009 (Action)

 

Motion

Made by

2nd by

Aye

Nay

Abstain

Absent

To adopt the minutes of July 11, 2009 as amended

Trustee Lange

Trustee Elkind

6

0

Trustee Godwin

2

 

 

8:08 AM Management Report

 

Operations:

 

Mowing is complete despite wetness of grass, and the mountain is ready for snow. We had a good crew this summer, and actually turned people away because we had a full crew. We hope this continues this winter because we are not bringing in any foreign workers this winter.

 

Capital projects have gone well and came in on or below budget. The biggest project was a new bearing in the Lift 2 bullwheel at the top. This was a scheduled change recommended by the manufacturer.

 

Summer camp numbers picked up a little as summer went on, but were still low. The camp broke even for the summer. We consolidated weeks so we wouldn’t lose money.

 

APR money seems to be coming in at a normal rate. However, we will not have a good handle on preseason sales until October 15th. Programs are biggest concern right now.

 

We are looking into adding capacitors to our electrical distribution system which would increase our power factor and reduce our electric cost by leveling out our peak demand. It would cost $3,600 to install and have a 100% payback in 10 months. President Wimble plans to use money saved on capital projects to get the work done. He also has a quote on a larger system that could save us substantial money and would have a 30 month payback. This would be a $16,000 project.

 

A patroller was killed at Jackson Hole in a ski accident, and subsequently the family and OSHA have sued the ski area for not supplying helmets to patrollers. This is a big topic in the ski industry right now. President Wimble would not suggest any change in our policy at the moment, but this will be something he will be watching closely as it plays out. If it is determined that areas should supply employees with helmets, it would be expensive for us.

 

President Wimble has been approached by a company that wants to lease some land from us to put a wind tower on the mountain; we would get electricity at a reduced rate from them during the winter. During the summer, we would get a percentage of whatever they could sell back to the grid. They have not yet been able to provide numbers as far as potential income. The general consensus was that it should certainly be explored, but it was believed that the company will probably find it an unsuitable site given proximity to ski trails and other factors. It would undoubtedly be quite controversial and would have to go to a shareholder vote due to restrictions on improvements above 2300 feet in altitude.

 

President Wimble is looking into instituting a short-term disability policy which would allow up to sixteen weeks of paid leave at 67% of salary; this would help employees who get sick but run out of all their sick days. According to his straw poll, all but one of the employees would want to sign up. It would not impact our long-term disability coverage, nor would there be any cost to the Co-op. It would cost about $10/week per employee and would apply only to full-time year-round employees. Trustee Elkind commended President Wimble for trying to find ways to help our dedicated employees.

 

President Wimble will be instituting some precautions against the H1N1 virus. The day care, ski school, and those handling money are going to be particularly targeted. Trustee Lange asked about getting shots for employees; President Wimble replied that we may not be able to obtain them because priority is being given to high-risk populations first.

 

Share Sales:

 

We sold one share in the month of August against a budget of one. We have sold seventeen shares YTD. There are thirteen shares waiting to be tendered. We budget to sell 40/yr. and tender 20/yr. The spike in requests tends to come when APR goes out and so far that has not been particularly high. The difference between sold and tendered is low, however.

 

 

8:33 AM Financial Report

 

Our August numbers are a little behind due to advanced payment of insurance premiums that will save us interest expense, the camp numbers being down, and early payment on advertising to take advantage of discounts. Projected net operating income is about (30,000). The single loan balance is $67,000. Total cash on hand is $181,000. Trustee Reynolds asked about windows in the Cricket Club as a possible maintenance/capital expenditure now that we have some money to use due to other projects coming in under budget. President Wimble is looking into that.

 

 

8:36 AM Amended Budget (Action)

 

Trustee Bruns noted that the Finance Committee (FC) had a conference call in July and made adjustments to be a bit more conservative with the budget. The FC recommends adopting the amended budget with a net operating income of $278,121.31, gross revenue just over $3M, and net operating expense of about $2.7M.

 

Motion

Made by

2nd by

Aye

Nay

Absent

To approve the amended budget which would result in an increase in the net operating income to a figure of $278,121.31.

Trustee Bruns

Trustee Lange

7

0

2

 

 

8:43 AM Easement/Culvert Expenditure (Action)

 

In 2005, shareholder and homeowner Eric Schoenholz had requested a septic easement onto the lower part of Antelope, and also had some drainage work done that upgraded the road culvert. He’d requested that the Co-op pay half of the cost for the road work, as it benefited the Co-op as well, and also asked for reimbursement of that portion of the legal expenses that benefited the Co-op due to legal expertise we gained (regarding easements) as a result. The total amount of reimbursement was $1421. Minutes reflect that the Board at the time was favorably inclined to reimburse him but never officially acted on the item. Mr. Schoenholz did not raise the issue while on the Board to avoid a conflict of interest. President Wimble considers this to be a reasonable request. Trustee Bruns noted that he and Chair Reynolds had reviewed the request and agreed with recommending reimbursement. He also commented that we should ask homeowners to chip in for this project which also benefited the Homeowner’s Association (similar to the Schuss Pass bridge renovation funding).

 

Motion

Made by

2nd by

Aye

Nay

Absent

To reimburse Eric Schoenholz $1421.00 for easement/culvert expenditures incurred in 2005.

Trustee Elkind

Trustee Lesure

7

0

2

 

The Board noted that it is reimbursing Eric Schoenholz because he incurred legal costs that clarified the Cooperatives standing with respect to its ownership and rights. As was discussed in 2005 by the Board, the Board will only reimburse legal or other expenses that do directly benefit the Cooperative and have been approved by the Board prior to the expenses being incurred.

 

8:50 AM National Register of Historic Places (Action)

 

Trustee Reynolds noted that the Board has been considering this issue since at least 2002. A number of speakers have come to share their expertise in this area; these have included Meg Campbell of Preservation Trust of Vermont; Ron Shems, local environmental counsel with significant expertise in Act 250; members of the Fayston planning commission; members of the Mad River Valley Rural Resource Commission; and John Johnson, historian. Among them, there has generally been consensus that being listed on the National Historic Register (NHR) would be a positive thing for the Co-op and that it would not restrict the Co-op’s ability to modify, add, or remove any structures on our property.

 

Bob McCullough, a professor at UVM with significant expertise in this area, was present to help the Board answer significant questions that the members had regarding whether it would be possible to list only the Single vs. the entire area as a historic district. Trustee Reynolds asked Prof. McCullough to give a brief overview and address the questions of the Board.

 

Trustee Elkind asked if there were specific concerns of current or former members of the Board that remained unresolved. Trustee Reynolds answered that one of the main concerns seemed to be whether we would retain the aforementioned ability to add, remove, or modify structures. The Board and management have since looked at a number of specific cases (including Church St. in BTV) in which owners were challenged on modifications to structures, and those cases turned out not to be related to NHR listing. Another concern was Act 250 and how NHR listing would impact that. Ron Shems has indicated that NHR status would not change our status with respect to Act 250.

Trustee Lange reminded the Board of the straw poll at the April shareholder town meeting, in which SH’s approved our seeking recognition of the historic nature of MRG. It did not specifically address which parts of the area would be listed. Trustee Reynolds pointed out that we are already bound by a covenant to preserve the Single for 50 years, and the Single is listed in HABS/HAER (Historic American Building Survey/Historic American Engineering Record) as an engineering feat of note, so we’re clearly recognized as a historic place. Prof. McCullough suggested we come up with hypothetical circumstances and ask about them, then he could answer how a NHR listing would impact those situations (if at all).

 

Prof. McCullough first outlined the process by which a listing is obtained. First, if a person wants to nominate a building, he retains a consultant, who prepares a nomination, which is then submitted to the State Historic Preservation Office (SHPO). Then, the consultant, property owner, and staff at SHPO work together to complete the nomination, which next goes to the State Advisory Council (SAC) on historical preservation. Weaknesses are corrected, then the document in final form goes to the National Park Service (NPS), where the keeper of the National Register makes the final determination. Usually it’s a formality at that point once it’s been approved at the state level.

There are three parts of a nomination: description of property; statement of significance – why is it historic, how does it satisfy criteria of NPS for NHR, etc.; and statement of integrity - there must be an affirmation that the “basic historic integrity” of resource has survived.

 

Prof. McCullough teaches courses in historic preservation law and community preservation projects. Students in his courses develop projects for non-profits, state entities, and “well-minded” organizations. Preparing NHR nominations is the kind of work his students do under his supervision; they could spearhead ours as part of their class. It would require a team of two to three students to do the work; they do one or two of these projects each year.

 

Trustee Bruns clarified that the PTV covenant and HABS/HAER are just on the Single, and perhaps it would be best to list only the items already under a covenant, which is already more restrictive than NHR listing would be. There was some agreement that this might be a good course of action at first. Prof. McCullough said that the issue of listing the Single vs. the whole area hinged on historical significance and why resources are historic. The Single is historic due to engineering and being one of the last single chairs in operation in the country. HAER simply documents that it’s an important engineering resource. He believes that the SAC would see the area as having historical significance and the Single as just one part of that, best understood in the context of area itself, including trails, buildings, architecture, and other features that contribute to the important historic character of MRG. He thinks the SAC would be unlikely to approve a nomination to list only the Single, on the grounds that divesting it from the ski area makes its historical significance less understandable.

 

Trustee Kalkstein asked what the implications would be if we listed the whole area. Prof. McCullough stated that additions to a property on the Register bring no regulatory controls. That only happens if the owner invites the federal government to participate in a project. Still, the question is not whether it’s listed, but whether it’s eligible to be listed. Ergo, any potential regulatory issues apply whether or not we apply to be listed.

Trustee Elkind asked if there’s been a finding to the effect that we’re eligible for listing. President Wimble answered that we have to go through local, regional, and state permits for various processes; on those forms he has to check a box that we are eligible for historical site status (by virtue of our being over 50 years old), and therefore our actions are subject to a higher level of scrutiny at some level. He believes that the SAC has already affirmed that the ski area is historic. In addition, the historic significance of the ski area is documented in the Fayston Town Plan. Trustee Reynolds read the following excerpt from the Fayston Town Plan:

 

In 1971, the State of Vermont Division for Historic Preservation began an

inventory of all historic structures and buildings in the Town of Fayston. The survey work was largely completed in 1978 and 1979. The inventory lists all structures and buildings in the Town that are eligible for listing on the National Register of Historic Places. The survey lists 39 buildings and structures that were eligible for listing on the National Register of Historic Places in 1979. More have since become eligible, including the base area buildings and single chair lift at Mad River Glen. (The Fayston Town Plan is available at http://www.faystonvt.com/TownPlan.php)

 

 

Trustee Kalkstein expressed surprise that there is no difference in listing vs. non-listing as far as how one is regulated. Prof. McCullough replied that the law in question is the National Historic Preservation Act. The regulatory segment of that is Section 106, which states that federal agencies are not allowed to issue permits, lend money, or participate in projects, without taking into account the effects thereof on historic resources. So with the example of wind turbines, some might argue that they have a visual impact and therefore change the character of the ski area, whereas others might claim it does not. The goal, he said, is to accomplish what we want to do without compromising historic resources.

Trustee Kalkstein asked if listing gives others “ammunition.” Prof. McCullough replied that a listing can cut off debate of whether a site is historic. Prof. McCullough then clarified that restrictions on changes that we might want to make requires three things regardless of NHR listing: (i) a site/asset has to be considered “historic”, (ii) the federal government has to be involved in the project (whether that be grant money, tax credits, or even permits), and (iii) the particular change has to potentially negatively impact the historic nature of that historic site/asset. The NHR listing would likely make it harder for one to argue whether a site/asset is “historic”, but would not impact the other two. Trustee Kalkstein pointed out that few would argue that the mountain is in fact historic, the whole debate would be over whether something negatively impacts that historic quality and as such in his view listing on the NHR would simply settle the part of the question that is not particularly controversial.

 

Trustee Bruns asked if there were actual prohibitions on only a structure being submitted. Prof. McCullough reiterated that the SAC would scrutinize it very closely and probably recommend that it be expanded to include all or part of the ski area. He thought a dialogue with the SAC would be very useful. Trustee Reynolds asked whether the Board could attend a SAC meeting; yes, we would simply have to be listed as an item on the agenda.

 

Trustee Elkind asked President Wimble to clarify what funds he was referencing as being available next spring (application due in January) to help with application process.

Prof. McCullough talked of having a master plan (optional); some trustees asked if potential projects could be listed on a master plan to forestall future opposition to said projects. Prof. McCullough said it might add some means of protection. Clarifications and questions ensued regarding whether opposition to any future projects would be galvanized by our being listed (“flagging us” per Trustee Kalkstein). The Unicel tower was brought up as an example – it could not have been erected within 250 ft. of a historic building.

 

Trustee Lange noted that the focus thus far was on theoretical negative consequences and asked what the positive aspects would be. Prof. McCullough noted that public recognition is the main one, but also that there are tax credit for income-producing properties that want to make changes (rehabilitation investment tax credits (RITC). An owner who applies for RITC must spend an amount equal to the basis of that improvement or $5000, whichever is greater.

 

SHC (Jay Appleton): Mr. Appleton was intrigued that the SAC wouldn’t likely accept a listing for the Single alone; he noted that it makes sense because the only old part now is the towers; every other piece is new. He commented that he works for the City of Burlington and is familiar with battles over historic preservation. The “trigger” is the zoning ordinance. He noted that the Church St. district has contributing buildings vs. non-contrib. buildings. The only original part of the Basebox is the thermopane window. He wondered if “the fight would go to materials” and therefore if every building in area is non-contributing except Chalet 10 and the original window in General Stark’s Pub.

 

President Wimble was sure that the Fayston planning board would try very hard to work with us to maintain historical character of buildings. Trustee Godwin asked if taking federal funds for one project (say, a Basebox renovation) would enable restrictions for any future projects (e.g. patrol building); Prof. McCullough said the answer is no.

 

SHC (JA): Mr. Appleton opined that we should just go ahead and move to apply for listing.

Trustee Bruns asked if an application could pre-define contributing vs. non-contributing buildings. Prof. McCullough answered that yes, the application sets boundaries and contributing vs. non-contributing structures. Trustee Godwin clarified that the Board would stay involved with that part of the process.

SHC (JA): The definition of a district could be “extremely tricky.” He recommended that homeowners’ houses not be included. Houses are surrounded by Co-op land so we can’t just use the property boundary as district boundary. The Stark’s Nest is largely intact and original from 1949.

 

A discussion ensued on how to draw a district boundary in a way that works for us and our homeowners.

 

Trustee Lange noted that if we don’t have a taxable situation, we don’t benefit from tax credits, so it would only provide public recognition, in which case would we still want to apply? Prof. McCullough noted that VT allows selling of tax credits. President Wimble said that Marketing Director Friedman would advocate strongly for listing the whole area due to the marketing potential of being the first ski area listed.

 

Motion

Made by

2nd by

Aye

Nay

Absent

To apply for listing on the National Register of Historic Places.

Trustee Reynolds

Trustee Godwin

7

 

2

 

10:22 AM Committee Reports

 

The Executive Committee approved one hardship request to tender a share.

 

The Board Development Committee has nothing to report.

 

The Finance Committee met via conference call and reviewed monthly financials and the state of capital expenditures. The details of that meeting were previously discussed during the financials discussion. The minutes of that meeting and their July meeting are available on the co-op website.

 

10:25AM New Business

 

Trustee Godwin noted that the shareholder website has portions that refer to the 2005-2006 ski season and are in need of updating. President Wimble duly noted the feedback.

 

SHC (JA): The agenda should also be on the website, not just in the Mountain Update.

SHC (JA): Will shares be redeemed at the proper time? President Wimble replied that we will know after the audit is reviewed.

 

Trustee Elkind said there would be a “green” walk-through with Virginia and Jack immediately after the meeting to review the Basebox and other facilities to see if there are targets of opportunity we’ve overlooked.

 

 

10:30 AM Adjourn

 

 

Motion

Made by

2nd by

Aye

Nay

Absent

To adjourn.

Trustee Kalkstein

Trustee Bruns

7

0

2

 

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