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MAD RIVER GLEN COOPERATIVE

BOARD OF TRUSTEES

MINUTES OF MEETING

September 20, 2003

 

After due notice, a meeting of the board of trustees of the Mad River Glen Cooperative was convened at 8:00 AM on September 20, 2003, on the 3rd floor deck of the Basebox at Mad River Glen Ski Area in Fayston, Vermont

 

Trustees Alan Moats, Deb Steines, Jito Coleman, Jay Appleton, Paul Finnerty, and Rick Moulton were present.  Leigh Michl and Lu Putnam were present via conference call.   Ken Eaton was absent.  Also present were General Manager Jamey Wimble and Sharon Crawford.  Several shareholders were present as well.

 

CALL TO ORDER:

President Alan Moats called the meeting to order at 8:05 AM. There was a brief discussion regarding teleconferencing for Co-op meetings.  Ms. Steines pointed out that getting out-of-state candidates (who are not homeowners) to run for the board is difficult.  According to the Bylaws, Article 5.4 expressly allows participation via conference call if the technology allows uninterrupted conversation.  A comment was made that in light of the equipment currently at its disposal, the Board needs new technology. 

 

APPROVAL OF PRIOR MINUTES

Several minor changes were recommended for the July 5, 2003 Board of Trustees and the consensus of the board was to include the full financials as an attachment to the meeting minutes:

 

Upon motion duly made by Deb Steines and seconded by Jay Appleton, it was unanimously

 

VOTED:        To accept the July 5, 2003 Board of Trustees meeting minutes.

 

SHAREHOLDER COMMENTS

There were no shareholder comments when Alan Moats opened the floor.

 

MANAGEMENT REPORT

Mr. Wimble asked if there were questions regarding the Management Report (copy attached).

 

Ms. Steines and Mr. Wimble discussed the approved capital expenditures and Ms. Steines pointed out that the replaced fuel tank would require a formal request as an addendum to the approved expenditures if Mr. Wimble intended to exceed the board approved capital expenditure limit of $120,000 for 2003.

 

In response to a question by Ms Steines, management indicated that 22 shares had been tendered during the fiscal year and that 20 are on the waiting list.  Mr. Wimble indicated that the principal reason cited for redemption requests were personal financial situations (but not the APR requirement). 

 

There followed a discussion of the July 4th barbeque, which was well attended but resulted in a $1,000 loss.  Ms. Steines said that whether to hold a picnic should be revisited each year in light of when July 4th falls during the week.  This year the 4th fell on Friday – thus the excellent turnout.  Mr. Moulton noted that the $1K loss could be considered an investment in the community.  Jito Coleman said that we should make an effort to let people know that despite the $15/person fee, MRG usually loses money on this event.

 

Mr. Moats requested that the meeting move on to the next issue.

 

FINANCIAL REPORT

Mr. Michl asked for an estimate of the total bonuses paid for employees under the recently adopted bonus plan.  Mr. Wimble replied that this year it was $54K, in contrast with the Co-op’s previous maximum bonus of $44K.  Mr. Michl praised the new program as an excellent investment.  Mr. Wimble said that it was well-received.

 

Mr. Finnerty noted that the Finance Committee has made a point of trying to reduce credit card expenses, although the listserve encourages people to order their passes over the internet, which requires credit card fees.  Ms. Crawford commented that Amex charges the most at 3%.  Mr. Michl commented that the Finance Committee had discussed this fact with Eric Friedman.  Eric had indicated that making it easy to pay sped up pass payments and resulted in higher expenditures.  Mr. Michl said that he’d still like to see email notification of passes sales and APR requirements, rather than a physical mailing.  Currently, the availability of shareholder email addresses was the principal limitation on achieving this objective.

 

STARK MOUNTAIN FOUNDATION

Ms. Steines reported that recent activities of the Foundation have been mainly fundraising.  She stated that the Co-op had made a grant request to the Foundation in order to complete the renovation and dedication of the old Slalom Hill lift shack as the KentThomasNatureCenter – which will be dedicated over Green and Gold weekend.  She mentioned that the Co-op is working on a grant request for erosion control but that the Foundation was hopeful of receiving more grant requests from the Co-op.

 

RELEASE OF SHAREHOLDER LIST

Sean Kalkstein reviewed his and Paul Finnerty’s work related to the release of the list of shareholders to other shareholders.  In summary, the Board sought to clarify a “proper purpose” for the release of the shareholder list. 

The board discussed a variety of topics related to the policy of releasing names,  the report of Messrs. Kalkstein and Finnerty, and specific “real world” examples of the policy in practice.  It was agreed that, upon receipt of a request by Mr. Wimble, the approval would be granted or denied by the Executive Committee of the Board.  It was also agreed that shareholder curiosity or the desire to get in touch with another shareholder did not constitute a “proper use” and that obtaining the list to help sell shares did not represent a “proper use” as well.  It was also agreed that multiple uses of the list were permissible, as long as the purpose of the subsequent mailings was the same as the stated reason in the original request.  It was also agreed that having a “proper purpose” extended to in-person reviews of the shareholder list in the Co-op office. 

 

Ms. Steines  and  Mr. Moats thanked Mr. Kalkstein and Mr. Finnerty for their hard work.  and for clarifying this important issue.

 

 

EASEMENT POLICY (action item)

Alan Moats asked the board for questions or clarifications related to the draft easement policy that had been circulated to the trustees previously. 

 

There was a discussion as to the proper point for an abutter to seek an easement of the Co-op.  It was agreed that, in order to keep a homeowner’s costs down, an “initial request” or “provisional draft” would be acceptable, but that the actual granting of an easement could only be made when a “finished” request was made (including proper drawings, surveys, permits, plans, etc.).

 

The board also discussed whether to “survey” homeowners to get a sense of how many septic and water easements may be made, particularly in light of increasingly stringent regulations that most certainly will apply to these matters.  It was agreed that Jamey would change the easement policy to reflect the trustees’ comments in time for the homeowners’ meeting on Green and Gold

 

 The question came up as to whether the assembled board members were comfortable with voting on the existing document.  Mr. Coleman said that a vote is not necessary right now – that it would be a “guideline” that can be revised regularly, rather than a formal “policy”.  

 

TOWN MEETING AGENDA

The board reviewed the planned agenda for the Green and Gold weekend Shareholder Town Meeting.

 

DISCUSSION ON WAIVING APR

The board reviewed a proposal by management whereby shares could be converted into preservation certificates (preservation certificates already being convertible to shares).  This proposal was made by management to be used as a tool to retain cash and involvement from shareholders who might otherwise tender their share because of the APR requirement (presumably because they do not live in proximity to the ski area).  It  was also believed that the potential for convertibility from shares to preservation certificates (thereby avoiding the requirement for indefinite APR payments) may help share sales.

 

Ms. Steines said that she is opposed to granting APR waivers, but would be open to working with shareholders to convert shares into a preservation certificate.  Lu Putnam agreed with this strategy, and added that if a shareholder goes into preservation status, they lose their voting rights, but can reenter and regain their rights if the convert back to share ownership (provided APR payments are made). 

 

Mr. Wimble said that APR from shares is critical to the cash flow and financial for MRG.  Sharon Crawford added that the Staff recommends that shares should be convertible into preservation certificates. 

 

Mr. Michl asked why this option was being considered.  Ms. Crawford replied that this would make it possible to retain some of the money from the shareholders, rather than offering redemption as the only option.  Mr. Michl agreed that the rate of share redemptions was becoming problematic because, while they have not grown significantly in absolute numbers, they had grown significantly relative to new share sales.  Therefore, he concluded that the Co-op would be better served by altering the current redemption policy (the shorter of 10 new shares sold or six months) rather than jeopardizing the APR stream by allowing convertibility into preservation certificates.  Ms. Putnam suggested that the 10 share/six month policy be changed to five share sales. 

 

Mr. Finnerty said that management’s proposal represents a second option to those wanting to tender their share.  Is this a policy change, or just providing people with information about an option?  Mr. Appleton said that it would be a policy change because it is a change in direction, because currently there is only one direction – redemption.  Mr. Moats said that up until now there has been a verbal agreement on this.  What we are now seeking is a resolution.  Ms. Steines made a motion for straw poll, seconded by Ms. Putnam. 

 

“Straw Poll” vote:  To offer the ability for a shareholder to convert their share into a preservation certificate.   All trustees voted in favor, except Mr. Michl who voted against the proposal.

 

Rocky Bleier commented that when he sold his initial shares, APR was obstacle to his efforts.

 

COMMITTEE REPORTS

 

Facilities:

Mr. Coleman reported that the Facilities Committee “charrette” would be held Friday, October 3rd, and will be bringing in architecture students and design and facilities professionals.  .

 

Board development:

Ms. Steines reported on the proposed management/board retreat.  She and Sharon have worked on a list of goals.  A primary goal is to develop positive harmony between the Board and Management.  Specific issues to be addressed included:

1.)    Lack of definition of roles and responsibilities:  Everyone will brainstorm about these at the retreat and have feedback from the group regarding expectations.

2.)    Publications: What should be published, who should be published – decide as a group.

3.)    Proposed meeting: Saturday, Dec 6th from 8am to 4pm unless the mountain is open, in which case the meeting would be split between two Friday nights to be determined. 

 

The board agreed to schedule the meeting for December 6th.  Attendees will be restricted to management (as determined by Jamey Wimble) and trustees.

 

 

Election:

Mr. Bleier presented his report on recommendations from the Election Sub-Committee of the Board Development Committee.  The report outlined numerous recommendations to improve future election processes.  A copy of this report is attached.  Deb Steines agreed to incorporate these recommendations into the election policy

 

A discussion ensued regarding the length of candidate bios and the deadline for mail-in ballots. Mr. Moats asked that this discussion be tabled until next meeting.

 

Finance:

Ms. Steines said that the report on funding sources would be reviewed at the next meeting.

 

Shareholder relations:

Having already left, Mr. Moulton was not present to give the report.

 

20th Hole: 

Mr. Moats said that he and Betsy Pratt are currently working on the issue.  Several contractors/developers are working on plans and, potentially, proposals.  The final plan needs to be acceptable to both Ms. Pratt and the Co-op. 

 

Mr. Appleton pointed out the relatively pristine nature of the hillside above SchussPass, and its lovely stand of trees, and expressed his desire to save those forests from development.  Mr. Moats said that the plan is still a work in progress, and has not been fully developed.  Mr. Kalkstein asked if there have been walk-throughs of the property.  There have.  Mr. Kalkstein asked if they (developers) are aware that the land doesn’t “perc?  How are they planning to get a road up there?  Mr. Moats said that all of this would be answered in the plans when they are submitted.

 

SHAREHOLDER COMMENTS

Bill Heinzerling inquired about the status of other neighboring properties and noted the passing of an Anne Kluckner, and active member of the community.

 

EXECUTIVE SESSION

The meeting went into executive session at 11:30 AM to discuss personnel matters

 

ADJOURNMENT

There being no further business to come before the board, the meeting adjourned at 12:00 PM

 

Respectfully submitted, Eric Scharnberg

 

A true record.

 

ATTEST:                                               __________________________________________

                                                                                    Leigh Michl, Secretary

 

Attachments

 

Attachment A: Management Report

 

Operations:

 

We have added two projects over the summer to our capital list. A new fuel tank, anode protection, and a new accounting software system. Total increase in capital is about $11,000. We have applied to the SMF for a $10,000 grant to cover erosion control done on the mountain over the summer. This will offset some of the added capital expense.

 

Other capital projects and routine maintenance are going well.

 

Preseason sales seem to be on pace with last year, which is good.

 

All of last season’s department heads will be returning this season for the second year in a row.

 

MRG has been relieved of a health insurance obligation to Tex Thompson as of 9-30-03.

 

Share Sales:

 

40 shares have been sold YTD against a budget of 38. 5 shares have already been sold for September. APR payments are on track with last season.

 

4th BBQ. Good event, good turn out. We had a $1,000 loss putting the event on. I have a critique from Tamar on the BBQ so we can make adjustments for future outings.

 

Financials:

 

August P&L looks good. YTD numbers are on track as well. We are still looking at a $270,000 +/- Profit for Sept. 30, 2003.

 

Auditors will be here end of September first of October. Should have a draft of financials in November.

 

Cash:

            Single Reserve  $150,000

            Sweep               $123,000

            Total                 $273,000

 

Attachment B: August Financial Statements

 

Month of August 2003

 

 

 

 

Aug 03

Budget

$ Over Budget

Ordinary Income/Expense

 

 

 

 

 

Income

 

 

 

 

 

 

Basebox

200.00

1,025.00

-825.00

 

 

 

Day Tickets

523.31

 

 

 

 

 

Interest

157.70

1,250.00

-1,092.30

 

 

 

Rental Income

159.39

 

 

 

 

 

Services Income

3,049.00

2,000.00

1,049.00

 

 

Total Income

4,089.40

4,275.00

-185.60

 

Gross Profit

4,089.40

4,275.00

-185.60

 

 

Expense

 

 

 

 

 

 

Basebox Expense

1,808.19

1,300.00

508.19

 

 

 

Cooperative Expenses

212.13

1,477.50

-1,265.37

 

 

 

Credit Card Service Charges

127.68

71.82

55.86

 

 

 

Facilities Expense

29,975.91

28,334.04

1,641.87

 

 

 

Insurance/Property Tax

20,478.37

22,862.94

-2,384.57

 

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