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Mad River Cooperative

Finance Committee Meeting (Teleconference)

November 9, 2007

 

Attendees: Chairman Eric Schoenholz, Andrew Snow, Andy Dulik, Lars Bruns,Deb Steines, Jed Kalkstein, Pete Ludlow, Roy Liu, and Jamey Wimble.

 

The telephone conference was call to order by the Chair at approximately 11 am.

 

Review and Approval of the Coop Audit

The primary function of this meeting was to review the details of the Coop Audit as prepared by Mudgett Krogh-Wisner, P.C. CPA’s.Overall it was noted that this financial report is distorted (from our normal operating accounting) by the large influx of Donations and Grants collected for the Single Chair.From an accounting view all of these funds are treated as income.

 

The Audit was reviewed and discussed as follows:

  1. There were no questions on the Adjustments
  2. P&L
    1. The operating profit of $10,080 was noted
    2. Net Income was $594K (much higher than normal) which include $194K from Chair Sales and scrap, $26K from Donations and $670K from Grants (PTV)
  3. Statement of Cash Flows
    1. Noted that preseason sales were about equal to last year with Passes down about 4% and Mad Card up about 6%.
  4. Balance Sheet and notes
    1. Noted that cash of $542 includes $84K in the “Single Fund” to be used for CTEC billing
    2. Cash with advanced purchases (~$800 – 84 = 716) should carry us to February in disaster situation (like last year)
    3. Explain the apparent discrepancy between the cash mentioned in Note # 1A with the Cash on the Balance Sheet? This question was subsequently answered with a conference call with the auditors

<![if !supportLists]>                                                              i.      <![endif]>The note is somewhat confusing and is really trying to note the distinction between cash on the balance sheet at 9/30 and the bank balance at 9/30. 

<![if !supportLists]>                                                            ii.      <![endif]>The difference was a large check to CTEC for the Single and checks to other vendors which were in float.  This cash can’t be counted even though the cash still showed on the bank account balance.

    1. Shareholder Notes (from Double) @ $84.5K are due to be paid in June of 2008!This cash must be protected!
    2. Loan balance for the Single is at $400K.The Coop still has a line of credit available but not drawn on.
    3. Question of “Accounting of the Single” was raised.Explain the balancing transactions in the accounting of the Single?This question was subsequently answered with a conference call with the auditors

<![if !supportLists]>                                                              i.      <![endif]>In round numbers ……

<![if !supportLists]>                                                            ii.      <![endif]>$1,653K – construction in progress – charges for the Single up to 10/1 (not the total cost of the project) and other projects (underground electrical and other small stuff)

<![if !supportLists]>                                                          iii.      <![endif]>Minus the approx. $100K in other projects which were included in the line above

<![if !supportLists]>                                                           iv.      <![endif]>Minus $424K in Accounts payable

<![if !supportLists]>                                                             v.      <![endif]>Minus $400K Notes Payable (Mortgage)

<![if !supportLists]>                                                           vi.      <![endif]>Minus $670K Grants Received – amount already paid to CTEC

<![if !supportLists]>                                                         vii.      <![endif]>= $59K  - Doesn’t tie in exactly but close enough considering scrap and depreciation

  1. Report to the Board of Trustees - no questions
  2. Communication of Significant Weakness and Deficiencies (formerly know as the Management Letter) -four items of concern were noted

 

Share Redemption – what do we recommend to the Board? – Resume or not?

The committee briefly discussed the fact that some Board members and the staff are getting pressure to resume Share Redemptions.There are currently 43 outstanding requests for redemption with a value of about $58.5K.We continue to recommend the suspension of share redemptions; however the Board may grant approval of one-off hardship requests.The committee feels very strongly that nothing should be done with redemption until we know our cash position after the Christmas / New Years Holidays.The committee is also concerned about the need to pay $84.5K to bondholders (Double) in June.There is also concern on how to “meter out” redemptions if some cash is available.Eric S. volunteered to put together a “financial barometer” which the committee could review and the Board could use to evaluate the timing of future redemptions.

 

The meeting adjourned at approximately noon.

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