Mad River Cooperative
Finance Committee Meeting (Telecon)
May 18, 2007
Attendees: Chairman Eric Schoenholz, Andrew Snow, Andy Dulik, Lars Bruns,Deb Steines, Jed Kalkstein, Leigh Michl, Pete Ludlow, Roy Liu, Jamey Wimble, and staff members Eric Friedman; Sharon Crawford
The telephone conference was call to order by the Chair at 10:32 am
Short report on Single Campaign (Deb)
The campaign has raised $1,145,000 in pledges so far leaving us just shy of $400k to go.Chair sponsors and tower donor will be honored at special events during Green and Gold Weekend which will be the “soft opening” of the new Single.The Grand Opening is planned for Dec 15th.There is a plan to hold another Telethon this winter in an attempt to reach all shareholders that have not contributed.$650k in cash has been collected so far which is important to reduce the carrying cost / interest expense while additional pledges are being made and while contributors are paying off their pledges.The overall impression of the committee is that the campaign has exceed everyone’s expectations.
Short P&L Review for April and forecast for end of fiscal year (Jamey)
The outlook from the April P&L indicates that our current forecast to breakeven at the year end still holds.There were no surprises in the report.There was a discussion on Mad Card breakage where it was reported that we had about $60k (21%) of breakage in Mad Cards vs. about $180k (43%) in breakage last year (bad snow year).
Ticket pricing 2007 / 2008 (Jamey)
Due to the competitive nature of the discussion no specifics will be reported in these minutes at this time.
During the discussion Eric Freedman reported on the general state of our competitive market and indicated that competition in the season pass market is tough.Since 50% of college kids snowboard the college pass has lost a lot of value to the Coop.Sugerbush has initiated a corporate pass which has been used by “groups” that have also affecting our sales.The majority (about 60%) of our passholders is from out of state and most Mad Cards are used on weekends.
Budget for 2007 / 2008 (Jamey)
The proposed budget for 2007 /2008 was discussed.Cost savings and frugal operation is the key to our planned profit for the coming year.There was a question why the interest expense for the Single Loan was not included in the proposed budget.The budget includes the cost of financing within the capital budget for the SingleDebt service will be taken out of future capital work as part of the CAPX formula.We expect the mortgage expense for next year to be between $60K and $80K depending upon the amount of cash that is collected by the Campaign.The committee discussed the need to begin to discuss the total cost of the project including the contract price ($1.6M),the interest expense through our line of credit/loan and the administrative costs of the Single campaign which will be closer to $1.7M to $1.8M rather than the “public” number of $1.54M.
The committee recommended approval of the submitted pricing and recommended budget and to present it to the Coop Board as presented by management.
Share Redemption – what do we recommend to the Board? – Resume or not? (Eric)
The committee briefly discussed Section 9.6 of the Coop By-laws.There are currently 41 outstanding requests for redemption with a value of about $37K.We continue to recommend the suspension of share redemptions; however we will consider approval of one-off hardship requests.The committee feels very strongly that Section 9.6 of the by-laws should not be amended to change the redemption value to shareholders.
Raise the APR from $200 / year to maybe $250+? (Lars)
The committee discussed the By-law requirement to raise the APR by the CPI and the fact that this has not been addressed by previous Boards.We recommend that the bylaws be changed to give the Board “discretion” to change the APR. The general feel is that the benefit of the increased cash flow (coming from the estimated 100 to 120 shareholders that spend just the minimum $250) would be outweighed by the bad press/karma in a time when shareholders are being asked for contributions to the Single Campaign.We discussed the possibility of increasing the APR next year after a soft warning is given in advance to the Coop in the spring.
The meeting adjourned at approximately noon.