Mad River Glen Cooperative
Finance Committee Conference Call
May 7, 2009
Telephone Conference began at 7:32 am
Attending: Tom Cagnina, Andy Dulik; Ken Frey, Jed Kalkstein, Gary Lange, George Lesure, Roy Liu, Pete Ludlow, Jeff Paduch, Eric Schoenholz, Andrew Snow, Jamey Wimble, Lars Bruns
Absent: Betsy Jondro; Deb Steines; Leigh Michl
Schedule and Agenda Review
Lars reviewed the current schedule of Board and Finance Committee meetings as we review last season’s results and prepare budgets and financial plans for the upcoming new FY and season.Lars discussed the agenda for this meeting to include review of financials to date, review of requested summer 2009 capital expenditures from Management, as well as a preview of pricing to come at the next Finance Committee meeting scheduled for May 22nd.
Jamey reviewed the financials to date and the projected cashflow through the remainder of the fiscal year ending September 30, 2009.Jamey answered a number of questions relating to impact of a season with some poor conditions over the holiday periods.Questions were asked regarding lower day-tickets, effect of poor weather/seasonal impact on share sales , as well as generic redemption requests.The status of the rainy day fund was questioned and this amount will be revisited when Jamey and Lars meet the following week.The goal of $100k at the end of this FY was desired by the Finance Committee, and we need to consider and review the impact that pre-payment of insurance and other future liabilities will have on this number.
Capital Expenditure Review
Jamey reviewed Management’s request for summer Capital Expenditure work.Management requested $64k for ~10 items classified in Tier 1.Jamey noted that he has received engineering guidance that the office infrastructure fix from last fall will last 3-5 years and is not necessarily required to be done this summer.He noted that the Schuss Pass bridge was also in a similar state according to an engineer working with Jamey.Jamey has received a written letter on this topic reassuring the Cooperative that we can go at least another 1-2 years without the large-scale infrastructure fix.The Finance Committee members asked many questions on this topic ranging from potential safety issues, deferring significant capital to future financially unknown years, etc.There was generic consensus that the Cooperative should plan to complete these fixes in the next year or two depending on the advice of the engineer.
Further discussion of each of the capital expenditure items yielded questions and answers concerning green environmental items and the potential funding assistance that may be available from the Stark Mountain Foundation (SMF).Ken Frey indicated that SMF was having a meeting later in the week, so Jamey took an action item to ensure he gets a list of potential green projects and costs sent to SMF for their discussion.Some potential green environmental items include waterless urinals, bar and cricket club windows, electrical power filter components to better utilize electricity on the mountain and in the facilities, and maintenance shed heating via wood fuel.
In closing the capital expenditure discussion, the Finance Committee members questioned the viability of the existing Capital Expenditure funding formula which currently uses the last 5 years NOI average + share sales – debt service to calculate a guideline.Recent poor weather years have provided very limited funding for capital expenditure.Some Finance Committee members suggested revisiting this formula, while others suggested we need to look hard at future budgets to generate more NOI.Additional discussion was also had regarding opportunities to limit or reduce the expense side in addition to considering building into the budget future capital expenditure needs so that we are able to generate adequate cashflow.
After detailed and lengthy discussion, including correlation to our currently limited end of FY2009 cashflow (before inclusion of FY2010 preseason sales), the Finance Committee recommended to the Board approval of $45k for only critical Tier 1 maintenance items deemed absolutely necessary.The $45k recommended capital expense funding included the following items: trail bridge planking, rental/repair roofing, ski shop rental skis, Lift 2 bullwheel bearing, and fuel tank fill and cathotic protection.
Conclusion, Action Items, Next Meeting
Lars then discussed the next budget meeting scheduled for May 22nd at 7:30am via teleconference which will cover the discussion and review/potential recommendation of the proposed 2009-2010 budget prior to the June 6th Board meeting.The Finance Committee asked Jamey to prepare a version of the budget that assumes significant revenue reduction during the one of the three holiday weeks, review potential future capital expenditure needs for future budgets, as well as revisit the predicted end of FY2009 cashflow.
Meeting was closed at 8:59 am.
Treasurer and Chairperson of the Finance Committee